Document:

FLEX POWER GENERATION, INC.

 

November 12, 2012

 

FlexEnergy, Inc.

9400 Toledo Way

Irvine, California 92618

Attention: Jay Mitchell, CEO

 

Dear Jay:

 

FlexEnergy, Inc., a Delaware corporation
(“FlexEnergy”), FlexEnergy Energy Systems, Inc., a Delaware corporation (“FEES”; FEES and
FlexEnergy collectively referred to as “Flex”), and Flex Power Generation, Inc. (“FPG”) are
entering into that certain Contribution Agreement dated the same date hereof (the “Contribution Agreement”).

 

FPG agrees that, to the extent that any
of the following result in any liabilities or obligations with respect to Flex (“Contingent Flex Liabilities”),
those liabilities and obligations shall be deemed to be Assumed Liabilities (as defined in the Contribution Agreement) effective
as of the date hereof and shall be subject to indemnification as provided in Section 5 of the Contribution Agreement, and contracts
referenced below shall be deemed to have been assigned to and assumed by FPG effective as of the date hereof:

 

(i)           the
Flex-Microturbine System Development and License Agreement dated September 17, 1999, as supplemented by that certain Supplemental
Agreement, dated September 22, 2000, executed by Edan Prabhu, Inc., a California corporation formerly known as FlexEnergy, Inc.
(“EPI”) and Capstone Turbine Corporation;

 

(ii)          Agreement,
dated May 19, 2000, between FlexEnergy, Inc. and the California State Energy Resources Conservation and Development Commission;
and

 

(iii)       any
other liabilities or obligations of EPI, not already included as Assumed Liabilities.

 

Section 7 of the Contribution Agreement
is incorporated into this side-letter.

 

	 	Flex Power Generation, Inc.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

ACKNOWLEDGED AND AGREED TO BY:

 

	FlexEnergy, Inc.	 
	 	 
	By:	 	 
	 	James M. Mitchell, President/CEOPURCHASE ORDER

 

	 	PO
    No:	RFQ
    No:	Date	Customer
    No:	Description:
    
	 	FPG
    00038	6/26/2013	June
    26, 2013	N/A	EX250
    Gas Turbine
	 	 	 	 	 	Customer	 	Vendor	 	Ship-To
    Address	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Company:	 	Ener-Core
    Power Inc	 	FlexEnergy
    Energy Systems	 	ENER-CORE
    POWER	 
	 	 	Contact:	 	Douglas
    Hamrin	 	Joe
    Skuza	 	Douglas
    Hamrin	 
	 	 	Phone
    No:	 	949-616-3315	 	603-430-7112	 	949-616-3315	 
	 	 	Fax
    No:	 	949-616-3399	 	 	 	 	 
	 	 	E-Mail:	 	douglas.hamrin@ener-core.com	 	Joseph.skuza@flexEnergy.com	 	 	 
	 	 	Address:	 	9400
    Toledo Way	 	30
    New Hampshire Ave	 	9400
    Toledo Way	 
	 	 	 	 	Irvine,
    CA 92618	 	Portsmouth,
    NH, 03801	 	Irvine,
    CA, 92618	 
	 	 	 	 	 	 	 	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Item	Qty	Description	Part
    Number	FX
    Number	Unit
    Cost	Total
    Cost	 
	 	1	1	EX250
    Gas Turbine - 250SX (Proposal 20130626-1)	250SX	N/A	$307,252.00	$307,252.00	 
	 	1	1	Engineering
    Service (108hrs) (Proposal 20130626-1)	n/a	N/A	$12,748.00	$12,748.00	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Total:	$320,000.00	 
	 	 	Project:	EECT
    - Production order	 	 	 	 	 	 	 	 	 	 	 
	 	 	Comments:	Gas
    Turbine	 	 Requested
    by: Douglas Hamrin	Date:	6/26/2013	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 Approved
    by: Boris Maslov	Date:	6/24/2013FlexEnergy Energy Systems
	 	30 New Hampshire Avenue
	 	Portsmouth, NH 03801 
	 	www.flexenergy.com

 

Boris Maslov

Ener-Core Power, Inc.

9400 Toledo Way

Irvine, CA 92618

 

June 28, 2013

 

		Subject:	Order Acknowledgement: Ener-Core Power, Inc., Purchase Order No FPG00038, Project reference: EECT

 

Mr. Maslov:

 

Thank you for the subject purchase order in the amount of $320,000.00
USD for one MT250EX Turbine and special engineering support as described in the referenced Purchase Order and FlexEnergy Energy
Systems Inc. Proposal 20130626-1 dated 26 June 2013.

 

Proposal Clarifications: 

 

Scope of Supply.

 

		1.	In the event of any conflict or inconsistency between the Terms and Conditions of Sale (including International Warranty) of
FlexEnergy Energy Systems, Inc. (“Company”) and any Purchase Order or other document proposed by Customer, Company’s
Terms and Conditions will control.

 

		2.	Scope of supply is as stated on PO and as further clarified in FlexEnergy proposal. Additional scope beyond these 2 guiding
documents requested will be quoted and agreed to by both parties prior to start of work on added scope.

 

Payment Terms:

 

		1.	FlexEnergy agrees to payment terms as described in the
Proposal.

 

		a.	20% payment due upon acceptance of Order Acknowledgment.

 

		i.	Payment of $64,000.00 received by wire transfer on 6/28/2013

 

		b.	30% payment due 60 days prior to shipment or at time of order acknowledgement, whichever is later.

 

		c.	Balance due net 30 days after date of shipment, FOB plant.

 

    	 

    	 

    

 

	 	FlexEnergy Energy Systems
	 	30 New Hampshire Avenue
	 	Portsmouth, NH 03801 
	 	www.flexenergy.com

 

Shipping
Terms:

 

		1.	Shipping is FOB shipping point, Portsmouth, NH as stated
in Proposal.

 

		a.	Shipment date is 12 weeks after the date of this letter, assuming the electrical cabinet is received in-house early enough
in advance. The exact requirement for cabinet delivery will be determined at a later date.

 

		b.	Early shipment to be coordinated with customer and FlexEnergy Energy Systems Inc. to include 50%
of payment of the total balance prior to shipment of equipment, the rest due net 30 days after shipment.

 

The FlexEnergy contact person who will manage your order is:

Michael Sheffey

Phone: (603) 430-7111

michael.sheffey@flexenergy.com

 

Once again thank you for your business and we look forward to
a successful project with Ener-Core. If any of the above is not your understanding, please notify us immediately.

 

Sincerely,

 

Chris Dirk

Controller

FlexEnergy Energy Systems Inc.

 

Cc: Dan Whelan, Chris Dirk, Bob Campbell, Andy Freeman, Mike
Sheffey

  

    	2304 INVERNESS WAY SOUTH, SUITE 355

        CENTENNIAL, COLORADO 80112

        303-962-7267

 

July 16, 2013

 

Mr. Boris Maslov

President

Ener-Core Power Inc.

9400 Toledo Way

Irvine, CA 92618

 

Dear Mr. Maslov,

 

This letter confirms our agreement that
Colorado Financial Service Corp. ("CFSC") will act as a nonexclusive placement agent to Ener-Core Power, Inc. a
Nevada corporation ("you' or the "Company") in connection with the proposed private placement (an
"Offering") of unregistered equity or equity linked securities of the Company ("Securities").

 

Services. During the term of our
engagement, we will advise and assist you in connection with the planning, execution and closing of the Offering. In connection
with the planning, execution and closing of an Offering, CFSC's services may include, to the extent that you and CFSC agree necessary
or advisable, assisting and advising you with respect to (1) performing valuation analyses, (2) identifying potential investors
acceptable to you and establishing meetings with such persons or entities, (3) coordinating the process by which you will select
the ultimate investor(s) in the Company, (4) supporting the Company in its negotiation of the terms and agreements effecting the
purchase of Securities, and (5) rendering such assistance as the Company may reasonably request. The Company is responsible for
compliance with all applicable securities laws, including the Securities Act of 1933 as well as the preparation of appropriate
offering materials.

 

Any written or oral advice provided by
us pursuant to this engagement will be treated by the Company as confidential, will be solely for the information and assistance
of the Company and its advisors in connection with their consideration of a sale of securities and purchase of assets and will
not be reproduced, summarized, described or referred to, or furnished to any other party or used for any other purpose, except
in each case with our prior written consent or as required by law.

 

In addition, and regardless of whether
the Offering is consummated, the Company shall promptly, upon request there for, reimburse CFSC for all reasonable legal expenses
related to due diligence and the preparation, assistance, drafting and review of various corporate documentation in respect of
the Offering, including those amounts incurred prior to the date hereof. The reimbursement of legal expenses under this section
shall not exceed $2,000 without prior authorization of the Company.

 

Confidentiality. In connection with
the Offering, the Company and CFSC will provide each other with information that is non-public, confidential or proprietary in
nature. All information about the disclosing party furnished by the disclosing party to the receiving party or its directors, officers,
employees, agents or representatives, including without limitation attorneys, accountants, consultants and financial advisors (collectively,
"representatives"), and all analyses, compilations, data, studies or other documents prepared by the receiving party
or its representatives containing, or based in whole or in part on, any such furnished information is hereinafter referred to as
the "Confidential Information:" provided; that, Confidential Information shall not include information, which is (i)
available to the public other than as a result of a disclosure in breach of this letter; (it becomes available to the receiving
party on a non-confidential basis from a source other than the Company. (iii) known to you the receiving party on a non-confidential
basis prior to such disclosure or (iv) required to be disclosed as a matter of law.

 

    	 

    	 

    

 

The Company and CFSC agree that the Confidential
Information will be kept confidential by them and their respective representatives and will not be disclosed for a period of two
years from the date hereof, without the prior written consent of the disclosing party.

 

Compensation. In connection with this engagement, you
will pay CFSC as follows according to the following transactions.

 

Equity Financing:
For transactions involving investment of equity or equity-linked transactions: a cash fee of 8% paid to CFSC, the originating broker.
As additional compensation for our services hereunder, you will upon consummation of the Offering issue to CFSC a warrant to purchase
a number of shares of common stock of the Company equal to 8% of all shares of Securities placed by CFSC in the Offering at an
exercise price per share of $0.75, the price per share. CFSC may assign any portion of the warrants to its representatives. The
warrant will be immediately exercisable and will contain the same registration rights with respect to the common stock of the Company
underlying the warrant (or any securities into which the common stock of the Company may be converted or for which it may
be exchanged) as are granted to investors in the Offering. The warrant will have a cashless exercise provision, have a term of
5 years from the date of issuance and have such other terms and conditions as shall be mutually agreed upon. Our fees will be reduced
by any fees payable to other brokers or finders if approved in advance by CFSC in writing.

 

Subordinated Debt Financing:
For transactions involving investment of Subordinated Debt, the cash fee shall be 2% for acting as placement agent, paid to CFSC,
plus 3% and a warrant equal to 5%, shall he issued to CFSC under the same terms as pursuant to an equity transaction above. CFSC
may assign any portion of the warrants to any of its representatives.

 

Debt Project Financing:
For transactions involving project financing, the cash fee shall be .5% for acting as placement agent paid to CFSC, plus a
cash fee of 1% of the amount of the financing or commitment paid to CFSC with no warrants for debt project financing.

 

The Cash compensation and the
warrant compensation, if any, are together the "Success Fee."

 

Term. The term of our engagement
will begin on the date hereof and continue for 24 months (the "Term"). However, either of us may terminate our engagement
earlier upon 5 days prior written notice. Any earlier termination of our engagement will not affect your obligation to pay our
fees or reimburse our expenses.

 

If within 12 months following the expiration
or earlier termination of our engagement, you sell equity, equity-linked securities, subordinated debt or project financing to
any investor or lender who purchase or was offered securities or debt of the Company during the Term, you will pay us the Success
Fee described under "Compensation" above.

 

Indemnification. Because we will
be acting on your behalf, you will indemnify us and related persons according to the indemnification and contribution provisions
in Annex A. Your obligations in Ax A will remain operative regardless of any termination or completion of our services hereunder.

 

    	 

    	 

    

 

Miscellaneous. We are a full service
securities firm and, therefore, we may from time to time effect transactions for our own account or for the account of our customers
and hold positions in securities or options on securities of the Company and other companies that may be the subject of our services.
This letter agreement will not limit or restrict our ability to engage in such transactions with respect to either the Company's
securities or any other entity's securities.

 

We will provide our financial advice, written
or oral, exclusively for the information of your Board of Directors and senior management, who will make all decisions regarding
whether and how pursue any opportunity or transaction. Your Board of Directors and senior management will base their decisions
on our advice as well as on the advice of their legal, tax and other business advisors and other factors that they consider appropriate.
Accordingly, as an independent contractor we will not assume the responsibilities of a fiduciary to you or your stockholders in
connection with the performance of our services.

 

This letter agreement, together with the
attached agreement on indemnification and contribution, contains our entire agreement concerning the proposed transaction and supersedes
any prior understandings and agreements.

 

This letter agreement will be binding upon
and inure to the benefit of you, us, each Indemnified Person (as defined in Annex A) and our respective successors and assigns
and nothing herein is intended to confer upon any person, other than you, us, each Indemnified Person and our respective successors
and assigns, any rights, remedies, obligations or liabilities.

 

This letter agreement shall be governed
by and construed in accordance with the laws of the state of Colorado.

 

Any dispute arising out of or relating
to this letter agreement (including any annex) will exclusively be submitted to an arbitrator for binding and conclusive resolution.
The arbitration shall be in Arapahoe County, Colorado and wilt be administered by JAMS. The arbitrator will be a former or retired
judge selected from a list of those affiliated with JAMS. The arbitrator will have the authority to permit discovery and to follow
the procedures that he or she determines to be appropriate. The arbitrator will have no power to award consequential (including
lost profits), punitive or exemplary damages. The parties will advance the forum fees and other costs of the arbitration equally,
but the arbitrator will have the discretion as part of his or her final award to apportion some or all of the costs of the arbitration
among the parties. The arbitrator will also have the discretion to direct, as part of his or her final award, that a party recover
some or all of its attorney's fees. You and we consent to personal jurisdiction and venue in the federal or state courts located
in Colorado for purposes of enforcement of any arbitration award.

 

Any waiver of any right or obligation hereunder must be in writing
signed by the party against whom such waiver is sought to be enforced. Any amendment hereto must be in writing signed by you and
us.

 

SIGNATURE PAGE FOLLOWS

 

    	 

    	 

    

 

After reviewing this letter agreement,
please confirm that it is in accordance with your understanding by signing and returning to us the enclosed copy.

 

Very truly yours,

COLORADO FINANCIAL SERVICE CORPORATION

 

	By:	 	 
	 	Chester Hebert
	 	Chief Executive Officer

 

Accepted and Agreed as of the date set forth 

above: ENER-CORE
POWER, INC.

 

	By:	 	 
	 	Boris Maslov
	 	President

 

    	 

    	 

    

 

Annex A

 

The Company will indemnify and hold harmless
Colorado Financial Service Corp. (CFSC), its affiliates, the partners, directors, officers, agents and employees of CFSC
and its affiliates, and each other person or entity, if any, controlling CFSC or any of its affiliates (each, an Indemnified Person"),
from and against any third party losses, claims, damages, liabilities or expenses (including actions, claims or proceedings in
respect thereof (collectively, Proceedings") brought by or against any person, including stockholders of the Company, and
the cost of any investigation and preparation thereof and defense thereof) (collectively, 'Losses') arising out of or in connection
with (i) advice or services rendered or to be rendered by any indemnified Person pursuant to the letter agreement, (ii) the transactions
contemplated by the letter agreement or (iii) any Indemnified Person's actions or inactions in connection with any such advice,
services or transactions,-provided, however, that the Company will not be obligated to indemnify for any Losses of any Indemnified
Person that are determined by a court of competent jurisdiction in a final judgment not subject to appeal to have resulted solely
from the bad faith or gross negligence of such Indemnified Person. The Company also agrees that no Indemnified Person shall have
any liability (whether direct or indirect, in contract or tort or otherwise) to the Company in connection with (i) advice or services
rendered or to be rendered by any Indemnified Person pursuant to the letter agreement, the transactions contemplated by the letter
agreement or (ill) any Indemnified Person's actions or inactions in connection with any such advice, services or transactions,
except to the extent such liabilities are determined by a court of competent jurisdiction in a final judgment not subject to appeal
to have resulted from the bad faith or gross negligence of such Indemnified Person. The Company agrees that in no event will CFSC
be liable or obligated in any manner for any consequential, exemplary or punitive damages or lost profits arising out of the letter
agreement or the services provided thereunder, and the Company agrees not to seek, or claim any such damages or profits in any
circumstance.

 

The Company also agrees to reimburse each
Indemnified Person for all expenses (including fees and expenses of counsel) as they are incurred by such Indemnified Person in
connection with investigating, preparing for or defending any Proceeding (or enforcing the letter agreement or any related engagement
or commitment agreement), whether or not in connection with pending or threatened litigation in which any Indemnified Person is
a party.

 

If for any reason the foregoing indemnification
is unavailable to any Indemnified Person or insufficient to bold it harmless, then the Company shall contribute to the amount paid
or payable by such Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect the relative economic
interests of the Company, its affiliates and its stockholders on the one hand and the Indemnified Person on the other in the matters
contemplated by the letter agreement as well as the relative fault of the Company, its affiliates or its stockholders, on the one
hand, and such Indemnified Person, on the other; provided, however, that in no event shall the Indemnified Persons as a whole be
required to contribute an amount greater than the amount of all fees actually received by CFSC from the Company under the letter
agreement.

 

The Company's reimbursement, indemnity
and contribution obligations hereunder shall be in addition to any liability that it may otherwise have and shall inure to the
benefit of any successors, assigns, heirs and representatives of any Indemnified Person. Solely for the purpose of enforcing the
letter agreement, the Company hereby consents to personal jurisdiction and venue in any court in which any Proceeding is brought.
The provisions of this Annex A shall survive any termination or other expiration of the letter agreement, the consummation of any
transaction contemplated thereby or the other completion of CFSC's services with respect thereto.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]