Document:

Exhibit 10.1

 

AUDIOEYE, INC.

 

2015 INCENTIVE COMPENSATION PLAN

 

 

AUDIOEYE, INC.

 

2015 INCENTIVE COMPENSATION PLAN

 

	
1.
    	
Purpose
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
3.
    	
Administration
    	
6
    
	
 
    	
 
    	
 
    
	
4.
    	
Shares Subject to Plan
    	
7
    
	
 
    	
 
    	
 
    
	
5.
    	
Eligibility; Per-Person Award Limitations
    	
8
    
	
 
    	
 
    	
 
    
	
6.
    	
Specific Terms of Awards
    	
8
    
	
 
    	
 
    	
 
    
	
7.
    	
Certain Provisions Applicable to Awards
    	
14
    
	
 
    	
 
    	
 
    
	
8.
    	
Code Section 162(m) Provisions
    	
16
    
	
 
    	
 
    	
 
    
	
9.
    	
Change in Control
    	
18
    
	
 
    	
 
    	
 
    
	
10.
    	
General Provisions
    	
19
    

 

 

AUDIOEYE, INC.

 

2015 INCENTIVE COMPENSATION PLAN

 

1.                                      Purpose.  The purpose of this AUDIOEYE, INC. 2015 INCENTIVE COMPENSATION PLAN (the “Plan”) is to assist AudioEye, Inc., a Delaware corporation (the “Company”) and its Related Entities (as hereinafter defined) in attracting, motivating, retaining and rewarding high-quality executives and other employees, officers, directors, consultants and other persons who provide services to the Company or its Related Entities by enabling such persons to acquire or increase a proprietary interest in the Company in order to strengthen the mutuality of interests between such persons and the Company’s stockholders, and providing such persons with annual and long term performance incentives to expend their maximum efforts in the creation of stockholder value.

 

2.                                      Definitions.  For purposes of the Plan, the following terms shall be defined as set forth below, in addition to such terms defined in Section 1 hereof and elsewhere herein.

 

(a)                                 “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Deferred Stock Award, Share granted as a bonus or in lieu of another Award, Dividend Equivalent, Other Stock-Based Award or Performance Award, together with any other right or interest, granted to a Participant under the Plan.

 

(b)                                 “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award granted by the Committee hereunder.

 

(c)                                  “Beneficiary” means the person, persons, trust or trusts that have been designated by a Participant in his or her most recent written beneficiary designation filed with the Committee to receive the benefits specified under the Plan upon such Participant’s death or to which Awards or other rights are transferred if and to the extent permitted under Section 10(b) hereof.  If, upon a Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

 

(d)                                 “Beneficial Owner” and “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule.

 

(e)                                  “Board” means the Company’s Board of Directors.

 

(f)                                   “Cause” shall, with respect to any Participant, have the meaning specified in the Award Agreement.  In the absence of any definition in the Award Agreement, “Cause” shall have the equivalent meaning or the same meaning as “cause” or “for cause” set forth in any employment, consulting, or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the failure by the Participant to perform, in a reasonable manner, his or her duties as assigned by the Company or a Related Entity, (ii) any violation or breach by the Participant of his or her employment, consulting or other similar agreement with the Company or a Related Entity, if any, (iii) any violation or

 

 

breach by the Participant of any non-competition, non-solicitation, non-disclosure and/or other similar agreement with the Company or a Related Entity, (iv) any act by the Participant of dishonesty or bad faith with respect to the Company or a Related Entity, (v) use of alcohol, drugs or other similar substances in a manner that adversely affects the Participant’s work performance, or (vi) the commission by the Participant of any act, misdemeanor, or crime reflecting unfavorably upon the Participant or the Company or any Related Entity.  The good faith determination by the Committee of whether the Participant’s Continuous Service was terminated by the Company for “Cause” shall be final and binding for all purposes hereunder.

 

(g)                                  “Change in Control” means a Change in Control as defined in Section 9(b) of the Plan.

 

(h)                                 “Code” means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto.

 

(i)                                     “Committee” means a committee designated by the Board to administer the Plan; provided, however, that if the Board fails to designate a committee or if there are no longer any members on the committee so designated by the Board, or for any other reason determined by the Board, then the Board shall serve as the Committee.  While it is intended that the Committee shall consist of at least two directors, each of whom shall be (i) a “non-employee director” within the meaning of Rule 16b-3 (or any successor rule) under the Exchange Act, unless administration of the Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the meaning of Section 162(m) of the Code, and (iii) “Independent,” the failure of the Committee to be so comprised shall not invalidate any Award that otherwise satisfies the terms of the Plan.

 

(j)                                    “Consultant” means any Person (other than an Employee or a Director, solely with respect to rendering services in such Person’s capacity as a director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity.

 

(k)                                 “Continuous Service” means the uninterrupted provision of services to the Company or any Related Entity in any capacity of Employee, Director, Consultant or other service provider.  Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in any capacity of Employee, Director, Consultant or other service provider, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director, Consultant or other service provider (except as otherwise provided in the Award Agreement).  An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.

 

(l)                                     “Covered Employee” means the Person who, as of the end of the taxable year, either is the principal executive officer of the Company or is serving as the acting principal executive officer of the Company, and each other Person whose compensation is required to be disclosed in the Company’s filings with the Securities and Exchange Commission by reason of that person being among the three highest compensated officers of the Company as of the end of

 

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a taxable year, or such other person as shall be considered a “covered employee” for purposes of Section 162(m) of the Code.

 

(m)                             “Deferred Stock” means a right to receive Shares, including Restricted Stock, cash measured based upon the value of Shares or a combination thereof, at the end of a specified deferral period.

 

(n)                                 “Deferred Stock Award” means an Award of Deferred Stock granted to a Participant under Section 6(e) hereof.

 

(o)                                 “Director” means a member of the Board or the board of directors of any Related Entity.

 

(p)                                 “Disability” means a permanent and total disability (within the meaning of Section 22(e) of the Code), as determined by a medical doctor satisfactory to the Committee.

 

(q)                                 “Dividend Equivalent” means a right, granted to a Participant under Section 6(g) hereof, to receive cash, Shares, other Awards or other property equal in value to dividends paid with respect to a specified number of Shares, or other periodic payments.

 

(r)                                    “Effective Date” means the effective date of the Plan, which shall be September 5, 2014.

 

(s)                                   “Eligible Person” means each officer, Director, Employee, Consultant and other person who provides services to the Company or any Related Entity.  The foregoing notwithstanding, only Employees of the Company, or any parent corporation or subsidiary corporation of the Company (as those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be Eligible Persons for purposes of receiving any Incentive Stock Options.  An Employee on leave of absence may, in the discretion of the Committee, be considered as still in the employ of the Company or a Related Entity for purposes of eligibility for participation in the Plan.

 

(t)                                    “Employee” means any person, including an officer or Director, who is an employee of the Company or any Related Entity.  The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.

 

(u)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules thereto.

 

(v)                                 “Fair Market Value” means the fair market value of Shares, Awards or other property as determined by the Committee, or under procedures established by the Committee.  Unless otherwise determined by the Committee, the Fair Market Value of a Share as of any given date shall be the closing sale price per Share reported on a consolidated basis for stock listed on the principal stock exchange or market on which Shares are traded on the date immediately preceding the date as of which such value is being determined (or as of such later measurement date as determined by the Committee on the date the Award is authorized by the Committee), or, if there is no sale on that date, then on the last previous day on which a sale was reported.

 

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(w)                               “Good Reason” shall, with respect to any Participant, have the meaning specified in the Award Agreement.  In the absence of any definition in the Award Agreement, “Good Reason” shall have the equivalent meaning or the same meaning as “good reason” or “for good reason” set forth in any employment, consulting or other agreement for the performance of services between the Participant and the Company or a Related Entity or, in the absence of any such agreement or any such definition in such agreement, such term shall mean (i) the assignment to the Participant of any duties inconsistent in any material respect with the Participant’s duties or responsibilities as assigned by the Company or a Related Entity, or any other action by the Company or a Related Entity which results in a material diminution in such duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; (ii) any material failure by the Company or a Related Entity to comply with its obligations to the Participant as agreed upon, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by the Participant; or (iii) the Company’s or Related Entity’s requiring the Participant to be based at any office or location outside of fifty (50) miles from the location of employment or service as of the date of Award, except for travel reasonably required in the performance of the Participant’s responsibilities.

 

(x)                                 “Incentive Stock Option” means any Option intended to be designated as an incentive stock option within the meaning of Section 422 of the Code or any successor provision thereto.

 

(y)                                 “Independent,” when referring to either the Board or members of the Committee, shall have the same meaning as used in the rules of the Listing Market.

 

(z)                                  “Incumbent Board” means the Incumbent Board as defined in Section 9(b)(ii) hereof.

 

(aa)                          “Listing Market” means the OTC Bulletin Board or any other national securities exchange on which any securities of the Company are listed for trading, and if not listed for trading, by the rules of the Nasdaq Market.

 

(bb)                          “Non-Qualified Stock Option” means any option that is not an Incentive Stock Option.

 

(cc)                            “Option” means a right granted to a Participant under Section 6(b) hereof, to purchase Shares or other Awards at a specified price during specified time periods.

 

(dd)                          “Optionee” means a person to whom an Option is granted under this Plan or any person who succeeds to the rights of such person under this Plan.

 

(ee)                            “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(i) hereof.

 

(ff)                              “Participant” means a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person.

 

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(gg)                            “Performance Award” means any Award of Performance Shares or Performance Units granted pursuant to Section 6(h) hereof.

 

(hh)                          “Performance Period” means that period established by the Committee at the time any Performance Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are to be measured.

 

(ii)                                  “Performance Share” means any grant pursuant to Section 6(h) hereof of a unit valued by reference to a designated number of Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

(jj)                                “Performance Unit” means any grant pursuant to Section 6(h) hereof of a unit valued by reference to a designated amount of property (including cash) other than Shares, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including cash, Shares, other property, or any combination thereof, upon achievement of such performance goals during the Performance Period as the Committee shall establish at the time of such grant or thereafter.

 

(kk)                          “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, and shall include a “group” as defined in Section 13(d) thereof.

 

(ll)                                  “Related Entity” means any Subsidiary, and any business, corporation, partnership, limited liability company or other entity designated by the Board, in which the Company or a Subsidiary holds a substantial ownership interest, directly or indirectly.

 

(mm)                  “Restriction Period” means the period of time specified by the Committee that Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose.

 

(nn)                          “Restricted Stock” means any Share issued with the restriction that the holder may not sell, transfer, pledge or assign such Share and with such risks of forfeiture and other restrictions as the Committee, in its sole discretion, may impose (including any restriction on the right to vote such Share and the right to receive any dividends), which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Committee may deem appropriate.

 

(oo)                          “Restricted Stock Award” means an Award granted to a Participant under Section 6(d) hereof.

 

(pp)                          “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.

 

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(qq)                          “Shares” means the shares of common stock of the Company, par value $.00001 per share, and such other securities as may be substituted (or resubstituted) for Shares pursuant to Section 10(c) hereof.

 

(rr)                                “Stock Appreciation Right” means a right granted to a Participant under Section 6(c) hereof.

 

(ss)                              “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% or more of the assets on liquidation or dissolution.

 

(tt)                                “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, Awards previously granted, or the right or obligation to make future Awards, by a company (i) acquired by the Company or any Related Entity, (ii) which becomes a Related Entity after the date hereof, or (iii) with which the Company or any Related Entity combines.

 

3.                                      Administration.

 

(a)                                 Authority of the Committee.  The Plan shall be administered by the Committee except to the extent (and subject to the limitations imposed by Section 3(b) hereof) the Board elects to administer the Plan, in which case the Plan shall be administered by only those members of the Board who are Independent members of the Board, in which case references herein to the “Committee” shall be deemed to include references to the Independent members of the Board.  The Committee shall have full and final authority, subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number and other terms and conditions of, and all other matters relating to, Awards, prescribe Award Agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award Agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan.  In exercising any discretion granted to the Committee under the Plan or pursuant to any Award, the Committee shall not be required to follow past practices, act in a manner consistent with past practices, or treat any Eligible Person or Participant in a manner consistent with the treatment of any other Eligible Persons or Participants.

 

(b)                                 Manner of Exercise of Committee Authority.  The Committee, and not the Board, shall exercise sole and exclusive discretion (i) on any matter relating to a Participant then subject to Section 16 of the Exchange Act with respect to the Company to the extent necessary in order that transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Act, (ii) with respect to any Award that is intended to qualify as “performance-based compensation” under Section 162(m), to the extent necessary in order for such Award to so qualify; and (iii) with respect to any Award to an Independent Director.  Any action of the Committee shall be final, conclusive and binding on all persons, including the Company, its

 

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Related Entities, Eligible Persons, Participants, Beneficiaries, transferees under Section 10(b) hereof or other persons claiming rights from or through a Participant, and stockholders.  The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee.  The Committee may delegate to officers or managers of the Company or any Related Entity, or committees thereof, the authority, subject to such terms and limitations as the Committee shall determine, to perform such functions, including administrative functions as the Committee may determine to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify.  The Committee may appoint agents to assist it in administering the Plan.

 

(c)                                  Limitation of Liability.  The Committee and the Board, and each member thereof, shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or Employee, the Company’s independent auditors, Consultants or any other agents assisting in the administration of the Plan.  Members of the Committee and the Board, and any officer or Employee acting at the direction or on behalf of the Committee or the Board, shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.

 

4.                                      Shares Subject to Plan.

 

(a)                                 Limitation on Overall Number of Shares Available for Delivery Under Plan.  Subject to adjustment as provided in Section 10(c) hereof, the total number of Shares reserved and available for delivery under the Plan shall be five million (5,000,000).  Any Shares delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares.

 

(b)                                 Application of Limitation to Grants of Awards.  No Award may be granted if the number of Shares to be delivered in connection with such an Award exceeds the number of Shares remaining available for delivery under the Plan, minus the number of Shares deliverable in settlement of or relating to then outstanding Awards.  The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of Shares actually delivered differs from the number of Shares previously counted in connection with an Award.

 

(c)                                  Availability of Shares Not Delivered under Awards and Adjustments to Limits.

 

(i)                                     If any Awards are forfeited, expire or otherwise terminate without issuance of such Shares, or any Award is settled for cash or otherwise does not result in the issuance of all or a portion of the Shares subject to such Award, the Shares to which those Awards were subject, shall, to the extent of such forfeiture, expiration, termination, cash

 

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settlement or non-issuance, again be available for delivery with respect to Awards under the Plan, subject to Section 4(c)(iv) below.

 

(ii)                                  In the event that any Option or other Award granted hereunder is exercised through the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the Company, or withholding tax liabilities arising from such option or other award are satisfied by the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the Company, then only the number of Shares issued net of the Shares tendered or withheld shall be counted for purposes of determining the maximum number of Shares available for grant under the Plan.

 

(iii)                               Substitute Awards shall not reduce the Shares authorized for delivery under the Plan or authorized for delivery to a Participant in any period.  Additionally, in the event that a company acquired by the Company or any Related Entity or with which the Company or any Related Entity combines has shares available under a pre-existing plan approved by its stockholders, the shares available for delivery pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for delivery under the Plan; if and to the extent that the use of such Shares would not require approval of the Company’s stockholders under the rules of the Listing Market.

 

(iv)                              Any Share that again becomes available for delivery pursuant to this Section 4(c) shall be added back as one (1) Share.

 

(v)                                 Notwithstanding anything in this Section 4(c) to the contrary but subject to adjustment as provided in Section 10(c) hereof, the maximum aggregate number of Shares that may be delivered under the Plan as a result of the exercise of the Incentive Stock Options shall be five million (5,000,000) Shares.

 

5.                                      Eligibility; Per-Person Award Limitations.  Awards may be granted under the Plan only to Eligible Persons.  Subject to adjustment as provided in Section 10(c), in any fiscal year of the Company during any part of which the Plan is in effect, no Participant may be granted (i) Options or Stock Appreciation Rights with respect to more than 500,000 Shares or (ii) Restricted Stock, Deferred Stock, Performance Shares and/or Other Stock-Based Awards with respect to more than 500,000 Shares.  In addition, the maximum dollar value payable to any one Participant with respect to Performance Units is (x) $250,000 with respect to any 12 month Performance Period and (y) with respect to any Performance Period that is more than 12 months, $500,000.

 

6.                                      Specific Terms of Awards.

 

(a)                                 General.  Awards may be granted on the terms and conditions set forth in this Section 6.  In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including

 

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terms requiring forfeiture of Awards in the event of termination of the Participant’s Continuous Service and terms permitting a Participant to make elections relating to his or her Award.  Except as otherwise expressly provided herein, the Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan.  Except in cases in which the Committee is authorized to require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of Delaware law, no consideration other than services may be required for the grant (as opposed to the exercise) of any Award.

 

(b)                                 Options.  The Committee is authorized to grant Options to any Eligible Person on the following terms and conditions:

 

(i)                                     Exercise Price.  Other than in connection with Substitute Awards, the exercise price per Share purchasable under an Option shall be determined by the Committee, provided that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of the Option and shall not, in any event, be less than the par value of a Share on the date of grant of the Option.  If an Employee owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and an Incentive Stock Option is granted to such Employee, the exercise price of such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no less than 110% of the Fair Market Value of a Share on the date such Incentive Stock Option is granted.

 

(ii)                                  Time and Method of Exercise.  The Committee shall determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which Options shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the methods by which the exercise price may be paid or deemed to be paid (including in the discretion of the Committee a cashless exercise procedure), the form of such payment, including, without limitation, cash, Shares (including without limitation the withholding of Shares otherwise deliverable pursuant to the Award), other Awards or awards granted under other plans of the Company or a Related Entity, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis provided that such deferred payments are not in violation of Section 13(k) of the Exchange Act, or any rule or regulation adopted thereunder or any other applicable law), and the methods by or forms in which Shares will be delivered or deemed to be delivered to Participants.

 

(iii)                               Incentive Stock Options.  The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code.  Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options (including any Stock Appreciation Right issued in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422 of the Code, unless the Participant has first requested, or consents to, the change that will

 

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result in such disqualification.  Thus, if and to the extent required to comply with Section 422 of the Code, Options granted as Incentive Stock Options shall be subject to the following special terms and conditions:

 

(A)                               the Option shall not be exercisable for more than ten years after the date such Incentive Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting power of all classes of stock of the Company (or any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) and the Incentive Stock Option is granted to such Participant, the term of the Incentive Stock Option shall be (to the extent required by the Code at the time of the grant) for no more than five years from the date of grant; and

 

(B)                               The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and all other option plans of the Company (and any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) that become exercisable for the first time by the Participant during any calendar year shall not (to the extent required by the Code at the time of the grant) exceed $100,000.

 

(c)                                  Stock Appreciation Rights.  The Committee may grant Stock Appreciation Rights to any Eligible Person in conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (a “Tandem Stock Appreciation Right”), or without regard to any Option (a “Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in its sole discretion, not inconsistent with the provisions of the Plan, including the following:

 

(i)                                     Right to Payment.  A Stock Appreciation Right shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one Share on the date of exercise over (B) the grant price of the Stock Appreciation Right as determined by the Committee.  The grant price of a Stock Appreciation Right shall not be less than 100% of the Fair Market Value of a Share on the date of grant, in the case of a Freestanding Stock Appreciation Right, or less than the associated Option exercise price, in the case of a Tandem Stock Appreciation Right.

 

(ii)                                  Other Terms.  The Committee shall determine at the date of grant or thereafter, the time or times at which and the circumstances under which a Stock Appreciation Right may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which Stock Appreciation Rights shall cease to be or become exercisable following termination of Continuous Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Shares will be delivered or deemed to be delivered to Participants, whether or not a Stock Appreciation Right shall be in tandem or in combination with any other Award, and any other terms and conditions of any Stock Appreciation Right.

 

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(iii)                               Tandem Stock Appreciation Rights. Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or, for Options that are Non-Qualified Stock Options, at any time thereafter before exercise or expiration of such Option.  Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the Shares subject to the related Option exceeds the exercise price at which Shares can be acquired pursuant to the Option.  In addition, if a Tandem Stock Appreciation Right exists with respect to less than the full number of Shares covered by a related Option, then an exercise or termination of such Option shall not reduce the number of Shares to which the Tandem Stock Appreciation Right applies until the number of Shares then exercisable under such Option equals the number of Shares to which the Tandem Stock Appreciation Right applies. Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised, and any Tandem Stock Appreciation Right shall no longer be exercisable to the extent the related Option has been exercised.

 

(d)                                 Restricted Stock Awards.  The Committee is authorized to grant Restricted Stock Awards to any Eligible Person on the following terms and conditions:

 

(i)                                     Grant and Restrictions.  Restricted Stock Awards shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, or as otherwise provided in this Plan during the Restriction Period.  The terms of any Restricted Stock Award granted under the Plan shall be set forth in a written Award Agreement which shall contain provisions determined by the Committee and not inconsistent with the Plan.  The restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter.  Except to the extent restricted under the terms of the Plan and any Award Agreement relating to a Restricted Stock Award, a Participant granted Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee).  During the period that the Restriction Stock Award is subject to a risk of forfeiture, subject to Section 10(b) below and except as otherwise provided in the Award Agreement, the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.

 

(ii)                                  Forfeiture.  Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable Restriction Period, the Participant’s Restricted Stock that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited and reacquired by the Company; provided that, subject to the limitations set forth in Section 6(j)(ii) hereof, the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to Restricted Stock Awards shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock.

 

(iii)                               Certificates for Stock.  Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine.  If certificates representing

 

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Restricted Stock are registered in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock, that the Company retain physical possession of the certificates, and that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock.

 

(iv)                              Dividends and Splits.  As a condition to the grant of a Restricted Stock Award, the Committee may require or permit a Participant to elect that any cash dividends paid on a Share of Restricted Stock be automatically reinvested in additional Shares of Restricted Stock or applied to the purchase of additional Awards under the Plan.  Unless otherwise determined by the Committee, Shares distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Shares or other property have been distributed.

 

(e)                                  Deferred Stock Award.  The Committee is authorized to grant Deferred Stock Awards to any Eligible Person on the following terms and conditions:

 

(i)                                     Award and Restrictions.  Satisfaction of a Deferred Stock Award shall occur upon expiration of the deferral period specified for such Deferred Stock Award by the Committee (or, if permitted by the Committee, as elected by the Participant).  In addition, a Deferred Stock Award shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine.  A Deferred Stock Award may be satisfied by delivery of Shares, cash equal to the Fair Market Value of the specified number of Shares covered by the Deferred Stock, or a combination thereof, as determined by the Committee at the date of grant or thereafter.  Prior to satisfaction of a Deferred Stock Award, a Deferred Stock Award carries no voting or dividend or other rights associated with Share ownership.

 

(ii)                                  Forfeiture.  Except as otherwise determined by the Committee, upon termination of a Participant’s Continuous Service during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Deferred Stock Award), the Participant’s Deferred Stock Award that is at that time subject to a risk of forfeiture that has not lapsed or otherwise been satisfied shall be forfeited; provided that, subject to the limitations set forth in Section 6(j)(ii) hereof, the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that forfeiture conditions relating to a Deferred Stock Award shall be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of any Deferred Stock Award.

 

(iii)                               Dividend Equivalents.  Unless otherwise determined by the Committee at the date of grant, any Dividend Equivalents that are granted with respect to any Deferred Stock Award shall be either (A) paid with respect to such Deferred Stock Award at the dividend payment date in cash or in Shares of unrestricted stock having a Fair Market Value

 

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equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock Award and the amount or value thereof automatically deemed reinvested in additional Deferred Stock, other Awards or other investment vehicles, as the Committee shall determine or permit the Participant to elect.  The applicable Award Agreement shall specify whether any Dividend Equivalents shall be paid at the dividend payment date, deferred or deferred at the election of the Participant.  If the Participant may elect to defer the Dividend Equivalents, such election shall be made within 30 days after the grant date of the Deferred Stock Award, but in no event later than 12 months before the first date on which any portion of such Deferred Stock Award vests.

 

(f)                                   Bonus Stock and Awards in Lieu of Obligations.  The Committee is authorized to grant Shares to any Eligible Persons as a bonus, or to grant Shares or other Awards in lieu of obligations to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, provided that, in the case of Eligible Persons subject to Section 16 of the Exchange Act, the amount of such grants remains within the discretion of the Committee to the extent necessary to ensure that acquisitions of Shares or other Awards are exempt from liability under Section 16(b) of the Exchange Act.  Shares or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee.

 

(g)                                  Dividend Equivalents.  The Committee is authorized to grant Dividend Equivalents to any Eligible Person entitling the Eligible Person to receive cash, Shares, other Awards, or other property equal in value to the dividends paid with respect to a specified number of Shares, or other periodic payments.  Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award.  The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Shares, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify.  Any such determination by the Committee shall be made at the grant date of the applicable Award.

 

(h)                                 Performance Awards.  The Committee is authorized to grant Performance Awards to any Eligible Person payable in cash, Shares, or other Awards, on terms and conditions established by the Committee, subject to the provisions of Section 8 if and to the extent that the Committee shall, in its sole discretion, determine that an Award shall be subject to those provisions.  The performance criteria to be achieved during any Performance Period and the length of the Performance Period shall be determined by the Committee upon the grant of each Performance Award; provided, however, that a Performance Period shall not be shorter than twelve (12) months nor longer than five (5) years.  Except as provided in Section 9 or as may be provided in an Award Agreement, Performance Awards will be distributed only after the end of the relevant Performance Period.  The performance goals to be achieved for each Performance Period shall be conclusively determined by the Committee and may be based upon the criteria set forth in Section 8(b), or in the case of an Award that the Committee determines shall not be subject to Section 8 hereof, any other criteria that the Committee, in its sole discretion, shall determine should be used for that purpose.  The amount of the Award to be distributed shall be conclusively determined by the Committee.  Performance Awards may be paid in a lump sum or in installments following the close of the Performance Period or, in accordance with procedures established by the Committee, on a deferred basis.

 

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(i)                                     Other Stock-Based Awards.  The Committee is authorized, subject to limitations under applicable law, to grant to any Eligible Person such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan.  Other Stock-Based Awards may be granted to Participants either alone or in addition to other Awards granted under the Plan, and such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan.  The Committee shall determine the terms and conditions of such Awards.  Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(i) shall be purchased for such consideration, (including without limitation loans from the Company or a Related Entity provided that such loans are not in violation of Section 13(k) of the Exchange Act, or any rule or regulation adopted thereunder or any other applicable law) paid for at such times, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards or other property, as the Committee shall determine.

 

7.                                      Certain Provisions Applicable to Awards.

 

(a)                                 Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under another plan of the Company, any Related Entity, or any business entity to be acquired by the Company or a Related Entity, or any other right of a Participant to receive payment from the Company or any Related Entity.  Such additional, tandem, and substitute or exchange Awards may be granted at any time.  If an Award is granted in substitution or exchange for another Award or award, the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award.  In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any Related Entity, in which the value of Shares subject to the Award is equivalent in value to the cash compensation (for example, Deferred Stock or Restricted Stock), or in which the exercise price, grant price or purchase price of the Award in the nature of a right that may be exercised is equal to the Fair Market Value of the underlying Shares minus the value of the cash compensation surrendered (for example, Options or Stock Appreciation Right granted with an exercise price or grant price “discounted” by the amount of the cash compensation surrendered), provided that any such determination to grant an Award in lieu of cash compensation must be made in compliance with Section 409A of the Code.

 

(b)                                 Term of Awards.  The term of each Award shall be for such period as may be determined by the Committee; provided that in no event shall the term of any Option or Stock Appreciation Right exceed a period of ten years (or in the case of an Incentive Stock Option such shorter term as may be required under Section 422 of the Code).

 

(c)                                  Form and Timing of Payment Under Awards; Deferrals.  Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or a Related Entity upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Shares, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis, provided that any determination to pay in installments or

 

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on a deferred basis shall be made by the Committee at the date of grant.  Any installment or deferral provided for in the preceding sentence shall, however, be subject to the Company’s compliance with applicable law and all applicable rules of the Listing Market, and in a manner intended to be exempt from or otherwise satisfy the requirements of Section 409A of the Code.  Subject to Section 7(e) hereof, the settlement of any Award may be accelerated, and cash paid in lieu of Shares in connection with such settlement, in the sole discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in Control).  Any such settlement shall be at a value determined by the Committee in its sole discretion, which, without limitation, may in the case of an Option or Stock Appreciation Right be limited to the amount if any by which the Fair Market Value of a Share on the settlement date exceeds the exercise or grant price.  Installment or deferred payments may be required by the Committee (subject to Section 7(e) of the Plan, including the consent provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award Agreement) or permitted at the election of the Participant on terms and conditions established by the Committee.  The Committee may, without limitation, make provision for the payment or crediting of a reasonable interest rate on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Shares.

 

(d)                                 Exemptions from Section 16(b) Liability.  It is the intent of the Company that the grant of any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption (except for transactions acknowledged in writing to be non-exempt by such Participant).  Accordingly, if any provision of this Plan or any Award Agreement does not comply with the requirements of Rule 16b-3 then applicable to any such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section 16(b).

 

(e)                                  Code Section 409A.

 

(i)                                     The Award Agreement for any Award that the Committee reasonably determines to constitute a Section 409A Plan, and the provisions of the Plan applicable to that Award, shall be construed in a manner consistent with the applicable requirements of Section 409A, and the Committee, in its sole discretion and without the consent of any Participant, may amend any Award Agreement (and the provisions of the Plan applicable thereto) if and to the extent that the Committee determines that such amendment is necessary or appropriate to comply with the requirements of Section 409A of the Code.

 

(ii)                                  If any Award constitutes a “nonqualified deferred compensation plan” under Section 409A of the Code (a “Section 409A Plan”), then the Award shall be subject to the following additional requirements, if and to the extent required to comply with Section 409A of the Code:

 

(A)                               Payments under the Section 409A Plan may not be made earlier than the first to occur of (u) the Participant’s “separation from service,” (v) the date the Participant becomes “disabled,” (w) the Participant’s death, (x) a “specified time (or pursuant to a fixed schedule)” specified in the Award Agreement at the date of the deferral of such

 

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compensation, (y) a “change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets” of the Company, or (z) the occurrence of an “unforeseeble emergency;”

 

(B)                               The time or schedule for any payment of the deferred compensation may not be accelerated, except to the extent provided in applicable Treasury Regulations or other applicable guidance issued by the Internal Revenue Service;

 

(C)                               Any elections with respect to the deferral of such compensation or the time and form of distribution of such deferred compensation shall comply with the requirements of Section 409A(a)(4) of the Code; and

 

(D)                               In the case of any Participant who is “specified employee,” a distribution on account of a “separation from service” may not be made before the date which is six months after the date of the Participant’s “separation from service” (or, if earlier, the date of the Participant’s death).

 

For purposes of the foregoing, the terms in quotations shall have the same meanings as those terms have for purposes of Section 409A of the Code, and the limitations set forth herein shall be applied in such manner (and only to the extent) as shall be necessary to comply with any requirements of Section 409A of the Code that are applicable to the Award.  The Company does not make any representation to the Participant that any Awards awarded under this Plan will be exempt from, or satisfy, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless any Participant or Beneficiary for any tax, additional tax, interest or penalties that any Participant or Beneficiary may incur in the event that any provision of this Plan, any Award Agreement, or any amendment or modification thereof, or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

 

(iii)                               Notwithstanding the foregoing, the Company does not make any representation to any Participant or Beneficiary that any Awards made pursuant to this Plan are exempt from, or satisfy, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless the Participant or any Beneficiary for any tax, additional tax, interest or penalties that the Participant or any Beneficiary may incur in the event that any provision of this Plan, or any Award Agreement, or any amendment or modification thereof, or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

 

8.                                      Code Section 162(m) Provisions.

 

(a)                                 Covered Employees.  Unless otherwise specified by the Committee, the provisions of this Section 8 shall be applicable to any Performance Award granted to an Eligible Person who is, or is likely to be, as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee.

 

(b)                                 Performance Criteria.  If a Performance Award is subject to this Section 8, then the payment or distribution thereof or the lapsing of restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as applicable, shall be contingent

 

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upon achievement of one or more objective performance goals.  Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.”  One or more of the following business criteria for the Company, on a consolidated basis, and/or for Related Entities, or for business or geographical units of the Company and/or a Related Entity (except with respect to the total stockholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for such Awards: (1) earnings per share; (2) revenues or margins; (3) cash flow; (4) operating margin; (5) return on net assets, investment, capital, or equity; (6) economic value added; (7) direct contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings after interest expense and before extraordinary or special items; operating income or income from operations; income before interest income or expense, unusual items and income taxes, local, state or federal and excluding budgeted and actual bonuses which might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of fixed costs or variable costs; (11) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including strategic mergers, acquisitions or divestitures; (12) total stockholder return; (13) debt reduction; (14) market share; (15) entry into new markets, either geographically or by business unit; (16) customer retention and satisfaction; (17) strategic plan development and implementation, including turnaround plans; and/or (18) the Fair Market Value of a Share.  Any of the above goals may be determined on an absolute or relative basis or as compared to the performance of a published or special index deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of companies that are comparable to the Company.  In determining the achievement of the performance goals, the Committee shall exclude the impact of any (i) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, or (iii) change in accounting standards required by generally accepted accounting principles.

 

(c)                                  Performance Period; Timing For Establishing Performance Goals.  Achievement of performance goals in respect of Performance Awards shall be measured over a Performance Period no shorter than twelve (12) months and no longer than five (5) years, as specified by the Committee.  Performance goals shall be established not later than 90 days after the beginning of any Performance Period applicable to such Performance Awards, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

 

(d)                                 Adjustments.  The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with Awards subject to this Section 8, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of an Award subject to this Section 8.  The Committee shall specify the circumstances in which such Awards shall be paid or forfeited in the event of termination of Continuous Service by the Participant prior to the end of a Performance Period or settlement of Awards.

 

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(e)                                  Committee Certification.  No Participant shall receive any payment under the Plan that is subject to this Section 8 unless the Committee has certified, by resolution or other appropriate action in writing, that the performance criteria and any other material terms previously established by the Committee or set forth in the Plan, have been satisfied to the extent necessary to qualify as “performance based compensation” under Section 162(m) of the Code.

 

9.                                      Change in Control.

 

(a)                                 Effect of “Change in Control.”  If and only to the extent provided in any employment or other agreement between the Participant and the Company or any Related Entity, or in any Award Agreement, or to the extent otherwise determined by the Committee in its sole discretion and without any requirement that each Participant be treated consistently, upon the occurrence of a “Change in Control,” as defined in Section 9(b):

 

(i)                                     Any Option or Stock Appreciation Right that was not previously vested and exercisable as of the time of the Change in Control, shall become immediately vested and exercisable, subject to applicable restrictions set forth in Section 10(a) hereof.

 

(ii)                                  Any restrictions, deferral of settlement, and forfeiture conditions applicable to a Restricted Stock Award, Deferred Stock Award or an Other Stock-Based Award subject only to future service requirements granted under the Plan shall lapse and such Awards shall be deemed fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject to applicable restrictions set forth in Section 10(a) hereof.

 

(iii)                               With respect to any outstanding Award subject to achievement of performance goals and conditions under the Plan, the Committee may, in its discretion, deem such performance goals and conditions as having been met as of the date of the Change in Control.

 

(b)                                 Definition of “Change in Control.”  Unless otherwise specified in any employment agreement between the Participant and the Company or any Related Entity, or in an Award Agreement, a “Change in Control” shall mean the occurrence of any of the following:

 

(i)                                     The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the value of then outstanding equity securities of the Company (the “Outstanding Company Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities) (the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling Interest”); provided, however, that for purposes of this Section 9(b), the following acquisitions shall not constitute or result in a Change in Control:  (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Entity; or (z) any acquisition by any entity pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) below; or

 

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(ii)                                  During any period of two (2) consecutive years (not including any period prior to the Effective Date) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

(iii)                               Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its Related Entities, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or equity of another entity by the Company or any of its Related Entities (each a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Outstanding Company Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the value of the then outstanding equity securities and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of members of the board of directors (or comparable governing body of an entity that does not have such a board), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or any Person that as of the Effective Date owns Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty percent (50%) or more of the value of the then outstanding equity securities of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the Board of Directors or other governing body of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

 

(iv)                              Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

10.                               General Provisions.

 

(a)                                 Compliance With Legal and Other Requirements.  The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Shares or payment of other benefits under any Award until completion of such registration or

 

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qualification of such Shares or other required action under any federal or state law, rule or regulation, listing or other required action with respect to the Listing Market, or compliance with any other obligation of the Company, as the Committee, may consider appropriate, and may require any Participant to make such representations, furnish such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Shares or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.

 

(b)                                 Limits on Transferability; Beneficiaries.  No Award or other right or interest granted under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than Incentive Stock Options and Stock Appreciation Rights in tandem therewith) may be transferred to one or more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such transfers are permitted by the Committee pursuant to the express terms of an Award Agreement (subject to any terms and conditions which the Committee may impose thereon).  A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award Agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

 

(c)                                  Adjustments.

 

(i)                                     Adjustments to Awards.  In the event that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or such other securities of the Company or any other issuer such that a substitution, exchange, or adjustment is determined by the Committee to be appropriate, then the Committee shall, in such manner as it may deem equitable, substitute, exchange or adjust any or all of (A) the number and kind of Shares which may be delivered in connection with Awards granted thereafter, (B) the number and kind of Shares by which annual per-person Award limitations are measured under Section 4 hereof, (C) the number and kind of Shares subject to or deliverable in respect of outstanding Awards, (D) the exercise price, grant price or purchase price relating to any Award and/or make provision for payment of cash or other property in respect of any outstanding Award, and (E) any other aspect of any Award that the Committee determines to be appropriate.

 

(ii)                                  Adjustments in Case of Certain Transactions.  In the event of any merger, consolidation or other reorganization in which the Company does not survive, or in the event of any Change in Control, any outstanding Awards may be dealt with in accordance with any of the following approaches, without the requirement of obtaining any consent or agreement of a Participant as such, as determined by the agreement effectuating the transaction or, if and to

 

20

 

the extent not so determined, as determined by the Committee: (a) the continuation of the outstanding Awards by the Company, if the Company is a surviving entity, (b) the assumption or substitution for, as those terms are defined in Section 9(a)(iv) hereof, the outstanding Awards by the surviving entity or its parent or subsidiary, (c) full exercisability or vesting and accelerated expiration of the outstanding Awards, or (d) settlement of the value of the outstanding Awards in cash or cash equivalents or other property followed by cancellation of such Awards (which value, in the case of Options or Stock Appreciation Rights, shall be measured by the amount, if any, by which the Fair Market Value of a Share exceeds the exercise or grant price of the Option or Stock Appreciation Right as of the effective date of the transaction).  The Committee shall give written notice of any proposed transaction referred to in this Section 10(c)(ii) at a reasonable period of time prior to the closing date for such transaction (which notice may be given either before or after the approval of such transaction), in order that Participants may have a reasonable period of time prior to the closing date of such transaction within which to exercise any Awards that are then exercisable (including any Awards that may become exercisable upon the closing date of such transaction).  A Participant may condition his exercise of any Awards upon the consummation of the transaction.

 

(iii)                               Other Adjustments.  The Committee (and the Board if and only to the extent such authority is not required to be exercised by the Committee to comply with Section 162(m) of the Code) is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards, or performance goals and conditions relating thereto) in recognition of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting the Company, any Related Entity or any business unit, or the financial statements of the Company or any Related Entity, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee’s assessment of the business strategy of the Company, any Related Entity or business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no such adjustment shall be authorized or made if and to the extent that such authority or the making of such adjustment would cause Options, Stock Appreciation Rights, Performance Awards granted pursuant to Section 8(b) hereof to Participants designated by the Committee as Covered Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and the regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Code Section 162(m) and regulations thereunder.  Adjustments permitted hereby may include, without limitation, increasing the exercise price of Options and Stock Appreciation Rights, increasing performance goals, or other adjustments that may be adverse to the Participant.

 

(d)                                 Taxes.  The Company and any Related Entity are authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company or any Related Entity and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award.  This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect

 

21

 

thereof in satisfaction of a Participant’s tax obligations, either on a mandatory or elective basis in the discretion of the Committee.

 

(e)                                  Changes to the Plan and Awards.  The Board may amend, alter, suspend, discontinue or terminate the Plan, or the Committee’s authority to grant Awards under the Plan, without the consent of stockholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of the Company’s stockholders not later than the annual meeting next following such Board action if such stockholder approval is required by any federal or state law or regulation (including, without limitation, Rule 16b-3 or Code Section 162(m)) or the rules of the Listing Market, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to stockholders for approval; provided that, except as otherwise permitted by the Plan or Award Agreement, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under the terms of any previously granted and outstanding Award.  The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award theretofore granted and any Award Agreement relating thereto, except as otherwise provided in the Plan; provided that, except as otherwise permitted by the Plan or Award Agreement, without the consent of an affected Participant, no such Committee or the Board action may materially and adversely affect the rights of such Participant under terms of such Award.  Notwithstanding anything to the contrary, the Committee shall be authorized to amend any outstanding Option and/or Stock Appreciation Right to reduce the exercise price or grant price without the prior approval of the stockholders of the Company.  In addition, the Committee shall be authorized to cancel outstanding Options and/or Stock Appreciation Rights replaced with Awards having a lower exercise price without the prior approval of the stockholders of the Company.

 

(f)                                   Limitation on Rights Conferred Under Plan.  Neither the Plan nor any action taken hereunder or under any Award shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a Related Entity; (ii) interfering in any way with the right of the Company or a Related Entity to terminate any Eligible Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a stockholder of the Company including, without limitation, any right to receive dividends or distributions, any right to vote or act by written consent, any right to attend meetings of stockholders or any right to receive any information concerning the Company’s business, financial condition, results of operation or prospects, unless and until such time as the Participant is duly issued Shares on the stock books of the Company in accordance with the terms of an Award.  None of the Company, its officers or its directors shall have any fiduciary obligation to the Participant with respect to any Awards unless and until the Participant is duly issued Shares pursuant to the Award on the stock books of the Company in accordance with the terms of an Award.  Neither the Company nor any of the Company’s officers, directors, representatives or agents is granting any rights under the Plan to the Participant whatsoever, oral or written, express or implied, other than those rights expressly set forth in this Plan or the Award Agreement.

 

22

 

(g)                                  Unfunded Status of Awards; Creation of Trusts.  The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.  With respect to any payments not yet made to a Participant or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Shares, other Awards or other property, or make other arrangements to meet the Company’s obligations under the Plan.  Such trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.  The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law.

 

(h)                                 Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable including incentive arrangements and awards which do not qualify under Section 162(m) of the Code.

 

(i)                                     Payments in the Event of Forfeitures; Fractional Shares.  Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration.  No fractional Shares shall be issued or delivered pursuant to the Plan or any Award.  The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

(j)                                    Governing Law.  The validity, construction and effect of the Plan, any rules and regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to principles of conflict of laws, and applicable federal law.

 

(k)                                 Non-U.S. Laws.  The Committee shall have the authority to adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Related Entities may operate to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan.

 

(l)                                     Plan Effective Date and Stockholder Approval; Termination of Plan.  The Plan shall become effective on the Effective Date, subject to subsequent approval, within 12 months of its adoption by the Board, by stockholders of the Company eligible to vote in the election of directors, by a vote sufficient to meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange Act (if applicable), applicable requirements under the rules of any stock exchange or automated quotation system on which the Shares may be listed or quoted, and other laws, regulations, and obligations of the Company applicable to the Plan.  Awards may be granted subject to stockholder approval, but may not be exercised or otherwise settled in the event the stockholder approval is not obtained.  The Plan shall terminate

 

23

 

at the earliest of (a) such time as no Shares remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the tenth anniversary of the Effective Date.  Awards outstanding upon expiration of the Plan shall remain in effect until they have been exercised or terminated, or have expired.

 

24Exhibit 10.1

 

CREDIT AGREEMENT

 

Dated as of October 14, 2014

 

among

 

RETAIL ENERGY HOLDINGS L.L.C., a Minnesota
limited liability company

TOWN SQUARE ENERGY, LLC, a Delaware limited
liability company

DISCOUNT ENERGY GROUP, LLC, a Delaware
limited liability company

as Borrowers,

 

and

 

MAPLE BANK GMBH, acting through its Maple
Bank Toronto Branch

as Lender

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	Section	 	Page
	 	 	 
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS	1
	1.01.	Defined Terms	1
	1.02.	Other Interpretive Provisions	15
	1.03.	Accounting Terms	16
	1.04.	Rounding	16
	1.05.	Times of Day	16
	1.06.	Borrower Representative	16
	ARTICLE II. THE REVOLVING LOANS	16
	2.01.	Committed Loans	16
	2.02.	Borrowings of Revolving Loans	16
	2.03.	Procedures for Borrowings	17
	2.04.	Optional Prepayments	17
	2.05.	Mandatory Prepayments	17
	2.06.	Repayment of the Revolving Loans	17
	2.07.	Funding of Collection Accounts and Concentration Account	18
	2.08.	Interest	19
	2.09.	Fees	19
	2.10.	Termination of Commitment; Prepayment Premium	20
	2.11.	Computation of Interest and Fees	20
	2.12.	Evidence of Debt	20
	2.13.	Payments Generally	20
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY	21
	3.01.	Taxes	21
	3.02.	Illegality	22
	3.03.	Inability to Determine Rates	23
	3.04.	Increased Costs; Reserves on LIBOR Rate Loans	23
	3.05.	Survival	24
	ARTICLE IV. CONDITIONS PRECEDENT TO BORROWINGS	24
	4.01.	Conditions of the Initial Revolving Loan	24
	4.02.	Conditions to all Borrowings	25

    	i

    	 

    

 

	ARTICLE V. REPRESENTATIONS AND WARRANTIES	26
	5.01.	Existence, Qualification and Power	26
	5.02.	Authorization; No Contravention	26
	5.03.	Governmental Authorization; Other Consents	26
	5.04.	Binding Effect	27
	5.05.	Financial Statements; No Material Adverse Effect	27
	5.06.	Litigation	27
	5.07.	No Default	27
	5.08.	Ownership of Property; Liens	27
	5.09.	Environmental Compliance	28
	5.10.	Insurance	28
	5.11.	Taxes	28
	5.12.	ERISA Compliance	28
	5.13.	Subsidiaries; Equity Interests	29
	5.14.	Margin Regulations; Investment Company Act	29
	5.15.	Disclosure	29
	5.16.	Compliance with Laws	29
	5.17.	Taxpayer Identification Number	29
	5.18.	Intellectual Property; Licenses, Etc	29
	5.19.	OFAC	30
	5.20.	Solvency of the Loan Parties	30
	5.21.	Management Services Agreement	30
	ARTICLE VI. AFFIRMATIVE COVENANTS	30
	6.01.	Financial Reporting	30
	6.02.	Notices	31
	6.03.	Payment of Material Obligations	31
	6.04.	Preservation of Existence, Etc	32
	6.05.	Maintenance of Properties	32
	6.06.	Maintenance of Insurance	32
	6.07.	Compliance with Laws	32
	6.08.	Books and Records	32
	6.09.	Inspection Rights	32
	6.10.	Use of Proceeds	33
	6.11.	Approvals and Authorizations	33
	6.12.	Additional Borrowers	33
	6.13.	Energy Regulatory Compliance	33

    	ii

    	 

    

 

	6.14.	Industry Standards	33
	6.15.	Account Monitoring	33
	6.16.	Additional Documents and Further Actions	33
	6.17.	Depository Relationship	33
	6.18.	Credit and Risk Management Policy	34
	6.19.	Excess Availability	34
	6.20.	Addition of New Utility Obligors	34
	ARTICLE VII. NEGATIVE COVENANTS	34
	7.01.	Liens	34
	7.02.	Investments	35
	7.03.	Indebtedness	36
	7.04.	Fundamental Changes	36
	7.05.	Dispositions	37
	7.06.	Restricted Payments	37
	7.07.	Change in Nature of Business	38
	7.08.	Transactions with Affiliates	38
	7.09.	Burdensome Agreements	38
	7.10.	Use of Proceeds	38
	7.11.	Reserved	38
	7.12.	Sanctions	39
	7.13.	Third Party Arrangement	39
	ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES; ADJUSTMENTS TO THE BORROWING
    BASE	39
	8.01.	Events of Default	40
	8.02.	Remedies Upon Event of Default	41
	8.03.	Application of Funds	42
	8.04.	Adjustments to the Borrowing Base	42
	ARTICLE IX. CROSS-GUARANTY	42
	9.01.	The Cross-Guaranty	42
	9.02.	Bankruptcy	43
	9.03.	Nature of Liability	43
	9.04.	Independent Obligation	43
	9.05.	Authorization	43
	9.06.	Reliance	43
	9.07.	Waiver; Subrogation	43

    	iii

    	 

    

 

	9.08.	Books and Records	44
	ARTICLE X. MISCELLANEOUS	45
	10.01.	Amendments, Etc	45
	10.02.	Notices; Effectiveness; Electronic Communication	45
	10.03.	No Waiver; Cumulative Remedies; Enforcement	45
	10.04.	Expenses; Indemnity; Damage Waiver	46
	10.05.	Payments Set Aside	47
	10.06.	Successors and Assigns	47
	10.07.	Treatment of Certain Information; Confidentiality	47
	10.08.	Right of Setoff	48
	10.09.	Interest Rate Limitation	48
	10.10.	Counterparts; Integration; Effectiveness	48
	10.11.	Survival of Representations and Warranties	48
	10.12.	Severability	49
	10.13.	Governing Law; Jurisdiction; Etc	49
	10.14.	Waiver of Jury Trial	50
	10.15.	No Advisory or Fiduciary Responsibility	50
	10.16.	USA PATRIOT Act	50
	10.17.	Termination of Loan Documents	51

 

 

SCHEDULES

 

	 	1.01	Utility Obligors; Applicable Margin
	 	5.06	Litigation
	 	5.13	Subsidiaries; Other Equity Investments
	 	7.01	Existing Liens
	 	7.03	Existing Indebtedness
	 	10.02	Certain Addresses for Notices
	 	 	 
	 	 	 	 	 

 

EXHIBITS

	 	 	Form of
	 	A	Borrowing Base Certificate
	 	B	Committed Loan Notice
	 	C	Payment Direction Letter

 

 

     

 

 

    	iv

    	 

    

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT
(“Agreement”) is entered into as of October 14, 2014, among RETAIL ENERGY HOLDINGS L.L.C., a Minnesota
limited liability company (“REH”), TOWN SQUARE ENERGY, LLC, a Delaware limited liability company (“TSE”),
DISCOUNT ENERGY GROUP, LLC, a Delaware limited liability company (“DEG”; and together with REH and TSE,
each a “Borrower” and collectively, the “Borrowers”), jointly and severally, and certain
Affiliates from time to time party hereto, and MAPLE BANK GMBH, acting through its Maple Bank Toronto Branch (together with
its successors and assigns, the “Lender”).

 

Borrowers have requested
that Lender provide certain financial accommodations to Borrowers, and Lender is willing to do so on the terms and conditions set
forth herein.

 

In consideration of
the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I. DEFINITIONS
AND ACCOUNTING TERMS

 

1.01.Defined
Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Account”
as defined in the Uniform Commercial Code.

 

“Account Debtor”
as defined in the Uniform Commercial Code.

 

“Affiliate”
means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by, or is under common Control with the Person specified. Unless otherwise specified, any reference to an Affiliate
or Affiliates herein shall mean and refer to an Affiliate or Affiliates of the Borrowers.

 

“Agreement”
means this Credit Agreement.

 

“Applicable
Margin” means Six percent (6.00%) per annum, subject to adjustment by Lender in its reasonable discretion in connection
with any adverse change in the ratings of any Utility Obligor.

 

“Assignment
Agreements” means, collectively, each collateral assignment of Purchase of Receivables Agreement by and among the applicable
Borrower, Lender and the applicable Utility Obligor.

 

“Audited Financial
Statements” means the audited balance sheets of the Guarantor and segment information for the Borrowers for the fiscal
year ended December 31, 2013, and the related statements of income or operations, shareholders’ equity and cash flows for
such fiscal year of the Guarantor, including any notes thereto.

 

“Availability
Period” means the period from and including the Closing Date to the earlier of (a) Maturity Date, and (b) the date of
termination of the Commitment pursuant to Section 2.10 or Section 8.02.

 

“Billed Receivables”
means Eligible Receivables specifically arising from the sale of electric generation by a Borrower to end users, which sales have
been reflected in an energy meter and have been entered on consolidated and/or dual bills delivered to such end users.

 

    	1

    	 

    

 

 

“Blocked Account
Agreement” means a deposit account control agreement among one or more Borrowers, the depository institution with whom
a Borrower account is established (which may or may not be Lender), and Lender, whereby the applicable Borrower(s) grant(s) Lender
exclusive dominion and control over such account.

 

“Borrower”
and “Borrowers” have the respective meanings specified in the introductory paragraph hereto.

 

“Borrowing”
means a borrowing of Revolving Loan proceeds by any Borrower under Article II of this Agreement.

 

“Borrowing
Base” means, as of any date, the sum of (a) up to ninety-two percent (92%) of Billed Receivables, and (b) seventy-five
percent (75%) of Unbilled Receivables, in each case, as set forth in the most recent Borrowing Base Certificate delivered to Lender
in accordance with Section 2.02 or Section 6.01(h), less such other reserves as Lender may establish
from time to time in its sole discretion, and subject to any adjustments to the advance rates and any limits on advances to be
made against the receivables of any particular Utility Obligor made by Lender in accordance with this Agreement or any other Loan
Document.

 

“Borrowing
Base Certificate” means a certificate in substantially the form of Exhibit A hereto, or in another form acceptable
to Lender, which is to be delivered to Lender in accordance with Sections 2.02 or 6.01(h) hereof, and which in each
case shall be signed by a Responsible Officer that is a party to the Validity Guaranty.

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under
the Laws of, or are in fact closed in Province of Ontario.

 

“Capital Expenditures”
means, with respect to any Person for any period, any expenditure that, in conformity with GAAP, is required to be capitalized
and reflected in the property, plant and equipment or similar fixed or capital asset on the consolidated balance sheet of the Borrowers
(excluding normal replacements and maintenance which are properly charged to current operations).

 

“Cash Equivalents”
means any of the following types of Investments, to the extent owned by any Borrower free and clear of all Liens (other than Permitted
Liens):

 

(a)readily
marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality
thereof having maturities of not more than 365 days from the date of acquisition thereof; provided that the full faith and
credit of the United States of America is pledged in support thereof;

 

(b)time
deposits and demand deposits with, or insured certificates of deposit or bankers’ acceptances or notes of, any commercial
bank that (i) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is
the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state
thereof or the District of Columbia, (ii) issues (or the parent of which issues) commercial paper rated as described in clause
(c) of this definition and (iii) has combined capital and surplus of at least $200,000,000, in each case with maturities of
not more than 360 days from the date of acquisition thereof;

 

    	2

    	 

    

 

 

(c)commercial
paper, demand notes, master notes, promissory notes or other short-term debt obligations issued by any Person organized under the
laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade)
by Moody’s Investors Service, Inc. and any successor thereto (“Moody’s”) or at least “A-1”
(or the then equivalent grade) by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies,
Inc. and any successor thereto (“S&P”), in each case with maturities of not more than 360 days from the
date of acquisition thereof; and

 

(d)Investments,
classified in accordance with GAAP as current assets of any Borrower in money market investment programs which are administered
by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which
are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c)
of this definition.

 

“Change in
Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect
of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline
or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United
States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change
in Law”, regardless of the date enacted, adopted or issued.

 

“Change of
Control” means an event or series of events by which any of the following occurs: (i) Guarantor ceases to own and
control one hundred percent (100%) of the Equity Interest of REH or (ii) REH ceases to own and control one hundred percent
(100%) of the Equity Interests of TSE and DEG.

 

“Closing Date”
means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section
10.01.

 

“Code”
means the Internal Revenue Code of 1986.

 

“Collateral”
has the meaning set forth in the Security Agreement.

 

“Collection
Account” means each of the deposit accounts established at the Collection Account Bank pursuant to Section 4.01(a)(iii)
for purposes of receiving the proceeds of all Receivables, including, without limitation, all Eligible Receivables, which deposit
accounts shall be in the name of one or more Borrowers, but subject to the dominion and control of Lender pursuant to a Blocked
Account Agreement.

 

“Collection
Account Bank” means, Wells Fargo Bank N.A.

 

“Commitment”
means, Lender’s obligation to make Revolving Loans to the Borrowers pursuant to Section 2.01, in an aggregate principal
amount not to exceed the Revolving Commitment Amount.

 

“Committed
Loan Notice” means a notice of a Borrowing which shall be substantially in the form of Exhibit B attached hereto.

 

    	3

    	 

    

 

 

“Commodity
Exchange Act” means the Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.), as amended from time to time, and any
successor statute.

 

“Concentration
Account” means and refers to the account from time to time specified by Lender (by five days’ prior written notice
thereof to Borrower) as the account into which all transfers are to be made from the Collection Accounts in accordance with Section
2.07.

 

“Contractual
Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

 

“Control Agreement”
means each deposit account control agreement among one or more Borrowers, the depository institution with whom a Borrower deposit
account is established (which may or may not be Lender), and Lender, whereby the applicable Borrower(s) grant(s) Lender dominion
and control over such account upon the occurrence of an Event of Default and notice thereof to such depository institution.

 

“Credit and
Risk Management Policy” means one or more duly adopted policies of the Borrowers that (a) restricts enrollment of retail
end-use customers that do not qualify for participation in the Purchase of Receivables Agreement and related applicable program
of any Utility Obligor; (b) requires the Borrowers’ commodity risk be hedged with a portfolio of short and long-term supply
contracts, swap and derivative products designed to minimize commodity risk to the extent possible; and (c) restricts the Borrowers
from entering into speculative, unhedged or otherwise risky wholesale commodity swaps and derivatives transactions.

 

“Debtor Relief
Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws
of the United States or other applicable jurisdictions from time to time in effect, and all regulations promulgated thereunder.

 

“Default”
means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time,
or both, would be an Event of Default.

 

“Default Rate”
means an interest rate equal to (a) the LIBOR Rate plus (b) the Applicable Margin, plus (c) 3% per annum.

 

“Designated
Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any
Sanction.

 

“Disposition”
or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback
transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse,
of any notes or accounts receivable or any rights and claims associated therewith.

 

“Dollar”
and “$” mean lawful money of the United States.

 

    	4

    	 

    

 

 

“Eligible
Receivables” means all Accounts due exclusively from an investment-grade Utility Obligor to a Borrower pursuant to a
Purchase of Receivables Agreement that: (i) are generated and held by such Borrower in the ordinary course of its business, (ii)
are not the subject of any dispute with respect to the Accounts or the delivery of energy giving rise to such Accounts, (iii) are
free from any Liens, (iv) have not previously been pledged, sold, assigned, transferred or encumbered to any Person, (v) have been
acknowledged in writing by the Utility Obligor obligated on each such Account, (vi) are not subject to any discounts, rebates,
offsets, or adjustments (other than Permitted Charge-Offs), (vii) are not owed by a Utility Obligor that is insolvent or is the
subject of a proceeding under any Debtor Relief Law, (viii) are not five (5) or more days past-due; (ix) do not represent amounts
owing from the Utility Obligor’s end-user that are (a) more than 90 days past due with respect Billed Receivables, or (b)
arose more than 60 days after the end user’s last meter reading with respect to Unbilled Receivables, and (xii) Lender has
not determined are otherwise ineligible.

 

“Environmental
Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution
and the protection of the environment or the release of any materials into the environment, including those related to hazardous
substances or wastes, air emissions and discharges to waste or public systems.

 

“Environmental
Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

 

“Equity Interests”
means, with respect to any Person, all of the shares of capital stock of or other ownership or profit interests (other than royalty
and similar profit interests such Person, all of the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible
into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership
or profit interests (other than royalty and similar profit interests) in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding
on any date of determination.

 

“Equity Pledge
Agreement” means that certain Equity Pledge Agreement of even date herewith among the Guarantor, Borrowers and Lender,
whereby Guarantor and REH each pledge to Lender as additional collateral for the payment and performance of the Obligations, all
of the Guarantor’s Equity Interests in REH and all of REH’s Equity Interests in TSE and DEG, which Equity Interests
in the aggregate, shall constitute one hundred percent (100%) of the issued and outstanding Equity Interests of the Borrowers on
a fully-diluted basis.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

    	5

    	 

    

 

 

“ERISA Affiliate”
means any trade or business (whether or not incorporated) under common control with any Borrower within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ERISA Event”
means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of any Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined
in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination
under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event
or condition which allows under Section 4042 of ERISA for the institution of proceedings to terminate, or for the appointment of
a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan
in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA;
or (h) the imposition of any liability for failure to comply with Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Borrower or any ERISA Affiliate.

 

“Event of
Default” has the meaning specified in Section 8.01.

 

“Excess Availability”
means, as of any date of determination, the difference between (a) the lesser of (i) the Borrowing Base (as determined by the most
recent Borrowing Base Certificate delivered to and approved by Lender), and (ii) the Revolving Commitment Amount, minus
(b) the aggregate outstanding principal balance of the Revolving Loans as of such date.

 

“Excluded
Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted
from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, imposed as a result of such Recipient being organized under the laws of, or having its principal office
located in the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) in the case of Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of Lender with respect to a Revolving Loan or Commitment pursuant
to a law in effect on the date hereof, or with respect to any assignees of Lender, on the date on which such assignee becomes a
Lender hereunder, and (c) any U.S. federal withholding Taxes imposed pursuant to FATCA.

 

“Facility
Termination Date” means the date as of which all of the following shall have occurred: (a) Lender’s Commitment
has terminated, and (b) all Obligations have been paid in full (other than contingent indemnification and contingent expense obligations
for which no claim has been asserted).

 

“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471 (b) (1) of the Code.

 

“Floor Amount”
means Five Thousand and 00/100 Dollars ($5,000.00).

 

“FRB”
means the Board of Governors of the Federal Reserve System of the United States.

 

“FERC”
has the meaning specified in Section 4.01(a)(vii).

 

    	6

    	 

    

 

 

“GAAP”
means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in
the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Governmental
Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect
of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of
the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee
in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss
in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or
otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

 

“Guaranty”
means, that certain guaranty of payment of even date herewith given by Guarantor in favor of Lender, in its original form and as
amended, restated or reaffirmed from time to time.

 

“Guarantor”
means Twin Cities Power Holdings, LLC, a Minnesota limited liability company.

 

“Hazardous
Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls,
radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental
Law.

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness
or liabilities in accordance with GAAP:

 

(a)all
obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements
or other similar instruments;

 

    	7

    	 

    

 

 

(b)all
direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)net
obligations of such Person under any Swap Contract;

 

(d)all
obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the
ordinary course of business);

 

(e)indebtedness
(excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;

 

(f)capital
leases and Synthetic Lease Obligations;

 

(g)all
obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest
in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, other than any obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity Interest in such Person in connection with any compensation
plan provided to employees, officers, directors or other service providers; and

 

(h)all
Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof,
the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that
is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless and
to the extent such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap
Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

 

“Indemnified
Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of
any obligation of any Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other
Taxes.

 

“Indemnitees”
has the meaning specified in Section 10.04(b).

 

“Information”
has the meaning specified in Section 10.07.

 

“Interest
Period” means, the three-month period commencing on the first (1st) day of each January, April, July and October; provided
that the initial Interest Period hereunder shall be the period from the Closing Date until December 31, 2014.

 

    	8

    	 

    

 

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee
or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person,
including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, or (c) the purchase or other acquisition of a portfolio of customer contracts. For purposes
of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases
or decreases in the value of such Investment.

 

“IRS”
means the United States Internal Revenue Service.

 

“ISO”
has the meaning specified in Section 4.01(a)(vii).

 

“Laws”
means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, tariffs, authorizations and permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.

 

“Lender”
has the meaning specified in the introductory paragraph hereto.

 

“LIBOR Rate”
means, for each Interest Period, the rate per annum equal to (i) the interest rate for deposits in U.S. Dollars for such Interest
Period, as it appears on the Wall Street Journal Money Rates page (currently available at http://online.wsj.com/mdc/public/page/2_3020-libor.html)
(or any successor or substitute page thereof, or any successor to or substitute for such publication, as reasonably determined
by Lender from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, on the last Business Day prior to the commencement of such Interest
Period, or (ii) if such rate is not available at such time for any reason, the rate per annum reasonably determined by Lender to
be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate
amount of the applicable LIBOR Rate Loan and with term equal to the Interest Period would be offered to major banks in the London
interbank LIBOR market at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period;
provided that, in no event shall the LIBOR Rate be less than one-half of one percent (0.50%).

 

“LIBOR Rate
Loan” means and refers to any Revolving Loan that bears interest at a rate based on the LIBOR Rate.

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or preferential arrangement in the nature of a security interest (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Loan Documents”
means this Agreement, the Note, the Equity Pledge Agreement, the Security Agreement, the Guaranty, each Blocked Account Agreement,
each Control Agreement, the Assignment Agreements and all other documents given to evidence, secure or guaranty the Revolving Loans.

 

“Loan Parties”
means, collectively, each Borrower and Guarantor.

 

    	9

    	 

    

 

 

“Management
Services Agreement” means, that certain Management and Services Agreement, dated as of March 30, 2012 but effective as
of January 1, 2012, by and among Guarantor and certain Subsidiaries of Guarantor, as amended by that certain Amendment No. 1 to
Management and Services Agreement dated as of October 23, 2013, by and between Guarantor and a Subsidiary of Guarantor, as further
amended by that certain Amendment No. 1 to Management and Services Agreement dated as of October 25, 2013, by and between Guarantor
and REH.

 

“Material
Adverse Effect” mean (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties,
liabilities (actual or contingent), condition (financial or otherwise) of any Borrower, and; (b) a material impairment of the rights
and remedies of Lender under any loan documentation, or of the ability of the Loan Parties, taken as a whole, to perform their
respective obligations under any Loan Document to which they are a party; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

 

“Material
Contracts” means, collectively, each Purchase of Receivables Agreement, each Supply Agreement and each contract for the
purchase of electricity and each other agreement to which any Borrower is a party and which, if breached or terminated, could reasonably
be expected to result in a Material Adverse Effect.

 

“Maturity
Date” means, October 31, 2016; provided, however, that if such date is not a Business Day, the Maturity
Date shall be the next succeeding Business Day.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Borrower or
any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated
to make contributions.

 

“Multiple
Employer Plan” means a Plan which has two or more contributing sponsors (including any Borrower or any ERISA Affiliate)
at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

“Net Cash
Proceeds” means, with respect to any Disposition, the aggregate cash payments received by the applicable Borrower from
such Disposition, net of: (i) direct expenses of such Disposition reasonably acceptable to Lender, (ii) Taxes paid or payable in
cash as a result of such Disposition (which for purposes hereof shall be assumed to be the then-highest capital gains rate applicable
to such Borrower), and (iii) escrowed cash amounts (provided that such escrowed cash amounts shall, to the extent later released
to a Borrower, be immediately paid over to Lender and applied towards the Obligations).

 

“Note”
has the meaning set forth in Section 2.12.

 

“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document
or otherwise with respect to any Revolving Loan, in each case whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“OFAC”
means the Office of Foreign Assets Control of the United States Department of the Treasury.

 

    	10

    	 

    

 

 

“Organization
Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or
equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating agreement (or equivalent or comparable constitutive
documents with respect to any non-U.S. jurisdiction); and (c) with respect to any partnership, joint venture, trust or other form
of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental
Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or
organization of such entity (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction).

 

“Other Taxes”
means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment
made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document.

 

“Out-of-Formula
Advances” means, on any day, the amount by which (i) the outstanding principal balance of all Revolving Loans exceeds
(ii) the lesser of (A) the Borrowing Base and (B) the Revolving Commitment Amount.

 

“Participant”
has the meaning specified in Section 10.06(b).

 

“Payment Direction
Letter” means a letter agreement from a Borrower to, and acknowledged by, a Utility Obligor, in substantially the form
of Exhibit C hereto, or in another form acceptable to Lender in its sole discretion.

 

“PBGC”
means the Pension Benefit Guaranty Corporation. “Pension Act” means the Pension Protection Act of 2006.

 

“Pension Funding
Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment
thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section
412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432
and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan”
means any employee pension benefit plan (including a Multiple Employer Plan but excluding any Multiemployer Plan) that is maintained
or is contributed to by any Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum
funding standards under Section 412 of the Code.

 

“Permitted
Acquisitions” has the meaning specified in Section 7.02(i).

 

“Permitted
Charge-Offs” means discounts charged on purchases of Accounts and other specific offsets permitted under a Purchase of
Receivables Agreement.

 

“Permitted
Liens” has the meaning set forth in Section 7.01.

 

“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

 

    	11

    	 

    

 

 

“Plan”
means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan but excluding any Multiemployer
Plan), maintained for employees of any Borrower or any ERISA Affiliate or any such Plan to which any Borrower or any ERISA Affiliate
is required to contribute on behalf of any of its employees.

 

“Purchase
of Receivables Agreement” means each agreement providing for the consolidated or dual billing and purchase of receivables
between a Borrower and a Utility Obligor, which agreement shall be in form and substance acceptable to Lender in its sole discretion,
including written agreements and/or tariff arrangements in which Borrower is entitled to purchase receivables services from a Utility
Obligor by enrolling for such services.

 

“Receivables”
means all Accounts owed to a Borrower from a Utility Obligor pursuant to a Purchase of Receivables Agreement, or otherwise, including,
without limitation, all Eligible Receivables.

 

“Recipient”
means Lender, or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.

 

“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period
has been waived.

 

“Responsible
Officer” means the chief executive officer, president, vice president, chief financial officer, treasurer, assistant
treasurer, controller, director or manager of a Loan Party and solely for purposes of the delivery of incumbency certificates pursuant
to Section 4.01, the secretary, any assistant secretary or any director of a Loan Party. Any document delivered hereunder
that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.

 

“Restricted
Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any
capital stock or other Equity Interest of any Borrower, or any payment (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination
of any such capital stock or other Equity Interest, or on account of any return of capital to any Borrower’s stockholders,
partners or members (or the equivalent Persons thereof).

 

“Revolving
Loan” means any advance or other extension of credit by Lender to or on behalf of any Borrower in accordance with Article
2 of this Agreement.

 

“Revolving
Commitment Amount” means Five Million and 00/100 Dollars ($5,000,000.00).

 

“Sanction(s)”
means any international economic sanction administered or enforced by the United States Government (including without limitation,
OFAC) or other relevant sanctions authority.

 

“Security
Agreement” means that certain Security Agreement of even date herewith, made by the Borrowers in favor of Lender.

 

    	12

    	 

    

 

 

“Settlement
Date” means, the second (2nd) Business Day of each calendar month, commencing on November 2, 2014, and continuing through
and including the month in which the Maturity Date occurs, and the Maturity Date.

 

“Solvent”
means, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person
is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person
on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not
engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property
would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall
be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially
owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries”
shall refer to a Subsidiary or the Subsidiaries of the Borrowers (or if applicable, a particular Borrower).

 

“Supply Agreement”
means an agreement by and between a Borrower, on the one hand, and a Utility Obligor on the other hand, setting forth the terms
and conditions under which such Borrower may act as a competitive retail supplier of electricity transmitted and/or distributed
by such Utility Obligor.

 

“Swap Contract”
means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity
futures, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond
price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any
related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined
based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).

 

    	13

    	 

    

 

 

“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax
retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance
sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).

 

“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“UCC”
or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of
New York; provided, however, that if a term is defined in Article 9 of the Uniform Commercial Code differently
than in another Article thereof, the term shall have the meaning set forth in Article 9; provided further
that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, or priority of a
security interest in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, “Uniform Commercial Code” means the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection
or non-perfection, or priority, or availability of such remedy, as the case may be.

 

“United States”
and “U.S.” mean the United States of America.

 

“Unbilled
Receivables” means Eligible Receivables arising from the sale of electric generation by a Borrower to end users, for
which Borrowers deliver evidence satisfactory to Lender that such electric generation has been delivered to the applicable end
user). For the avoidance of doubt, when an Eligible Receivable is included on a consolidated and/or dual bill delivered to an end
user, such Eligible Receivable shall become a Billed Receivable and shall no longer be considered an Unbilled Receivable.

 

“Utility Obligor”
means the host utility that is billing a Borrower’s customers in its service territory and has purchased such Borrower’s
receivables pursuant to a Purchase of Receivables Agreement, and that is designated as such on Schedule 1.01, as such schedule
is amended from time to time in accordance with Section 10.01.

 

“Validity
Guaranty” means that certain Validity Guaranty of even date herewith, made by certain Responsible Officers of the Borrowers,
as such guaranty may be amended, restated or reaffirmed from time to time.

 

“Variation”
means, for any given period of measurement, (a) with respect to the conversion of Unbilled Receivables to Billed Receivables, the
amount, expressed as a percentage, by which Unbilled Receivables for any Utility Obligor during such period, when converted to
Billed Receivables, exceeds such Billed Receivables, and (b) with respect to Billed Receivables that are ultimately collected by
the Utility Obligor, the amount, expressed as a percentage, by which (i) Billed Receivables plus any associated ESCO Fees for any
Utility Obligor during such period, exceeds (ii) amounts collected by the applicable Utility Obligor on the Accounts that give
rise to such Billed Receivables.

 

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1.02.Other
Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein
or in such other Loan Document:

 

(a)The definitions
of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word “shall.” Unless
the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein
or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors
and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,”
and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall
be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law or regulation herein shall include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law, and shall, unless otherwise specified, refer to such law or regulation as amended, modified
or supplemented from time to time, and, unless the context requires otherwise, shall include without limitation, any applicable
decision of any competent court or other judicial body, and (vi) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

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(b)The “winding-up,”
“dissolution,” “bankruptcy” or “administration” of a person shall be construed
so as to include the seeking of liquidation, winding-up, bankruptcy, reorganization, dissolution, administration, adjustment, protection
from creditors or relief of debtors or any proceedings equivalent or analogous to any of the foregoing under the law of the jurisdiction
in which such person is incorporated or resides, as applicable, or any jurisdiction in which such person carries on business.

 

(c)In the computation
of periods of time from a specified date to a later specified date, the word “from” means “from and
including;” the words “to” and “until” each mean “to but excluding;”
and the word “through” means “to and including.”

 

(d)Section headings
herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.

 

1.03.Accounting
Terms.

 

(a)Generally.
All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared
in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that
used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding
the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained
herein, Indebtedness of the Borrowers shall be deemed to be carried at 100% of the outstanding principal amount thereof.

 

(b)Changes
in GAAP. If at any time any change in GAAP (including the adoption of IFRS) would affect the computation of any financial
ratio or requirement set forth in any Loan Document, and either any Borrower or Lender shall so request, Lender and the Borrowers
shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to Lender’s approval); provided that, until so amended, (A) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and (B) Borrowers shall (C) provide to Lender financial
statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation
between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

1.04.Rounding.
Any ratios or percentages to be determined pursuant to this Agreement shall be calculated by dividing the appropriate component
by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05.Times
of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern Time (daylight
or standard, as applicable).

 

1.06.Borrower
Representative. Each Borrower hereby designates REH as its representative and agent on its behalf (in such capacity,
the “Borrower Representative”) for the purposes of selecting giving Committed Loan Notices and giving and receiving
all other notices and consents hereunder or under any of the other Loan Documents and taking all other actions (including in respect
of compliance with covenants) on behalf of any Borrower or Borrowers under the Loan Documents. REH hereby accepts such appointment.
Lender may regard any notice or other communication pursuant to any Loan Document from the Borrower Representative as a notice
or communication from all Borrowers, and may give any notice or communication required or permitted to be given to any Borrower
or all Borrowers hereunder to the Borrower Representative on behalf of such Borrower or all Borrowers. Each Borrower agrees that
each notice, election, representation and warranty, covenant, agreement and undertaking made on its behalf by the Borrower Representative
shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower
to the same extent as if the same had been made directly by such Borrower.

 

ARTICLE II. THE
REVOLVING LOANS

 

2.01.Committed
Loans. Subject to the terms and conditions set forth herein, Lender agrees to make loans (each such loan, a “Revolving
Loan”) to the Borrowers (jointly and severally) from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed the lesser of (a) the Revolving Commitment and (b) the Borrowing Base. Amounts borrowed under
this Section 2.01 and repaid under Section 2.04 or Section 2.06(b) or (c) may be re-borrowed during
the Availability Period.

 

2.02.Borrowings
of Revolving Loans. Each Borrowing (other than a Borrowing made pursuant to the last paragraph of Section 2.06(c))
shall be made upon a Borrower’s irrevocable notice to Lender in the form of a Committed Loan Notice. Each such notice must
be received by Lender not later than 12:00 pm, two (2) Business Days prior to the requested date of any Borrowing. Each Committed
Loan Notice shall be accompanied by a completed Borrowing Base Certificate, duly executed by a Responsible Officer that is a party
to the Validity Guaranty, and shall specify (i) the requested date of the Borrowing (which shall be a Business Day), and (ii) the
principal amount of the Borrowing being requested, and shall be accompanied by supporting information reasonably acceptable to
Lender.

 

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2.03.Procedures
for Borrowings. Each Committed Loan Notice delivered to Lender in accordance with Section 2.02 shall be deemed
a representation by the Borrowers that the conditions specified in Article IV have been and will continue to be satisfied.
Upon receipt of a Committed Loan Notice, and provided that all conditions precedent to a Borrowing hereunder have been satisfied,
Lender will make the requested Revolving Loan(s) available to the Borrowers by disbursing such amounts to the account or accounts
specified in the corresponding Committed Loan Notice, no later than 3:00 pm on the date of the requested Borrowing.

 

2.04.Optional
Prepayments. The Borrowers may voluntarily prepay all or any portion of the Revolving Loans at any time or from time
to time (without terminating or reducing the Commitment), without premium or penalty therefor.

 

2.05.Mandatory
Prepayments. The Borrowers shall prepay the principal amount of the Revolving Loans from time to time outstanding (without
a corresponding reduction in the Commitment, but subject to the Prepayment Premiums set forth in Section 2.10) in an amount
equal to:

 

(a)at the election
of Lender upon the occurrence of an Event of Default, the entire unpaid principal amount of all Revolving Loans; and

 

(b)one hundred
percent (100%) of the Net Cash Proceeds received by any Borrower in connection with any Disposition of its property (other than
Dispositions permitted under Section 7.05); provided that, the acceptance
of such Net Cash Proceeds shall not be construed as a waiver of or election of remedies with respect to any Default or Event of
Default arising as a result of such Disposition.

 

All prepayments made pursuant to this Section
2.05 shall be accompanied by all accrued and unpaid interest on the amount being prepaid, and all other fees and expenses then
due and payable to Lender hereunder.

 

2.06.Repayment
of the Revolving Loans.

 

(a)Repayment
of Out-of-Formula Advances. If any Out-of-Formula Advance shall exist at any time for any reason (including, without
limitation, as a result of any Eligible Receivable becoming ineligible), then the Borrowers, jointly and severally, shall immediately
repay to Lender a portion of the principal of the Revolving Loans then-outstanding equal to the amount of such Out-of-Formula Advance,
together with all accrued and unpaid interest thereon. Borrower hereby authorizes Lender, at Lender’s election, to withdraw
any such amounts from the Concentration Account.

 

(b)Regular
Payments from the Concentration Account. Provided that no Default or Event of Default has occurred and is continuing,
on each Business Day (other than the Settlement Dates), all available funds on deposit in the Concentration Account in excess of
the Floor Amount shall be applied by Lender as follows:

 

(i)First,
to Lender, as a reduction of the principal balance of the Revolving Loans then outstanding;

 

(ii)Second,
to Lender, for the payment of accrued and unpaid fees and expenses in connection with the maintenance of the Concentration Account
and any other expenses of Lender payable by any Borrower hereunder;

 

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(iii)Third,
to Lender to pay all accrued and unpaid interest on the Revolving Loans; and

 

(iv)Last,
to an account in the name of a Borrower, or otherwise as directed by the Borrowers in a written notice delivered to Lender.

 

(c)Repayment
of the Revolving Loans on each Settlement Date. Borrowers shall, jointly and severally, pay to Lender, commencing on
the first Settlement Date, and continuing on each Settlement Date thereafter, through and including the Maturity Date, and provided
that no Default or Event of Default has occurred and is continuing, all available funds on deposit in the Concentration Account,
which shall be applied by Lender as follows:

 

(i)First,
to Lender to pay the accrued and unpaid fees and expenses due in connection with the maintenance of the Concentration Account and
any other expenses of the Lender payable by any Borrower hereunder;

 

(ii)Second,
to Lender to pay all accrued and unpaid interest then-due and payable with respect to the Revolving Loans;

 

(iii)Third,
to Lender, as a reduction of the principal balance of the Revolving Loans then outstanding;

 

(iv)Fourth,
to an account in the name of a Borrower, or otherwise as directed by the Borrowers in writing not less than two (2) Business Days
prior to such Settlement Date.

 

To the extent that there are insufficient
funds on deposit in the Concentration Account on any given Settlement Date to pay all amounts due on such date under clauses (i)
and (ii) of this Section 2.06(c), Borrower hereby authorizes Lender (at Lender’s sole discretion), to make a Revolving
Loan in an amount sufficient to pay such amounts; provided that, Lender shall have no obligation to make any such Revolving Loan
and Lender’s making of any such Revolving Loan shall not constitute a waiver of any Event of Default arising out of any Borrower’s
failure to make any payments due pursuant to this Section 2.06(c).

 

(d)Payments
During Existence of Default or Event of Default. At any time during the existence of a Default or Event of Default,
amounts on deposit in the Concentration Account may ( at Lender’s discretion) be applied towards the Obligations or kept
in such account as security for the Obligations. Any such amounts applied towards the payment of the Obligations shall be applied
in such manner as Lender may determine it is sole discretion.

 

(e)Payment
at Maturity. On the Maturity Date, Borrowers shall pay to Lender the unpaid principal balance of all Revolving Loans,
together with all accrued and unpaid interest thereon, and all other Obligations payable hereunder.

 

2.07.Funding
of Collection Accounts and Concentration Account. The Borrowers shall procure a Payment Direction Letter from each Utility
Obligor identified on Schedule 1.01, and pursuant to such letters, shall cause all Utility Obligors to make all payments on account
of all Receivables, and otherwise under the applicable Purchase of Receivables Agreement, directly to the applicable Borrower’s
Collection Account. To the extent any Borrower receives any proceeds of Receivables directly, or otherwise under any Purchase of
Receivables Agreement, such Borrower shall hold the same in trust for Lender and shall promptly (and in any event not more than
two (2) Business Days after receipt thereof), deposit such proceeds into such Borrower’s Collection Account. The Borrowers
shall cause the Collection Account Bank to, on each Business Day, transfer all available funds on deposit in the Collection Accounts
to the Concentration Account.

 

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2.08.Interest.

 

(a)Subject to the
provisions of subsection (b) below, each Revolving Loan shall bear interest on the outstanding principal amount thereof
at a rate per annum equal to the LIBOR Rate plus the Applicable Margin.

 

(b)If any amount
of principal of any Revolving Loan is not paid when due, whether at stated maturity, by acceleration or otherwise, such amount
shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

 

(ii)If
any amount (other than principal of any Loan) payable by any Borrower under any Loan Document is not paid when due (after the lapse
of any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then at Lender’s election, such
amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

 

(iii)At
Lender’s election while any Event of Default exists (other than as set forth in clauses (b)(i) and (b)(ii)
above), the Borrowers shall pay interest on the principal amount of all outstanding Obligations under this Agreement at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

 

(iv)Accrued
and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)Interest on
each Revolving Loan shall be due and payable in arrears, for the immediately preceding calendar month, on each Settlement Date,
and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof
before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.09.Fees.
(a)Annual Fee. Borrowers shall pay to Lender an annual loan fee in an amount
equal to one percent (1.00%) of the Revolving Commitment Amount (“Annual Fee”), which Annual Fee shall be deemed
earned by Lender and due and non-refundable from Borrower on the Closing Date and again on the first anniversary of the Closing
Date. The Annual Fee shall be payable by Borrowers to Lender in equal monthly installments commencing on the Closing Date, and
on each Settlement Date thereafter until each Annual Fee (for each of the first two years hereof) is paid in full, or earlier,
if the Revolving Loans are accelerated in accordance with the terms of this Agreement.

 

(b)Reserved.

 

(c)Unused
Fee. Borrowers shall pay to Lender a monthly unused fee in an amount equal to the product of (a) one percent (1.00%)
(per annum) and (b) the amount by which the Revolving Commitment Amount exceeds the average daily principal balance of all Revolving
Loans during such month (“Unused Fee”); provided that, during the existence of any Out-of Formula Advance, the
principal balance for purposes of determining the Unused Fee shall not exceed the Revolving Commitment Amount. The Unused Fee shall
be due and payable, in arrears, by the Borrowers to Lender on each Settlement Date, and shall be calculated based on the average
daily outstanding principal balance during the immediately preceding calendar month.

 

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(d)Field
Exam Fees. Subject to the limitations set forth in Section 6.09 hereof, the Borrowers shall pay to Lender, Lender’s
usual and customary field examination fees for all on-site examinations performed by or on behalf of Lender.

 

(e)Other
Fees. On or prior to the Closing Date, Borrowers shall have paid to Lender all other out-of-pocket fees and expenses
incurred by Lender in connection with the negotiation, preparation and execution of this Agreement and the other Loan Documents.

 

2.10.Termination
of Commitment; Prepayment Premium. On or after the Closing Date, the Borrowers may terminate the Commitment at any time
by giving Lender not less than ninety (90) days’ prior written notice thereof. On the effective date of any such termination,
the Borrowers shall pay to Lender the outstanding principal amount of all Revolving Loans, all accrued and unpaid interest and
all other fees and expenses due to Lender under this Agreement or any of the other Loan Documents, and (a) if such termination
occurs on or prior to the first anniversary of the Closing Date, a prepayment premium equal to Two Hundred Thousand and 00/100
Dollars ($200,000.00), or (b) if such termination occurs after the first anniversary of the Closing Date, a prepayment premium
equal to One Hundred Thousand and 00/100 Dollars ($100,000.00).

 

2.11.Computation
of Interest and Fees. All computations of interest shall be made on the basis of a 360-day year and actual number of
days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on the average daily principal balance of each Revolving Loan, and shall accrue on the day on which each
Revolving Loan is made, but shall not accrue on a Revolving Loan, or any portion thereof, for the day on which such Revolving Loan
or portion thereof is paid, provided that any Revolving Loan that is repaid on the same day on which it is made shall bear interest
for one day. Each determination by Lender of an interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

 

2.12.Evidence
of Debt. The Revolving Loans made by Lender shall be evidenced by one or more accounts or records maintained by Lender
in the ordinary course of business. The accounts or records maintained by Lender shall be conclusive, absent manifest error, of
the amount of the Revolving Loans made by Lender to the Borrowers and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the obligation of any Loan Party to pay any amount owing
with respect to the Obligations under this Agreement or any of the other Loan Documents. The Borrowers shall execute and deliver
to Lender a promissory note payable, jointly and severally, to Lender in an original principal amount equal to the Revolving Commitment
Amount to evidence the Revolving Loans (in its original form and as amended, restated or replaced from time to time, the “Note”),
which Note shall evidence the Revolving Loans in addition to such accounts or records.

 

2.13.Payments
Generally. All payments to be made by any Borrower shall be made free and clear of and without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by any Borrower
hereunder shall be made to Lender, at the office of Lender set forth on Schedule 10.02, in Dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein, and any such funds received will be credited against the outstanding
principal balance of the Revolving Loans on the next Business Day. All payments received by Lender after 2:00 p.m. shall be
deemed received on the next succeeding Business Day and the Borrowing Base and any applicable interest or fees shall continue to
accrue accordingly. If any payment to be made by any Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the
case may be. Borrowers shall ensure that there are sufficient funds on deposit in the Concentration Account on any day (including,
without limitation, any Settlement Date) on which payments are to be made from such accounts hereunder. In the event that there
are insufficient funds on deposit in the Concentration Accounts on the date of any such payment, Borrowers shall pay to Lender
on such date and from sources other than the proceeds of a Revolving Loan, an amount equal to the difference between the payment
amount then-due, and the amount on deposit in the Concentration Account (after giving effect to all disbursements to be made therefrom
in accordance with Section 2.06(b) and (c)).

 

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ARTICLE III. TAXES,
YIELD PROTECTION AND ILLEGALITY

 

3.01.Taxes.

 

(a)Payments
Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

(i)Any
and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or
withholding for any Taxes, except as required by applicable Laws.

 

(ii)If
any Loan Party shall be required by the Code to withhold or deduct any Taxes, including both United States Federal backup withholding
and withholding taxes, from any payment, then (A) such Loan Party shall withhold or make such deductions as are determined by Lender
to be required, (B) such Loan Party shall timely pay the full amount withheld or deducted to the relevant Governmental Authority
in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the
sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of
all required deductions (including deductions applicable to additional sums payable under this Section 3.01) Lender or the
applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

 

(iii)If
any Loan Party shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then
(A) such Loan Party shall withhold or make such deductions as are determined by it to be required, (B) such Loan Party shall timely
pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent
that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be
increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable
to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would
have received had no such withholding or deduction been made.

 

(b)Payment
of Other Taxes by the Borrower. Without limiting the provisions of Section 3.01(a) above, the Loan Parties shall
timely pay to the relevant Governmental Authority in accordance with applicable law, any Other Taxes.

 

(c)Tax
Indemnifications. (i) Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient,
and shall make payment in respect thereof within ten (10) Business Days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable
or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered
to the Borrowers by Lender shall be conclusive absent manifest error.

 

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(d)Evidence
of Payments. Upon request by any Borrower or Lender, as the case may be, after any payment of Taxes by any Loan Party
or by Lender to a Governmental Authority as provided in this Section 3.01, the applicable Borrower shall deliver to Lender,
or Lender shall deliver to the applicable Borrower, as the case may be, the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence
of such payment reasonably satisfactory to the applicable Borrower or Lender, as the case may be.

 

(e)Stamp
Taxes. Borrowers shall pay and, within ten (10) Business Days of demand, indemnify Lender against any cost, loss or
liability incurred in relation to all stamp duty, registration and other similar Taxes payable in respect of this Agreement or
any related agreement or document.

 

(f)Treatment
of Certain Refunds. Unless required by applicable Laws, at no time shall Lender have any obligation to file for or otherwise
pursue any refund of Taxes withheld or deducted from funds paid for the account of Lender. If any Recipient determines, in its
sole discretion exercised in good faith, that it has received a refund or similar remission or repayment of any Tax (a “Tax
Benefit”) as a result of the Taxes as to which it has been indemnified by any Loan Party or with respect to which any
Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to the Loan Party an amount equal to
such Tax Benefit (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section
3.01 with respect to the Taxes giving rise to such Tax Benefit), net of all out-of-pocket expenses (including Taxes) incurred
by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority), provided that the
Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to the Loan Party (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay
such Tax Benefit to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will
the applicable Recipient be required to pay any amount to the Loan Party pursuant to this subsection the payment of which would
place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification
and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid. This Section 3.01(f) shall not be construed to require any Recipient
to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party
or any other Person.

 

(g)Survival.
Each party’s obligations under this Section 3.01 shall survive the Facility Termination Date.

 

3.02.Illegality.
If Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for
Lender to make, maintain or fund Revolving Loans whose interest is determined by reference to the LIBOR Rate, or to determine or
charge interest rates based upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions on the authority
of Lender to purchase or sell, or to take deposits of, Dollars or Eurodollars in the London interbank market, then, on notice thereof
by Lender to the Borrowers, any obligation of Lender to make or continue to hold LIBOR Rate Loans shall be suspended (including,
without limitation, Lender’s obligation to make Revolving Loans hereunder). Upon receipt of such notice, (x) Borrowers shall,
upon demand from Lender, prepay all LIBOR Rate Loans, if Lender may not lawfully continue to maintain such LIBOR Rate Loans, or
if Lender may continue to maintain such LIBOR Rate Loans, then at such time as shall be necessary under applicable Laws. Upon any
such prepayment, Borrower shall also pay accrued interest on the amount so prepaid.

 

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3.03.Inability
to Determine Rates.  If in connection with any request for a LIBOR Rate Loan, (a) Lender determines that (i) Dollar
deposits are not being offered to banks in the London interbank market for the applicable amount and Interest Period of such LIBOR
Rate Loan, or (ii) adequate and reasonable means do not exist for determining the LIBOR Rate for the applicable Interest Period
with respect to a proposed LIBOR Rate Loan (in each case with respect to clause (a) above, “Impacted Loans”),
or (b) Lender determines that for any reason the LIBOR Rate with respect to a proposed LIBOR Rate Loan does not adequately and
fairly reflect the cost to Lender of funding such LIBOR Rate Loan, Lender will promptly so notify the Borrowers. Thereafter, the
obligation of Lender to make or maintain LIBOR Rate Loans shall be suspended (to the extent of the affected LIBOR Rate Loans) until
Lender revokes such notice.

 

Notwithstanding the
foregoing, if Lender has made the determination described in clause (a) of the first sentence of this Section, Lender, in
consultation with the Borrowers, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative
rate of interest shall apply with respect to the Impacted Loans until (1) Lender revokes the notice delivered with respect to the
Impacted Loans under clause (a) of the first sentence of this Section, (2) Lender notifies the Borrowers that such alternative
interest rate does not adequately and fairly reflect the cost to Lender of funding the Impacted Loans, or (3) Lender determines
that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for Lender to make, maintain
or fund Revolving Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge
interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of Lender
to do any of the foregoing and provides Borrowers written notice thereof.

 

3.04.Increased
Costs; Reserves on LIBOR Rate Loans.

 

(a)Increased
Costs Generally. If any Change in Law shall:

 

(i)impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in by, Lender (except any reserve requirement contemplated
by Section 3.04(e));

 

(ii)subject
any Recipient to any Taxes (other than (A) Indemnified Taxes and (B) Taxes described in clauses (b) through (d) of
the definition of Excluded Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits,
reserves, other liabilities or capital attributable thereto; or

 

(iii)impose
on Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Rate Loans made
by Lender;

 

and the result of any of the foregoing
shall be to increase the cost to Lender of making or maintaining any LIBOR Rate Loan (or of maintaining its obligation to make
any such loan), or to reduce the amount of any sum received or receivable by Lender hereunder (whether of principal, interest or
any other amount) then, upon request of Lender, Borrower will pay to Lender such additional amount or amounts as will compensate
Lender for such additional costs incurred or reduction suffered. Notwithstanding anything in this Section 3.04 to the contrary,
this Section 3.04 shall not apply to Taxes which shall be governed exclusively by Section 3.01.

 

 

 

(b)Capital
Requirements. If Lender, in good faith, determines that any Change in Law affecting Lender or Lender’s holding
company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on Lender’s
capital or on the capital of Lender’s holding company, if any, as a consequence of this Agreement, Revolving Loans made by
Lender, to a level below that which Lender or Lender’s holding company could have achieved but for such Change in Law (taking
into consideration Lender’s policies and the policies of Lender’s holding company with respect to capital adequacy),
then from time to time upon written notice from Lender (such notice to set out the basis for such reduction suffered and a summary
calculation of such reduction suffered), Borrowers, within ten (10) Business Days of receipt of such notice will pay to Lender
such additional amount or amounts as will compensate Lender or Lender’s holding company for any such reduction suffered.

 

(c)Certificates
for Reimbursement. A certificate of Lender setting forth the amount or amounts necessary to compensate Lender or its
holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrowers
along with a summary calculation thereof, shall be conclusive absent manifest error asserted by the Borrowers within ten (10) Business
Days of receipt. Borrowers shall pay Lender the amount shown as due on any such certificate within ten (10) Business Days after
receipt thereof.

 

(d)Delay
in Requests. Failure or delay on the part of Lender to demand compensation pursuant to the foregoing provisions of this
Section 3.04 shall not constitute a waiver of Lender’s right to demand such compensation, provided that Borrowers
shall not be required to compensate Lender pursuant to the foregoing provisions of this Section for any increased costs incurred
or reductions suffered more than six (6) months prior to the date that Lender notifies the Borrowers of the Change in Law giving
rise to such increased costs or reductions and of Lender’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof).

 

(e)Additional
Reserve Requirements. Borrowers shall pay to Lender, (i) as long as Lender shall be required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each LIBOR Rate Loan equal to the actual costs of
such reserves allocated to such Loan by Lender (as determined by Lender in good faith, which determination shall be conclusive
absent manifest error), and (ii) as long as Lender shall be required to comply with any reserve ratio requirement or analogous
requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitment
or the funding of the LIBOR Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary,
to the nearest five decimal places) equal to the actual costs allocated to the applicable Commitment or Revolving Loans by Lender
(as determined by Lender in good faith, which determination shall be conclusive absent manifest error), which in each case shall
be due and payable on each date on which interest is payable on such Revolving Loan, provided Borrowers shall have received
at least ten (10) Business Days’ prior notice of such additional interest or costs from Lender, such notice to set out the
basis for such additional interest or cost incurred and a summary calculation thereof. If Lender fails to give notice ten (10)
Business Days prior to the relevant Interest Payment Date, such additional interest or costs shall be due and payable ten (10)
Business Days from receipt of such notice.

 

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3.05.Survival.
All of the Borrowers’ obligations under this Article III shall survive the Facility Termination Date.

 

ARTICLE IV. CONDITIONS
PRECEDENT TO BORROWINGS

 

4.01.Conditions
of the Initial Revolving Loan. The obligation of Lender to make the initial Revolving Loan hereunder is subject to satisfaction
of the following conditions precedent:

 

(a)Lender’s
receipt of the following, each of which shall be originals (or telecopies followed promptly by originals) unless otherwise specified,
each properly executed by a Responsible Officer of the signing Loan Party, each dated as of the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to Lender:

 

(i)executed
counterparts of this Agreement, the Guaranty, the Equity Pledge Agreement, the Security Agreement, the Note, the Validity Guaranty,
Control Agreements with respect to all of the Borrowers’ deposit accounts (other than the Collection Account), and if requested
by Lender, an Assignment Agreement from each Utility Obligor, and the other Loan Documents, in each case, sufficient in number
for distribution to Lender and each Loan Party requesting an original thereof;

 

(ii)a
Committed Loan Notice, together with an initial Borrowing Base Certificate, in accordance with Section
2.02;

 

(iii)evidence
satisfactory to Lender that the Collection Accounts have been established at the Collection Account Bank, and a Blocked Account
Agreement for each such deposit account, duly executed by the applicable Borrower and the Collection Account Bank;

 

(iv)such
certificates of resolutions or other action, incumbency certificates and/or other certificates of a Responsible Officer of each
Borrower as Lender may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Borrower is a party;

 

(v)such
documents and certifications as Lender may reasonably require to evidence that each Borrower is duly organized or formed, and that
each Borrower is validly existing, in good standing (with respect to jurisdictions in which the concept of good standing exists),
and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of
its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

 

(vi)favorable
pending litigation, judgment, tax lien and UCC search results for each of the Loan Parties, in such jurisdictions as Lender may
reasonably require, and such other searches or due diligence regarding any Loan Party as Lender may reasonably request in connection
with the transactions contemplated hereunder or under any of the other Loan Documents, including, without limitation, Lender’s
review and approval (in its sole discretion) of the Purchase of Receivables Agreements;

 

    	24

    	 

    

 

 

(vii)evidence
satisfactory to Lender that each Borrower has (A) obtained all necessary licenses to operate in each state in which such Borrower
operates, and evidence that each Borrower has obtained its approval to engage in wholesale power transactions as a power marketer
from the Federal Energy Regulatory Commission or its successor (“FERC”), and evidence confirming that the Borrowers
are members in good standing in each regional transmission organization or independent system operator (collectively, the “ISO”)
for each relevant jurisdiction into which Borrower will be serving as a third party supplier; and (B) adopted a Credit and Risk
Management Policy acceptable to Lender;

 

(viii)evidence
satisfactory to Lender that each Borrower is authorized or approved by the relevant Utility Obligors to operate as a third party
supplier and participate in the purchase of receivables program run by that Utility Obligor;

 

(ix)a
favorable opinion of counsel to the Loan Parties addressed to Lender;

 

(x)a
certificate of a Responsible Officer of each Borrower either (A) attaching copies of all consents, licenses and approvals required
in connection with the execution, delivery and performance by such Borrower of the Loan Documents to which it is a party, and such
consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals
are so required;

 

(xi)a
certificate signed by a Responsible Officer of each Borrower certifying (A) that the conditions specified in Sections 4.02(a)
and (b) have been satisfied, and (B) that, to the knowledge of such Responsible Officer, there has been no event or circumstance
since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or
in the aggregate, a Material Adverse Effect;

 

(xii)evidence
satisfactory to Lender that each Borrower is in compliance with all applicable ISO credit requirements, including, without limitation,
a certificate or statement of good standing from each ISO;

 

(xiii)the
passwords, authorizations and other access to the Borrower’s EDI reporting as required under Section 6.15; and

 

(xiv)such
other assurances, certificates, documents, consents or opinions as Lender reasonably may require and as requested prior to the
Closing Date.

 

(b)Any fees required
to be paid on or before the Closing Date shall have been paid.

 

(c)Unless waived
by Lender, the Borrowers shall have paid all fees, charges and disbursements of counsel to Lender (directly to such counsel if
requested by Lender) to the extent invoiced prior to or on the Closing Date and payable under Section
10.04(a).

 

4.02.Conditions
to all Borrowings. The obligation of Lender to make any Revolving Loan is subject to the following conditions precedent:

 

(a)(i) The representations
and warranties of the Borrowers contained in Sections 5.01, 5.02,
5.03, 5.04, 5.05(c), and 5.14 are true and correct, and (ii) all other representations and warranties of the
Borrowers contained in Article V and the other Loan Documents, or which are contained in any document furnished in connection
with a Committed Loan Notice or Borrowing Base Certificate, are true and correct in all material respects (or, in the case of any
such other representation, warranty, certification or statement of fact qualified by materiality, Material Adverse Effect or any
similar concept, incorrect or misleading in any respect), in each case on and as of the date of such Borrowing, except to the extent
that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in
all material respects as of such earlier date, and except that for purposes of this Section 4.02, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01.

 

    	25

    	 

    

 

 

(b)No Default or
Event of Default shall exist, or would result from such proposed Borrowing or from the application of the proceeds thereof.

 

(c)Lender shall
have received a Committed Loan Notice in accordance with Section 2.02.

 

(d)There shall
be no impediment, restriction, limitation or prohibition imposed under Law or by any Governmental Authority, as to the proposed
financing under this Agreement or the repayment thereof or as to rights created under the Guaranty or as to application of the
proceeds of the realization of any such rights.

 

(e)Each Committed
Loan Notice submitted by the Borrowers shall be deemed to be a representation and warranty that the conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable Borrowing.

 

ARTICLE V. REPRESENTATIONS
AND WARRANTIES

 

The Borrowers, jointly
and severally, represent and warrant to Lender that:

 

5.01.Existence,
Qualification and Power. Each Loan Party (a) is duly organized or formed, validly existing and, as applicable, in good
standing (with respect to jurisdictions in which the concept of good standing exists) under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations
under the Loan Documents to which it is a party, and (c) is duly qualified, is licensed and, as applicable, a member in good standing
(with respect to jurisdictions in which the concept of good standing exists) under the Laws of each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such qualification, license or membership (including ISO
membership and tariff compliance); except in each case referred to in clause (b)(i) or (c), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect.

 

5.02.Authorization;
No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person
is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene
the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of,
or the creation of any Lien under (i) any material Contractual Obligation to which such Person is a party or affecting such Person
or the properties of such Person or (ii) any material order, injunction, writ or decree of any Governmental Authority or any material
arbitral award to which such Person or its property is subject; or (c) violate any material Law.

 

5.03.Governmental
Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery
or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document.

 

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5.04.Binding
Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed
and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered
will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto
in accordance with its terms, except as may be limited by equitable principles and by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors rights generally.

 

5.05.Financial
Statements; No Material Adverse Effect.

 

(a)The Audited
Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except
as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Borrowers as
of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material Indebtedness and
other material liabilities of the Borrowers as of the date thereof to the extent required by GAAP.

 

(b)The unaudited
consolidated balance sheets of the Borrowers dated June 30, 2014, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial
condition of the Borrowers as of the date thereof and their results of operations for the period covered thereby, subject, in the
case of clauses (i) and (ii), to
the absence of footnotes and to normal year-end audit adjustments.

 

(c)Since the date
of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has
had or could reasonably be expected to have a Material Adverse Effect.

 

5.06.Litigation.
There are no actions, suits, proceedings, regulatory investigations or inquiries, claims or disputes pending or, to the actual
knowledge of any Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority,
by or against any Loan Party or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or (b) except as specifically disclosed in Schedule
5.06, either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

5.07.No
Default. No Loan Party is, or will be with the passage of time, in default under or with respect to any Contractual
Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default
has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any
other Loan Document.

 

5.08.Ownership
of Property; Liens. Each Loan Party has good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary in the ordinary conduct of its business, except for such defects in title as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. The property of each Loan Party is subject to no
Liens, other than Permitted Liens. All properties of each Loan Party are in good working order and condition.

 

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5.09.Environmental
Compliance.  (a) There exists no written claim alleging potential liability or responsibility for violation of any Environmental
Law on the respective business of any Loan Party, and (b) there exists no violation of an Environmental Law by any Loan Party,
in the case of clauses (a) or (b), to the extent such liability, responsibility or violation would reasonably be
expected to have a Material Adverse Effect.

 

5.10.Insurance.
 The properties of each Loan Party are insured with financially sound and reputable insurance companies not Affiliates of any
Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the applicable Loan Party operates.

 

5.11.Taxes.
 Each Loan Party has filed all Federal and state income and other material tax returns and reports required to be filed, and
has paid all Federal and state income and all other material taxes, assessments, fees and other governmental charges levied or
imposed upon it or its properties, income or assets otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There
is no proposed tax assessment against any Loan Party that would, if made, have a Material Adverse Effect.

 

5.12.ERISA
Compliance.

 

(a)Each Plan is
in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws. Each
Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code is subject to an Internal Revenue Service
opinion letter, or has received a favorable determination letter from the Internal Revenue Service to the effect that the form
of such Plan is qualified under Section 401(a) of the Code, or an application for such a letter is currently being processed by
the Internal Revenue Service. To the best knowledge of each Borrower, nothing has occurred that would prevent or cause the loss
of such tax-qualified status.

 

(b)There are no
pending or, to the best knowledge of any Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to
result in a Material Adverse Effect.

 

(c)No ERISA Event
has occurred, and neither any Borrower nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably
be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) each Borrower and each ERISA Affiliate
has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum
funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date
for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and
neither any Borrower nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the
funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; neither any Borrower
nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium
payments which have become due that are unpaid; neither any Borrower nor any ERISA Affiliate has engaged in a transaction that
could reasonably be expected to be subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated
by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be
expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.

 

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5.13.Subsidiaries;
Equity Interests. As of the Closing Date, no Borrower has any Subsidiaries other than those specifically disclosed in
Part (a) of Schedule 5.13 and all of the outstanding Equity Interests in such Subsidiaries have been or will be validly
issued, are fully paid and non-assessable and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13
free and clear of all Liens, other than Permitted Liens. As of the Closing Date, no Loan Party has any material equity investments
in any other corporation or entity other than those specifically disclosed in Part (b) of Schedule 5.13. All of the outstanding
Equity Interests in the Borrowers have been validly issued and are fully paid and non-assessable.

 

5.14.Margin
Regulations; Investment Company Act.

 

(a)No Loan Party
is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin
stock.

 

(b)Neither any
Loan Party, nor any Person Controlling any Loan Party is or is required to be registered as an “investment company”
under the Investment Company Act of 1940.

 

5.15.Disclosure.
None of the reports, financial statements, certificates and other written information (taken as a whole) furnished by or on behalf
of any of the Loan Parties to Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement
or delivered hereunder or under any other Loan Document contain, as the date such reports, financial statements, certificates or
other written information were furnished to Lender (in each case, as may be later modified or supplemented by other information
so furnished), material misstatements of fact or omit to state material facts necessary to make the statements therein, in the
light of the circumstances under which they were made and taken as a whole, not misleading; provided that, with respect
to projected financial information, if any, each Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.

 

5.16.Compliance
with Laws. Each Loan Party is in compliance in all material respects with the requirements of all Laws and all orders,
writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of
Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

5.17.Taxpayer
Identification Number. Each Borrower’s true and correct unique identification number that has been issued by its
jurisdiction of organization and the name of such jurisdiction are set forth on Schedule 10.02.

 

5.18.Intellectual
Property; Licenses, Etc. Each Loan Party owns, or possesses the right to use, all of the trademarks, service marks,
trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (a) that are material
to the operation of its respective businesses, and (b) without conflict with the rights of any other Person, except in the case
of each of clauses (a) and (b), as could not reasonably be expected to have a Material Adverse Effect. No Loan Party
conducts its business in a manner that infringes upon any rights held by any other Person, except where the effect thereof could
not reasonably be expected to have a Material Adverse Effect.

 

    	29

    	 

    

 

 

5.19.OFAC.
No Loan Party, nor, to the knowledge of any Borrower, any director, officer, employee or agent thereof, is an individual or entity
currently the subject of any Sanctions, nor is any Loan Party located, organized or resident in a Designated Jurisdiction.

 

5.20.Solvency
of the Loan Parties. Each Loan Party is, and after giving effect to each of the Revolving Loans and other financial
accommodations to be made in accordance with this Agreement will be, Solvent with all applicable renewable portfolio standards
and any alternative compliance payment obligations in each state or jurisdiction in which such Borrower operates.

 

5.21.Management
Services Agreement. Borrowers have provided Lender with a complete and true copy of the Management Services Agreement,
to include any and all amendments thereto in effect as of the date hereof,.

 

ARTICLE VI. AFFIRMATIVE
COVENANTS

 

So long as Lender shall
have any Commitment hereunder and until the Facility Termination Date, the Borrowers shall (or each Borrower shall, as the context
requires) do the following:

 

6.01.Financial
Reporting. Deliver to Lender, or in the case of Sections 6.01(e), 6.01(f) and 6.01(g), cause the
Guarantor to deliver to Lender, in form and detail reasonably satisfactory to Lender:

 

(a)as soon as available,
but in any event within 120 days after the end of each fiscal year of the Borrowers (commencing with the fiscal year ending December
31, 2014), consolidated and consolidating balance sheets for the Guarantor and Borrowers as of the end of such fiscal year, and
the related consolidated and consolidating statements of income or operations, changes in shareholders’ equity, and cash
flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP, such consolidated and consolidating statements to be reviewed and accompanied by a
report of an independent certified public accountant reasonably acceptable to Lender, which report shall be indicate that such
accountant is not aware of any material modifications that should be made to the financial statements in order for them to be in
conformity with GAAP;

 

(b)as soon as available,
but in any event within 30 days after the end of each calendar month, (commencing with the calendar month preceding the month in
which the Closing Date occurs), consolidated and consolidating balance sheets for the Borrowers as of the end of such calendar
month, the related consolidated and consolidating statements of income or operations for such calendar month and for the portion
of the Borrowers’ fiscal year then ended, and the related consolidated and consolidating statements of changes in shareholders’
equity, and cash flows for the portion of the Borrowers’ fiscal year then ended, in each case setting forth in comparative
form, as applicable, the figures for the corresponding calendar month of the previous fiscal year and the corresponding portion
of the previous fiscal year, all in reasonable detail, such consolidated and consolidating statements to be certified by a Responsible
Officer of the Borrowers that is a party to the Validity Guaranty, as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Borrowers in accordance with GAAP, subject only to normal year-end audit adjustments
and the absence of footnotes;

 

(c)Reserved.

 

(d)Reserved.

 

(e)Reserved.

 

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(f)as soon as available,
but in any event within 120 days of the end of each fiscal year of the Guarantor, audited financial statements for Guarantor;

 

(g)as soon as available,
but in any event within 7 days of the filing thereof, copies of Guarantor’s filed federal income tax returns, together with
all supporting and related schedules thereto

 

(h)On Monday of
each week (or if Monday is not a Business Day, then on the next succeeding Business Day), and in addition to any that are required
to be delivered in connection with any new Borrowing, a Borrowing Base Certificate for the Borrowers, duly executed by a Responsible
Officer of the Borrowers that is a party to the Validity Guaranty;

 

(i)no later than
9:00 am on each Business Day, a system generated EDI report detailing the status of all Receivables as of the prior Business Day;
and

 

(j)promptly, such
additional information regarding the business, financial or corporate affairs of any Borrower, or compliance with the terms of
the Loan Documents, as Lender may from time to time reasonably request.

 

6.02.Notices.
Promptly notify Lender of any of the following occurrences of which any Responsible Officer of Borrower has knowledge:

 

(a)the occurrence
of any Default;

 

(b)any matter that
has resulted or could reasonably be expected to result in a Material Adverse Effect;

 

(c)the occurrence
of any ERISA Event;

 

(d)any material
change in accounting policies or financial reporting practices by Borrower or any Subsidiary;

 

(e)any termination
of any agreement with any Utility Obligor or discontinuance or suspension of membership with any ISO; and

 

(f)the commencement
of any investigation, enforcement proceeding or other regulatory action initiated by any Governmental Authority with any Borrower
and any litigation matter with a claim against any Borrower, or each Borrower singularly or in the aggregate, which is in excess
of $10,0000 or any non-collection related litigation initiated by any Borrower.

 

Each notice pursuant
to this Section 6.02 shall be accompanied by a statement of a Responsible Officer (and where applicable, a Responsible Officer
that is also party to the Validity Guaranty) of the applicable Borrower setting forth details of the occurrence referred to therein
and stating what action the Borrowers have taken and propose to take with respect thereto. Each notice pursuant to Section 6.02(a)
shall describe with particularity any and all provisions of this Agreement and any other Loan Document that are known to have been
breached.

 

6.03.Payment
of Material Obligations. Pay and discharge as the same shall become due and payable, all its material obligations and
liabilities, including (a) all material tax liabilities, assessments and governmental charges or levies upon it or its properties
or assets; (b) all material lawful claims which, if unpaid, would by law become a Lien upon its property (other than a Permitted
Lien); and (c) all material Indebtedness, as and when due and payable, but subject to any subordination provisions contained in
any instrument or agreement evidencing such Indebtedness, except in the case of clauses (a), (b) or (c), if
(i) the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the applicable Borrower, or (ii) the failure to make such payment could not reasonably be expected
to result in a Material Adverse Effect.

 

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6.04.Preservation
of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing (with
respect to jurisdictions in which the concept of good standing exists) under the Laws of the jurisdiction of its organization except
in a transaction permitted by Section 7.04 or Section 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have
a Material Adverse Effect.

 

6.05.Maintenance
of Properties. Other than as permitted under Article VII hereof, each Loan Party shall (a) maintain, preserve
and protect all of its properties and equipment necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and replacements thereof, except
in the case of clause (a) or (b), where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

6.06.Maintenance
of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of Borrower, insurance
with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged
in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such
other Persons; provided that Borrower shall not be required to obtain or carry any other type of insurance not generally made available
to retail energy business companies.

 

6.07.Compliance
with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and
decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order,
writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure
to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.08.Books
and Records. Maintain proper books of record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Borrower.

 

6.09.Inspection
Rights. Permit representatives and independent contractors of Lender to visit and inspect any of its properties, to
examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public accountants, all at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable advance notice to the applicable Borrower; provided
that, unless an Event of Default shall exist, Lender shall not exercise such rights more than four (4) times in any calendar
year at the Borrowers’ expense; and provided further, that when an Event of Default exists, Lender may do any
of the foregoing at the expense of the Borrowers at any time during normal business hours and without advance notice.

 

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6.10.Use
of Proceeds.  Use the proceeds of the Borrowings to finance Capital Expenditures, as working capital for general corporate
purposes and to pay certain fees and expenses associated with the closing of the transactions herein contemplated.

 

6.11.Approvals
and Authorizations. Maintain all authorizations, consents, approvals and licenses from, exemptions of, and filings and
registrations with, each Governmental Authority, ISO and Utility Obligor, and obtain all approvals and consents of each other Person
in such jurisdiction, in each case that are required in connection with the Loan Documents, if the failure to do so could reasonably
be expected to result in a Material Adverse Effect.

 

6.12.Additional
Borrowers. Notify Lender at least thirty (30) days prior to the date on which any Person becomes a Subsidiary of any
Borrower after the Closing Date, and prior to the date on which such Person becomes a Subsidiary, cause such Person to (a) become
a co-borrower by executing and delivering to Lender a joinder to this Agreement and such other joinders or amendments to the other
Loan Documents as Lender determines is reasonably necessary, or such other documents as Lender shall reasonably deem appropriate
for such purpose, and (b) deliver to Lender documents of the types referred to in Section 4.01(a), including, without limitation,
if required by Lender in its reasonable judgment, favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the documentation referred to herein), all in form, content
and scope reasonably satisfactory to Lender.

 

6.13.Energy
Regulatory Compliance. Comply in all material respects with each Borrower’s applicable license, registration,
approval, or authorization and the requirements of the FERC, each state public utility commission, all applicable tariffs and rules
of the applicable ISOs and the tariffs and rules of each Utility Obligor.

 

6.14.Industry
Standards. Comply in all material respects with industry standards applicable to competitive retail electric supply
industry, including, but not limited to applicable Laws relating to commodities, consumer protection, securities, telemarketing
and truth in advertising.

 

6.15.Account
Monitoring. At all times provide Lender with proper authorizations and current passwords and other login information
sufficient to grant Lender direct online access to and reporting of all of the Borrowers’ accounts with the Borrowers’
Electronic Data Interchange (“EDI”) providers, and only use such EDI providers as are acceptable to Lender and
that allow for third-party verification of receivables. The Borrowers shall ensure that Lender, at all times while any of the Obligations
remain outstanding, has access to the EDI reporting of all of the Borrowers’ accounts.

 

6.16.Additional
Documents and Further Actions. Each Loan Party shall at its expense, promptly do all such acts and execute and deliver
all such documents as Lender, may, from time to time, reasonably require in connection with the rights and remedies of the Lender
pursuant to this Agreement or any Loan Document, including the Guaranty, to consummate the transactions contemplated herein or
therein.

 

6.17.Depository
Relationship. Except as prohibited by or required under applicable Laws, maintain all of its depository accounts and
cash management services with Lender or an Affiliate of Lender, or to the extent any such depository accounts are not held with
Lender, deliver to Lender a Control Agreement in connection with each such account (unless waived by Lender in its sole discretion).

 

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6.18.Credit
and Risk Management Policy. Each Borrower shall comply with the Credit and Risk Management Policy approved by the Lender
and will not make any material changes thereto without Lender’s prior written consent.

 

6.19.Excess
Availability. The Borrowers shall maintain, at all times until the Facility Termination Date, Excess Availability of
not less than Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00).

 

6.20.Addition
of New Utility Obligors. Borrower may not add additional Utility Obligors to Schedule 1.01 without Lender’s prior
written consent, such consent not to be unreasonably withheld. If Lender consents to the addition of any new Utility Obligor, then
as a condition precedent thereto, Borrower shall deliver or cause to be delivered to Lender the following items with respect to
each such Utility Obligor (each of which shall be in form, substance and execution acceptable to Lender):

 

(a)A copy of the
Purchase of Receivables Agreement with such Utility Obligor;

 

(b)If requested
by Lender, a collateral assignment of such Purchase of Receivables Agreement together with a consent and acknowledgment thereof
duly executed by the Utility Obligor;

 

(c)A Payment Direction
Letter duly executed by the Utility Obligor; and

 

(d)Such other documents,
agreements and information pertaining to such Utility Obligor as Lender may reasonably require.

 

ARTICLE VII. NEGATIVE
COVENANTS

 

So long as Lender shall
have any Commitment hereunder and until the Facility Termination Date, the Borrowers shall not, nor shall any Borrower permit any
Subsidiary to, directly or indirectly, do any of the following:

 

7.01.Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following (“Permitted Liens”):

 

(a)Liens pursuant
to any Loan Document;

 

(b)Liens existing
on the date hereof and listed on Schedule 7.01 and any renewals or extensions
thereof, provided that (i) the property covered thereby is not increased (unless such increase is itself a Permitted Lien),
(ii) the amount secured or benefited thereby is not increased except as contemplated by Section 7.03(b), and (iii) any renewal
or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);

 

(c)Liens for taxes
or other governmental charges or assessments not yet due or which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance
with GAAP;

 

(d)carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course
of business which are not overdue for a period of more than 45 days or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

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(e)pledges or deposits
in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security
or employee legislation, other than any Lien imposed by ERISA;

 

(f)pledges or deposits
to secure the performance of bids, trade contracts, government contracts and obligations, and leases (other than Indebtedness),
statutory obligations, surety and appeal bonds, performance bonds, and other obligations of a like nature incurred in the ordinary
course of business, including obligations imposed by the applicable Laws of foreign jurisdictions;

 

(g)easements, rights-of-way,
restrictions and other similar encumbrances affecting real property interests which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

 

(h)Liens
securing judgments for the payment of money, or securing appeal or other surety bonds related to such judgments, not constituting
an Event of Default under Section 8.01(h);

 

(i)Liens securing
Indebtedness permitted under Section 7.03(e); provided that (i) such
Liens do not at any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtedness
secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of
acquisition; and

 

(j)Liens arising
by virtue of any contractual, statutory or common law provision relating to banker’s liens, rights of setoff or similar rights
and remedies as to deposit accounts or other funds maintained with a creditor depository institution.

 

7.02.Investments.
Make any Investments, except:

 

(a)Investments
held by any Borrower in the form of cash and Cash Equivalents;

 

(b)advances to
officers, directors and employees of any Loan Party and its Subsidiaries in an aggregate amount not to exceed $15,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

 

(c)(i) Investments
of any Borrower in any Subsidiary that has delivered the documents required under Section
6.12; (ii) Investments of any such Subsidiary in any Borrower; and (iii) Investments of any Borrower in a joint
venture that is otherwise a permitted Investment hereunder;

 

(d)Investments
consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

(e)Guarantees permitted
by Section 7.03;

 

(f)Investments
under clause (c) of the definition thereof which individually or in the aggregate (in any series of related transactions)
have a transaction value of less than $100,000;

 

(g)Investments
resulting from pledges or deposits that are included as Permitted Liens;

 

(h)Purchase or
acquire additional assets in the form of new customers; and

 

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(i)Acquire by purchase
of equity or merger, companies in the same business segments as Borrower; provided Borrower complies with the conditions of Section
6.12 (“Permitted Acquisitions”).

 

7.03.Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)Indebtedness
under the Loan Documents;

 

(b)Indebtedness
outstanding on the date hereof and listed on Schedule 7.03 and any refinancings,
refundings, renewals or extensions thereof; provided that (i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid,
and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments
unutilized thereunder and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing, refunding, renewing or extending Indebtedness, and
of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect
to the Loan Parties or Lender than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does
not exceed the then-applicable market interest rate;

 

(c)Guarantees of
any Loan Party in respect of Indebtedness otherwise permitted hereunder of any Loan Party or any Subsidiary that is otherwise subject
to the covenants set forth in Articles VI and VII herein;

 

(d)obligations
(contingent or otherwise) of any Borrower or any Subsidiary existing or arising under any Swap Contract, provided that such obligations
are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated
with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person (to include any reasonably
anticipated risks based on the business as it exists as well as the anticipated reasonable growth of the business), and not for
purposes of speculation;

 

(e)Indebtedness
in respect of capital leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however,
that the aggregate amount of all such Indebtedness incurred in any fiscal year of the Borrowers shall not exceed $100,000;

 

(f)Indebtedness
in respect of cash management operations, netting services, cash pooling arrangements, automatic clearinghouse arrangements, daylight
overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course
of business, and any Guarantees thereof; and

 

7.04.Fundamental
Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor
of any Person, except that, so long as no Default exists or would result therefrom:

 

(a)any Subsidiary
may merge with any Borrower; provided that Borrower shall be the continuing or surviving Person;

 

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(b)any Subsidiary
may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to any Borrower;

 

(c)any Subsidiary
may merge with any other Subsidiary that has become a co-Borrower under this Agreement pursuant to Section
6.12; and

 

(d)subject to Section
7.04(b), the existence (corporate or otherwise) of any Subsidiary of any Borrower may be terminated or liquidated
if such termination or liquidation is determined by such Borrower to be in the best interest of such Borrower and its Subsidiaries,
taken as a whole, and such termination would not reasonably be expected to result in a Material Adverse Effect.

 

The foregoing notwithstanding, no Borrower
shall enter into any merger or consolidation or permit any dissolution, liquidation or Disposition of all or substantially all
of its assets if such merger, consolidation, dissolution, liquidation or Disposition would give rise to a default under any of
such Borrower’s Purchase of Receivables Agreements.

 

7.05.Dispositions.
Make any Disposition of its property, except:

 

(a)Dispositions
of obsolete, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)Dispositions
of inventory in the ordinary course of business;

 

(c)(i) Dispositions
of property to the extent that (A) such property is exchanged for credit against the purchase price of similar replacement property,
(B) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property, or (C)
such property is no longer necessary to the continued operation of the business of any Loan Party or any Subsidiary; and (ii) Dispositions
of real property interests of any Loan Party or any of its Subsidiaries; provided that such Disposition does not materially adversely
affect the business or operation of the Loan Parties and their Subsidiaries, taken as a whole;

 

(d)Dispositions
of property by any Borrower or any Subsidiary to a another Borrower; provided that
if the transferor of such property is a Borrower or a Subsidiary that has become a co-Borrower under Section
6.12, the transferee thereof must be Borrower or become a co-Borrower (in accordance with Section 6.12);

 

(e)Dispositions
otherwise permitted under this Agreement; and

 

(f)Dispositions
of accounts receivable (other than Eligible Receivables) arising in the ordinary course of business which are overdue or payable
by a distressed company or individual in connection with the compromise or collection thereof;

 

provided,
however, that Borrowers shall give Lender prior written notice of any Disposition
pursuant to subsections (a) through (f) (other than clause (d)) if
the aggregate consideration received on account of such Disposition is in excess of $100,000, and each such Disposition shall be
for fair market value.

 

7.06.Restricted
Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise)
to do so, except that:

 

(a)any Subsidiary
may make Restricted Payments to any Borrower;

 

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(b)any Borrower
may declare and make dividend payments or other distributions or payments payable solely in the common stock or other common Equity
Interests of such Borrower (to the extent the same would not result in a Change of Control);

 

(c)so long as no
Default shall have occurred and be continuing at the time of any action described below or would result therefrom, any Borrower
may make Restricted Payments (including repurchases of Equity Interests) in connection with any equity compensation plans provided
to employees, officers, directors or other service providers in an amount not to exceed $250,000 in any given calendar year; and

 

(d)so long as no
Default shall have occurred and be continuing at the time of any action described below or would result therefrom, and upon Lender’s
prior written consent (such consent not to be unreasonably withheld), any Borrower may make other Restricted Payments not otherwise
described in this Section 7.06 to any Person that owns an Equity Interest
or capital stock in Borrower.

 

7.07.Change
in Nature of Business. Engage in any line of business other than: 1) retail supply of electricity or natural gas in
restructured markets; 2) the sale or marketing of services such as home warranties and the like; or 3) the sale or marketing of
products intended to generate energy (such as solar panels) or improve energy efficiency (such as “smart” thermostats).

 

7.08.Transactions
with Affiliates. Enter into any transaction of any kind with any Affiliate, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to the applicable Borrower as would be obtainable
by such Borrower at the time in a comparable arm’s length transaction with a Person other than an Affiliate, provided
that the foregoing restriction shall not apply to (a) transactions between or among Borrowers and/or any Subsidiary that has become
a co-Borrower under Section 6.12, and (b) customary compensation and indemnification paid to officers, directors and employees,
and (c) transactions under the Management Services Agreement as in effect as of the date hereof.

 

7.09.Burdensome
Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits
the ability (i) of any Subsidiary to make Restricted Payments to any Borrower, or to otherwise transfer property to any Borrower,
(ii) of any Subsidiary to Guarantee the Indebtedness of any Borrower or (iii) of Borrower or any Subsidiary to create, incur, assume
or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit
any negative pledge incurred or provided in favor of any holder of a Lien permitted under Sections 7.01, solely to the extent
any such negative pledge relates to the property that is the subject of such Lien; or (b) requires the grant of a Lien to secure
an obligation of such Person if a Lien is granted to secure another obligation of such Person; provided, however,
that this Section 7.09 shall not prohibit any such limitations or requirements that are binding on a Person at the time
such Person first became a Subsidiary, so long as all such limitations and requirements were not entered into in contemplation
of such Person becoming a Subsidiary, together with any replacement agreement thereof so long as the terms thereof are not materially
less favorable to such Subsidiary.

 

7.10.Use
of Proceeds. Use the proceeds of any Borrowing, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others
for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose in a manner
which violates, or would be inconsistent with, Regulation U of the FRB.

 

7.11.Reserved.

 

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7.12.Sanctions.
Directly or indirectly, use the proceeds of any Borrowing, or lend, contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other individual or entity, to fund any activities of or business with any individual or entity,
or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that
will result in a violation by any individual or entity participating in the transaction of Sanctions.

 

7.13.Third
Party Arrangement. Enter into any contract or agreement with any third party for any servicing or cross-selling arrangements
with such third party (other than approved EDI providers), without Lender’s prior written consent thereto, or arrangements
related to the description in Section 7.07.

 

ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES; ADJUSTMENTS TO THE BORROWING BASE

 

8.01.Events
of Default. Any of the following shall constitute an Event of Default:

 

(a)Non-Payment.
Any Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any regularly scheduled installment
of principal or interest on any Loan, or (ii) within five (5) days after the same becomes due, any other amount payable hereunder
or under any other Loan Document; or

 

(b)Specific
Covenants. Any Borrower fails to perform or observe or cause any of its Subsidiaries (as applicable) to observe or perform,
any term, covenant or agreement contained in any of Section 6.01, 6.02(a), 6.02(e), 6.04(a), 6.07,
6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.18, or Article VII; or

 

(c)Other
Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection
(a), (b) or (o) of this Section 8.01) contained in any Loan Document on its part to be performed or observed
and such failure continues for 30 days after the earlier of (i) knowledge by any Responsible Officer of any Borrower, or (ii) receipt
by any Borrower of written notice thereof from Lender; or

 

(d)Representations
and Warranties. (i) Any representation or warranty made or deemed made by or on behalf of any Borrower or any other
Loan Party herein or in any other Loan Document, shall be incorrect or misleading in any material respect (or, in the case of any
such other representation or warranty qualified by materiality, Material Adverse Effect or any similar concept, shall be incorrect
or misleading in any respect) when made or deemed made; or

 

(e)Cross-Default.
(i) any Borrower (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts)
having an aggregate principal amount (including undrawn committed or available amounts) of more than $25,000, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or Guarantee described in clause (A) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default
or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving
of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid (other than mandatory prepayments
not due to a default thereunder), defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay (other than
mandatory prepayments not due to a default thereunder), defease or redeem such Indebtedness to be made, prior to its stated maturity,
or such Guarantee to become payable or cash collateral in respect thereof to be demanded (but excluding pursuant to due-on-sale
clauses of which are not subject to or triggered by a breach or default); or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which
any Borrower or any of its Subsidiaries is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) under such Swap Contract as to which any Borrower or any of its Subsidiaries is an Affected Party (as so defined)
and, in either event, the Swap Termination Value owed by such Borrower or such Subsidiary as a result thereof is greater than $25,000;
or

 

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(f)Insolvency
Proceedings, Etc. Any Loan Party or any of their respective Subsidiaries institutes or consents to the institution of
any proceeding for the bankruptcy, winding-up, dissolution, administration, insolvency, reorganization of or for any freeze order,
moratorium or other similar proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies
for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator
or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or
unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material
part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days,
or an order for relief is entered in any such proceeding; or

 

(g)Inability
to Pay Debts; Attachment. (i) any Borrower or any Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or

 

(h)Judgments.
There is entered against any Borrower or any Subsidiary (i) one or more final and unappealable judgments or orders for the payment
of money in an aggregate amount (as to all such judgments or orders) exceeding $100,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage, other than a customary reservation of rights letter),
or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment
or order, or (B) in the case of a monetary judgment, such judgment remains unpaid there is a period of 45 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(i)ERISA.
(i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected
to result in liability of any Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC that could be
reasonably likely to result in a Material Adverse Effect, or (ii) any Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount that could be reasonably likely to result in a Material Adverse Effect;
or

 

(j)Invalidity
of Loan Documents. Any material provision of any Loan Document, at any time after its execution and delivery and for
any reason other than as expressly permitted hereunder or thereunder or upon the Facility Termination Date, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any material provision
of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any material provision of any Loan Document; or

 

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(k)Default
Under Other Loan Documents. If any default occurs and is continuing (after giving effect to all applicable grace or
cure periods, if any) under any other Loan Document; or

 

(l)Collateral
Impairment. If at any time Lender shall cease to have a valid and perfected first-priority Lien on any of the Collateral,
or any Lien in favor of Lender in any of the Collateral is otherwise impaired; or

 

(m)Change
of Control. There occurs any Change of Control; or

 

(n)Unlawfulness
of Loan Documents. This Agreement or any Loan Document or the performance hereof or thereof shall at any time and for
any reason be declared by a court of competent jurisdiction to be, or pursuant to any applicable Law shall be, unlawful; or

 

(o)EDI
Reporting; Access. (i) Lender is unable to obtain the information from any EDI provider as required under Section
6.15, whether due to (A) any willful act or intentional omission of Borrower or (B) any other failure of Borrower or the EDI
provider to provide Lender access to obtain such information, and such failure remains uncured for a period of two (2) Business
Days, (ii) Borrower intentionally misstates any information reported in any Borrowing Base Certificate or any financial report
required to be delivered under Section 6.01, or (iii) any EDI provider becomes the subject of any proceeding under a Debtor
Relief Law; or

 

(p)Default
Under Material Contract; Material Adverse Effect. Any Borrower is in default (and such default is not waived or cured
within the applicable grace or cure period provided thereunder) under any Material Contract, or any such agreement is modified
or interpreted in a manner which could reasonably be expected to result in a Material Adverse Effect; or

 

(q)Compliance
with Third Party Regulations and Requirements. Any Borrower fails to meet the obligations of any Governmental Authority,
ISO, Utility Obligor or any other third party, which failure could reasonably be expected to result in a Material Adverse Effect;
or

 

(r)Any
Responsible Officer or other senior officer of any Borrower is the subject of a criminal indictment.

 

8.02.Remedies
Upon Event of Default. If any Event of Default occurs and is continuing, Lender may take any or all of the following
actions:

 

(a)declare the
Commitment to be terminated;

 

(b)declare
the unpaid principal amount of all outstanding Revolving Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the Borrowers; provided,
however, that upon the occurrence of an actual or deemed entry of an order for
relief with respect to any Borrower or any Subsidiary that has become a co-Borrower pursuant to Section
6.12 under the Bankruptcy Code of the United States, the obligation of Lender to make Revolving Loans shall automatically
terminate, the unpaid principal amount of all outstanding Revolving Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of Lender;

 

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(c)exercise all
rights and remedies available to it under the Loan Documents, at law or in equity; and

 

(d)upon
the occurrence of any Event of Default under Section 8.01(q), Lender
may take any and all actions necessary to cure the applicable Borrower’s default or satisfy the applicable Borrower’s
obligations with respect to such Governmental Authority, ISO, Utility Obligor or other third party, and each Borrower hereby appoints
Lender as such Borrower’s attorney-in-fact for the limited purpose of performing such cure or satisfying such obligation
(which appointment is coupled with an interest and is irrevocable). All amounts advanced or incurred by Lender under this Section
8.02(d) shall be additional Obligations owing by the Borrowers to Lender, upon demand.

 

8.03.Application
of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Revolving Loans have automatically
become immediately due and payable as set forth in the proviso to Section 8.02), any amounts received on account of the
Obligations shall be applied by Lender in such order as Lender may determine in its sole and absolute discretion.

 

8.04.Adjustments
to the Borrowing Base. Lender may reduce or make other adjustments to the advance rates used to determine the Borrowing
Base (a) in its sole discretion after the occurrence and during the existence of a Default or an Event of Default, (b) in its sole
discretion if the Variation for any Borrower for any applicable period exceeds (i) fifteen percent (15%) with respect to the conversion
of Billed Receivables to Unbilled Receivables or (ii) two percent (2%) with respect to the collection of Accounts giving rise to
Billed Receivables, and (c) as Lender otherwise determines in its exercise of prudent business judgment and standards of commercial
reasonableness.

 

ARTICLE IX. CROSS-GUARANTY

 

9.01.The
Cross-Guaranty.  In order to induce Lender to enter into this Agreement and to make the Revolving Loans hereunder and
in recognition of the direct benefits to be received by each Borrower from the Loan hereunder and from the other Loan Documents,
each Borrower hereby unconditionally and irrevocably, jointly and severally, guarantees as primary obligor and not merely as surety
(each Borrower, in such capacity, a “Cross-Guarantor” and collectively, the “Cross-Guarantors”
for purposes of this Article IX) the full and prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all Obligations of each other Borrower to Lender under this Agreement, the Note or any other Loan Document. If any or all
of the indebtedness of any Borrower to Lender becomes due and payable hereunder or under the Note or any other Loan Documents,
each Cross-Guarantor unconditionally promises to pay such indebtedness to Lender, or order, ON DEMAND, together with any and all
reasonable expenses which may be incurred by or on behalf of the Lender in collecting any of the indebtedness, including, without
limitation, such expenses described in Section 10.04. The word “indebtedness” is used in this Article IX in
its most comprehensive sense and includes any and all Obligations of any Borrower arising in connection with this Agreement, the
Note or any of the other Loan Documents in each case, heretofore, now or hereafter made, incurred or created, whether voluntarily,
involuntarily, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether or not such indebtedness
is from time to time reduced, or extinguished and thereafter increased or incurred, whether any Borrower may be liable individually
or jointly with others, whether or not recovery upon such indebtedness may be or hereafter becomes barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter becomes unenforceable. Notwithstanding any provision to the contrary contained
herein or in any of the other Loan Documents, to the extent the obligations of any Cross-Guarantor shall be adjudicated to be invalid
or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent
conveyances or transfers) then the obligations of such Cross-Guarantor hereunder shall be enforced to the maximum amount that is
permissible under applicable law (whether federal or state, and including, without limitation, any Debtor Relief Laws).

 

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9.02.Bankruptcy.
Each Cross-Guarantor unconditionally and irrevocably guarantees, jointly and severally, the payment of any and all Obligations
of the Borrowers to the Lender under this Agreement, the Note and any other Loan Document whether or not due or payable upon the
occurrence of any of the events specified in Sections 8.01(f) or (g), and unconditionally promises to pay such Obligations
to Lender, or order, ON DEMAND, in lawful money of the United States. Each Cross-Guarantor further agrees that to the extent that
any Borrower shall make a payment or a transfer of an interest in any property to Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and /or required to be
repaid to any Borrower, the estate of any Borrower, a trustee, receiver or any other party under any Debtor Relief Law, state or
federal law, common law or equitable cause, then to the extent of such avoidance or repayment, the Obligation or part thereof intended
to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.

 

9.03.Nature
of Liability. The liability of each Cross-Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the indebtedness of any Borrower whether executed by such Cross-Guarantor, any other guarantor or by any other party,
and such Cross-Guarantor’s liability hereunder shall not be affected or impaired by (a) any direction as to the application
of payment by any Borrower or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability
of a guarantor or of any other party as to the indebtedness of any Borrower, or (c) any payment on or reduction of any such other
guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Borrower, or (e)
any payment made to Lender on the Obligations which Lender repays to any Borrower pursuant to a court order in any Bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and each Cross-Guarantor waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.

 

9.04.Independent
Obligation. The obligations of each Cross-Guarantor hereunder are independent of the obligations of each Borrower, and
a separate action or actions may be brought and prosecuted against each Cross-Guarantor whether or not action is brought against
any Borrower and whether or not any Borrower is joined in any such action or actions.

 

9.05.Authorization.
Each Cross-Guarantor authorizes Lender, without notice or demand (except as shall be required by applicable statute and cannot
be waived), and without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time or manner of payment of, or otherwise change the terms of the indebtedness or any part
thereof in accordance with this Agreement, including any increase or decrease of the rate of interest thereon, (b) take and hold
security from each Cross-Guarantor or any other party for the payment of this Cross-Guaranty or the Obligations and exchange, enforce,
waive and release any such security, (c) apply such security and direct the order or manner of sale thereof as Lender in its sole
and absolute discretion may determine and (d) release or substitute any one or more endorsers, guarantors, any Borrower or other
obligors or any security for the Obligations.

 

9.06.Reliance.
It is not necessary for Lender to inquire into the capacity or powers of any Borrower or the officers, director, partners or agents
acting or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

 

9.07.Waiver;
Subrogation.

 

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(a)Each
Cross-Guarantor waives any right (except as shall be required by applicable statute and cannot be waived) to require Lender to
(i) proceed against any Borrower or any other party, (ii) proceed against or exhaust any security held from any Borrower or any
other party or (iii) pursue any other remedy in Lender’s power whatsoever. Each Cross-Guarantor waives any defense
based on or arising out of any defense of any Borrower or any other party other than payment in full of the indebtedness, including,
without limitation, any defense based on or arising out of the disability of any Borrower or any other party, or the unenforceability
of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower other than
payment in full of the indebtedness. Lender may, at its election, foreclose on any security held by it by one or more judicial
or non-judicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted
by applicable law), or exercise any other right or remedy the Lender may have against any Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Cross-Guarantor hereunder except to the extent the indebtedness
has been paid. Each Cross-Guarantor waives any defense arising out of any such election by Lender, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Cross-Guarantor against any
Borrower or any other party or any security.

 

(b)Each
Cross-Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices
of nonperformance, notice of protest, notices of dishonor, notices of acceptance of this Cross-Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each Cross-Guarantor assumes all responsibility for being and keeping
itself informed of each Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the indebtedness and the nature, scope and extent of the risks which such Cross-Guarantor assumes and incurs hereunder,
and agrees that Lender shall have no duty to advise such Cross-Guarantor of information known to it regarding such circumstances
or risks.

 

(c)Each
Cross-Guarantor hereby agrees that it will not exercise any rights of subrogation that it may at any time have as a result of this
Cross-Guaranty, or otherwise (whether contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to the claims
of Lender against any Borrower, and all contractual, statutory or common law rights of reimbursement, contribution or indemnity
from any other party which it may at any time otherwise have as a result of this Cross-Guaranty until such time as the Revolving
Loans and all other Obligations hereunder and under each Loan Document shall have been fully paid and performed and Lender’s
commitment to make Revolving Loans hereunder has been terminated. Each Cross-Guarantor hereby further agrees not to exercise any
right to enforce any other remedy which Lender now has or may hereafter have against any other party, any endorser or any other
guarantor of all or any part of the indebtedness of any Borrower and any benefit of, and any right to participate in, any security
or collateral given to of for the benefit of Lender to secure payment of the Obligations of any Borrower until such time as the
Revolving Loans and all other Obligations are paid in full, Lenders commitment to make Revolving Loans hereunder is terminated
and all other Obligations hereunder and under the other Loan Documents are performed in full.

 

(d)Any
and all present and future debts and obligations of each Borrower to any Cross-Guarantor is hereby postponed in favor of, and subordinated
until the payment and performance of, any and all present and future debts and obligations of each Borrower to Lender, including,
without limitation, all of the Obligations under this Agreement, the Note and the other Loan Documents.

 

9.08.Books
and Records. The Lender’s books and records showing the accounts between Lender and each Borrower, respectively,
shall be admissible in evidence in an action or proceeding and shall be binding upon each Cross-Guarantor for the purpose of establishing
the items therein set forth and shall constitute prima facie proof thereof.

 

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ARTICLE X. MISCELLANEOUS

 

10.01.Amendments,
Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure
by any Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by Lender and the Borrowers or the
applicable Loan Party, as the case may be, and each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

 

10.02.Notices;
Effectiveness; Electronic Communication.

 

(a)Notices
Generally. Except as provided in subsection (b) below, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent
by facsimile to the address, facsimile number or electronic mail address specified for such Person on Schedule 10.02. Notices
and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed
to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications
to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

 

(b)Electronic
Communications. Notices and other communications to Lender hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures approved by Lender, provided that approval of
such procedures may be limited to particular notices or communications. Unless Lender otherwise prescribes, notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement);
provided that, if such email is not sent during the normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next business day for the recipient.

 

(c)Change
of Address, Etc. Each Borrower and Lender may change its address, facsimile or telephone number for notices and other
communications hereunder by notice to the other parties hereto.

 

(d)Reliance
by Lender. Lender shall be entitled to rely and act upon any notices (including electronic Committed Loan Notices) purportedly
given by or on behalf of any Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were
not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. Each Borrower shall indemnify Lender and the Related Parties of Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower.
All telephonic notices to and other telephonic communications with Lender may be recorded by Lender, and each of the parties hereto
hereby consents to such recording.

 

10.03.No
Waiver; Cumulative Remedies; Enforcement. No failure by Lender to exercise, and no delay by Lender in exercising, any
right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under
each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

 

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10.04.Expenses;
Indemnity; Damage Waiver.

 

(a)Costs
and Expenses. The Borrowers shall, jointly and severally, pay (i) all reasonable out-of-pocket expenses incurred by
Lender (including the reasonable fees, charges and disbursements of counsel for Lender), in connection with the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers
of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii)
all out-of-pocket expenses incurred by Lender (including the fees, charges and disbursements of any counsel for Lender), in connection
with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including
its rights under this Section, or (B) in connection with the Revolving Loans made hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Revolving Loans.

 

(b)Indemnification
by the Borrowers. The Borrowers shall, jointly and severally, indemnify Lender and each Related Party of Lender (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for
any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Borrower or any other
Loan Party) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance
by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated
hereby or thereby, (ii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated
by any Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of its Subsidiaries,
or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory, whether brought by a third party or by any Borrower or any other Loan Party, and regardless
of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y)
result from a claim brought by any Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if such Borrower or such Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent jurisdiction. Without limiting the provisions of Section
3.01(c), this Section 10.4(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims,
damages, etc. arising from any non-Tax claim.

 

(c)Waiver
of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Borrower shall assert, and each
Borrower hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof.

 

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(d)Payments.
All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor.

 

(e)Survival.
The agreements in this Section shall survive the Facility Termination Date.

 

10.05.Payments
Set Aside.  To the extent that any payment by or on behalf of any Borrower is made to Lender, or Lender exercises its
right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Lender in its discretion)
to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise,
then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such setoff had not occurred.

 

10.06.Successors
and Assigns.

 

(a)Successors
and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that neither any Borrower nor any other Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Lender. Lender
may, without the consent of any Borrower (however, Borrower at no time shall be responsible for any fees or expenses of Lender
related to any such assignment), assign or otherwise transfer all or any of its rights or obligations hereunder.

 

(b)Participations.
Lender may at any time, without the consent of, or notice to any Borrower (however, Borrower at no time shall be responsible for
any fees or expenses of Lender related to the sale of any such participation), sell participations to any Person (each, a “Participant”)
in all or a portion of Lender’s rights and/or obligations under this Agreement and the other Loan Documents (including, without
limitation, all or any portion of its Commitment and/or the Revolving Loans).

 

(c)Certain
Pledges. Lender or any assignee thereof may at any time, without the consent of or notice to, any Borrower, pledge or
assign a security interest in all or any portion of its rights under this Agreement or any of the other Loan Documents (including,
without limitation, under the Note).

 

10.07.Treatment
of Certain Information; Confidentiality. Lender agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction
over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to
any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action
or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or (ii) any actual or
prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by
reference to any Borrower and its obligations, this Agreement or payments hereunder, (g) with the consent of the applicable Borrower
or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y)
becomes available to Lender or any of its Affiliates on a nonconfidential basis from a source other than a Borrower. For purposes
of this Section, “Information” means all information received from any Borrower or any Subsidiary relating to
any Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to Lender
on a nonconfidential basis prior to disclosure by such Borrower or such Subsidiary. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential
information.

 

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10.08.Right
of Setoff. If an Event of Default shall have occurred and be continuing, Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations
(in whatever currency) at any time owing by Lender or any such Affiliate to or for the credit or the account of any Borrower against
any and all of the obligations of any Borrower now or hereafter existing under this Agreement or any other Loan Document to Lender
or such Affiliate, irrespective of whether or not Lender or such Affiliate shall have made any demand under this Agreement or any
other Loan Document and although such obligations of such Borrower may be contingent or unmatured or are owed to a branch, office
or Affiliate of Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness. The
rights of Lender and its Affiliates under this Section are in addition to other rights and remedies (including other rights of
setoff) that Lender or its Affiliates may have. Lender agrees to notify the applicable Borrowers promptly after any such setoff
and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

 

10.09.Interest
Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed
to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the
“Maximum Rate”). If Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Revolving Loans in such order as Lender determines in its sole discretion, or, if it exceeds
such unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by Lender
exceeds the Maximum Rate, such Lender may, to the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term
of the Obligations under the Loan Documents.

 

10.10.Counterparts;
Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof
and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective when it shall have been executed by Lender and each Borrower and when Lender shall have received
counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g. “pdf”
or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement.

 

10.11.Survival
of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery
hereof and thereof. Such representations and warranties have been or will be relied upon by Lender, regardless of any investigation
made by Lender or on its behalf and notwithstanding that Lender may have had notice or knowledge of any Default at the time of
any Borrowing, and shall continue in full force and effect until the Facility Termination Date.

 

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10.12.Severability.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

 

10.13.Governing
Law; Jurisdiction; Etc.

 

(a)GOVERNING
LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN
CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS
TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.

 

(b)SUBMISSION
TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION
OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST LENDER,
OR ANY RELATED PARTY OF LENDER IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO
OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING
IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)WAIVER
OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

    	49

    	 

    

 

 

(d)SERVICE
OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAW.

 

10.14.Waiver
of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.15.No
Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including
in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Borrower acknowledges
and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the services provided by Lender hereunder are arm’s-length
commercial transactions between such Borrower, on the one hand, and Lender, on the other hand, (B) such Borrower has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) such Borrower is capable
of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; (ii) (A) Lender is and has been acting solely as a principal and, except as expressly agreed in writing by
the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Borrower or any of
their respective Affiliates, or any other Person and (B) Lender does not have any obligation to any Borrower or any of their Affiliates
with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) Lender and its Affiliates may be engaged in a broad range of transactions that involve interests that differ
from those of the Borrowers and their Affiliates, and Lender does not have any obligation to disclose any of such interests to
any Borrower or any of their Affiliates. To the fullest extent permitted by law, each Borrower hereby waives and releases any claims
that it may have against Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

 

10.16.USA
PATRIOT Act. Lender hereby notifies each Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies each Borrower, which information includes the name and address of each Borrower and other information
that will allow Lender to identify each Borrower in accordance with the Act. Each Borrower shall, promptly following a request
by Lender, provide all documentation and other information that Lender requests in order to comply with its ongoing obligations
under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

 

    	50

    	 

    

 

 

10.17.Termination
of Loan Documents. This Agreement and the other Loan Documents shall terminate upon the Facility Termination Date.

 

[Signature pages follow.]

 

 

 

 

    	51

    	 

    

 

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

	 

                                                           
	RETAIL ENERGY HOLDINGS L.L.C.,

as a Borrower	 
	 	 	 
	 	 	 
	 	By:	/s/ Timothy S. Krieger	 
	 	Name:	Timothy S. Krieger	 
	 	Title:	President and Chief Executive Officer	 
	 	 	 
	 	 	 
	 	TOWN SQUARE ENERGY, LLC, 

as a Borrower	 
	 	 	 
	 	 	 
	 	By:	/s/ Timothy S. Krieger	 
	 	Name:	Timothy S. Krieger	 
	 	Title:	Chief Executive Officer	 
	 	 	 
	 	 	 
	 	DISCOUNT ENERGY GROUP, LLC, 

as a Borrower	 
	 	 	 
	 	 	 
	 	By:	/s/ Timothy S. Krieger	 
	 	Name:	Timothy S. Krieger	 
	 	Title:	Chief Executive Officer	 
	 	 	 
	 	 	 

 

 

 

 

 

 

 

 

 

[Counterpart Signature Page to
Credit Agreement]

    	 

    	 

    

 

	 	MAPLE BANK GMBH, 

as Lender	 
	 	 	 
	 	 	 
	 	By:	/s/ Linda Lai	 
	 	Name:	Linda Lai	 
	 	Title:	Chief Financial Officer	 
	 	 	 
	 	 	 
	 	By:	/s/ Paul Lishman	 
	 	Name:	Paul Lishman	 
	 	Title:	General Manager	 
	 	 	 	 
	 	 	 	 

 

 

 

[Counterpart Signature Page to
Credit Agreement]

 

    	 

    	 

    

 

EXHIBIT A

“Form of Borrowing Base Certificate”

A Form of Borrowing Base Certificate is attached hereto.

 

 

 

 

Exhibit A – Page 1

 

 

    	 

    	 

    

 

Exhibit A – Page 2

 

 

    	 

    	 

    

 

 

 

Exhibit A – Page 3

 

 

    	 

    	 

    

 

 

EXHIBIT B

“Form of Committed Loan Notice”

Loan Number:  

COMMITTED LOAN NOTICE

(Revolving Loan)

Date: _________________

	 	To:	Maple Bank
	 	 	 
	 	Ladies and Gentlemen:
	 	 

Reference is made
to that certain Credit Agreement dated as of October __, 2014 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the “Agreement”) among RETAIL ENERGY HOLDINGS L.L.C., a Minnesota limited liability
company, TOWN SQUARE ENERGY, LLC, a Delaware limited liability company and DISCOUNT ENERGY GROUP, LLC, a Delaware limited liability
company (each, a “Borrower” and collectively, the “Borrowers”), and MAPLE BANK GMBH, acting
through its Maple Bank Toronto Branch, as Lender. Capitalized terms used but not defined herein shall have the meaning set forth
in the Agreement.

The undersigned
hereby requests a Revolving Loan to be advanced by Lender on _____________, 20_____, in the principal amount of $___________________.
As of the date hereof, all conditions precedent to the making of the borrowing herein requested, as set forth in the Agreement,
have been satisfied.

Attached hereto
are (i) a completed Borrowing Base Certificate, duly executed by a Responsible Officer of Borrower that is a party to the Validity
Guaranty, (ii) [other supporting documentation, if specifically requested by Maple Bank].

	 	BORROWER REPRESENTATIVE:	 
	 	 	 
	 	RETAIL ENERGY HOLDINGS L.L.C., 

a Minnesota limited liability company	 
	 	 	 
	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Its:	 	 
	 	 	 	 

 

Exhibit B – Page 1

    	 

    	 

    

 

 

 

EXHIBIT C

“Form of Payment Direction Letter”

A Form of Payment Direction Letter is attached hereto.

 

 

 

 

 

 

 

 

Exhibit C – Page 1

    	 

    	 

    

 

[October 10, 2014]

[Utility Obligor]

[Utility Obligor Address]

[Utility Obligor Address]

Attn: [______________]

 

		Re:	Payment Direction Under [Purchase of Receivables Agreement]

Dear [____________]:

In connection with that certain [Purchase
of Receivables Agreement] dated [____________________] between Retail Energy Holdings L.L.C. (“REH”) and [Utility
Obligor] (“___________________”), REH hereby assigns to Maple Bank GMBH, acting through its Maple Bank Toronto branch
(“Maple Bank”), all of REH’s right, title and interest in and to all monies now or hereafter due to REH
by [Utility Obligor] under [Utility Obligor’s] [Purchase of Receivables Agreement] dated [_____________] (“Purchase
of Receivables Agreement”), with [Utility Obligor]; and REH hereby irrevocably directs and authorizes [Utility Obligor]
to forward all monies due to REH related to the Purchase of Receivables Agreement or otherwise, to the following account (which
account is under the exclusive control of Maple Bank):

	 	Bank Name:	 
	 	Bank Address:	 
	 	 	 
	 	Account No.:	 
	 	ABA No.:	 
	 	Beneficiary:	 
	 	 	 

This authorization is effective commencing
with the [_____________, 2014] payment due from [Utility Obligor] to REH under the Purchase of Receivables Agreement, and may only
be changed or revoked with the express written consent of the duly authorized representatives of Maple Bank.

Pursuant to the agreement[s] mentioned
above, this letter shall serve notice for the “assignment” of certain attributes of such agreement[s], namely, the
instructions for [Utility Obligor’s] payments to REH under the Purchase of Receivables Agreement.

If there is a dispute in the future
between REH and Maple Bank as to where any funds due REH should be remitted pursuant to the Purchase of Receivables Agreement,
[Utility Obligor] shall continue to pay Maple Bank using the above account information (or as otherwise directed by Maple Bank)
until the dispute is resolved. So long as this payment direction is followed by [Utility Obligor], REH and Maple Bank hereby agree
not to initiate any legal proceedings of any nature against [Utility Obligor] relating to such payment or such dispute and agree
to indemnify, defend and hold [Utility Obligor] harmless from and against any claims or liability resulting from the same (except
any such claims or liability which arose due to the gross negligence or willful misconduct of [Utility Obligor]).

Exhibit C – Page 2

    	 

    	 

    

 

This letter agreement may not be amended
and no provision hereof may be waived without the prior written consent of [Utility Obligor] and Maple Bank. This Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the State of New York.

Please confirm your agreement with this
direction to pay by executing this letter where indicated below, and returning a copy to the undersigned at the address set forth
below.

If you have any questions or concerns,
please contact the undersigned at [(____) _____-_____].

 

 

Sincerely,

 

RETAIL ENERGY HOLDINGS L.L.C.

 

Signature:____________

 

Name:_______________

 

Title:________________

     

 

	MAPLE BANK GMBH,	 	 
	acting through its Maple Bank Toronto branch	 	[Utility Obligor]
	 	 	 
	Signature:__________	 	Signature:__________
	 	 	 
	Name:__________	 	Name:__________
	 	 	 
	Title:__________	 	Title:__________

 

Exhibit C – Page 3

    	 

    	 

    

 

SCHEDULE 1.01

“Utility Obligors”

	REH

Entity	

State	

Utility
	TSE	CT	The Connecticut Light and Power Company
	TSE	CT	The United Illuminating Company
	DEG	MD	Baltimore Gas and Electric Company
	DEG	MD	Delmarva Power & Light Company
	DEG	NJ	Atlantic City Electric Company
	DEG	NJ	Jersey Central Power & Light Company
	DEG	NJ	Public Service Gas and Electric Company
	DEG	OH	Duke Energy Ohio, Inc.
	DEG	PA	Duquesne Light Company
	DEG	PA	PECO Energy Company

 

Schedule 1.01 - Page 1

 

    	 

    	 

    

 

SCHEDULE 5.06

“Litigation”

None

 

 

 

Schedule 5.06 - Page 1

    	 

    	 

    

 

SCHEDULE 5.13

“Subsidiaries and Equity Interests”

Subsidiaries of Retail Energy Holdings L.L.C. (a “Borrower”)

At August 31, 2014

	

Company Name	 	Jurisdiction of Organization	 	

Status	 	

Tier
	Town Square Energy, LLC	 	Delaware	 	Active	 	First
	Discount Energy Group, LLC	 	Delaware	 	Active	 	First

 

Subsidiaries of Town Square Energy,
LLC (a “Borrower”)

At August 31, 2014

	

Company Name	 	Jurisdiction of 

Organization	 	

Status	 	

Tier
	None	 	 	 	 	 	 

 

Subsidiaries of Discount Energy
Group, LLC (a “Borrower”)

At August 31, 2014

	

Company Name	 	Jurisdiction of 

Organization	 	

Status	 	

Tier
	None	 	 	 	 	 	 

 

 

 

Schedule 5.13 - Page 1

 

    	 

    	 

    

 

SCHEDULE 7.01

“Liens”

None.

 

 

Schedule 7.01 - Page 1

 

    	 

    	 

    

 

SCHEDULE 7.03

“Indebtedness”

None.

 

 

Schedule 7.03 - Page 1

 

    	 

    	 

    

 

SCHEDULE 10.02

“Certain Addresses for Notices”

LENDER:

 

Maple Bank GmbH, acting through its Maple Bank Toronto Branch

79 Wellington Street West, Suite 3500

Toronto, Ontario, M5K 1K7

Attn:  General Manager Toronto Branch

 

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

 

Holland & Knight LLP

31 West 52nd Street

New York, NY 10019

Attn:  Marc Reisler

marc.reisler@hklaw.com

 

and

 

131 S. Dearborn Street, 30th Floor

Chicago, Illinois 60603

Attn:  Joshua M. Spencer

joshua.spencer@hklaw.com

 

 

[Rest of Page Intentionally Left Blank; Borrower Notice Information
on Next Page]

 

Schedule 10.02 – Page 1

    	 

    	 

    

 

BORROWERS:

 

RETAIL ENERGY HOLDINGS L.L.C.

16233 Kenyon Avenue

Suite 210

Lakeville MN 55044

Attn:  Timothy S. Krieger

Attn:  Wiley H. Sharp

tkrieger@twincitiespower.com

wsharp@twincitiespower.com

 

TOWN SQUARE ENERGY, LLC

16233 Kenyon Avenue

Suite 210

Lakeville MN 55044

Attn:  Timothy S. Krieger

Attn:  Wiley H. Sharp

tkrieger@twincitiespower.com

wsharp@twincitiespower.com

 

DISCOUNT ENERGY GROUP, LLC

16233 Kenyon Avenue

Suite 210

Lakeville MN 55044

Attn:  Timothy S. Krieger

Attn:  Wiley H. Sharp

tkrieger@twincitiespower.com

wsharp@twincitiespower.com

 

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

 

Stinson Leonard Street LLP

150 South Fifth Street, Suite 2300

Minneapolis, MN 55331

Attn:  Mark Weitz

Mark.weitz@stinsonleonard.com

 

 

Schedule 10.02 – Page 2

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