Document:

Exhibit 10.3

 

Agreement
in Principle

 

MAGNEGAS
CORPORATION (“MNGA”)

 

-AND-

 

FUTURENERGY
PTY LTD (“FE”)

 

	Initials FE	 	 	MNGA	 

 

    	1

    	 

    

  

Date: 19th March
2014

 

BETWEEN:

 

MAGNEGAS CORPORATION (“MNGA”)

 

AND

 

FUTURENERGY PTY LTD (“FE”)

 

RECITALS

 

		A	WHEREAS,MNGA
                                         is a corporation organized and existing under the laws of the State of Delaware with
                                         its principal place of business in the State of Florida.

 

		B	WHEREAS,
                                         FE is a company organized and existing under the laws of Australia with its principal
                                         place of business in the State of Queensland.

 

		C	MNGA
                                         is in the business of generating gaseous fuel from liquid waste with recyclers manufactured
                                         with its patented Plasma Arc Flow technology.

 

		D	WHEREAS,
                                         FE has developed processes for multi-fuel combustion and is also working on further inventions
                                         in this field.

 

WHEREAS,
the parties desire to enter into this Memorandum of Understanding (“AGREEMENT”) in connection with the development
and commercialization of the technology utilizing the relevant Intellectual Property rights set out in this AGREEMENT. NOW,
THEREFORE the parties hereby agree as follows:

 

AGREEMENT TERMS

 

		1.	Definitions

 

Intellectual
Property (“IP”) means all patents, designs, drawings, plans, trade marks, copyrights, and trade secrets
(registered or unregistered), and all other industrial and intellectual property or rights, exclusively subsisting in, exclusively
used in or exclusively relating to the Technology, the Prototype, or improvements thereto. This will include patent continuations,
CIPs, extensions, renewals and foreign equivalents.

 

MNGA
Gasification & Gas IP – means all IP relating to the gas, process and apparatus for production of MagneGas thereof,
further defined as the production of gaseous fuel utilizing an electric arc under liquid.

 

FE
Multi-Fuel IP- means all IP relating to the processes for the combustion of MagneGas with other fuels (referred
to herein as the multi-fuel combustion program) as described in the Schedule “A” of this AGREEMENT.

 

MNGA
Hy-Fuels IP – means all IP relating to the processes for the production of MagneGas mixed with other fuels, owned by
MNGA such as Hyfuels, and its uses in Incineration and Soil Remediation referred to in Provisional (referred to herein as MNGA
Hy-Fuels IP).

 

	Initials
    FE	 	 	MNGA	 

 

    	2

    	 

    

  

MagneGas
– means gaseous fuel produced via the use of an electric arc under liquid.

 

Channel
Partners – means other entities within specific territories that will bring the IP to market.

 

		2.	Purpose

 

The
purpose of this AGREEMENT is to set forth the basis upon which the parties intend to move forward with the development and commercialization
of the technology and share in the revenue from sales in the market and territories defined below. Accordingly, this agreement
deals with only the principal issues and is not intended to be exhaustive. It is intended that a further more detailed definitive
agreement will subsequently be executed.

 

		3.	Term

 

The
term of this AGREEMENT is for two years from the date of execution. It is the intention of both parties that a definitive agreement
will be executed during that time period and that this agreement will not materially differ from the terms outlined in this AGREEMENT.

 

		4.	Joint
                                         Venture

A
50:50 joint venture is to be formed between MNGA and FE for development and commercialization of the technology world-wide for
the Combustion of MagneGas utilizing the relevant rights from the FE Multi-Fuel IP and the production of MNGA Hy-Fuels
IP.. To this end, the parties agree to set up a joint venture company (“MF JV Co”) in a neutral zone with
50% preference shares owned by MNGA and by FE respectively with equal voting rights. The Board of Management shall be comprised
of 4 directors. MNGA and FE shall each be entitled to appoint two directors to the board of MF JV Co. The parties shall decide
on a jurisdiction and appoint an independent counsel and accountant for the new entity. Set up costs for the new entity are to
be borne equally between the parties.

 

Except
for certain specified decisions outlined below which require unanimous vote, decisions are to be determined by majority vote.

The
following actions require unanimous vote by the Board of Directors:

		a)	Action
                                         by one party that dilutes the other party’s interest;

		b)	Distribution
                                         of profits at a different percentage than share ownership;

		c)	Change/reduction
                                         or expansion of Board seats;

		d)	Issuance,
                                         transference or sale of percentage of MF JV Co;

		e)	Sale
                                         of MF JV Co or any of its assets;

		f)	Transfer
                                         or sale of FE interest or MNGA interest in the MF JV Co;

		g)	Creation
                                         of a new class of membership interest of MF JV Co;

		h)	Approval
                                         of debt in excess of $100,000.

		i)	Assignment
                                         of sub licenses from MF JV Co to third parties

 

Where
there is a block and the tie cannot be resolved, or unanimous vote cannot be obtained, the decision shall be referred to arbitration.
A clause setting out the procedure for resolution of such matters will be included in the definitive agreement

 

		5.	New
                                         Partners

 

It
is envisaged that it will be necessary to bring in new partners to work with MF JV Co at various stages in order to exploit relevant
markets. These may be Channel Partners with industry specific skills and local knowledge as well as investment funds) and/or investors.

 

	Initials FE	 	 	MNGA	 

 

    	3

    	 

    

 

It
is envisaged that this shall be way of a separate joint venture or partnership for a particular region or territory. This may involve
dilution of shares or profits for that region/ territory. Any dilution of shares or sharing of profits with a channel partner and/or
investor shall be proportional to the shares held at that time.

 

All
negotiations and dealings between the parties and any potential new parties shall be subject to obligations of confidentiality,
particularly any dealings relating to disclosure and use of IP which is not in the public domain. Details of any IP disclosed must
not be used without prior consent in writing.

 

Agreements
with Channel Partners shall be subject to approval of the Board of Management. Approval of any new channel partner or investor
(or renewal) shall be by way of unanimous vote of the directors.

 

For
the avoidance of doubt, the agreement with each respective channel partner and/or distributor shall include at least the following:
confidentiality obligations (prior, during and continuing obligations thereafter), scope of permitted activities, threshold criteria
(eg securing relevant certification), key roles, performance criteria and requirements (such as timing of rollout) and grounds
for termination/removal or dilution are to be specified. New partners can then be brought in where required.

 

		6.	IP
                                         and Distribution Rights

FE
shall permanently and irrevocably license to the MF JV Co the use of the FE Mutli-Fuel IP as defined above. MNGA shall permanently
and irrevocably license to the MF JV Co the use of the MNGA Multi-Fuel IP as defined above.. MNGA will permanently and irrevocably
grant distribution rights to MF JV Co for purposes of selling MagneGas Gasification units into markets set forth in this AGREEMENT.
All licenses and distribution rights are non-exclusive.

 

MF
JV Co shall enter into various sub-licences with Channel partners for a region/territory to the extent necessary to give
effect to the contractual rights for the respective region/territory. Each party shall continue to own its respective IP and
no transfer shall be construed as a consequence of this agreement.

 

Both FE and
MNGA have the right to engage individually with other partners with IP that is not specifically included in this agreement without
limitation. For the avoidance of doubt, should FE wish to pursue Combustion markets utilizing other fuels not covered by MNGA Gasification
& Gas IP or MNGA Multi-Fuel IP as defined above, they are free to do so. Conversely should MNGA wish to pursue Combustion markets
utilizing other Combustion apparatus not covered by FE Multi-Fuel IP as defined above they are free to do so The exception to this
is XXXX, namely neither MNGA corporation nor FE can deal directly with XXXX or SES. All dealings with XXXX will be through the
MF JV.

 

In
the event of bankruptcy, dissolution or insolvency of the MF JV Co, all rights granted by FE and MNGA shall automatically revert
back to original inventors/owners and the original inventors / owners shall reform a partnership under new entity unless otherwise
divided by unanimous vote of the former MF JV board members.

 

Should
FE or MNGA sell their IP in whole or in part, this agreement survives any such sale. This
AGREEMENT does not grant the MF JV Co the right to manufacture any process or apparatus without expressed written consent of the
IP inventor/owner.

 

	Initials FE	 	 	MNGA	 

 

    	4

    	 

    

  

Any
IP improvements identified by MF JV Co or partners will revert back to and be owned by FE or MNGA, depending on which existing
IP the new IP improved upon, such that no IP is owned by MF JV Co.

 

		7.	Confidentiality

Confidential
Information disclosed shall be kept confidential. The parties will agree to customary confidentiality provisions to protect each
Party’s proprietary information as well as provisions relating to other material information in compliance with the requirements
of the United States Securities and Exchange Commission as apply to MNGA and shall keep such information confidential unless disclosure
is required by law.

 

		8.	Business
                                         Plans & Budgets

The
parties shall work together to develop a strategic business plancovering the following areas: customer segments, value propositions,
customer relationships, revenue streams, channels, key activities, key partners, key resources and cost structures.

 

The
above plan is to be developed in the first 3 months of operation. Budgets and expenditure are to be signed off by the Board of
Management.

 

		9.	Certification
                                         & Construction of Pilot Plant

Channel
partners are to be responsible for certification for the respective region/territory for the certification and for the construction
of any pilot plant, and all costs associated therewith.

 

		10.	Commercialization

 The
commercialization costs and responsibility therefor shall be part of the strategic Planning and budgets which shall subject
to approval and signed off by the parties to the MF JV Co. It is envisaged that partners will be brought in, as
required.

 

		11.	Effect

This
AGREEMENT supersedes all previous agreements between the parties. No amendment, modification, termination or waiver of any of the
terms, provisions or conditions of this AGREEMENT shall be effective unless it is in writing and signed off by all of the parties
hereto. The prior confidentiality agreements signed between FE and MNGA remain in full force and effect.

 

		12.	Severability

Any
clause or part thereof which is found invalid or unenforceable shall be severed to the extent of any invalidity.

 

		13.	Territory

It
is intended that this joint venture shall be effective world-wide.

 

		14.	Governing
Law

This
AGREEMENT shall be governed by the State of Florida and Federal laws in the U.S.A. . Any dispute shall be resolved via WIPO Arbitration
and Mediation Centre.

 

		15.	Counterparts

This
AGREEMENT may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall together
constitute one and the same instrument.

 

	Initials FE	 	 	MNGA	 

 

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		16.	Prior
                                         Agreements

It
is the intention of both parties to integrate prior agreements related to the combustion of MagneGas into the MF JV Co. These
include the SES LLC agreement of the U.S.A, and ENEA agreement of Italy.

 

As part of the
signature of this agreement, MF JV Co is authorizing the sub-license of the rights granted under this agreement to the Supplemental
Energy Solutions, LLC Combustion partnership formed for the use of Coal Combustion with MagneGas in the United States and Canada.
Under the terms of the existing agreement, FE and MNGA acknowledges that there is 50% of the SES partnership available, which will
be equally shared between MNGA and FE. It is the intention of both parties to propose that the original partner of SES, XXXX accepts
a 1/3 ownership, providing MF JV a 2/3 ownership in exchange for expanded fuel usage, namely co-combustion in electricity production
industry for US and Canada only, and technical assistance from FE.

 

While
this agreement supersedes the AGREEMENT between MNGA and FE from 14/9/2013 the $200,000 in shares previously granted to FE / MNGA
Australia will be granted for a 12 month consulting engagement with two weeks at MNGA facilities to assist with MagneGas
Gasification IP. Any IP developed as part of this consulting arrangement will remain property of MNGA.

 

IN
WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed as of the date indicated above.

 

	Dated:	19/3/2014	 MAGNEGAS
    CORPORATION	/s/ Ermanno Santilli	 
	 	 	 	Ermanno Santilli, CEO

	 
	 	 	 	 	 
	Dated:	19/3/2014	      FUTURENERGY
    PTY LTD	 	 

 

	Initials FE	 	 	MNGA	 

 

    	6

    	 

    

  

SCHEDULE
A

 

MagneGas
Multi-fuel combustion program

 

The
following definitions are for bonding or processing MagneGas with fossil fuels in a process called multi-fuel combustion. This
process covers all processes used with MagneGas bonding with fossil fuels including:

 

		1.	Post
Combustion

		2.	Pre
Combustion,

		3.	Dual
fuels,

		4.	Highly refined
fracking process,

		5.	The apparatus
used and developed for the processes mentioned above.

 

MagneGas
is required to be combined with all fossil fuels in a way the combustion results in increase heat, reduce emissions, increase oxygen
or reduce contaminants either emissions or particulates in any shape of form either in a singular or combined effect.

 

Futurenergy
has developed a process for combusting fossil fuels with MagneGas.

 

The
apparatus used are developed by Futurenergy. The apparatus used, bonds MagneGas to the fossil fuel or emissions.

 

Post Combustion

 

Post combustion is whereby
the flue gas emissions of a boiler combustion process is then re combusted in an apparatus.

 

This
process works with fossil fuels and derivatives of fossil fuel products covering:

 

		·	Coal,

		·	Liquid
Petroleum Gas,

		·	Natural
gas,

		·	Propane,

		·	Rubber,

		·	Bitumen,

		·	Plastic,
etc.

 

The
apparatus is a chamber eg post combustion chamber.

 

The
methodology covers cooling of flue gases before combustion, fans, combustion controls, etc.

 

    	 

    	 

    

  

Highly Refined Fracking
Process.

 

The
process developed for bonding and removal contaminants in the new fuel. The new fuel is stable and pollution contaminants are removed.

 

The
highly refined fracking process produces hydrogen bonded enriched fuel for combustion. It captures contaminants from the refining
process and reprocesses these into usable gases. The gases are filtered and used again. The process can be completed either on
site or off site.

 

The
following fuels can be processed with this equipment:

 

		1.	Diesel,

		2.	Light
oils,

		3.	Av
Gas,

		4.	Aviation
fuels, for civil use or military use,

		5.	Kerosene,
and

		6.	Heavy
oils.

 

Pre Combustion

 

Futurenergy
has developed a process that covers infusing MagneGas with fossil fuels and carbon.

 

The
process cleans the base fuel or fossil fuel and removes contaminants. It then reforms the fuel into pellets using MagneGas and
a catalyst for improved combustion.

 

The
fuel increases its calorific value.

The
pellets are manufactured on site or off site.

 

A
Patent apparatus is used to produce pellets. Third parties own the apparatus.

 

Fossil
fuels include:

 

		·	Coal
and

		·	Biomass.

 

Dual fuels

 

This covers
LPG and MagneGas running in a gas fired boiler.

Dual
fuels require two gases running and burning in a co-combustion process whereby MagneGas is added to the existing fossil fuel. The
burning apparatus is modified to accept the duel fuels.

 

The
process has a combustion management system and a metered control system to optimize combustion efficiency.

Fuels
used are:

 

		·	LPG

		·	Natural
Gas

		·	Diesel

		·	Petrol

 

This
usually occurs in combustion environments covering boilers but not limited to boilers.Exhibit 10.1 Preferred Share Exchange Agrmnt

		

			 

		

		
			PREFERRED STOCK EXCHANGE AGREEMENT
		

		
			This Preferred Stock Exchange Agreement (this “Agreement”) is made and entered into this 9th day of October, 2014, by and between PostRock Energy Corporation, a Delaware corporation (“PostRock”) and White Deer Energy L.P., a Cayman Islands exempted limited partnership, White Deer Energy TE L.P., a Cayman Islands exempted limited partnership, and White Deer Energy FI L.P., a Cayman Islands exempted limited partnership (collectively, “White Deer” and together with PostRock, the “Parties” and each individually, a “Party”).
		

		
			WHEREAS, as of the date hereof, White Deer owns 7,250 shares of Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, of PostRock (“Series A Preferred Stock”) with an aggregate liquidation preference of $112,338,945.50;
		

		
			WHEREAS, PostRock and White Deer propose that White Deer exchange (the “Exchange”) 2,175 shares of Series A Preferred Stock issued on September 21, 2010 pursuant to the Securities Purchase Agreement dated September 2, 2010 between PostRock and White Deer (the “2010 SPA”), with an aggregate liquidation preference of $35,004,022.42 (the “Preferred Shares”), for a total of 32,113,782 shares of newly issued common stock, par value $0.01 per share, of PostRock (“Common Stock”) at a price of $1.09 per share (the “Common Shares”); 
		

		
			WHEREAS, the price per share, as stated in the previous recital, was determined as the higher of (i) the consolidated closing bid price of the Common Stock on Nasdaq Stock Market (“Nasdaq”) immediately preceding the execution and delivery of this Agreement and (ii) the volume weighted average price of the Common Stock on Nasdaq for the 10 trading days preceding the date of this Agreement;
		

		
			WHEREAS, the unaffiliated members of PostRock’s Board of Directors have determined that the Exchange is advisable and in the best interests of PostRock and its stockholders (other than White Deer) and have approved the Exchange contemplated hereby; and
		

		
			WHEREAS, the Parties mutually desire to consummate the Exchange as set forth herein.
		

		
			NOW, THEREFORE, for and in consideration of the foregoing recitations, the promises, terms and provisions herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, PostRock and White Deer agree as follows:
		

			
	
			
				 1.
			

			
	
			
			Application to Nasdaq.  Prior to the date hereof, PostRock has submitted to the Nasdaq a Listing of Additional Shares Notification Form with respect to the issuance of the Common Stock upon exchange of the Preferred Shares contemplated herein without the necessity of obtaining the approval of PostRock’s stockholders.  In the event that Nasdaq does not approve the application for any reason, or requires that PostRock obtain stockholder approval prior to such issuance, then this Agreement shall automatically terminate, shall be null and void and of no further force or effect and shall no longer be binding on any Party unless the Parties expressly agree in writing to extend or amend this Agreement.

		 

		

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			US 3007139v.4

		

 

		

			 

		

			
	
			
				 2.
			

			
	
			
			Delivery and Assignment of Preferred Shares.  Upon receipt of approval of the transaction as proposed from Nasdaq, at Closing (as defined below), White Deer shall transfer, deliver and assign to PostRock, free and clear of all liens and encumbrances, the Preferred Shares in exchange for the Common Shares, at which time said Preferred Shares shall be canceled and retired and revert to authorized but unissued shares of preferred stock of PostRock and White Deer shall have no right, title or interest therein.

			
	
			
				 3.
			

			
	
			
			Issuance of Common Stock.  Contemporaneously with White Deer’s delivery of the Preferred Shares to PostRock pursuant to paragraph 2 above, PostRock shall issue and deliver the Common Shares to White Deer, such Common Shares to be allocated among the three White Deer entities as set forth at Exhibit A hereto.

			
	
			
				 4.
			

			
	
			
			Closing.  The closing of the Exchange will occur at 10:00 a.m. Central Time on the first business day following receipt of approval of the transaction from Nasdaq, or at such other day and time following said receipt as the Parties may agree (the “Closing”).

			
	
			
				 5.
			

			
	
			
			Representations of PostRock.  

			
	
			
				 a.
			

			
	
			
			PostRock has the corporate power and authority to execute and deliver this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance by PostRock of this Agreement and the consummation of the Exchange have been duly authorized by all necessary corporate action on the part of PostRock, and no further approval or authorization is required on the part of PostRock.  This Agreement will be valid and binding on PostRock and enforceable against PostRock in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity.  

			
	
			
				 b.
			

			
	
			
			All of the Common Shares have been duly authorized by all necessary corporate action on the part of PostRock and, when issued pursuant to this Agreement upon receipt by PostRock of the Preferred Shares in exchange therefor, will be validly issued, fully paid and non-assessable and free and clear of any liens, charges, encumbrances, security interests, or similar restrictions created by or through PostRock. 

			
	
			
				 c.
			

			
	
			
			PostRock represents that neither PostRock nor any person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D of the Securities Act of 1933 (the “Securities Act”)) in connection with the Exchange.  The offer and sale of the Common Shares as contemplated hereby are exempt from the registration requirements of the Securities Act.

		 

		

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			US 3007139v.4

		

 

		

			 

		

			
	
			
				 6.
			

			
	
			
			Representations of White Deer.  

			
	
			
				 a.
			

			
	
			
			White Deer has the partnership power and authority to execute and deliver this Agreement and to carry out its obligations hereunder.  The execution, delivery and performance by White Deer of this Agreement and the consummation of the Exchange have been duly authorized by all necessary action on the part of White Deer, and no further approval or authorization is required on the part of White Deer.  This Agreement will be valid and binding on White Deer and enforceable against White Deer in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance, moratorium or similar laws affecting the enforcement of creditors’ rights generally and general equitable principles, regardless of whether such enforceability is considered in a proceeding at law or in equity.  

			
	
			
				 b.
			

			
	
			
			White Deer acknowledges that the Exchange has not been registered under the Securities Act or under any state securities laws and represents that it (i) is acquiring the Common Shares pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to distribute them to any person in violation of the Securities Act or any applicable U.S. state securities laws, (ii) will not sell or otherwise dispose of any of the Common Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any applicable U.S. state securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of the Exchange and of making an informed investment decision, and has conducted a review of the business and affairs of PostRock that it considers sufficient and reasonable for purposes of making the Exchange, and (iv) is an “accredited investor” (as that term is defined by Rule 501 under the Securities Act).  

			
	
			
				 7.
			

			
	
			
			Expenses.  PostRock shall reimburse White Deer for its reasonable costs and expenses, including reasonable legal or other professional fees and expenses, incurred or made in connection with this Agreement and the Exchange (including any reasonable cost and expenses incurred after the Closing to the extent related), whether or not consummated, in an amount not to exceed, in the aggregate $25,000.  Prior to any such reimbursement, White Deer shall provide PostRock with reasonably detailed invoices setting forth the expenses to be reimbursed.  This covenant shall survive the termination of this Agreement. 

			
	
			
				 8.
			

			
	
			
			Transfer Restrictions. The Common Shares are restricted securities under the Securities Act and may not be offered or sold except pursuant to an effective registration statement or an available exemption from registration under the Securities Act. Accordingly, White Deer agrees it shall not, directly or through others, offer or sell any Common Shares except pursuant to a registration statement or pursuant to Rule 144 or another exemption from registration under the Securities Act, if available. Prior to any transfer of Common Shares other than pursuant to an 
		

		 

		

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			US 3007139v.4

		

 

		

			 

		

			effective registration statement, White Deer agrees it shall notify PostRock of such transfer and PostRock may require White Deer to provide, prior to such transfer, such evidence that the transfer will comply with the Securities Act (including written representations and an opinion of counsel) as PostRock may reasonably request. PostRock may impose stop-transfer instructions with respect to any securities that are to be transferred in contravention of this Agreement.  For the avoidance of doubt, the Common Shares shall be considered “Registrable Securities” as such term is defined in Section 1 of the First Amended and Restated Registration and Investor Rights Agreement, dated August 8, 2011 (as amended from time to time), by and among PostRock and the other parties thereto.

			
	
			
				 9.
			

			
	
			
			Legend. White Deer agrees that all certificates or other instruments representing Common Shares will bear a legend substantially to the following effect:

		
			“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED PURSUANT TO AND SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF THE PREFERRED STOCK EXCHANGE AGREEMENT, DATED OCTOBER 9, 2014, AS AMENDED FROM TIME TO TIME, AMONG THE ISSUER OF THESE SECURITIES AND THE OTHER PARTIES THERETO, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”
		

		
			In the event that any Common Shares (i) become registered under the Securities Act or (ii) are eligible to be transferred without restriction in accordance with Rule 144 under the Securities Act, PostRock shall issue new certificates or other instruments representing such Common Shares, which shall not contain such portion of the above legend that is no longer applicable; provided that White Deer surrenders to PostRock the previously issued certificates or other instruments.
		

			
	
			
				 10.
			

			
	
			
			Restrictions on Sale of Common Stock. White Deer agrees that the Common Shares shall be “Excluded Securities” as defined in, and for purposes of, the 2010 SPA.

			
	
			
				 11.
			

			
	
			
			Charter Amendment and Waiver.  PostRock agrees to propose an amendment to its Restated Certificate of Incorporation to increase the authorized number of shares of Common Stock thereunder to 200,000,000 shares, or such greater or lesser number as shall be approved by the Board of Directors of the Company and consented to by White Deer (the “Charter Amendment”).  Until the date that PostRock has effected 
		

		 

		

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			US 3007139v.4

		

 

		

			 

		

			the Charter Amendment, White Deer hereby waives compliance by PostRock with (i) the fourth sentence of Section 5 of each Warrant to Purchase Common Stock agreement issued to White Deer (the “Warrants”) and (ii) the first sentence of Section 3.3 of the 2010 SPA and the first sentence of Section 4.5 of each of the Securities Purchase Agreements dated August 1, 2012 and December 17, 2012, in each case with respect to 15,000,000 authorized but unissued shares of Common Stock subject thereto, such that, until such date and with respect to such shares, PostRock shall have no obligation to reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of providing for the exercise of the applicable Warrants, such shares of Common Stock issuable upon exercise of such Warrants.  Upon the effectiveness of the Charter Amendment, such shares shall again be reserved and made available for issuance solely for the purpose of providing for the exercise of the applicable Warrants.  The waiver contemplated herein shall not affect the validity of the Warrants or White Deer’s right to exercise any Warrants if there are a sufficient number of shares of authorized and unissued Common Stock to effectuate such exercise.  

			
	
			
				 12.
			

			
	
			
			Counterparts. For the convenience of the Parties, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement.  Executed signature pages to this Agreement may be delivered by facsimile or other electronic means and such will be deemed as sufficient as if actual signature pages had been delivered.

			
	
			
				 13.
			

			
	
			
			Entire Agreement. This Agreement (including Exhibit A hereto) constitutes and contains the entire agreement and understanding by and between the Parties with respect to the subject matter hereof, and supersedes any and all prior negotiations, agreements or understandings relating thereto.

			
	
			
				 14.
			

			
	
			
			Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State, without giving effect to any choice of law or conflict of law rules or provisions that would cause the application of the laws of any other jurisdiction.

		

		

		 

		

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			IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the authorized officers and/or directors of the parties hereto as of the date first above written.
		

		
			 
		

		
			PostRock Energy Corporation
		

		
			 
		

		
			 
		

		
			By:  /s/ Stephen L. DeGiusti
		

		
			 
		

		
			Stephen L. DeGiusti
		

		
			Executive Vice President, 
		

		
			General Counsel & Secretary
		

		
			 
		

		
			 
		

		
			White Deer Energy L.P.
		

		
			 
		

		
			By:  Edelman & Guill Energy L.P., its general partner
		

		
			By:  Edelman & Guill Energy Ltd., its general partner
		

		
			 
		

		
			 
		

		
			By:  /s/ Thomas J. Edelman
		

		
			Thomas J. Edelman, Director  
		

		
			 
		

		
			 
		

		
			White Deer Energy TE L.P.
		

		
			 
		

		
			By:  Edelman & Guill Energy L.P., its general partner
		

		
			By:  Edelman & Guill Energy Ltd., its general partner
		

		
			 
		

		
			 
		

		
			By:  /s/ Thomas J. Edelman
		

		
			Thomas J. Edelman, Director 
		

		
			
		

		
			 
		

		
			White Deer Energy FI L.P. 
		

		
			 
		

		
			By:  Edelman & Guill Energy L.P., its general partner
		

		
			By:  Edelman & Guill Energy Ltd., its general partner
		

		
			 
		

		
			 
		

		
			By:  /s/ Thomas J. Edelman
		

		
			Thomas J. Edelman, Director
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		

		

		 

		

			6

		

		

			 

		

		

			US 3007139v.4

		

 

		

			 

		

		Exhibit A
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						White Deer Entity

					
					
						                      Common Shares

				
	
					
						White Deer Energy L.P.

					
					
						                      30,041,159

				
	
					
						White Deer Energy TE L.P.

					
					
						                      998,096

				
	
					
						White Deer Energy FI L.P.

					
					
						                      1,074,527

				

		
			 
		

		 

		

			7

		

		

			 

		

		

			US 3007139v.4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00236-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00236-of-00352.parquet"}]]