Document:

EXHIBIT
10.22

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

COMMERCIAL
LICENSE AGREEMENT

 

This
COMMERCIAL LICENSE AGREEMENT (“Agreement”) is made as of the 14th day of November, 2014, (“Effective
Date”) by and between Dresser-Rand Company, a New York general partnership (“D-R”), and
Ener-Core Power, Inc., a Delaware corporation (“E-C”) (each a “Party” and,
together, the “Parties”).

 

WHEREAS,
D-R is in the business of building gas turbines, including the D-R KG2-3GEF gas turbine;

 

WHEREAS,
E-C is in the business of building gradual oxidizers, which would be complementary to the D-R KG2-3GEF gas turbine;

 

WHEREAS,
E-C desires to develop a gradual oxidizer for D-R’s KG2-3GEF gas turbines;

 

WHEREAS,
D-R desires to design its controls to be specific to a product configured as a single integrated unit consisting of a combination
of the gradual oxidizer with the D-R KG2-3GEF gas turbine;

 

WHEREAS,
the Parties desire to market an integrated KG2-3GEF/GO unit;

 

WHEREAS,
subject to the conditions set forth herein, D-R and E-C will commit to this project the resources described in Sections 2.2,
2.3, and 5.1;

 

WHEREAS,
the Parties are willing to grant each other rights to their background intellectual property during the Initial System Project
to permit them to conduct their development and commercialization activities under this Agreement in accordance with the terms
and conditions set forth herein; and

 

WHEREAS,
the Parties desire to allocate ownership and license rights to the technology developed by, or acquired by either of them for,
the Initial System Project and to allow them to jointly commercialize the KG2-3GEF/GO on the terms and conditions set forth herein.

 

NOW,
THEREFORE, in consideration of the premises and the mutual covenants, terms and conditions set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.           DEFINITIONS.
Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings set forth in this Section.

 

	1.1 	“Affiliate”
    shall mean, with respect to any Person, any other person or entity that, directly or indirectly through one or more intermediaries,
    controls, or is controlled by, or is under common control with, such Person. For the purpose of this Agreement the term “control”
    (including the terms “controlled by” and “under common control with”) means the possession, directly
    or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether
    through ownership of voting securities, by contract or otherwise. A person or entity shall be deemed an Affiliate of another
    person or entity only during such time as such control exists.

 

	1.2	“Customer”
    means the Person who purchases, or contracts for the purchase of, a KG2-3GEF/GO from D-R.

 

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CONFIDENTIAL
TREATMENT REQUESTED 

 

	1.3	“Deliverables”
    shall mean all tangible objects, quantifiable characteristics or functions, and services required to complete Initial System
    Project Plan that each Party has agreed to provide or deliver to the other to satisfy timelines or Milestones specified in
    the Initial System Project Plan pursuant to the terms of this Agreement.

 

	1.4	“D-R
    Background Intellectual Property” shall mean (a) all Inventions, Intellectual Property, and all other proprietary
    rights owned or controlled (with the right to (sub)license as contemplated herein) by D-R as of the Effective Date, and (b)
    all Improvements of the Inventions and Intellectual Property described in (a), above, and associated intellectual property
    rights owned or controlled (with the right to (sub)license as contemplated herein) by D-R after the Effective Date and during
    the Term.

 

	1.5	“D-R
    Hardware” shall mean the D-R Target Gas Turbine products, components and spare parts, integrated controls, and
    packaging, all designed for the KG2-3GEF/GO.

 

	1.6	“D-R
    Products” shall mean D-R Hardware and on-site commissioning and technical support that D-R has agreed to provide
    or deliver to a Customer or End-User pursuant to the terms of this Agreement, but excluding any E-C Products.

 

	1.7	“D-R
    Target Gas Turbine” means the D-R KG2-3GEF gas turbine.

 

	1.8	“E-C
    Background Intellectual Property” shall mean (a) all Inventions, Intellectual Property, and all other proprietary
    rights owned or controlled (with the right to (sub)license as contemplated herein) by E-C as of the Effective Date and (b)
    all Improvements of the Inventions, Intellectual Property described in (a), above, and associated intellectual property rights
    owned or controlled (with the right to (sub)license as contemplated herein) by E-C after the Effective Date and during the
    Term.

 

	1.9	“E-C
    Hardware” shall mean E-C’s Gradual Oxidizer products, components, spare parts, and controls, all designed
    for the KG2-3GEF/GO.

 

	1.10	“E-C
    Products” shall mean E-C Hardware and on-site commissioning and technical support, and training of D-R field
    support personnel that E-C has agreed to provide or deliver to D-R pursuant to the terms of this Agreement.

 

	1.11	“End-User”
    means the Person for whose benefit the KG2-3GEF/GO was purchased or installed, if that Person is not the Customer.

 

	1.12	“Fundamental
    Process” means a process (including sensors, instrumentation, controls and heat exchangers) designed for the
    primary purpose of achieving heat release from any fuel whereby such fuel is gradually oxidized in a high-temperature vessel
    maintained at such high temperature.

 

	1.13	“Fundamental
    Process Technology Developments” shall mean any Inventions relating to the Fundamental Process conceived, invented,
    discovered, developed or created during the Term of this Agreement (i) solely by one or more employees, contractors or agents
    of D-R or an Affiliate of D-R, or (ii) jointly by employees, contractors or agents of D-R or an Affiliate on the one hand
    and by one or more employees, contractors or agents of E-C or an Affiliate of E-C on the other hand, in each case based upon
    or resulting from the use of E-C Background Intellectual Property.

 

	1.14	“Gas
    Turbine Technology Developments” shall mean any Inventions relating to gas turbines conceived, invented, discovered,
    developed or created during the Term of this Agreement (i) solely by employees or agents of E-C or an Affiliate of E-C, or
    (ii) jointly by one or more employees, contractors or agents of E-C or an Affiliate of E-C on the one hand and one or more
    employees, contractors or agents of D-R or an Affiliate of D-R on the other hand, in each case based upon or resulting from
    the use of D-R Background Intellectual Property.

 

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CONFIDENTIAL
TREATMENT REQUESTED 

 

	1.15	“Governmental
    Body” means any government or governmental or regulatory body thereof, or political subdivision thereof, whether
    federal, state, local or foreign, or any agency, instrumentality or authority thereof, or any court or arbitrator (public
    or private).

 

	1.16	“Gradual
    Oxidizer” means the E-C gradual oxidizer, which is a ceramic filled pressure vessel, including fuel distribution
    manifold, implementing the Fundamental Process.

 

	1.17	“Improvements”
    means any and all improvements, derivative works, additions, modifications, enhancements, changes, translations, abridgements,
    revisions, adaptations, corrections and updates, findings, discoveries, Inventions, developments, formulations, ideas, processes,
    techniques, industrial and other designs, specifications, schematics, computer programs, source code (in both machine and
    human readable formats) and object code, whether or not patentable.

 

	1.18	“Initial
    System” means the first commercial order and installation of a KG2-3GEF/GO.

 

	1.19	“Initial
    System Project” shall mean a joint project to develop and put into commercial operation the Initial System,
    as more particularly described in the Initial System Product Plan.

 

	1.20	“Initial
    System Project Plan” shall mean the timelines, Deliverables, and Milestones, of the Initial System Project attached
    hereto as Annex A. The Parties agree that all of the timelines set forth in Annex A shall not start to run until the
    Core Binding Date.

 

	1.21	“Intellectual
    Property” shall mean all right, title and interest of a Party or the Parties in intellectual property, whether protected,
    created or arising under the laws of the United States or any other jurisdiction, including: (i) Patents; (ii) trademarks,
    service marks, trade names, service names, brand names, trade dress rights, corporate names, trade styles, logos and other
    source or business identifiers and general intangibles of a like nature, together with the goodwill associated with any of
    the foregoing, along with all applications, registrations, renewals and extensions thereof; (iii) Internet domain names; (iv)
    copyrights and mask work, database and design rights, whether or not registered or published, all registrations and recordations
    thereof and all applications in connection therewith, along with all reversions, extensions and renewals thereof; (iv) trade
    secrets and other proprietary Confidential Information; (v) Inventions, and (vi) contracts granting any right relating to
    or under the foregoing.

 

	1.22	“Invention”
    shall mean all tangible or intangible ideas, know-how, knowledge, concepts, analyses, evaluations, developments, designs,
    Improvements, formulae, software, processes, inventions, discoveries, methods, compositions, techniques, designs or manufacturing
    specifications, and procedures, whether or not patentable.

 

	1.23	“Joint
    Inventions” shall mean all Inventions conceived, reduced to practice, invented, discovered, developed, created
    or authored during the Term of this Agreement, jointly by some combination of an employee, contractor or agent of E-C or an
    Affiliate of E-C on the one hand, and an employee, contractor or agent of D-R or an Affiliate of D-R on the other hand, and
    all rights in any of the foregoing; provided, however, that Joint Inventions shall not include Fundamental Process
    Technology Developments or Gas Turbine Technology Developments.

 

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TREATMENT REQUESTED  

  

	1.24	“KG2-3GEF/GO”
    shall mean a packaged solution where the Gradual Oxidizer and D-R Target Gas Turbine are combined into a single fully integrated
    system (i) to be offered to Customers or End Users or (ii) that D-R has agreed to provide or deliver to Customers or End-Users
    pursuant to the terms of this Agreement and consisting of E-C Products and D-R Products.

 

	1.25	“Milestone”
    shall mean a point in time, during the Initial System Project, signifying (i) a critical-path event that receives special
    attention, (ii) the completion of one or more Deliverables, or (iii) an important decision or derivation of a critical piece
    of information which affects the future of the Initial System Project; each as set forth in the Initial System Project Plan.

 

	1.26	“Patent”
    shall mean any United States or foreign patent application, provisional patent application, and any patent issuing there from
    anywhere in the world (including by way of example and not limitation, patents of importation, patents of confirmation, patents
    of improvement, patents and certificates of addition and utility model patents, together with any extension, registration,
    confirmation, reissue, continuation, division, continuations-in-part, reexamination or other post-issuance certificate, certificate
    of invention and application for certificate of invention, revalidation, renewal, substitution, supplementary protection certificate,
    or any addition or term restoration thereof, utility models, and industrial designs. The term “Patent”
    does not include copyrights or trademarks.

 

	1.27	“Perpetuity
    Threshold” shall mean * KG2-3GEF/GO units.

 

	1.28	“Perpetuity
    Window” shall mean any three consecutive calendar years after the four-year anniversary of the end of the Initial
    Exclusive License Term.

 

	1.29	“Person”
    means any individual, corporation, limited liability company, partnership, firm, joint venture, association, joint-stock company,
    trust, unincorporated organization, Governmental Body or other entity.

  

	1.30	“Sales
    Price” means the price paid by D-R for E-C’s scope of supply for each KG2-3GEF/GO ordered, except the
    Initial System, as evidenced by a valid Customer Purchase Order during an Exclusive License Term.

 

	1.31	“Specifications”
    means, as the context requires, the performance specifications for the Gradual Oxidizer set forth on Annex B or
    the performance guarantees set forth for the KG2-3GEF/GO in any Customer purchase order.

 

	1.32	“Technical
    Acceptance Criteria” means, the criteria for acceptance of the Gradual Oxidizer for the KG2-3GEF/GO set forth
    on Annex F.

 

	1.33	“Threshold”
    means either a Perpetuity Threshold or an Extension Threshold, as the context requires.

 

	1.34	“Underperforming
    Perpetuity Window” shall mean a Perpetuity Window, prior to the date of any Election Notice pursuant to Section
    6.10.2, during which the Actual Units Credited (calculated based on Actual Units and Applied Carried Forwards for the
    full three-year Perpetuity Window in lieu of the last twelve months of the Exclusive License Term) is less than the Perpetuity
    Threshold.

 

	1.35	“Variable
    Overhead” means any item tied to production levels, such as indirect labor, utilities, maintenance, etc.

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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	1.36	“Warranty
    Funding Date” shall mean the date that E-C has provided evidence to D-R reasonably satisfactory to D-R that
    E-C has sufficient funding to meet its warranty obligations in full for the Initial System until such warranty obligations
    expire by their terms.

 

	1.37	“Work
    Product” shall mean any drawing, designs, specifications, results or output of investigations, including, without
    limitation, any designs, models, drawings, prints, samples, transparencies, specifications, reports, documents, spreadsheets,
    manuscripts, working notes, documentation, manuals, photographs, negatives, tapes, discs, software or any other similar items,
    or any modifications thereto, which are prepared by a Party under this Agreement.

 

	1.38	Other
    Definitions. Other defined terms in this Agreement are set forth in the following sections of this Agreement:

 

	Term	 	Section	 	 	Term	 	Section	 
	AAA Rules	 	 	18.15.2	 	 	Exclusive
    License	 	 	6.1	 
	Acceptance Date	 	 	4.4	 	 	Exclusive License
    Term	 	 	6.1.3	 
	Action	 	 	7.4.1	 	 	Extended Exclusive
    License Term	 	 	6.1.2	 
	Actual Units	 	 	6.1.2	 	 	Extension Fee	 	 	6.1.3	 
	Actual Units Commissioned	 	 	6.1.4	 	 	Extension Threshold	 	 	6.1.2	 
	Actual Units Credited	 	 	6.1.3	 	 	FPTD License	 	 	6.3	 
	Agreement	 	 	Introductory
                                         Paragraph 	 	 	FSAT	 	 	4.1.2	 
	Applied Carry Forwards	 	 	6.1.2	 	 	Fundamental Process
    Security	 	 	3.2.2	 
	Application Engineering
    Resources	 	 	2.2.3	 	 	Indemnifiable Claim	 	 	12.1	 
	Arbitration	 	 	18.15.2	 	 	Indemnified Party	 	 	12.1	 
	Average SVM	 	 	6.1.4	 	 	Indemnifying Party	 	 	12.1	 
	Carry Forwards	 	 	6.1.2	 	 	Initial Exclusive
    License Term	 	 	6.1.1	 
	Claim Notice	 	 	12.1	 	 	Installment Payment	 	 	5.1.3.2	 
	Code	 	 	18.13	 	 	Leased KG2-3GEF	 	 	5.1.1.3	 
	Completed Test	 	 	4.4	 	 	License	 	 	6.1	 
	Confidential Information	 	 	15.1	 	 	Non-Exclusive License	 	 	6.1.3	 
	Core Binding Conditions	 	 	3.3.1	 	 	Paid Units	 	 	6.1.3	 
	Core Binding Date	 	 	3.3.2	 	 	Participating Party	 	 	7.4.2	 
	Costs	 	 	3.1.1	 	 	Party	 	 	Introductory
                                         Paragraph	 
	Cure Period	 	 	3.2.1	 	 	Per Unit Amount	 	 	6.1.3	 
	Customer Acceptance	 	 	6.1.1	 	 	Paid-In-Full Quarter	 	 	5.1.3.2	 
	Damages	 	 	11.1	 	 	Performance Security	 	 	3.1.2	 
	Deliverable Customer	 	 	4.2	 	 	Perpetuity Buyout
    Option	 	 	6.10.1.2	 
	Deliverable Owner	 	 	4.2	 	 	Perpetuity Buyout
    Price	 	 	6.10.1.2	 
	Development Resources	 	 	2.2.2	 	 	Plan B	 	 	3.1.1	 
	Development Supplies	 	 	2.2.4	 	 	Prepaid License Fee	 	 	5.1.1.1	 
	Development Supplies
    Commitment	 	 	5.1.2.1.1	 	 	Purchase Price	 	 	6.10.1	 
	Development Supplies
    Overage	 	 	5.1.2.3.2	 	 	Quote	 	 	9.1	 
	Development Supplies
    Savings	 	 	5.1.2.2	 	 	Receiving Party	 	 	15.1	 
	Disclosing Party	 	 	15.1	 	 	Recovery	 	 	7.4.1	 
	Down Payment	 	 	5.1.3.1	 	 	Requisition Engineering
    Commitment	 	 	5.1.2.1.3	 
	D-R	 	 	Introductory
                                         Paragraph	 	 	Requisition Engineering
    Advance Payment	 	 	5.1.3.4	 
	D-R Backstop Security	 	 	3.1.2	 	 	Requisition Engineering
    Payment	 	 	5.1.3.5	 
	D-R Indemnitees	 	 	3.1.1	 	 	Residual Binding
    Condition	 	 	3.3.3	 
	D-R Perpetual Manufacturing
    License	 	 	9.5	 	 	Residual Binding
    Date	 	 	3.3.4	 
	D-R Purchase Order	 	 	9.1	 	 	Residual Binding
    Notice	 	 	3.3.4	 

  

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	Term	 	Section	 	 	Term	 	Section	 
	E-C	 	 	Introductory
                                         Paragraph	 	 	Residual Binding Quarter	 	 	3.3.4	 
	E-C Company Budget	 	 	3.3.1.3	 	 	Review Period	 	 	4.2	 
	E-C Indemnitees	 	 	11.1	 	 	Savings Reimbursement Payment	 	 	5.1.3.6	 
	E-C OCTS	 	 	2.2.10	 	 	Shipment Delay	 	 	6.1.1	 
	E-C Perpetual Manufacturing License	 	 	9.6	 	 	Shotgun Purchase Offer	 	 	6.10.1	 
	E-C Resource Commitment	 	 	5.1.2.1.2	 	 	Shotgun Purchase Offer Response	 	 	6.10.2	 
	E-C Resource Overage	 	 	5.1.2.3.1	 	 	Shotgun Purchase Option	 	 	6.10.1	 
	Effective Date	 	 	Introductory
                                         Paragraph	 	 	SSAT	 	 	4.1.1	 
	Election Notice	 	 	6.10.2	 	 	Tax	 	 	5.2.1	 
	Enjoined Technology	 	 	11.3	 	 	Total Units Credited	 	 	6.1.3	 
	Expanded License	 	 	6.2	 	 	Transfer	 	 	18.16	 
	 	 	 	 	 	 	Unused Carry Forwards	 	 	6.1.2	 

 

	2.	PARTIES’
    OBLIGATIONS. Subject to the conditions set forth in Section 3.4 and Section 5.1, each of the Parties
    agrees as follows:

  

	2.1	Initial
    System Project Activities. The Parties have entered into this Agreement to jointly and collaboratively develop and commercialize
    the KG2-3GEF/GO as set forth in this Agreement.

 

	 	2.1.1	The Parties shall
    work together to develop the Initial System in accordance with the Initial System Project Plan.

 

	 	2.1.2	Each
    Party shall use commercially reasonable efforts to:

 

	 	 	2.1.2.1	perform
    its responsibilities in accordance with this Agreement and the Initial System Project Plan and perform all Initial System
    Project Plan requirements, including by meeting all Initial System Project Plan timelines, Deliverables and Milestones;

 

	 	 	2.1.2.2	cooperate
    with and provide reasonable support to the other Party in connection with the other Party’s performance of its obligations
    under this Agreement including the Initial System Project Plan.

 

	 	 	2.1.2.3	develop
    marketing collateral and support material (including a compelling economic value proposition) for the KG2-3GEF/GO;

 

	 	 	2.1.2.4	establish a Joint
    Oversight Team as listed in Annex D; and

 

	 	 	2.1.2.5	through
    the Joint Oversight Team, cooperate in development of the KG2-3GEF/GO product according to the Specifications and the definition
    of roles and responsibilities and development schedule set forth in the Initial System Project Plan. Either or both of the
    Specification and the Initial System Project Plan may be amended, by mutual agreement of the Parties, to account for and accommodate
    alterations to the design of the KG2-3GEF/GO, and the Parties agree to cooperate in the implementation of such mutually acceptable
    changes to the Initial System Project.

 

	2.2	E-C Specific
    Obligations. E-C hereby agrees to do the following:

 

	 	2.2.1	Develop
    a Gradual Oxidizer for KG2-3GEF/GO.

 

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	 	2.2.2	Provide
    up to 15,000 labor hours of non-billable engineering, project management, and technical support (such support, collectively,
    “Development Resources”) for the Initial System Project.

 

	 	2.2.3	Contract
    D-R for up to 3,000 hours of non-recurring, application engineering and project management resources to design D-R controls
    to be specific to the KG2-3GEF/GO unit (“Application Engineering Resources”), at a fixed-fee cost
    to E-C of $500,000.

 

	 	2.2.4	Spend
    up to $2,200,000 on parts, components, and materials required to prepare and conduct the SSAT and FSAT for the Initial System Project
    (“Development Supplies”), *.

 

	 	2.2.5	Maintain
    during the Initial System Project, and provide to D-R by the 30th day of each quarter commencing with the calendar quarter
    beginning January 1, 2015, until and through the Paid-In-Full Quarter, pursuant to Section 5.1.3, detailed (i) project
    cost accounting, through the end of the prior quarter, of all Development Supplies purchased and Development Resources hours*worked,
    if any, and (ii) updated outlook, by quarter, of the remaining estimated Development Supplies costs and Development Resources
    hours required to achieve a Completed Test, pursuant to Section 4.4 and the Initial System Project Plan.

 

	 	2.2.6	Maintain
    during the period commencing with the calendar quarter beginning January 1, 2015 through the later of (a) the twenty-fourth
    month following the Core Binding Date and (b) the Warranty Funding Date, and provide to D-R by the 30th day of each quarter
    therein, a reconciliation of E-C’s actual and forecasted (i) quarterly cash inflows and expenditures and (ii) balance
    sheet account balances, pursuant to Section 3.4.2, with explanations as necessary to explain variances in actual or
    forecasted values. In addition to the foregoing reports, on February 10, 2015, March 10, 2015 and April 10, 2015, provide
    to D-R a reconciliation of E-C’s actual and forecasted (i) quarterly cash inflows and expenditures and (ii) balance
    sheet account balances, with explanations as necessary to explain variances in actual or forecasted values, updated to reflect
    results through the end of January 2015, February 2015 and March 2015, respectively. Participate in quarterly reviews of E-C
    Company Budget, pursuant to Section 3.3.1.3, with D-R, as well as monthly reviews of the E-C Company Budget for the
    first three months of 2015.

 

	 	2.2.7	Work
    with D-R to design the Initial System embodying the Gradual Oxidizer and the D-R Target Gas Turbine.

 

	 	2.2.8	Develop,
    with D-R support, the integrated controls for the KG2-3GEF/GO.

 

	 	2.2.9	Develop
    the spare parts list pertaining to the E-C scope of supply to allow D-R to offer service agreements for the KG2-3GEF/GO.

 

	 	2.2.10	Provide
    on-site commissioning and technical support for the startup of KG2-3GEF/GOs (“E-C OCTS”). For the
    first seven KG2-3GEF/GOs, D-R will endeavor to structure commercial contracts with Customers such that Customers pay for E-C
    OCTS; *.

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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	 	2.2.11	Train
D-R field support personnel on startup and commissioning of the Gradual Oxidizer.
	 	 	 
	 	2.2.12	 Work with D-R to develop and prioritize
    sales opportunities for the KG2-3GEF/GO.

 

	 	2.2.13	Supply
    a Gradual Oxidizer designed for the KG2-3GEF/GO that complies with the Specifications.

 

	 	2.2.14	Provide
    prompt engineering and field warranty support for the E-C Products included in each KG2-3GEF/GO on the terms stipulated in
    D-R’s contract with the Customer purchasing the KG2-3GEF/GO and in D-R’s corresponding purchase contract with
    E-C.

 

	 	2.2.15	Assume
    all warranty responsibilities and liabilities associated with E-C Products per contract between D-R and the Customer and in
    D-R’s corresponding purchase contract with E-C. Warranties shall be as set forth in D-R 100 Terms and Conditions and
    D-R 195 Terms of Purchase, unless otherwise agreed by D-R and E-C on individual commercial transactions.

 

	 	2.2.16	Develop
    a standard price list and delivery time listings for the E-C Products for D-R to use in Customer proposals. This will be subject
    to a quarterly or semi-annual review by the Parties and subject to mutual agreement.

 

	2.3	D-R
    Specific Obligations. D-R agrees to market and sell the KG2-3GEF/GO in accordance with Section 9. In addition,
    D-R agrees to do the following:

 

	 	2.3.1	Provide
    technical data, applications guidelines, and general arrangement drawings to E-C for the D-R Target Gas Turbine to support
    E-C’s design of the Initial System.

 

	 	2.3.2	Sell
    to E-C at a fixed-fee of $500,000 up to 3,000 hours of Application Engineering Resources in the package and system design
    of the Initial System.

 

	 	2.3.3	Provide
    E-C up to $1,600,000 in cash for the Prepaid License Fee, pursuant to Section 5.1.1, consisting of:

 

	 	2.3.3.1	The Down Payment
    of $400,000, pursuant to Section 5.1.3.1, and

 

	 	2.3.3.2	*
    additional Installment Payments totaling $1,200,000, pursuant to Section 5.1.3.2.

 

	 	2.3.4	Develop
    the controls strategy for the D-R developed D-R Target Gas Turbine control system.

 

	 	2.3.5	With support from
    E-C as expressly provided herein, commercialize the KG2-3GEF/GO.

 

	 	2.3.6	With
    support from E-C as expressly provided herein, develop and prioritize sales opportunities for the KG2-3GEF/GO.

 

	 	2.3.7	Define
    standard lead times for the D-R Target Gas Turbine to support high-priority commercial opportunities; provided, however, that
    D-R shall not be obligated to purchase any E-C Products from E-C with respect to any particular KG2-3GEF/GO until D-R has
    received a valid Customer purchase order for that KG2-3GEF/GO and has issued an official order acknowledgement with respect
    thereto and the other conditions precedent contained in Sections 3 and 9.1 have been met.

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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CONFIDENTIAL
TREATMENT REQUESTED  

 

	 	2.3.8	Assume
    the sales lead role with respect to each Customer. D-R may, at its sole discretion, allow qualified E-C distributors to support
    D-R’s commercial lead throughout the sales cycles for particular Customers. All such E-C distributors will be obligated
    to maintain strict adherence to D-R business policies, including D-R’s Code of Business Conduct attached hereto as Annex
    E.

 

	 	2.3.9	Take
    commercial lead in developing sales to Customers. Unless otherwise mutually agreed in writing by D-R and E-C, which agreement
    shall not be unreasonably withheld, delayed or conditioned, all sales of KG2-3GEF/GOs shall be made by D-R to the Customer
    pursuant to the D-R100 Terms and Conditions in the form attached hereto as Annex C.

 

	3.	PERFORMANCE
    GUARANTEES

 

	3.1	Performance
    Guarantees for Gradual Oxidizers to be included in KG2-3GEF/GOs. With respect to the initial * KG2-3GEF/GOs:

 

	 	3.1.1	E-C
    agrees to, at its own expense, protect, defend, hold harmless and indemnify D-R, its successors and assigns and their respective
    directors, officers, employees, agents, contractors, customers and Affiliates (collectively, the “D-R Indemnitees”)
    from and against any and all claims, proceedings and lawsuits brought by third parties for any and all losses, damages, liabilities,
    penalties, fines, forfeitures, attorneys’ fees, costs, and expenses of any kind and nature whatsoever, including (a)
    any performance or delivery liquidated damages or other damages which are incurred by the Customer or the End User, (b) any
    incremental costs incurred by D-R to develop and implement an alternative combustion system with appropriate emissions control
    technology (“Plan B”) to replace the E-C Products, and (c) any power shortfall claims for the period
    until either (i) the E-C Products can be corrected to comply with the Specifications or (ii) Plan B can be implemented to
    replace the E-C Products (collectively, “Costs”) arising out of (x) E-C’s failure to timely
    supply E-C Products or (y) E-C Products’ failure to meet the Specifications, which in either (x) or (y) results in a
    material breach by D-R of its obligations to the Customer under the sales contract, except to the extent that any such costs
    result from (p) the gross negligence or intentional misconduct of a D-R Indemnitee or Customer, or (q) a material breach by
    D-R of its obligations hereunder or material breach by a Customer of its obligations thereunder. E-C’s aggregate indemnification
    obligation under this Section 3.1 shall not exceed, for each KG2-3GEF/GO, the greater of D-R’s aggregate limit
    on its indemnification obligations specified in its contractual commitment with the Customer and any actual Costs directly
    imposed on D-R by a Government Body. E-C’s time to cure defaults in E-C Products and E-C’s maximum liability pursuant
    to this performance guarantee will be as set forth in the sales agreement between the Customer and D-R (which shall be subject
    to E-C’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed).

 

	 	3.1.2	*
    The Parties agree not to unreasonably withhold, delay or condition their consent to the proposed terms of such a customer
    commitment. The foregoing D-R Backstop Security requirement for:

 

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CONFIDENTIAL
TREATMENT REQUESTED  

 

	 	3.1.2.1	Any
    order associated with the initial * KG2-3GEF/GOs (i) shall cover the period from order acknowledgement through the end of
    the warranty period and (ii) may be waived in whole or in part by D-R in its sole discretion.

 

	 	3.1.2.2	The
    Initial System Project shall be in an amount equal to the total order value of the D-R Purchase Order for E-C Products applicable
    thereto.

 

	3.2	Performance Guarantees
    for Fundamental Process in the Initial System.

 

	 	3.2.1	If
    the Initial System fails to meet the Specifications in the timelines set forth in Annex A, D-R shall give E-C
    up to the lesser of (i) an additional 60 days and (ii) the additional number of days, if any, allowed by D-R’s contractual
    commitment to the Customer, to cure such non-performance (the “Cure Period”). If the Cure Period
    has expired and the Initial System performance has not been conformed to Specifications, D-R shall be entitled to terminate
    this Agreement and E-C shall promptly pay to D-R an amount in cash equal to D-R’s financial contribution to this Agreement
    to date.

 

	 	3.2.2	*
    The Fundamental Process Security shall be for a period of 24 months and shall be promptly terminated upon Completed Test pursuant
    to Section 4.4 below.

 

	 3.3	Binding Conditions.

 

	 	3.3.1	All
    of D-R’s actions, performance, covenants and obligations contained in this Agreement, including, without limitation,
    those obligations set forth in Section 2.3 and Section 5.1, will be conditioned on and subject to (the “Core
    Binding Conditions”):

 

	 	 	3.3.1.1	E-C obtaining the
    Fundamental Process Security pursuant to Section 3.2.2;

 

	 	 	3.3.1.2	E-C
    providing D-R with evidence reasonably satisfactory to D-R that all (a) previously existing liens on the E-C Intellectual
    Property have been released and (b) all Patents applicable to the Fundamental Process, Gradual Oxidizer, Target Gas Turbine
    and/or KG2-3GEF/GO purported to be owned by E-C are in fact owned by E-C and recorded at the appropriate Patent Office(s);

 

	 	 	3.3.1.3	E-C
    providing D-R with (i) evidence reasonably satisfactory to D-R that it has sufficient funding as of the Effective Date to
    fund its planned operations for a period of * and (ii) a budget consistent with discussions between the Parties and reasonably
    satisfactory to D-R, for the period starting with the month of the Core Binding Date, pursuant to Section 3.3.2, through
    the * outlining E-C’s planned (x) quarterly balance sheet account balances and (y) monthly inflows of cash and expenditures
    of cash (such budget the “E-C Company Budget”); and

 

	 	 	3.3.1.4	D-R
    provides a written acknowledgement of an initial binding Customer purchase order for a KG2-3GEF/GO. For the avoidance of doubt,
    D-R shall notbe obligated to enter into a contract with a Customer or End User for the Initial System unless E-C has previously
    satisfied the conditions pursuant to Sections 3.3.1.1, 3.3.1.2, and 3.3.1.3.

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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	 	3.3.2	Core
    Binding Notice. Within two business days of all of the Core Binding Conditions set forth above having been implemented to
    D-R’s reasonable satisfaction, D-R shall provide E-C with written confirmation that such conditions have been satisfied
    and that D-R’s obligations of this Agreement, except for those contained in Sections 2.3.3.2 and Section 5.1.3.2,
    have become binding (the date of delivery of such notice the “Core Binding Date”).

 

	 	3.3.3	Residual
    Binding Condition for Prepaid License Fee. Notwithstanding the foregoing, D-R’s actions, performance, covenants
    and obligations in Section 2.3.3.2 and Section 5.1.3.2 of this Agreement will be further conditioned on and
    subject to E-C obtaining the D-R Backstop Security within 45 days of the Core Binding Date, but no earlier than January 1,
    2015 (the “Residual Binding Condition”).

 

	 	3.3.4	Residual
    Binding Notice. Within two business days of the Residual Binding Condition having been implemented to D-R’s reasonable
    satisfaction, D-R shall provide E-C with written confirmation that such condition has been satisfied and that all of D-R’s
    obligations in Section 2.3.3.2 and Section 5.1.3.2 have become binding (such notice the “Residual
    Binding Notice”, the date of delivery of such notice the “Residual Binding Date”,
    and the calendar quarter of such date the “Residual Binding Quarter”).

 

	3.4	E-C
    Company Financial Viability through Initial System Project. For avoidance of doubt, D-R has no intention of providing
    funding in any form or at any time to E-C, whether it be for equity, debt, or any other type of advance, beyond the Prepaid
    License Fee, pursuant to Section 5.1, and D-R Purchase Orders, pursuant to Sections 9.1 through 9.4.

  

	 	3.4.1	Company
    Funding. Notwithstanding anything else in this Agreement, if * E-C fails to raise additional capital in such amounts as
    are necessary, when included with cash on-hand on the Core Binding Date, to fund its planned operations for a period ending
    on the later of (a) the twenty-fourth month following the Core Binding Date and (b) the Warranty Funding Date, in accordance
    with the E-C Company Budget provided pursuant to Section 3.3.1.3 herein, and such failure is not cured within 45-days of occurrence,
    D-R shall be entitled, by delivering written notice to E-C, to terminate this Agreement.

 

	 	3.4.2	Company
    Budget Discipline. For the period starting with the month of the Core Binding Date through the later of (a) the twenty-fourth
    month following the Core Binding Date and (b) the Warranty Funding Date, E-C shall adhere to the E-C Company Budget. E-C shall
    provide to D-R, on a quarterly basis, a reconciliation of E-C’s actual (x) balance sheet account balances and (y) receipts
    and expenditures, pursuant to Section 3.3.1.3, to those contained in the E-C Company Budget. Any material increase
    in expenditures above and beyond those set forth in the E-C Company Budget shall be a violation of this Agreement, and D-R
    shall be entitled, by delivering written notice to E-C, to terminate this Agreement, unless such expenditures have been consented
    to in writing by D-R, or E-C has obtained additional funding sufficient to fund such additional expenditures.

 

	3.5	Delays in Initial
    System Project.

 

	 	3.5.1	The
    Parties shall monitor the Initial System Project Plan and any changes thereto, and each Party agrees to notify the other Party
    by written correspondence to the designated project leaders of each Party within five business days of that Party’s
    knowledge of any factor, occurrence, or event coming to its attention that may affect its ability to meet the requirements
    of the Initial System Project Plan or that is likely to cause any material delay in achieving any of the Milestones.

  

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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TREATMENT REQUESTED  

 

	 	3.5.2	In
    the event such delay results in the achievement of any of the Milestones to be delayed by more than 15 days, the delayed Party
    agrees to immediately schedule a Project Plan review meeting during which the Parties shall address the problem(s) that have
    caused such delays and the procedures to be followed by the delayed Party to resolve such problems.

 

	 	3.5.3	In
    the event that delays by either Party, or their respective Affiliates or contractors, (i) cause one or more Milestones to
    be delayed by more than 30 days and (ii) constitute a material and incurable breach of D-R’s Customer contractual commitment,
    such delay shall constitute a material breach of this Agreement.

 

	3.6	Third-Party
    Contractors. In the event that either Party employs the services of third-party contractors for performance of any task(s)
    assigned to that Party, that Party shall, before such third party or third-party personnel are provided any information regarding
    the KG2-3GEF/GO or any components or portions thereof: (i) notify the other Party of the third party’s involvement;
    and (ii) require that such third party and all third-party personnel involved in performance of the task(s) execute non-disclosure
    agreements containing confidentiality obligations at least as restrictive as those contained herein and invention disclosure
    and assignment agreements consistent with the obligations of the Parties hereunder.

  

	4.	PROCEDURES
    FOR ACCEPTANCE TESTING OF THE INITIAL SYSTEM

 

	4.1	Acceptance
    Testing. Immediately upon delivery of each Deliverable, or any upgrades or updates thereto:

  

	 	4.1.1	E-C
    shall perform sub-scale testing (the Sub-Scale Acceptance Test, or “SSAT”) and, if D-R accepts all
    SSAT Deliverables pursuant to Sections 4.2 and 4.3, then

 

	 	4.1.2	The
    Parties shall commence joint full-scale testing (the Full-Scale Acceptance Test, or “FSAT”). After
    such FSAT, the Parties shall make a joint protocol describing details of testing and determining whether the Initial System
    has met Technical Acceptance Criteria set forth in Annex F and Specifications set forth in Annex B.

 

	4.2	Test
    Reviews. Each Party shall have (i) 30 days following delivery of the SSAT Deliverables and (ii) 30 days following delivery
    of the FSAT Deliverables to conduct reviews (each such 30-day period a “Review Period”) to determine
    whether the Technical Acceptance Criteria and Specifications for the Initial System have been met. If the Party designated
    as the customer of any Deliverable (the “Deliverable-Customer” as set forth in the table in Annex
    A) does not, within 10 business days following the termination of the Review Period, provide written notice to the Party responsible
    for developing or preparing the Deliverable (the “Deliverable-Owner”) of its rejection of such Deliverable
    specifying the reason why the Deliverable was not accepted, such Deliverable shall be deemed to have been accepted by the
    Deliverable-Customer for purposes of this Agreement.

 

	4.3	Rejections
    and Remedies. If a Deliverable-Customer rejects an SSAT or FSAT Deliverable, the Deliverable-Owner shall have 10 business
    days from the date of receipt of written notice of rejection, unless otherwise provided for in a Customer contractual commitment,
    to commence a cure of all material non-conformances described in the written notice of rejection and to deliver to the Deliverable-Customer
    a plan for the prompt delivery of a revised Deliverable. If rejection of, or failure to deliver, an SSAT or FSAT Deliverable
    results in a breach of a Customer contractual commitment, the Deliverable-Customer may declare such Deliverable rejected and
    terminate this Agreement. Upon receipt by the Deliverable-Customer of a revised Deliverable delivered in accordance with this
    Section 4.3, the provisions of Section 4.2 and this Section 4.3 shall again apply, the new Review Period
    running from the date of delivery of the revised version of the Deliverable. If the revised Deliverable is again rejected
    by the Deliverable-Customer or fails to meet Customer contractual commitments, such Party may declare the Deliverable rejected
    and terminate this Agreement. For avoidance of doubt, for the Initial System Project, D-R shall have the right in its sole
    discretion to make the decision to replace the E-C Products with Plan B.

 

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TREATMENT REQUESTED  

 

	4.4	Completion.
    Once both Parties have accepted all FSAT Deliverables, the Initial System testing will be deemed completed (such outcome a
    “Completed Test”, and the date of a Completed Test the “Acceptance Date”),
    and E-C may elect to terminate the Fundamental Process Performance Security.

 

	4.5	Acceptance
    Testing Costs. E-C shall cover and be responsible for all costs associated with SSATs and FSATs conducted pursuant to
    Sections 4.1, 4.2 and 4.3, including any additional instrumentation required to verify that the Gradual
    Oxidizer meets Technical Acceptance Criteria and Specifications, and costs related to the Leased KG2-3GEF pursuant to Section
    5.1.

 

	5.	LICENSE
    AND INITIAL SYSTEM PROJECT COSTS; TAXES

 

	5.1	License
    and Initial System Project Costs. The total financial contribution required for E-C to develop and achieve a Completed
    Test of the Initial System is estimated to be $4.2 million. Of this amount, it is estimated that $ * will
    be required to purchase Development Supplies and the remainder will be in the form of Development Resources to be provided
    by E-C and Application Engineering Resources to be purchased from D-R by E-C. Amounts described in Sections 2.2 and
    2.3 are a subpart of the obligations in this Section 5 and not additive to the financial obligations described
    below.

 

	 	5.1.1	Contributions
    by D-R.

 

	 	 	5.1.1.1	Prepaid
    License Fee. In accordance with the requirements of Sections 5.1.3.1 and 5.1.3.2, D-R shall pay up to $1.6
    million in cash to E-C which, upon achievement of a Completed Test, will constitute a pre-payment for the Initial Exclusive
    License Term (the “Prepaid License Fee”) under Section 6.1.1.

 

	 	 	5.1.1.2	Application
    Engineering Resources. D-R shall provide up to 3,000 hours of Application Engineering Resources at a flat fee to E-C of
    $500,000.

 

	 	 	5.1.1.3	Product
    Use Contribution by D-R. D-R shall offer to lease to E-C one (1) D-R Target Gas Turbine (“Leased KG2-3GEF”),
    on a preferential commercial basis, for which E-C will be responsible for all costs of use, including but not limited to:
    modification and preparation; shipping to a site specified by E-C; packaging modification required to support E-C testing;
    shipping to and installing at test site(s); conduct of testing; demobilization of packaging modifications; shipping back to
    D-R Kongsberg; repair and refurbishment to its original condition; and any other out-of-pocket and labor-related expenses
    the Parties might incur in support of executing the associated lease agreement. The Leased KG2-3GEF shall be utilized by E-C
    in accordance with the Initial System Project Plan. The Parties shall negotiate a separate agreement for such Leased KG2-3GEF.

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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	 	5.1.2	Contributions
    by E-C.

 

	 		5.1.2.1	Financial
    Contributions by E-C. Subject to Sections 3.3 and 5.1.2.3, E-C’s total financial commitment for Development
    Supplies, Development Resources and Application Engineering Resources applicable to the Initial System will amount to $4.2
    million, comprised of:

 

	 	 	 	5.1.2.1.1	$   *   in
    spend on Development Supplies (such amount the “Development Supplies Commitment”), paid for with
    up to $   *   ; 

 

	 	 	 	5.1.2.1.2	$   *   in
    the form of Development Resources, consisting of 15,000 hours at an average cost of $   *   (such
    15,000 hours the “E-C Resource Commitment”); and

 

	 	 	 	5.1.2.1.3	$500,000
    flat fee, in cash, to be paid to D-R for Application Engineering Resource hours (such amount the “Requisition
    Engineering Commitment”) provided pursuant to Section 5.1.1.2.

 

	 	 	5.1.2.2	Cost
    Savings in the Initial System Project. In the event the actual total cost of Development Supplies utilized to achieve
    a Completed Test is less than the Development Supplies Commitment (such difference “Development Supplies Savings”),
    then as appropriate either (i) the Prepaid License Fee shall be reduced by an amount equal to one-half of the Development
    Supplies Savings or (ii) if D-R has previously paid the Prepaid License Fee in full, E-C shall pay to D-R a cash amount equal
    to one-half of the Development Supplies Savings.

 

	 	 	5.1.2.3	Cost
    Overruns in the Initial System Project.

 

	 	 	 	5.1.2.3.1	E-C
    shall be solely responsible for and shall pay for any (i) Development Supplies costs over and above the Development Supplies
    Commitment (such cost overrun the “Development Supplies Overage”) and (ii) Development Resources
    hours over and above E-C Resource Commitment (such hours overrun the “E-C Resource Overage”);

 

	 	 	 	5.1.2.3.2	Notwithstanding
    Section 5.1.2.3.1, E-C shall not be responsible for any E-C Resource Overage or Development Supplies Overage that are
    (i) solely attributable to D-R Products failing to perform according to Specifications or (ii) the result of delays in the
    scheduled delivery of D-R Deliverables.

 

	 	5.1.3	License
    and Initial System Project Costs Funding Schedule.

 

	 	 	5.1.3.1	Within
    five business days following the Core Binding Date, D-R shall pay to E-C $400,000, in cash, towards the Prepaid License Fee
    (the “Down Payment”).

 

	 	 	5.1.3.2
    	During
    each of the * immediately following the Residual Binding Quarter, * shall pay to E-C $*, in cash, towards the Prepaid
    License Payment (each such payment an “Installment Payment”, and the quarter of the final Installment
    Payment the “Paid-In-Full Quarter”).

  

	 	 	5.1.3.3	Notwithstanding
    the foregoing, if D-R delays the Down Payment or any scheduled Installment Payment for more than ten business days past the
    date it is payable under Sections 5.1.3.1 or 5.1.3.2 respectively, E-C shall be entitled to terminate this Agreement
    following notification to D-R and then a cure period of five additional business days following D-R’s receipt of such
    notification, and D-R shall promptly pay to E-C an amount in cash equal to E-C’s financial contribution (both in cash
    and labor) to this Agreement to the date of such default.

 

* Portions of
this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

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TREATMENT REQUESTED  

 

	 	 	5.1.3.4	Within
    five business days following the Core Binding Date, E-C shall pay to DR $125,000, in cash, towards the Requisition Engineering
    Commitment (the “Requisition Engineering Advance Payment”).

 

	 	 	5.1.3.5	Within
    the first five business days of the each of the three quarters immediately following the Residual Binding Quarter, E-C shall
    pay to D-R $125,000, in cash, towards the Requisition Engineering Commitment (each such payment an “Requisition
    Engineering Payment”).

 

	 	 	5.1.3.6	Within
    30 days following the later of (i) an Acceptance Date, if any, and (ii) end of the Paid-In-Full Quarter, E-C shall pay to
    D-R an amount in cash equal to one-half of the Development Supplies Savings, if any (such payment the “Savings
    Reimbursement Payment”).

 

	 	 	5.1.3.7	Notwithstanding
    the foregoing, if E-C delays any scheduled Requisition Engineering Advance Payment, Requisition Engineering Payment, or Savings
    Reimbursement Payment for more than ten business days past the date it is payable under Sections 5.1.3.4, 5.1.3.5
    or 5.1.3.6 respectively, D-R shall be entitled to net such outstanding amounts against future (x) Installment Payments,
    pursuant to Section 5.1.3.2, and (y) funding for any D-R Purchase Order, pursuant to Section 9.2, following
    a cure period of five additional business days.

 

	5.2	Taxes.

 

	 	5.2.1	“Tax”
    or “Taxes” shall mean all taxes, charges, duties, fees, levies or other assessments, including income,
    excise, property, sales, consumption, use, value added, profits, license, withholding (with respect to compensation or otherwise),
    payroll, employment, net worth, capital gains, transfer, stamp, social security, environmental, occupation and franchise taxes,
    imposed by any Governmental Body, and including any interest, penalties and additions attributable thereto, and all amounts
    payable pursuant to an agreement or arrangement with respect to taxes.

 

	 	5.2.2	As
    between the Parties, D-R shall be responsible for the collection, remittance and payment of any or all Taxes of any kind imposed
    by any governmental authority in respect of the purchase, importation, sale, lease or other distribution of the KG2-3GEF/GO.

 

	 	5.2.3	As
    between the Parties, D-R shall be responsible for obtaining any necessary import licenses or permits necessary for the entry
    of the KG2-3GEF/GO into each country, or its delivery to D-R, and D-R shall be responsible for any and all customs duties,
    clearance charges, taxes, brokers’ fees and other amounts payable in connection with the exportation, importation and
    delivery of KG2-3GEF/GO to or by D-R.

 

	 	5.2.4	The
    Parties agree to cooperate and produce on a timely basis any Tax forms or reports reasonably requested by the other Party
    in connection with any payment made under this Agreement. Each Party further agrees to provide reasonable cooperation to the
    other Party, at the other Party’s expense, in connection with any official or unofficial Tax audit or contest relating
    to payments made by the other Party under this Agreement.

 

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	 	5.2.5	Any
    payments made by a Party pursuant to this Agreement shall not be reduced on account of any Taxes unless required by applicable
    law. E-C shall be responsible for paying any and all Taxes (other than withholding taxes required to be paid by D-R under
    applicable law) levied on account of, or measured in whole or in part by reference to, any payments it receives hereunder.
    D-R shall deduct or withhold from any such payments to E-C any Taxes that D-R is required to deduct or withhold under applicable
    law. Notwithstanding the foregoing, if E-C is entitled under any applicable Tax treaty to a reduction in the rate of, or the
    elimination of, applicable withholding Tax, it may deliver to D-R or the appropriate governmental authority (with the assistance
    of D-R to the extent that such assistance is reasonably required and is requested in writing) the prescribed forms necessary
    to reduce the applicable rate of withholding or to relieve D-R of its obligation to withhold Tax, and D-R shall apply the
    reduced rate of withholding, or dispense with withholding, as the case may be, provided that D-R has received evidence, in
    a form reasonably satisfactory to D-R, of E-C’s delivery of all applicable forms (and, if necessary, its receipt of
    appropriate governmental authorization) at least 10 days prior to the time that the payments are due. If, in accordance with
    the foregoing, D-R withholds any amount, it shall (i) timely remit to E-C the balance of such payment; (ii) timely remit the
    full amount withheld to the proper governmental authority; and (iii) send to E-C written proof of remittance of the full amount
    withheld within 30 days following remittance.

 

	6.	GRANT OF LICENSES

 

	6.1	Grant
    to D-R of License. Subject to the terms and conditions of this Agreement, including timely payment in full of the Prepaid
    License Fee, E-C hereby grants D-R a worldwide right to market and commercialize the E-C Products to commercialize the Fundamental
    Process and Fundamental Process Technology Developments for gas turbine generators in the range of 1 to 4 MW per unit (the
    “License”). The License shall initially be an exclusive license (the “Exclusive License”)
    and, for the avoidance of doubt, such exclusive license is exclusive of all others, including E-C, except in connection with
    E-C’s performance of its obligations contemplated by this Agreement. The term and payment obligations applicable to
    the Exclusive License are set forth below:

 

	 	6.1.1	In
    exchange for the payment of the Prepaid License Fee, the Exclusive License shall remain in effect for an initial term commencing
    upon the Core Binding Date and ending on the date that is (i) four years after the Core Binding Date, with such date to be
    extended by (ii) an additional number of days equal to the sum of (x) the number of days of delay, if any, in achieving the
    Ship to Customer Site Milestone designated for Week 62 in the Initial System Project Plan set forth in Annex A (such number
    of days the “Shipment Delay”), plus (y) the number of days of delay, if any, in achieving the Final
    Completion milestone specified in D-R’s contractual commitment to the Customer for the Initial System at the time of
    the Core Binding Date (such milestone “Customer Acceptance”) that exceeds the Shipment Delay, plus
    (z) the number of days of delay, if any, during the period from Customer Acceptance to the expiration of the warranty period
    specified in D-R’s contract with the Customer for the Initial System, that the Initial System is out of operation because
    of a failure of the Gradual Oxidizer to perform according the specifications in D-R’s contract with the Customer (the
    “Initial Exclusive License Term”).

 

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	 	6.1.2	After
    the Initial Exclusive License Term, the Exclusive License shall automatically remain in effect for an additional 12-month
    period (an “Extended Exclusive License Term”) if, during the Initial Exclusive License Term, D-R
    has formally acknowledged the receipt of binding purchase orders for at * KG2-3GEF/GOs (with * KG2-3GEF/GOs being the “Extension
    Threshold”). KG2-3GEF/GOs for which D-R has formally acknowledged to Customers the receipt of such purchase
    orders are referred to herein as “Actual Units”. At the end of each Extended Exclusive License Term,
    the Exclusive License shall automatically remain in effect for an additional 12-month period if, during the last 12 months
    immediately prior to the end of the Extended Exclusive License Term just ended, Actual Units equaled or exceeded the Extension
    Threshold. If during the Initial Exclusive License Term or during any Extended Exclusive License Term, D-R has exceeded the
    applicable Threshold, then each additional unit above the applicable Threshold (the “Carry Forwards”)
    will be treated as having being formally acknowledged during the next Exclusive License Term for purposes of calculating whether
    the Threshold has been met for that subsequent Exclusive License Term or Perpetuity Window. These Carry Forwards shall continue
    for each Extended Exclusive License Term and Perpetuity Window such that if Carry Forwards cause the Threshold to be exceeded
    during any subsequent Exclusive License Term or Perpetuity Window (the “Unused Carry Forwards”),
    such Unused Carry Forwards shall continue to be carried forward to subsequent Exclusive License Terms and Perpetuity Windows
    until all Carry Forwards and Unused Carry Forwards have been utilized (collectively, “Applied Carry Forwards”).

 

	 	6.1.3	If
    the Initial Exclusive License Term or any Extended Exclusive License Term (each, an “Exclusive License Term”)
    does not automatically extend because the Threshold has not been achieved, D-R will have the right, exercisable by delivery
    of written notice to E-C prior to the date on which such Exclusive License Term would otherwise expire, to an additional Extended
    Exclusive License Term if D-R pays E-C an amount equal to the Extension Fee. The “Extension Fee”
    shall be equal to (i) the Extension Threshold less (ii) the sum of Actual Units for the last twelve months of the Exclusive
    License Term then ending and Applied Carry Forwards (such sum “Actual Units Credited”), multiplied
    by the Per Unit Amount (with (i) less (ii) being the number of “Paid Units”, and the sum of Paid
    Units and Actual Units Credited being the “Total Units Credited”). The “Per Unit Amount”
    shall be equal to *. The Extension Fee shall be payable within 30 days after the prior Extended Exclusive License Term has
    ended. If D-R fails to provide such notice to E-C within the time specified the License shall, at the end of the Exclusive
    License Term then ended, become a nonexclusive license (the “Non-Exclusive License”). Notwithstanding
    anything in this Section 6.1.3 to the contrary, if prior to the fourth anniversary of the end of the Initial Exclusive
    License Term, D-R accumulates an aggregate of * Total Units Credited, then the Exclusive License shall thereafter remain in
    effect in perpetuity regardless of the number of KG2-3GEF/GOs sold thereafter and without any further payments by D-R under
    this Section 6.1.3, with the exception of payments due by virtue of the exercise of the Shotgun Purchase Option set
    forth in Section 6.10.

 

*
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Securities and Exchange Commission.

 

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	 	6.1.4	During
    the term of this Agreement, E-C shall keep accurate records of the costs incurred, including standard overhead charges applied,
    in delivering E-C Products for each KG2-3GEF/GO produced and sold under this Agreement, in such amounts as are reflected on
    its financial statements. If it appears to either Party during any Exclusive License Term that the Extension Threshold will
    not be met, such Party shall immediately notify the other Party. In such event the Parties shall, no later than 45 days prior
    to the end of that Exclusive License Term, meet to exchange information regarding E-C Product costs incurred with respect
    to each Actual Unit fully commissioned by D-R and accepted by the Customer (“Actual Units Commissioned”)
    during the Exclusive License Term. The “Average SVM” for an Exclusive License Term or any Perpetuity
    Window shall be equal to (x) the difference of the (i) sum of all Sales Prices less (ii) sums of E-C’s direct material
    costs, direct labor costs, engineering/drafting costs, Variable Overhead expenses, warranty expenses, commission expenses
    and freight/duties expenses corresponding to respective Actual Units Commissioned, divided by (y) the number of Actual Units
    Commissioned, for all Actual Units Commissioned. If no Actual Units Commissioned occurred from which the Parties may derive
    an Average SVM during the Exclusive License Term or Perpetuity Window, the default value for determining the Per Unit Amount
    will be equal to *. If no Actual Units Commissioned occurred in the Exclusive License Term or Perpetuity Window immediately
    preceding the current Extended Exclusive License Term or Perpetuity Window, but Actual Units Commissioned have occurred in
    prior Exclusive License Terms or Perpetuity Windows, the Parties shall use Average SVM based upon most recent prior Exclusive
    License Term or Perpetuity Window in which Actual Units Commissioned occurred, adjusted for changes in the Consumer Price
    Index for all Urban Consumers, as publicized by the United States Department of Labor Bureau of Labor Statistics, between
    the dates of such base line bookings and the most recent month for which the Consumer Price Index is available. Notwithstanding
    the foregoing, the first D-R Purchase Order for non-recuperated oxidizers, not to exceed *in total, as well as the first
    D-R Purchase Order for recuperated oxidizers, not to exceed *in total, shall be excluded from all calculations of Average
    SVM.

 

	6.2	Expanded
    License Grant to D-R. Subject to the terms and conditions of this Agreement, as long as the License remains Exclusive
    under the terms of Section 6.1 hereof, E-C hereby grants D-R a non-exclusive, worldwide right to commercialize the
    Fundamental Process for projects larger than 4 MW that are comprised of the KG2-3GEF/GO in multiple power blocks with E-C
    supplying the Gradual Oxidizer (the “Expanded License”) for which D-R shall not be obligated to
    pay any additional license fees. Notwithstanding the foregoing, E-C shall immediately notify D-R in the event that E-C grants
    to a third party an exclusive license to commercialize the Fundamental Process for gas turbine generators larger than 4 MW
    per unit, which notice shall specify the effective date of such third party license. The Expanded License shall terminate
    immediately upon the effective date of such third party license.

 

	6.3	Fundamental
    Process Technology Developments. Subject to the terms and conditions of this Agreement, D-R hereby irrevocably assigns
    to E-C all rights in and to any Fundamental Process Technology Developments developed during the Term of this Agreement and
    E-C hereby grants to D-R a non-terminable, perpetual, exclusive, irrevocable and royalty-free license of such Fundamental
    Process Technology Developments to make, have made, use and impart products, processes and/or services in connection with
    or related to 1-4MW gas turbines (“FPTD License”). Notwithstanding the foregoing, should the Exclusive
    License become a Non-Exclusive License pursuant to Section 6.1.3, the FPTD License would become non-exclusive. For
    avoidance of doubt, the FPTD License pertains to gas turbines in the 1-4MW range only.

 

	6.4	Gas
    Turbine Technology Developments. Subject to the terms and conditions of this Agreement, E-C hereby irrevocably assigns
    to D-R all rights in and to any Gas Turbine Technology Developments developed during the Term of this Agreement and D-R hereby
    grants to E-C a non-terminable, perpetual, non-exclusive, irrevocable and royalty-free license of such Gas Turbine Technology
    Developments to make, have made, use, and impart products, processes and/or services in connection with or related to 1-4MW
    gas turbines.

  

*
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	6.5	Joint
    Inventions. The Parties agree that D-R and E-C shall jointly own any Joint Inventions developed during the Term of this
    Agreement. Each Party shall have unrestricted rights to use such Joint Inventions during the Term of this Agreement and perpetually
    thereafter, without accounting to the other Party.

 

	6.6	Sublicense
    Rights. Other than as expressly provided herein, the licenses granted under Sections 6.1 through 6.5 include
    the right to grant sublicenses.

 

	6.7	Background
    Intellectual Property. E-C shall have the right to use D-R Background Intellectual Property and D-R shall have the right
    to use E-C Background Intellectual Property, in each case, only as is necessary to perform such Party’s obligations
    and exercise such Party’s rights under this Agreement.

 

	6.8	Negative
    Pledge. E-C shall not, during the Initial Exclusive License Term, without the prior written consent of D-R, which consent
    shall not be unreasonably withheld, delayed or conditioned, allow the creation of any encumbrance, lien or pledge of the E-C
    Intellectual Property.

 

	6.9	Cooperation.
    Each Party shall take all reasonable actions necessary to evidence, protect, or convey the ownership rights set forth in this
    Section 6, including but not limited to the acquisition of assignments of any and all Intellectual Property rights from any
    contractors, subcontractors, employees or any other entity providing services to one or both Parties that results in the development
    of Intellectual Property rights to be conveyed hereunder. All conveyances shall be free and clear of any claims, liens, security
    interests or other encumbrances or interests by the transferring Party and any third parties claiming through such Party.

 

	6.10	E-C
    Exclusivity License Shotgun Purchase Option.

 

	 	6.10.1	Shotgun
    Purchase Option. Following an Underperforming Perpetuity Window, E-C shall have the right, but not the obligation, to
    offer to purchase the exclusivity provision of the License from D-R upon the terms and subject to the conditions set forth
    in this Section 6.10 (such right, E-C’s “Shotgun Purchase Option”, and such offer, the “Shotgun
    Purchase Offer”) at a purchase price of E-C’s choosing, provided that it is payable at closing in cash
    (the “Purchase Price”). In such case, D-R shall have the option to:

 

	 	 	6.10.1.1	Accept
    the Shotgun Purchase Offer, in which case the License shall become a Non-Exclusive License, or

 

	 	 	6.10.1.2	Reject
    it and instead pay E-C an amount equal to (i) the Perpetuity Threshold less the sum of (x) Actual Units during the Underperforming
    Perpetuity Window then ending and (y) Applied Carried Forwards carried forward into the Underperforming Perpetuity Window,
    multiplied by (ii) the lower of (x) * and (y) the * (such amount the “Perpetuity Buyout Price”),
    to eliminate E-C’s right to exercise E-C’s Shotgun Purchase Option at any time in the future (“Perpetuity
    Buyout Option”).

 

	 	6.10.2	Exercise
    of Shotgun Purchase Option; Closing. In order to exercise the Shotgun Purchase Option, E-C must give written notice (E-C’s
    “Election Notice”) to D-R of such election, including the Purchase Price, within 90 days following
    the Underperforming Perpetuity Window. In the event of the exercise of the Shotgun Purchase Option, D-R shall have 90 days
    following receipt of the Election Notice by D-R to notify E-C of its decision of whether to accept or reject the Shotgun Purchase
    Offer pursuant to Section 6.10.1 (D-R’s “Shotgun Purchase Offer Response”). Failure
    by D-R to notify E-C of its election during such 90 day period shall be conclusively deemed to constitute acceptance of the
    Shotgun Purchase Option. The closing of the Shotgun Purchase Option or the Perpetuity Buyout Option, as appropriate, shall
    occur within 60 days following receipt by E-C of D-R’s Shotgun Purchase Option Response. At such closing, if D-R accepts
    the Shotgun Purchase Offer, E-C shall pay to D-R, in cash or immediately available funds, an amount equal to the Purchase
    Price, and if D-R rejects the Shotgun Purchase Offer, D-R shall pay to E-C, in cash or immediately available funds, an amount
    equal to the Perpetuity Buyout Price. The Parties shall enter into an amendment to this Agreement or such other agreement
    as reasonably agreed to by the Parties to reflect D-R’s Shotgun Purchase Option Response, including (i) conversion of
    the License into a Non-Exclusive License or (ii) elimination of E-C’s Shotgun Purchase Option right.

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

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	7.	OWNERSHIP
    AND PROTECTION OF INTELLECTUAL PROPERTY

 

	7.1	Ownership.
    For the avoidance of doubt, all Intellectual Property rights that are owned by a Party as of the Effective Date shall remain
    the sole property of that Party, subject to the licenses expressly set forth in this Agreement, and no other rights are granted
    hereunder by implication, by estoppel, or otherwise.

  

	7.2	Protection
    of Joint Inventions. The Parties will adopt and include in the Initial System Project Plan measures and procedures to
    safeguard the value of the Joint Inventions. The Parties may issue instructions to guide the handling of the Joint Inventions
    constituting trade secrets. In any event, each Party will be obligated to treat the Joint Inventions in accordance with the
    same degree of care such Party uses to protect its own trade secrets, but in no event less than a reasonable degree of care.

 

	7.3	Prosecution
    and Maintenance. Each Party shall have the sole right to file, prosecute, maintain, register, or otherwise secure protection
    for all Intellectual Property solely owned by such Party, in its discretion and at its sole cost and expense using agents,
    attorneys and others selected by such Party.

 

	7.4	Enforcement.

 

	 	7.4.1	Except
    as otherwise provided herein, each Party shall have the sole right to enforce or otherwise prevent violations of all Intellectual
    Property solely owned by such Party, in its discretion and at its sole cost and expense using agents, attorneys and others
    selected by such Party. If either Party believes that any E-C Patent included in the Fundamental Process is being infringed
    or is being misused by a third party, such Party will promptly notify the other Party of such infringement or misuse. If,
    within sixty (60) days from the date such notice is received, the Parties agree that action is warranted, the Parties will
    cooperate in the filing and maintenance of a claim, demand, investigation, suit or other proceeding (an “Action”),
    as appropriate, regarding such infringement or misuse. Each of the Parties will bear its own internal costs and expenses in
    connection with the filing and prosecution of such Action, and out-of-pocket fees and expenses will be borne equally by the
    Parties. With respect to any monetary damages, profits, awards and royalties (“Recovery”) obtained
    by the Parties in connection with such Action, such Recovery will be allocated to the Parties as follows: firstly, out-of-pocket
    fees and expenses will be reimbursed to each Party, and then secondly, E-C will receive the remainder of the Recovery.

 

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	 	7.4.2	If
    either Party declines to participate in, or the Parties are unable to agree on, the filing of an Action within the sixty (60)
    day period set forth in Section 7.4.1, then the other Party (the “Participating Party”) may
    proceed in its sole discretion and at its sole expense to file and prosecute such Action for infringement or misuse in its
    own name or, if required by law, jointly with the other Party and in such event the Participating Party is hereby authorized
    to take action in the name of the other Party as well; provided however, that if the Participating Party takes action in the
    name of the other Party, the Participating Party will indemnify and hold the other Party harmless from and against any and
    all monetary damages, fines, fees, penalties, obligations, deficiencies, losses and out-of-pocket expenses that the other
    Party incurs or is subject to directly as a result of such Action. The Participating Party will receive for its sole benefit
    any damages, profits, awards and royalties recoverable for such infringement or misuse as the result of such Action.

 

	 	7.4.3	If
    both Parties initially agree to jointly bring any Action, either Party may elect at any time to settle or withdraw for any
    reason from the proceedings related to such Action; provided, however, the settling Party will not as part of any settlement
    grant a license in the E-C Patent that renders the Action moot without the consent of the other Party. Going forward, the
    continuing Party will bear all of the fees and expenses incurred for such Action and may proceed in its sole discretion to
    prosecute, settle (including, but not limited to, licenses granted in connection therewith) or discontinue prosecution of
    such Action. Any damages, profits, awards and royalties recovered or to be recovered for such Action will be apportioned between
    the Parties in direct proportion to the ratio of each Party’s out-of-pocket fees and expenses compared to the total
    out-of-pocket fees and expenses of both Parties and taking into account any benefits recovered by the non-continuing Party
    as the result of any settlement.

 

	8.	MARKETING

 

	8.1	Marketing
    Program. Except as otherwise expressly provided herein, D-R shall be solely responsible for marketing, commercialization,
    launch, sales, installation and aftermarket parts for KG2-3GEF/GOs, and D-R will use commercially reasonable efforts to do
    so throughout the Term. E-C may, in its discretion, also actively market and generate sales leads for the KG2-3GEF/GOs. Each
    Party shall be solely responsible for compensating its own sales representatives and distributors for their sales efforts
    in accordance with their own internal policies and out of their own funds. To the extent that D-R publicly discloses any information
    about any KG2-3GEF/GO provided to any Customer of D-R, such as through a press release, Internet web site, technical briefing/paper,
    marketing literature or brochures, or other channel, E-C may publicly disclose its participation in connection with such KG2-3GEF/GOs,
    including the fact that the KG2-3GEF/GO includes a Gradual Oxidizer manufactured by E-C.

  

	8.2	Customer
    Referrals. Each Party shall bring to the other Party any sales leads it becomes aware of for the KG2-3GEF/GO. In the event
    that a Party encounters an opportunity to refer a potential customer to the other Party (regardless of whether such opportunity
    involves a KG2-3GEF/GO), such recommendation shall be given. Neither Party will be obligated to actively pursue and develop
    business for the other Party.

 

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	8.3	Publicity.
    Neither Party will release any promotional materials concerning this Agreement or the collaboration between the Parties unless
    and until the other Party has provided written approval of such materials. E-C may affix its logo to any KG2-3GEF/GO, or D-R’s
    name or logo on any communication related to D-R, subject to prior approval of D-R, which shall not be unreasonably withheld,
    conditioned or delayed. It is understood that both D-R and E-C retain all rights in their individual trademarks or logos.
    The use of any joint letterhead or other material with joint logos affixed to any Work Product will not affect the Intellectual
    Property ownership as described in this Agreement. This Agreement does not create any license in either Party to use the trademarks,
    service marks, or trade names of the other Party. In the event either Party desires to use such marks in connection with this
    Agreement, the Parties shall negotiate a separate agreement.

 

	9.	PROVISION
    OF GRADUAL OXIDIZERS 

 

	9.1	Supply
    Arrangement. In the event D-R accepts SSAT Deliverables pursuant to Sections 4.2 and 4.3 of this Agreement, then
    D-R will purchase from E-C, and E-C will sell to D-R, E-C Products for inclusion in KG2-3GEF/GO. Unless otherwise agreed in
    writing between D-R and E-C, D-R 195 Terms of Purchase shall be used as the guide for preferred terms and conditions on all
    purchase orders between D-R and E-C for the supply of E-C Products. D-R shall issue a request for quote (“Quote”)
    to E-C for each KG2-3GEF/GO opportunity that D-R intends to quote to the customer. Based on the Quote received, D-R may issue
    purchase orders (“D-R Purchase Orders”) detailing the quantity and delivery specifications for E-C
    Products with a lead-time to be negotiated between the Parties or set forth in a contractual commitment with a Customer, but
    otherwise complying the D-R Purchase Order for which E-C has issued an official order acknowledgement. Unless otherwise provided
    herein, within five (5) business days of receipt of a D-R Purchase Order, E-C will issue a written acknowledgment (electronically
    or by facsimile) to D-R; provided, however, that if E-C has good-faith questions concerning the details of the D-R Purchase
    Order, the acknowledgment will be sent within three (3) business days after such questions have been resolved. If E-C does
    not notify D-R with questions regarding the D-R Purchase Order or does not acknowledge the D-R Purchase Order, E-C will be
    considered to have accepted the D-R Purchase Order.

 

	9.2	Funding
    Schedule for Initial Order of E-C Products. The E-C Products to be included in the Initial System shall be funded according
    to the schedule that will be contained in the D-R Purchase Order issued to and accepted by E-C. If D-R delays any scheduled
    payment under the Funding Schedule for Initial Order of E-C Products for more than ten business days, E-C shall be entitled
    to terminate this Agreement following a cure period of five additional business days, and D-R shall promptly pay to E-C an
    amount in cash equal to E-C’s financial contribution to date (both in cash and labor) to this Agreement.

 

	9.3	Adjustments
    to Supplier Arrangement. It is the intent of the Parties to negotiate in good faith a worldwide right for D-R to manufacture
    E-C Hardware for KG2-3GEF/GO. The Parties intend to negotiate in good faith in order to enter into a Manufacturing License
    Agreement within 6 months of the Effective Date that (a) would permit D-R to manufacture E-C Hardware for KG2-3GEF/GOs and
    (b) provide D-R with copies of and use of all E-C Background Intellectual Property, Fundamental Process Technology Developments
    and Joint Inventions to the extent necessary to perform such manufacturing. The Parties acknowledge that any E-C Hardware
    manufactured and sold pursuant to the Manufacturing License Agreement would be treated as if it were purchased by D-R from
    E-C hereunder for purposes of determining whether any Threshold has been met.

 

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	9.4	D-R
    Proposals. All D-R proposals to purchase E-C Products shall be subject to change at any time prior to D-R’s acceptance
    of a Customer purchase order that includes such E-C Products and shall expire at the end of the validity period stipulated
    in such proposal. If no such period is stipulated in a proposal, then the proposal shall expire sixty (60) days from the date
    of issuance.

 

	 9.5	Discontinuation
    of Gradual Oxidizer. Until the Parties can execute a Manufacturing License Agreement, in the event that E-C, directly
    or through one or more contract manufacturers, licensees or successors in interest, ceases to develop, manufacture or supply
    the Gradual Oxidizer technology, D-R shall have the right to acquire, subject to the Parties reaching mutually agreeable terms,
    a perpetual non-exclusive license (the “D-R Perpetual Manufacturing License”) to (a) manufacture
    E-C Hardware and (b) to acquire copies of and use all E-C Background Intellectual Property, Process Technology Developments
    and Joint Inventions to the extent necessary to perform such manufacturing. If the Exclusive License has previously become
    a perpetual license pursuant to Section 6.1.3, D-R shall not be required to make any additional payments for the D-R
    Perpetual Manufacturing License. If the Exclusive License has not previously become perpetual, D-R may acquire the D-R Perpetual
    Manufacturing License by making a payment to E-C in cash equal to (a) the difference between the number of Total Units Credited
    and *, multiplied by (b) the Per Unit Amount.

 

	 9.6	Discontinuation
    of D-R Target Gas Turbine. In the event that D-R, directly or through one or more contract manufacturers, licensees or
    successors in interest ceases to develop, manufacture or supply D-R Target Gas Turbines, at D-R’s option (1) E-C shall
    have the right to acquire, subject to the Parties reaching mutually agreeable terms, a non-exclusive perpetual license (the
    “E-C Perpetual Manufacturing License”) to (a) manufacture D-R Hardware and (b) to acquire copies
    of and use all D-R Background Intellectual Property, Gas Turbine Technology Developments and Joint Inventions to the extent
    necessary to perform such manufacturing or (2) D-R will manufacture a similarly suited gas turbine or turbines for the 1-4MW
    range that, subject to the Parties reaching mutually agreeable terms (including terms addressing appropriate cost sharing),
    will be integrated with E-C’s gradual oxidizer in substitution for the D-R Target Gas Turbine. EC shall not be required
    to make any additional payments for the E-C Perpetual Manufacturing License.

 

	10.	TERM
    AND TERMINATION

 

	10.1	Term.
    This Agreement shall commence on the Effective Date and shall continue until the end of the Initial Exclusive License Term,
    the last Extended Exclusive License Term or perpetually if the Exclusive License has become a perpetual license, unless this
    Agreement is earlier terminated in accordance with the provisions hereof.

 

	10.2	Termination
    for Default. Except in circumstances specifically described in Sections 10.3 and 10.4, which shall control
    in those events, if either Party defaults in the performance of any of its material obligations under this Agreement and does
    not substantially cure such default, or commence a cure, within 30 days after being given written notice specifying the default,
    the non-defaulting Party may, by giving written notice to the defaulting Party, terminate this Agreement as of a date specified
    in such notice of termination, such date to be no earlier than the date of written notice of the default.

 

	10.3	Termination
    by D-R. D-R will have the right to immediately terminate this Agreement upon delivery of written termination notice to
    E-C in the event that:

 

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	 	10.3.1	If
    the Cure Period has expired and the Gradual Oxidizer failure has not been remediated in accordance with the provisions of
    Section 3.2;

 

	 	10.3.2	In
    accordance with the provisions in Section 3.4;
	 	 	 
	 	10.3.3	In accordance
    with the provisions of Section 4.3;
	 	 	 
	 	10.3.4	In accordance
    with the provisions of Section 18.1;
	 	 	 
	 	10.3.5	In accordance
    with the provisions of Section 18.17; or

 

	 	10.3.6	E-C,
    directly or through one or more contract manufacturers, licensees or successors in interest ceases development and manufacturing
    of Gradual Oxidizers for use in the KG2-3GEF/GOs.

 

	10.4	Termination
    by E-C. E-C will have the right to immediately terminate this Agreement upon delivery of written termination notice to
    D-R in the event that

 

		10.4.1	In
    accordance with the provisions of Section 4.3;
	 	 	 
	 	10.4.2	In accordance
    with provisions of Section 5.1.3;
	 	 	 
	 	10.4.3	In accordance
    with provisions of Section 9.2;
	 	 	 
	 	10.4.4	In accordance
    with the provisions of Section 18.1;
	 	 	 
	 	10.4.5	In accordance
    with the provisions of Section 18.17; or
	 	 	 
	 	10.4.6	D-R, directly
    or through one or more contract manufacturers, licensees or successors in interest, ceases development and manufacturing of
    D-R Target Gas Turbines for use in the KG2-3GEF/GOs.

 

	10.5	Effect
    of Termination; Survival. Following termination of this Agreement, E-C will fulfill and DR will make payments in accordance
    with all D-R Purchase Orders that were accepted prior to the non-terminating Party’s receipt of written notice of termination.
    If this Agreement is terminated by D-R prior to the Completed Test, D-R shall be entitled to promptly redeem the D-R Backstop
    Security in full plus (i) the sum of Installment Payments previously paid plus (ii) any out-of-pocket expenses incurred by
    D-R in support of the development of KG2-3GEF/GO through the termination date. If E-C does not promptly pay the amounts set
    forth in (i) and (ii) above, D-R shall be entitled to promptly redeem the Fundamental Process Security in order to recoup
    such amounts. If this Agreement is terminated by D-R after the Completed Test, D-R shall be entitled to promptly redeem the
    D-R Backstop Security in full but shall have no claim against the Fundamental Process Security. Notwithstanding the termination
    of this Agreement, those provisions that, by their nature, are intended to survive termination shall so survive termination,
    including without limitation, Sections 1, 3.6, 6, 7, 11, 12, 13, 14, 15 and 18.

 

	10.6	The
    various licenses granted by the Parties under this Agreement shall terminate upon termination of this Agreement or survive
    such a termination in accordance with the parameters set forth on Annex G.

 

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	11.	INDEMNIFICATION

 

	11.1	Indemnification
    by D-R. D-R agrees to, at its own expense, protect, defend, hold harmless and indemnify E-C, its successors and assigns
    and their respective directors, officers, employees, agents, contractors, customers and Affiliates (collectively, the “E-C
    Indemnitees”) from and against any and all claims, proceedings and lawsuits brought by third parties for any
    and all losses, damages, liabilities, penalties, fines, forfeitures, attorneys’ fees, costs, and expenses of any kind
    and nature whatsoever (“Damages”), alleging that any of D-R’s Intellectual Property incorporated
    into D-R Products infringes upon or misappropriates any Intellectual Property of others; provided that (i) E-C promptly notifies
    D-R in writing of any such claim and (ii) D-R is given the opportunity to settle or defend such claim or make changes to the
    accused D-R Products for the purpose of avoiding infringement.

 

	11.2	Indemnification
    by E-C. E-C agrees to, at its own expense, protect, defend, hold harmless and indemnify D-R Indemnitees from and against
    any and all claims, proceedings and lawsuits brought by third parties for Damages alleging that any of E-C’s Intellectual
    Property incorporated into E-C Products infringes upon or misappropriates any Intellectual Property of others; provided that
    (i) D-R promptly notifies E-C in writing of any such claim and (ii) E-C is given the opportunity to settle or defend such
    claim or make changes to the accused E-C Products for the purpose of avoiding infringement. Notwithstanding the foregoing,
    E-C shall have no obligation with respect to allegations arising out of any modification of any E-C Products by D-R that is
    not authorized by E-C or this Agreement.

 

	11.3	Remedies.
    If an injunction, decree or judgment is entered providing that either Party may not use any of the E-C Products or D-R Products
    or any component or portion of a completed version of the KG2-3GEF/GO (collectively, “Enjoined Technology”)
    in the manner contemplated by this Agreement without violating the Intellectual Property rights of a third party, the Party
    responsible for the development of the Enjoined Technology shall, at its sole option and expense, either (i) procure for the
    other Party the right to use the Enjoined Technology as furnished hereunder, or (ii) replace or modify the Enjoined Technology
    to make the same non-infringing. If the Party elects to replace or modify the Enjoined Technology, such replacement shall
    undergo timely Acceptance Testing and review as set forth in Section 4 of this Agreement.

 

	11.4	Indemnification
    Exclusive. The foregoing indemnification provisions are the sole and exclusive remedy for any third-party claim of Intellectual
    Property infringement, misappropriation or violation.

 

	11.5	Indemnification
    for Acts or Omissions. Each Party agrees to, at its own expense, protect, defend, hold harmless and indemnify the other
    Party, its successors and assigns, and its respective directors, officers, employees, agents, contractors, customers and Affiliates,
    from and against any and all claims, proceedings and lawsuits brought by third parties for Damages against the Party for injury
    to persons (including libel, slander or death) or loss or damage to tangible or intangible property to the extent it results
    from any grossly negligent, willful or fraudulent act or omission of the Party under this Agreement.

 

	11.6	Conduct
    of Personnel. Each Party covenants that it has used and will use reasonable efforts to obligate those employees, agents
    or contractors of such Party involved in activities pursuant to this Agreement, to assign Inventions to the respective Party,
    consistent with the obligations of such Party hereunder with respect to Inventions. Personnel of a Party visiting the premises
    of the other Party shall observe and act in accordance with any and all work, security, health and safety standards as may
    be formulated by the host Party in accordance with and subject to statutory or other governmental administrative requirements.
    Each Party shall be responsible for its employees and contractors when they are visiting the premises of the other Party.

 

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CONFIDENTIAL
TREATMENT REQUESTED  

 

	12.	THIRD PARTY CLAIMS

 

	12.1	Notice
    of Third Party Claims. If a Party (“Indemnified Party”) receives notice of the assertion by any
    third party of any claim or of the commencement by any such third party of any action under Sections 3.1, 7.4.2, 11 or
    18.17.1, any such action being referred to herein as an (“Indemnifiable Claim”), then such Party
    shall promptly notify the indemnifying party (“Indemnifying Party”) in writing (the “Claim
    Notice”) of the Indemnifiable Claim; provided, that the Indemnifying Party is not obligated to indemnify and
    defend the Indemnified Party with respect to an Indemnifiable Claim (or portions of an Indemnifiable Claim) if the Indemnified
    Party fails to promptly send the Claim Notice to the Indemnifying Party and fails to provide reasonable cooperation and information
    to defend or settle the Indemnifiable Claim, if, and only to the extent that, the failure to provide such Claim Notice materially
    prejudices the Indemnifying Party’s ability to satisfactorily defend or settle the Indemnifiable Claim.

  

	12.2	Right
    to Defend. The Indemnifying Party will retain the right, at its option, to defend or settle, at its own expense and with
    its own counsel, the Indemnifiable Claim. The Indemnified Party will have the right, at its option, to participate in the
    defense or settlement of the Indemnifiable Claim, with its own counsel and at its own expense, but the Indemnifying Party
    will have the right to control the defense or settlement. The Indemnifying Party will not enter into any settlement that imposes
    any liability or obligation on the Indemnified Party without the Indemnified Party’s prior written consent. The Parties
    will cooperate in the defense or settlement of the Indemnifiable Claim and give each other full access to all necessary information.

 

	12.3	Other
    Rights of Indemnified Party. If the Indemnifying Party (i) fails to notify the Indemnified Party of the Indemnifying Party’s
    intent to take any action within thirty (30) days after receipt of the Claim Notice from the Indemnified Party or (ii) fails
    to proceed in good faith with the prompt resolution of the Indemnifiable Claim, the Indemnified Party, with prior written
    notice to the Indemnifying Party and without waiving any rights to indemnification, may defend or settle the Indemnifiable
    Claim without the prior written consent of the Indemnifying Party. The Indemnifying Party will reimburse the Indemnified Party
    on demand for all Damages incurred by the Indemnified Party in defending or settling the Indemnifiable Claim.

 

	13.	LIMITATION
    OF LIABILITY

 

		EXCEPT
    AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY NOR ITS AFFILIATES SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL,
    INDIRECT, EXEMPLARY, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, EVEN IF
    SUCH PARTY HAS PREVIOUSLY BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF BREACH OR FAILURE OF EXPRESS OR
    IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE FROM DAMAGES ARISING
    UNDER THIS AGREEMENT.
	 	 
	 	THE
    REMEDIES OF EACH PARTY SET FORTH HEREIN ARE EXCLUSIVE AS STATED AND, IN ANY EVENT, EXCEPT AS SET FORTH IN SECTIONS 3.1,
    3.2, 3.4 AND 11, THE TOTAL AGGREGATE LIABILITY OF EITHER PARTY WITH RESPECT TO ANY CLAIMS UNDER THIS AGREEMENT OR REGARDING
    THE EQUIPMENT, SERVICES, WORK, SPARE OR REPLACEMENT PARTS AND SERVICES INCIDENTAL THERETO AS FURNISHED HEREUNDER, WHETHER
    BASED IN CONTRACT, INDEMNITY, TORT, STRICT LIABILITY, OR OTHERWISE, SHALL NOT EXCEED THE TOTAL CONTRACT PRICE PAID FOR THE
    EQUIPMENT, SERVICES, WORK, SPARE OR REPLACEMENT PARTS AND SERVICES UPON WHICH ANY SUCH CLAIM IS BASED. THE OBLIGATIONS OF
    THE PARTIES UNDER SECTIONS 3.1, 3.2, 3.4 AND 11 SHALL NOT BE LIMITED BY THE IMMEDIATELY FOREGOING SENTENCE OR BY SPECIFIC
    EXCEPTIONS TO THE CONTRARY INCLUDED IN BINDING AGREEMENTS WITH CUSTOMERS.

 

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CONFIDENTIAL
TREATMENT REQUESTED  

 

	14.	WARRANTIES
    ON PRODUCTS SOLD; TERMS OF CONTRACTS

 

	14.1	E-C
    Warranties. D-R shall be prime on Customer contracts as far as the overall warranty and other commercial conditions to
    the Customer are concerned and be the sole project and service provider and interface with the Customer. E-C shall be responsible
    for warranty, service, and after-sales technical assistance for all portions of the KG2-3GEF/GOs that comprise E-C Products.
    E-C shall have the right to provide its formal pricing and commercial conditions on a project by project basis, and these
    prices and conditions, if acceptable to both D-R and the Customer, will form part of D-R’s overall proposal and contract
    with D-R’s Customers.

 

	14.2	D-R
    Warranties. D-R shall be responsible for warranty, service, and after-sales technical assistance for all portions of KG2-3GEF/GOs
    that comprise D-R Products.

 

	14.3	Terms.
    The work performed by D-R and E-C under this Agreement shall be governed by D-R100 Terms and Conditions for Sale with regard
    to D-R sales made to Customers and D-R195 Terms and Conditions for Purchase with regard to D-R’s purchases from E-C,
    both of which forms are attached hereto as Annex C.

 

	15.	CONFIDENTIAL
    INFORMATION

 

	15.1	Confidential
    Information. Neither D-R nor E-C has any intention pursuant to this Agreement of developing Intellectual Property that
    falls within each other’s proprietary space, and each agrees to limit disclosures of Confidential Information strictly
    to that which is necessary to achieve the purpose of this Agreement. Subject to Section 15.2, “Confidential
    Information” means confidential business information, including research and development, formulae, compositions,
    processes, techniques, methodologies, technical information, designs, industrial models, manufacturing, engineering and technical
    drawings, specifications, research records, records of inventions, test information, customer and supplier lists, customer
    data, pricing and cost information, and business and marketing plans and proposals, all proprietary, non-public information
    that has commercial value or other utility in a Party’s business, or the unauthorized disclosure of which could be detrimental
    to the Party’s interests, including the terms and conditions of this Agreement (but not its mere existence) and any
    other information exchanged between the Parties pursuant hereto, if any, provided by one Party (a “Disclosing
    Party”) to the other Party (a “Receiving Party”) in any form, and all copies thereof
    made, in whole or in part, by the Receiving Party in any form. Each Party shall be deemed a Receiving Party to the terms and
    conditions of this Agreement. Notwithstanding the foregoing, (a) to the extent to which any Fundamental Process Technology
    Developments are first disclosed by a representative of D-R or its Affiliate to a representative of E-C or its Affiliate,
    such things are the Confidential Information of E-C and (b) to the extent to which any Gas Turbine Technology Developments
    are first disclosed by a representative of E-C or its Affiliate to a representative of D-R or its Affiliate, such things are
    the Confidential Information of D-R and clauses (i) and (ii) of Section 15.2 shall not apply to Fundamental Process
    Technology Developments and Gas Turbine Technology Developments.

  

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CONFIDENTIAL
TREATMENT REQUESTED  

 

	15.2	Not
    Confidential Information. Confidential Information shall not include, and the duties and obligations of this Section
    15 shall not apply to, information for which the receiving Party can demonstrate through documentary evidence: (i) was
    known to the Receiving Party at the time of disclosure in its fully consolidated form as disclosed under this Agreement and
    without any obligation of confidentiality; (ii) can be shown by corroborated records to have been independently developed
    by the Receiving Party without breach of this Agreement or reference to or use of the Confidential Information disclosed by
    the Disclosing Party; (iii) is or becomes part of the public domain through no wrongful act of the Receiving Party, its Affiliates
    or their respective representatives; (iv) is rightfully received from a third party without restriction on disclosure; or
    (v) is approved for release upon prior written consent of the Disclosing Party.

 

	15.3	Restrictions
    on Use and Disclosure. The Receiving Party shall not use the Confidential Information of the Disclosing Party for any
    purpose other than to exercise the rights conveyed to it and to perform its obligations under this Agreement. The Receiving
    Party also shall not disclose the Confidential Information of the Disclosing Party to any third party, except to its Affiliates
    and their and the Receiving Party’s respective employees, contractors and consultants. The Receiving Party and such
    third parties to whom disclosure is permitted shall only disclose such Confidential Information to their employees, contractors,
    and consultants who have a need to know such information to exercise the rights conveyed or to perform the obligations under
    this Agreement and who have first agreed to restrictions regarding use and disclosure at least as protective of the Disclosing
    Party as those set forth in this Agreement. The Receiving Party shall, and shall cause all others to whom it discloses the
    Confidential Information of the Disclosing Party, to take reasonable security measures and use reasonable care to preserve
    and protect the secrecy of the Disclosing Party’s Confidential Information. E-C may not use the existence of this Agreement
    or the content of this Agreement in efforts to solicit, negotiate or reach an agreement with an original equipment manufacturer
    that could be deemed a competitor of D-R.

 

	15.4	Certain
    Permitted Disclosures. Notwithstanding Section 15.3, a Receiving Party may disclose the Confidential Information
    of the other Party to the limited extent that such disclosure (i) is inherent in products sold or otherwise disposed of by
    the Party or its Affiliates in accordance with this Agreement and subject to reasonable commercial terms regarding preservation
    of confidentiality of that material, (ii) to parties assisting such Party in evaluating the potential market for products
    to be developed under this Agreement, subject to reasonable commercial terms regarding preservation of confidentiality of
    that material or (iii) is otherwise strictly necessary in connection with the exercise of any of the rights licensed to it
    under this Agreement.

 

	15.5	Further
    Permitted Disclosures. Notwithstanding Section 15.3, either Party may disclose the Confidential Information of
    the other Party to: (i) Governmental Bodies in order to respond to inquiries, requests or investigations relating to this
    Agreement, provided, however, that such Party shall provide the Disclosing Party notice of its intent to disclose that information
    so that the Disclosing Party may seek protective orders and the like; (ii) in connection with prosecuting or defending litigation
    as permitted by this Agreement, provided, however, that such Party shall use reasonable efforts to limit the dissemination
    of such information, including by use of protective orders and the like, as such Party would use for its own similar types
    of confidential information; (iii) in connection with the resolution of disputes under this Agreement, provided, however,
    that such Party shall use reasonable efforts to limit the dissemination of such information, including by use of protective
    orders and the like, as such Party would use for its own similar types of confidential information; (iv) in connection with
    filings required by security and tax regulations and the rules and regulations of any securities exchanges upon which a Party’s
    or its Affiliate’s securities are traded, provided, however, that such Party shall use reasonable efforts to limit the
    dissemination of such information, including by use of protective orders and the like, as such Party would use for its own
    similar types of confidential information; (v) to a Party’s actual and potential lenders, private investors, bankers,
    accountants, and lawyers who are subject to an obligation of confidentiality prohibiting further disclosure of the information;
    and (vi) to a Party’s actual and bona fide potential assignees or transferees permitted in accordance with Section
    18.12 subject to an obligation of confidentiality prohibiting further disclosure of the information.

 

    	28

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

	15.6	Survival.
    The obligations of this Section 15 will survive any termination or expiration of this Agreement for, with respect to
    all Confidential Information, at least five (5) years, and for trade secrets within the Confidential Information, as long
    as such trade secrets remain a trade secret under applicable law.

 

	15.7	Return/Destruction
    of Information. Upon request after termination of this Agreement by a Party for return of the Confidential Information
    of such Party, the other Party shall, within sixty (60) business days of the request, use commercially reasonable efforts
    to either return or destroy all written or tangible material containing or reflecting Confidential Information of the requesting
    Party (whether prepared by the requesting Party or otherwise), without retaining any copies, summaries, analyses, or abstracts
    thereof, except that each Party’s independent outside counsel may retain one copy for attorney’s eyes only. An
    authorized individual of the Receiving Party shall confirm in writing Receiving Party’s compliance with this Section
    within sixty (60) business days after the other Party’s request for the return or destruction of Confidential Information.

 

	16.	REPRESENTATIONS
    AND WARRANTIES

 

	16.1	Authority.
    Each Party represents and warrants that the individuals signing this Agreement have full authority to execute this Agreement
    for, and on behalf of, and to bind the Parties, and that, when signed, this Agreement will be binding and enforceable according
    to its terms.

 

	16.2	No
    Conflicts. Each Party represents and warrants that neither it, nor any of its Affiliates, will enter into any other agreement
    or understanding in conflict with the provisions contained in this Agreement.

 

	16.3	Financial
    Status. E-C represents and warrants that it has sufficient financial resources to fully and timely perform its obligations
    to develop and manufacture Gradual Oxidizers for the KG2-3GEF/GO under the terms of this Agreement.

 

	16.4	Right and Title.

 

	 	16.4.1	E-C
    represents and warrants to D-R that: (i) E-C has the right to grant the license in the E-C Intellectual Property upon the
    terms and conditions set forth in this Agreement; (ii) E-C has not granted and will not grant any licenses or rights under
    the E-C Intellectual Property that would conflict with the licenses and rights granted to D-R hereunder; (iii) except as set
    forth on Annex I, there are no liens, pledges, deed of trusts, security interests, claims, leases, charges,
    options, rights of first refusal, easements, servitudes, proxies, voting trusts or agreements, transfer restrictions under
    any equity holder, conveyances, mortgages, assignments, encumbrances, or other obligations affecting the E-C Intellectual
    Property; and (iv) E-C’s disclosure or transfer of possession of any Confidential Information to D-R will not infringe
    any copyright or misappropriate any trade secrets of any third party.

 

    	29

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

	 	16.4.2	D-R
    represents and warrants to E-C that: (i) D-R has the right to grant the license in the Intellectual Property of D-R and its
    Affiliates upon the terms and conditions set forth in this Agreement; (ii) D-R has not granted and will not grant any licenses
    or rights under the Intellectual Property of D-R and its Affiliates that would conflict with the licenses and rights granted
    to E-C hereunder; (iii) there are no liens, pledges, deed of trusts, security interests, claims, leases, charges, options,
    rights of first refusal, easements, servitudes, proxies, voting trusts or agreements, transfer restrictions under any equity
    holder, conveyances, mortgages, assignments, encumbrances, or other obligations that would prevent or impair the full and
    complete exercise of the terms of this Agreement; and (iv) D-R’s disclosure or transfer of possession of any copies
    of any Confidential Information to E-C will not infringe any copyright or misappropriate any trade secrets of any third party.

 

	16.5	Noninfringement.
    E-C represents and warrants that, as of the Effective Date, it has not received any notice that any of the E-C Intellectual
    Property or the use thereof, misappropriates, infringes, constitutes an unauthorized use of, or dilutes any Intellectual Property
    rights (including any copyrights, patents, trade secrets or trademarks) of any third party.

 

	16.6	DISCLAIMER.
    EXCEPT AS OTHERWISE EXPRESSLY STATED IN SECTION 3 AND SECTIONS 16.1 THROUGH 16.5, NEITHER PARTY MAKES
    ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO ANY INTELLECTUAL PROPERTY OR ANY OTHER SUBJECT MATTER UNDER THIS
    AGREEMENT. EXCEPT AS OTHERWISE EXPRESSLY STATED IN SECTION 3 AND SECTIONS 16.1 THROUGH 16.5, EACH PARTY
    DISCLAIMS ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
    FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT.

 

	17.	INDEPENDENT
    CONTRACTOR

 

	17.1	Status.
    The Parties are and shall remain independent contractors with respect to all performances rendered pursuant to this Agreement.
    Further, neither Party nor any employee or agent of either Party shall be considered an employee, agent or representative
    of the other Party for any purpose. Neither Party, nor its employees, shall have any authority to act for, bind or otherwise
    create or assume any obligation on behalf of the other Party for any purpose, nor shall it or they hold itself or themselves
    out as having such authority. Each Party shall be responsible for its actions and the actions of its personnel in rendering
    performance pursuant to this Agreement, and shall be solely responsible for supervising, providing daily direction and control,
    paying the salaries (including withholding of income taxes and social security), worker’s compensation, disability benefits
    and the like of its personnel.

 

	17.2	No
    Joint Venture. Nothing contained in this Agreement shall be deemed or construed as creating a joint venture or partnership
    between D-R and E-C. The Parties agree that they will not by their conduct form such a joint venture or partnership and that
    they will not be deemed to be partners or joint venturers unless they agree in writing that they are such. Neither Party is
    by virtue of this Agreement authorized as an agent, employee or legal representative of the other. Neither Party shall have
    power to control the activities and operations of the other and their status is, and at all times shall continue to be, that
    of independent contractors. Neither Party shall have any power or authority to bind or commit the other.

 

    	30

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

	18.	MISCELLANEOUS

 

	18.1	Force
    Majeure. Either Party shall be excused from delays in performing or from its failure to perform hereunder to the extent
    that such delays or failures result from causes beyond the reasonable control of such Party; provided that, in order to be
    excused from delay or failure to perform, such Party must act diligently to remedy the cause of such delay or failure. Notwithstanding
    the foregoing, if either Party’s performance is delayed by more than ninety (90) calendar days for any reason, the other
    Party shall have the right to terminate this Agreement without any further liability to the non-performing Party, except for
    fulfillment of obligations previously incurred under this Agreement (e.g., outstanding purchase orders, shipments and payment
    of invoices).

 

	18.2	Construction.
    Unless the context requires otherwise: (a) the gender (or lack of gender) of all words used in this Agreement includes the
    masculine, feminine, and neuter; (b) the term “include” or “includes” means “includes, without
    limitation,” and “including” means “including, without limitation”; (c) references to laws refer
    to such laws as they may be amended from time to time, and references to particular provisions of a law include any corresponding
    provisions of any succeeding law; and (d) references to money or $ refer to legal currency of the United States of America.

 

	18.3	Specific
    Performance. Each Party acknowledges and agrees that a breach of Section 7.2 and Section 15 of this Agreement would
    cause irreparable damage to the other Party and that the non-breaching Party will not have an adequate remedy at law. Therefore,
    the obligations of E-C and D-R under this Agreement in Sections 7.2 and Section 15 shall be enforceable by a
    decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief may be applied
    for and granted in connection therewith. Such remedies shall, however, be cumulative and not exclusive and shall be in addition
    to any other remedies which any Party may have under this Agreement or otherwise.

 

	18.4	Multiple
    Counterparts. This Agreement may be executed in two counterparts, both of which taken together shall constitute one single
    Agreement between the Parties.

 

	18.5	Section
    and Schedule Headings. The section and subsection headings used herein are for reference and convenience only, and shall
    not enter into the interpretation hereof. The schedules referred to herein and attached hereto, or to be attached hereto,
    are incorporated herein to the same extent as if set forth in full herein.

 

	18.6	Required
    Approvals. Where agreement, approval, acceptance, or consent by either Party is required by any provision of this Agreement,
    such action shall not be unreasonably delayed, conditioned or withheld.

 

	18.7	No
    Waiver. No delay or omission by either Party hereto to exercise any right or power arising upon any noncompliance or default
    by the other Party with respect to any of the terms of this Agreement shall impair any such right or power or be construed
    to be a waiver thereof. A waiver by either of the Parties hereto of any of the covenants, conditions, or agreements to be
    performed by the other shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant, condition,
    or agreement herein contained. Unless stated otherwise, all remedies provided for in this Agreement shall be cumulative and
    in addition to and not in lieu of any other remedies available to either Party at law, in equity, or otherwise.

  

    	31

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

	18.8	Governing
    Law. This Agreement and the License shall be construed as to both validity and performance and enforced in accordance
    with the laws of the State of New York, without giving reference to its principles of conflicts of law.

 

	18.9	Entire
    Agreement; Amendment. Other than the currently existing Original Equipment Packaging Agreement between D-R and E-C (FKA
    Flex Power Generation, Inc.), which shall remain in full force and effect, this Agreement and the Schedules annexed hereto
    constitute the entire agreement between the Parties and specifically supersede all previous agreements, oral or written, regarding
    the subject matter hereof. No amendment, waiver, or discharge hereof shall be valid unless it is executed by the Party against
    whom such amendment, waiver, or discharge is sought to be enforced.

 

	18.10	Severability.
    If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any law or public
    policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the
    economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any
    Party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties
    hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely
    as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated
    to the greatest extent possible.

 

	18.11	Notices.
    Any notices to be given hereunder by either Party to the other shall be in writing on paper and be delivered either by personal
    delivery (including delivery by Federal Express or similar reputable overnight courier) or by mail, registered or certified,
    postage prepaid with return receipt requested. Mailed notices shall be addressed to the Parties at the addresses appearing
    in this Section of this Agreement, but each Party may change such address by written notice in accordance with this paragraph.
    Notices delivered personally, including via overnight courier, shall be deemed communicated as of actual receipt. Notices
    forwarded via the United States mail shall be deemed communicated as of five (5) days after mailing.

 

If
to E-C, to:

 

ENER-CORE
POWER, INC.

9400
Toledo Way

Irvine,
CA 92618 

Attn:
   Alain Castro, Chief Executive Officer 

     Boris
Maslov, President and Chief Technology Officer

 

with
a copy, which shall not constitute notice, to:

 

McDermott
Will & Emery LLP

4
Park Plaza, Suite 1700

Irvine,
CA 92614

Attention:

 

    	32

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

If
to D-R, to:

 

DRESSER-RAND
COMPANY

Paul
Clark Drive

Olean,
New York 14760

Attention:
David J. Grenell, Assistant General Counsel

 

with
a copy, which shall not constitute notice, to:

 

Haynes
and Boone, LLP

1221
McKinney Street, Suite 2100

Houston,
Texas 77010

Attention:
Bill Nelson

 

	18.12	Binding
    Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective
    successors and permitted assigns. Except as provided herein, neither Party shall assign or delegate this Agreement in whole
    or in part, or any of the licenses, rights, covenants, or duties under this Agreement, by agreement, merger, reorganization,
    sale of assets, operation of law or otherwise, including in connection with the insolvency or bankruptcy of the Party, without
    the prior written consent of the other Party. Notwithstanding the foregoing, either Party may (i) assign or otherwise transfer
    this Agreement in its entirety to (a) an acquirer of all or substantially all of the assets of a Party’s business to
    which this Agreement relates or (b) the surviving entity in any merger, consolidation, equity exchange, reorganization or
    other change of control transaction involving such Party.

 

	18.13	Bankruptcy.
    The Parties acknowledge and agree that the E-C Intellectual Property is “intellectual property” as defined in
    Section 101(35A) of the United States Bankruptcy Code (the “Code”), as the same may be amended from
    time to time, that has been licensed hereunder in a contemporaneous exchange for value. E-C acknowledges that if E-C, as a
    debtor in possession or a trustee in bankruptcy in a case under the Code, rejects this Agreement, D-R may elect to retain
    its rights under this Agreement as provided in Section 365(n) of the Code. Upon written request from D-R to E-C or the bankruptcy
    trustee of E-C’s election to proceed under section 365(n), E-C or the bankruptcy trustee shall comply in all respects
    with 365(n), including, without limitation, by not interfering with the rights of D-R as provided by this Agreement.

 

	18.14	Costs
    and Expenses. The Parties shall each be responsible for all of their own expenses (including legal, accounting, investment
    banking and financial advisory fees and expenses) incident to the negotiation, documentation and consummation of this Agreement.

 

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CONFIDENTIAL
TREATMENT REQUESTED  

 

	18.15	Dispute Resolution.

 

	 	18.15.1	In
    the event of any continuing dispute between the Parties relating to this Agreement which has not been resolved after reasonable
    attempts by either Party to do so, including without limitation any continuing dispute relating to the interpretation of any
    provision of this Agreement, the performance or non-performance by either Party hereunder, or the amount of any disputed consideration
    arising hereunder, then, upon the written request of either Party, each of the Parties will appoint a designated executive
    management representative, whose task it will be to meet for the purpose of endeavoring to resolve such dispute. The designated
    representatives shall meet as often as the Parties reasonably deem necessary in order to gather and furnish to the other all
    information with respect to the matter in issue which the Parties believe to be appropriate and germane in connection with
    its resolution. Such representatives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute
    without the necessity of any formal proceeding relating thereto. During the course of such negotiation, all reasonable requests
    made by one Party to the other for information will be honored in order that each of the Parties may be fully advised in the
    premises of the dispute. The specific format for such discussions will be left to the discretion of the designated representatives
    but may include the preparation of agreed upon statements of fact or written statements of position furnished to the other
    Party. Formal proceedings for the resolution of such dispute pursuant to Section 18.15.2 hereof may not be commenced
    until the earlier to occur of (i) the designated representatives concluding in good faith that amicable resolution through
    continued negotiation of the matter in issue does not appear likely, or (ii) thirty (30) days after the initial request to
    negotiate such dispute. The Parties hereby waive the expiration of any applicable statute of limitations during such thirty
    (30) day period and for the thirty (30) days next following. Except where clearly prevented by the area in dispute, both Parties
    agree to continue performing their respective obligations under this Agreement while the dispute is being resolved unless
    and until this Agreement expires or is terminated. The provisions of this Section 18.15.1 shall not apply to any actions
    of the Parties for equitable relief.

 

	 	18.15.2	Arbitration
    of Disputes. Any claim or controversy arising out of or relating to this Agreement, or the breach thereof, including any
    anticipated breach or disagreement as to interpretation of this Agreement, which is not resolved pursuant to Section 18.15.1
    hereof, shall be settled by arbitration as follows:

 

		 	(a)	No
                                         arbitration governed by this Section 18.15.2 may be commenced until thirty (30)
                                         days after the Party wishing to commence an arbitration proceeding shall have given the
                                         other Party written notice describing the dispute to be arbitrated. During that thirty
                                         (30) days the Parties shall attempt to resolve the dispute amicably by negotiation. A
                                         written request by either Party to resolve a dispute pursuant to Section 18.15.1
                                         hereof shall constitute notice of a dispute for purposes of this Section 18.15.2 (a).
	 	 	 	 
		 	(b)	Except
                                         as provided below and to the extent the Parties may otherwise agree in writing, any arbitration
                                         under this Section 18.15.2 (the “Arbitration”) shall
                                         be conducted in accordance with the rules of the American Arbitration Association (the
                                         “AAA Rules”) by three arbitrators, none of whom shall be a
                                         current or former officer, Manager, or employee of any Party hereto or its Affiliates,
                                         selected as provided in the AAA Rules.

	 	 	 	 
		 	(c)	The
                                         Arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1
                                         et seq., and judgment upon the award rendered by the arbitrators may be entered by any
                                         court of competent jurisdiction.
	 	 	 	 
		 	(d)	The
                                         Arbitration shall take place in New York, New York. The arbitrators may hold individual
                                         hearings at any location they deem appropriate.
	 	 	 	 
		 	(e)	The
                                         arbitrators shall hold a pre-hearing conference as promptly as possible after the selection
                                         of the arbitrators and shall hold the first hearing within thirty (30) days after the
                                         selection of the arbitrators. If additional hearings are needed, they shall be held as
                                         promptly as possible thereafter, so that all hearings that may be required are concluded
                                         within ninety (90) days after the selection of the arbitrators. The arbitrators shall
                                         render their award within thirty (30) days after the last hearing.

 

    	34

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

		 	(f)	The
                                         Parties may by written notice to each other and the arbitrators freely specify further
                                         controversies or claims to be arbitrated up until the date of the pre-hearing conference.
                                         Thereafter, additional controversies or claims may be added only with the consent of
                                         the arbitrators.
	 	 	 	 
		 	(g)	The
                                         arbitrators may make interim awards and may award equitable and declaratory relief.
	 	 	 	 
		 	(h)	The
                                         costs and expenses of the Arbitration (including reasonable attorneys’ fees) shall
                                         be borne equally between the Parties.
	 	 	 	 
		 	(j)	The
                                         arbitrators shall not consider, nor shall any award include amounts for, punitive, exemplary,
                                         or consequential damages.
	 	 	 	 
		 	(j)	It
                                         shall not be inconsistent with this Section 18.15.2 for either Party to seek from
                                         any court of competent jurisdiction interim relief in aid of arbitration or to protect
                                         the rights of either Party pending the establishment of the arbitral tribunal.

 

	18.16	Export
    Control. If either Party determines that any information, technology or data that is to be transferred, shared or contributed
    (collectively a “Transfer”) pursuant to this Agreement is subject to export control restrictions
    under the U.S. Export Administration Regulations, the International Traffic in Arms Regulations or any other U.S. law or regulation,
    such Party may withhold such information, technology or data from Transfer without being in violation of this Agreement. In
    the event of such restrictions, transferring-Party will take reasonable steps to obtain an export license to permit the Transfer,
    so long as such Transfer would not violate any transferring-Party policy.

 

	18.17	FCPA.

 

	18.17.1   	Each
    Party warrants that it and its Affiliates have not made, offered, or authorized and will not make, offer, or authorize with
    respect to the matters which are the subject of this Agreement, any payment, gift, promise or other advantage, whether directly
    or through any other person or entity, to or for the use or benefit of any public official (i.e., any person holding a legislative,
    administrative or judicial office, including any person employed by or acting on behalf of a public agency, a public enterprise
    or a public international organization) or any political party or political party official or candidate for office, where
    such payment, gift, promise or advantage would violate the applicable laws of the United States of America or of any other
    country in which the Parties are together in business. Each Party shall defend, indemnify and hold the other Party harmless
    from and against any and all claims, damages, losses, penalties, costs and expenses arising from or related to, any breach
    by such first Party of such warranty. Such indemnity obligation shall survive termination or expiration of this Agreement.
    Each Party shall in good time (i) respond in reasonable detail to any notice from any other Party reasonably connected with
    the above-stated warranty; and (ii) furnish applicable documentary support for such response upon request from such other
    Party.

 

    	35

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

	18.17.2   	Each
    Party agrees to (i) maintain adequate internal controls; (ii) properly record and report all transactions; and (iii) comply
    with the laws referred to in Section 18.17.1 above. Each Party must rely on the other Party’s system of internal
    controls and on the adequacy of full disclosure of the facts, and of financial and other data provided under this Agreement.
    No Party is in any way authorized to take any action on behalf of the other Party that would result in an inadequate or inaccurate
    recording and reporting of assets, liabilities or any other transaction, or which would put such Party in violation of its
    obligations under the laws applicable to this Agreement. Each Party, at its own expense and upon providing reasonable notice
    to the other Party, shall have the right to audit the books and records of the other Party to the extent necessary to verify
    compliance with the provisions of this Section.

 

	18.17.3   	In
    the event of a breach of this Section of the Agreement, the non-breaching Party may terminate this Agreement immediately without
    any further liability or obligation.

 

	18.18	Non-Solicitation.
    During the term of this Agreement, and upon termination of this Agreement for any reason (including the expiration of the
    term hereof or any extension thereof) then for the period of twelve (12) months after such termination, neither Party shall
    directly or indirectly, solicit or attempt to employ, any employees of the other Party, except as mutually agreed by the Parties.

 

	18.19	Time
    is of the Essence. Time shall be of the essence with respect to all time periods and notice periods set forth in this
    Agreement.

 

    	36

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

IN
WITNESS THEREOF, E-C and D-R have caused this Agreement to be signed and delivered by their duly authorized officers, all as of
the date first hereinabove written.

 

ENER-CORE
POWER, INC.

 

	 	By:	 	 
	 	 	 	 
	 	Name:  	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	Date:	 	 

 

DRESSER-RAND
COMPANY

 

	 	By:	 	 
	 	 	 	 
	 	Name:  	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 
	 	Date:	 	 

 

    	37

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

ANNEX
A: Initial System Project Plan

[Attached]

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	38

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 *

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	39

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

ANNEX
B: Performance Specifications for Gradual Oxidizer

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	40

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

ANNEX
C: D-R Terms of Sale (DR100) and Terms of Purchase (DR195)

[Attached]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	41

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	42

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	43

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	44

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	45

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	46

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

 

    	47

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY (D-R)

TERMS
AND CONDITIONS OF SALE FOR EQUIPMENT, PARTS, FIELD SERVICES AND REPAIRS

“D-R100 Terms and Conditions” - Effective February 1, 2013

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	48

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	49

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	50

    	 

    

 

CONFIDENTIAL TREATMENT
REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	51

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	52

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	53

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	54

    	 

    

 

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	55

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission.

 

    	56

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

DRESSER-RAND
COMPANY

TERMS
AND CONDITIONS OF PURCHASE

D-R195
Terms and Conditions –USA - Effective October 18, 2014

 

 *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*
Portions of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the
Securities and Exchange Commission. 

 

    	57

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

ANNEX
D: Joint Oversight Team

 

From
E-C:

1.     *

2.
     *

3.     *

 

From
D-R: 

1.     *

2.
     *

3.     *

4.     *

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission. 

 

    	58

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

Annex
E: Code of Business Conduct 

[Attached]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	59

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

 

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED  

 

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

ANNEX
F: Technical Acceptance Criteria

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

ANNEX G:
Termination or Survival of Licenses

 

	 	Termination
    Trigger—Agreement Section Number
	10.3.2	10.2	10.3.1
        or

        10.4.2
	10.4.3	10.3.3
        or

        10.4.1
	10.3.4
    

    or 10.4.4	10.3.5
    

    or 10.4.5	10.3.6
        or

        10.4.6

	Termination
        by

        (Party):
	D-R	Either	D-R	E-C	E-C	Either	Either	Either	D-R	E-C
	Timing:	NA	<CT	>CT	Anytime	Anytime	Anytime	<CT	>CT	<CT	>CT	Anytime
	(A)
    Exclusive License 
 under
    6.1 before it 
 becomes perpetual	T	T	T	T	T	T	T	T	T	T	T	P	T
	(B)
    Exclusive License under 6.1 after it becomes perpetual	T	T	T	T	T	T	T	T	T	T	T	P	T
	(C)
    Non-Exclusive License under 6.1	T	T	T	T	T	T	T	T	T	T	T	P	T
	(D)
    Expanded License under 6.2	T	T	T	T	T	T	T	T	T	T	T	P	T
	(E)
    Fundamental Process Tech. Dev. license under 6.3	P	P	P	P	P	P	P	P	P	P	P	P	T
	(F)
    Gas Turbine Tech. Dev. license under
    6.4	P	P	P	P	P	P	P	P	P	P	P	P	T
	(G)
    Rights to use Joint Inventions under
    6.5	P	P	P	P	P	P	P	P	P	P	P	P	T
	(H)
    Rights to use Background IP in order to perform under 6.7	T	T	T	T	T	T	T	T	T	T	T	T	T
	(I)
    Actions to... protect or convey ownership
    rights under 6.	T	T	T	T	T	T	T	T	T	T	T	T	T

 

Legend:

T
= Terminates immediately; P = Perpetual <CT = before Completed Test >CT = after Completed Test

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

ANNEX
H: Performance Security—Letter of Credit Form

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Portions
of this page have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities
and Exchange Commission.

 

    	 

    	 

    

 

CONFIDENTIAL
TREATMENT REQUESTED 

 

Annex
I

Existing
Liens on E-C Intellectual Property

 

NoneEXHIBIT 10.29

 

AMENDMENT
AND WAIVER AGREEMENT

 

THIS
AMENDMENT AND WAIVER AGREEMENT (this “Amendment”) is made and entered into this as of December 1, 2014, by
and among Ener-Core, Inc., a Nevada corporation (the “Company”), and the undersigned Investors. Capitalized
terms used but not defined herein shall have the meanings set forth in the Transaction Agreements (defined in the Recitals below).

 

RECITALS:

 

WHEREAS,
reference is made to that certain Subscription Agreement by and among the Company and the Investors, and dated as of November
18, 2013 (the “Subscription Agreement”), and the Registration Rights Agreement by the same parties and dated
as of November 18, 2013 (the “Registration Rights Agreement,” and together with the Subscription Agreement,
the “Transaction Agreements”); and

 

WHEREAS,
the Investors have proposed that the Subscription Agreement be amended on the terms set forth below, in consideration of which
the Investors shall waive certain of their rights under the Registration Rights Agreement, which Proposal is acceptable to the
Company;

 

NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual agreements herein contained and for other good and valuable
consideration, the parties hereto agree as follows:

 

(A)          AMENDMENT AND WAIVER.

 

(1)       Amendments
to the Subscription Agreement. The Subscription Agreement (including the Instruction Sheet for Investor and the exhibits attached
thereto) is hereby amended as follows:

 

(a)       Section
1 of the Subscription Agreement is deleted in its entirety and the following are inserted in substitution therefor:

 

“1.Subscription.
The undersigned (the “Investor”) hereby subscribes for and agrees to purchase the number of shares of common
stock (the “Common Stock” or the “Shares”) of Ener-Core, Inc., a Nevada corporation (the
“Company”), and warrants to purchase 50% of such number of shares of Common Stock (the “Warrants”),
as set forth on the signature page hereto at a purchase price of $0.78 per share.

 

(b)       All other references throughout the Subscription Agreement to the purchase price per share of Common Stock being $1.00
shall be stricken and replaced by $0.78.

 

(c)       The
term “Shares” appearing anywhere else throughout the Subscription Agreement shall be stricken and replaced by “Shares
and Warrants.”

 

    	-1-

    	 

    

 

(2)       Waiver
of Registration Rights. Each Investor signatory to this Amendment hereby agrees that the Registration Rights Agreement shall
not apply to, and such Investor hereby waives all of such Investor’s rights under the Registration Rights Agreement, if
any, with respect to the shares of Common Stock issuable by the Company to such Investor resulting from the amendment to the Subscription
Agreement set forth in Section (A)(1) above, including the shares of Common Stock underlying the Warrants, and will make
no claims for damages or for default thereunder; provided, however, that all other ongoing obligations of the Company
under the Registration Rights Agreement shall remain in full force and effect.

 

(3)       No
Other Amendments. Except as expressly set forth herein, this Amendment shall not be deemed to be a waiver, amendment
or modification of any provisions of the Transaction Agreements, or of any right, power or remedy of the Investors,
or constitute a waiver, amendment or modification of any provision of the Transaction Agreements (except to the extent herein
set forth), or any other document, instrument and/or agreement executed or delivered in connection therewith, in each case whether
arising before or after the date hereof or as a result of performance hereunder or thereunder, all of which (except as specified
herein) remain in full force and effect. Except as set forth herein, the Investors reserve all rights, remedies, powers,
or privileges.

 

(B)          CONFLICTS.
Except as expressly set forth in this Amendment, the terms and provisions of each of the Transaction Agreements shall continue
unmodified and in full force and effect. In the event of any conflict between this Amendment and any one of the Transaction Agreements,
this Amendment shall control.

 

(C)          GOVERNING
LAW. This Amendment shall be governed and construed under the laws of the State of California, and shall be binding on and
shall inure to the benefit of the parties and their respective successors and permitted assigns.

 

(D)          COUNTERPARTS.
This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument. A facsimile or other electronic transmission of this signed Amendment shall be legal and binding on
all parties hereto.

 

[Remainder
of page left blank intentionally.]

 

    	-2-

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.

 

COMPANY:

 

ENER-CORE,
INC.

 

	By:		 
	Name:	Alain
    J. Castro	 
	Title:	Chief
    Executive Officer	 

 

    	-3-

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.

 

INVESTORS:

 

RUFUS
DUFUS, LLC

 

	By:		 
	 	 	 
	Name:		 
		 	 
	Title:		 

 

    	-4-

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.

 

BUYERS:

 

DYLANA
DREAMS, LLC

 

	By:		 
	 	 	 
	Name:		 
	 	 	 
	Title:		 

 

 

-5-

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