Document:

EXHIBIT 10.4

    

    

    NEITHER THIS SECURITY NOR THE SECURITIES AS TO WHICH THIS SECURITY MAY BE EXERCISED HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
        SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
        STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
        OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
        ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

    

    

    COMMON STOCK PURCHASE WARRANT

    

    

    XSPORT GLOBAL, INC.

    

    

    Warrant Shares: 372,754

    

    

    Date of Issuance: December 17, 2018 (“Issuance Date”)

    

    

    This COMMON STOCK PURCHASE WARRANT (the “Warrant”)
        certifies that, for value received (in connection with the funding of purchase price of $100,000.00, for the convertible promissory note in the principal amount of $110,000.00 issued to the Holder (as defined below) on December 17, 2018) (the
        “Note”), ______________ (including any permitted and registered assigns, the “Holder”), is entitled, upon the terms and subject to the limitations on exercise
        and the conditions hereinafter set forth, at any time on or after the date of issuance hereof, to purchase from XSport Global, Inc., a Wyoming corporation (the “Company”),
        372,754 shares of Common Stock (as defined below) (the “Warrant Shares”) at the Exercise Price per share then in effect (whereby such number may be adjusted
        from time to time pursuant to the terms and conditions of this Warrant).

    

    

    Capitalized terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body
        of this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.50 subject to adjustment as provided herein (including but
        not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on
        the five-year anniversary thereof.

    

    

    1.           EXERCISE OF WARRANT.

    

    

    (a)         Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or times during the
        Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant
        resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant
        Shares purchased. On or before the third Trading Day (the “Warrant Share Delivery Date”) following the date on which the Company shall have received the
        Exercise Notice, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price” and together with the Exercise Notice, the “Exercise 
        Delivery Documents”) in cash or by wire transfer of immediately available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise
        Price provided), the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or
        its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of
        record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number
        of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after
        any exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant
        Shares with respect to which this Warrant is exercised.

    

    

    
      
        

    

    
    If the Company fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective
        Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and such failure shall be deemed an event of default under the Note.

    

    

    Unless the Warrant Shares are duly registered pursuant to an effective non-stale registration statement under the Securities Act
        permitting the immediate resale of the Warrant Shares by the Holder at prevailing market prices, if the Market Price of one share of Common Stock is greater than the Exercise Price, the Holder may elect to receive Warrant Shares pursuant to a
        cashless exercise, in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and a Notice of Exercise, in which event the
        Company shall issue to Holder a number of Common Stock computed using the following formula:

    

    

    X = Y (A-B)

    

    

    A

    

    

    Where X = the number of Warrant Shares to be issued to Holder.

    

    

    
      
        	

              	Y =	
                the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation).

              

      

    

    

    

    
      	 	
              A =

                

            	
              the Market Price (at the date of such calculation).

            

    

    

    

    
      	 	
              B =

                

            	
              Exercise Price (as adjusted to the date of such calculation).

            

    

    

    

    If, at the time of the Company’s request (each a “Call
            Notice”), (i) the Warrant Shares are registered for resale by the Holder at prevailing market prices under an effective non-stale registration statement of the Company, (ii) the Company is current in its reporting obligations with
        respect to the SEC, (iii) the VWAP of the Company’s common stock exceeds 140% of the Exercise Price in effect at that time for seven (7) consecutive Trading Days immediately preceding the date that the Call Notice is given to Holder, (iv) the
        Holder is not in possession of any information provided by the Company that constitutes material nonpublic information, (v) the number of shares being called will not result in the Holder exceeding the Beneficial Ownership Limitation (as defined
        below), (vi) an Event of Default (as defined in the Note) (each an “Event of Default”) under the Note has not occurred, (vii) an event which with the passage of
        time or the giving of notice could become an Event of Default under the Note is not pending, and (viii) the average daily share trading volume of the Company’s common stock exceeds 200% of the number of Warrant Shares being called for seven (7)
        consecutive Trading Days immediately preceding the date that the Call Notice is given to Holder, then the Company may call for cancellation of that portion of this Warrant for which an Exercise Notice has not yet been delivered as of the date of
        the Call Notice for consideration equal to the Exercise Price in effect at that time multiplied by the number of Warrant Shares being called. A Call Notice may not be given to the Holder with respect to any portion of this Warrant which if
        exercised would cause such Holder to exceed the Beneficial Ownership Limitation. A Call Notice may not be given later than sixty (60) calendar days before the end of the Exercise Period, nor more often than one time each ten (10) Trading Days. In
        the event that during the ten (10) Trading Days after the Holder exercises this Warrant pursuant to a Call Notice, the closing bid price of the Company’s Common Stock on the primary trading market falls below the Exercise Price pursuant to which
        Warrant Shares were acquired pursuant to such Call Notice (such lower price the “Reset Price”), then the Company shall issue additional shares of Common Stock so that the per share purchase price of the Warrant Shares purchased pursuant to such
        Call Notice shall equal the Reset Price.

     

      

    
      2

      
        

    

    (b)         No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions)
        issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share,
        the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.

    

    

    (c)         Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent
        that after giving effect to issuance of Warrant Shares upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other persons acting as a group together with the Holder or any of
        the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates
        shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of
        the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including without
        limitation any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence,
        for purposes of this paragraph (d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in
        compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this paragraph applies, the determination of
        whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice
        of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case
        subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.

    

    

    For purposes of this paragraph, in determining the number of outstanding shares of Common Stock, a Holder may rely on the
        number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written
        notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the request of a Holder, the Company shall within two Trading Days confirm to the Holder the number of shares of Common Stock then
        outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as
        of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership  Limitation” shall be 4.99% of the number of shares of the
        Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The Company
        covenants that this Warrant is outstanding, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full exercise of
        this Warrant. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full exercise of the Warrant (based on the Exercise Price in effect at that time) (the “Reserved
        Amount”). The Reserved Amount shall be increased from time to time in accordance with the Company’s obligations hereunder.

    

    

    
      3

      
        

    

    2.           ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

    

    

    (a)        Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
        or otherwise (including without limitation any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:

    

    

    (i)          any Exercise
        Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such
        record date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value
        of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock, and (ii) the denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day
        immediately preceding such record date; and

    

    

    (ii)          the number of Warrant Shares
        shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the
        Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i); provided, however, that in the event that the Distribution is of shares of common stock of a company (other than the Company) whose common
        stock is traded on a national securities exchange or a national automated quotation system (“Other Shares of Common Stock”), then the Holder may elect to receive a
        warrant to purchase Other Shares of Common Stock in lieu of an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of
        Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount
        by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the first part of this clause
        (ii).

    

    

    (b)         Anti-Dilution Adjustment. So long as this Warrant is outstanding, upon any issuance by the Company of any common stock purchase warrant, option, or similar security, with any term more favorable to the
        holder of such security or with a term in favor of the holder of such security that was not similarly provided to the Holder in this Warrant, then the Company shall notify the Holder of such additional or more favorable term and such term, at
        Holder’s option, shall become a part of this Warrant. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing exercise price and anti-dilution
        adjustments.

    

    

    
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    3.          FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or into another entity and the Company is not the surviving entity (such
        surviving entity, the “Successor Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii)
        any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for
        other securities, cash or property and the holders of at least 50% of the Common Stock accept such offer, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is
        effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental 

            Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of
        shares of Common Stock for which this Warrant is exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination). For purposes of any such exercise, the
        determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the
        Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the
        securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the
        extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such
        warrant into Alternate Consideration.

    

    

    4.          NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of
        arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this
        Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of
        this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise
        of this Warrant, and (iii) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this
        Warrant (without regard to any limitations on exercise).

    

    

    5.           WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder to any voting rights or other rights as a stockholder of the
        Company. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such
        liabilities are asserted by the Company or by creditors of the Company.

    

    6.           REISSUANCE.

    

    

    (a)         Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose
        (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

    

    

    (b)         Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with this Warrant, and
        shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.

    

    

    7.           TRANSFER.

    

    

    (a)          Notice of Transfer. The Holder agrees to give written notice to the Company before transferring this Warrant or transferring any Warrant Shares of such Holder’s intention to do so,
        describing briefly the manner of any proposed transfer. Promptly upon receiving such written notice, the Company shall present copies thereof to the Company’s counsel. If the proposed transfer may be effected without registration or qualification
        (under any federal or state securities laws), the Company, as promptly as practicable, shall notify the Holder thereof, whereupon the Holder shall be entitled to transfer this Warrant or to dispose of Warrant Shares received upon the previous
        exercise of this Warrant, all in accordance with the terms of the notice delivered by the Holder to the Company; provided, however, that an appropriate legend may be endorsed on this Warrant or the certificates for such Warrant Shares respecting
        restrictions upon transfer thereof necessary or advisable in the opinion of counsel and satisfactory to the Company to prevent further transfers which would be in violation of Section 5 of the Securities Act and applicable state securities laws;
        and provided further that the prospective transferee or purchaser shall execute the Assignment of Warrant attached hereto as Exhibit B and such other documents and make
        such representations, warranties, and agreements as may be required solely to comply with the exemptions relied upon by the Company for the transfer or disposition of the Warrant or Warrant Shares.

    

    

    
      5

      
        

    

    (b)          If the proposed transfer or
        disposition of this Warrant or such Warrant Shares described in the written notice given pursuant to this Section 7 may not be effected without registration or qualification of this Warrant or such Warrant Shares, the Holder will limit its
        activities in respect to such transfer or disposition as are permitted by law.

    

    

    (c)        Any transferee of all or a portion
        of this Warrant shall succeed to the rights and benefits of the initial Holder of this Warrant under Sections 4.1 and 4.3 (subject, however, to the limitations set forth in Section 4.2), 4.4 and 4.5 of the Purchase Agreement (registration rights,
        expenses, and indemnity).

    

    

    8.          NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the notice provisions contained in the
        Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least 20 days prior to
        the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or
        indirectly convertible into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
        dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

    

    

    
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    9.           AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written
        consent of the Company and the Holder.

    

    

    10.         GOVERNING LAW. This Warrant and all rights, obligations and liabilities hereunder shall be governed by, and construed in accordance with, the internal laws of the State of Nevada,
        without giving effect to the conflicts-of-law principles thereof.

    

    

    11.         ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

    

    

    12.         CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

    

    

    (a)         “Nasdaq” means www.Nasdaq.com.

    

    

    (b)         “Closing Sale Price” means, for any security as of any date, (i) the last closing trade price for such security on the Principal Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an
        extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Nasdaq, or (ii) if the foregoing does not apply, the last trade price of such security
        in the over-the-counter market for such security as reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask prices of any market makers for such security as reported by the OTC
        Markets. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and
        the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

    

    

    
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    (c)         “Common Stock” means the Company’s common stock, and any other class of securities into which such securities may hereafter be reclassified or changed.

    

    

    (d)         “Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options,
        warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

    

    

    (e)          [Intentionally Omitted].

    

    

    (f)          [Intentionally Omitted].

    

    

    (g)         “Principal Market” means the primary national securities exchange on which the Common Stock is then traded.

    

    

    (h)         “Market Price” means the highest traded price of the Common Stock during the sixty Trading Days prior to the date of the respective Exercise Notice.

    

    

    (i)          “Trading Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market, (ii) if the Common Stock is not then listed or quoted and traded on any national securities
        exchange, then a day on which trading occurs on any over-the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business Day.

    

    

    IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.

     

      

    	 	
            XSPORT GLOBAL, INC.

          
	 	 
	 	
            Name: Robert Finigan

          
	 	 
	 	
            Title: Chief Executive Officer

          

     

    

    
      
        

    

    EXHIBIT A

    

    

    EXERCISE NOTICE

    

    

    (To be executed by the registered holder to exercise this Common Stock Purchase Warrant)

    

    

    THE UNDERSIGNED holder hereby exercises the right to purchase of                                                                      

        the shares of Common Stock (“Warrant Shares”) of XSport Global, Inc., a Wyoming corporation (the “Company”), evidenced by the attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not otherwise
        defined shall have the respective meanings set forth in the Warrant.

    

    

    
      
        	1.	
                Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as
                    (check one):

              

      

    

    

    

    ☐ a cash exercise with respect to                                                                      Warrant Shares; or

    

    

    ☐ by cashless exercise pursuant to the Warrant.

    

    

    
      
        	2.	
                Payment of Exercise Price. If cash exercise is selected above, the holder shall pay the
                    applicable Aggregate  Exercise Price in the sum of $                                                                       to the Company in accordance with the terms of the Warrant.

              

      

    

    

    

    
      
        	3.	
                Delivery of Warrant Shares. The Company shall deliver to the holder                                                                       Warrant Shares in accordance with the terms of the Warrant.

              

      

    

    

    

    	
            Date:

          	 	 	 	 	 
	
            

            

          	 	 	 	 	 
	
            

            

          	 	 	
            (Print Name of Registered Holder)

          	 
	 	 	 	 	 	 
	 	 	 	
            By:

          	 	 
	 	 	 	 	 	 
	 	 	 	
            Name:

          	 	 
	 	 	 	 	 	 
	 	 	 	
            Title:

          	 	 

     

    

    
      
        

    

    EXHIBIT B

    

    

    ASSIGNMENT OF WARRANT

    

    

    (To be signed only upon authorized transfer of the Warrant)

    

    

    FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto                                                                       the right to purchase                                                                       shares of common stock of XSport Global, Inc., to which the
        within Common Stock Purchase Warrant relates and appoints                                                                     ,
        as attorney-in-fact, to transfer said right on the books of XSport Global, Inc. with full power of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and
        conditions of the within Warrant. 

     

      

    	
            Dated:

          	

          	 
	 	
            (Signature) *

          	 
	 	 	 
	 	
            (Name)

          	 
	 	 	 
	 	
            (Address)

          	 
	 	 	 
	 	
            (Social Security or Tax Identification No.)

          	 

     

    

    * The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular
        without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.Blueprint

Exhibit
10.1

 

 

 

 

 

 

 

 

 

 

 

AEMETIS BIOGAS LLC

 

SERIES A PREFERRED UNIT PURCHASE AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

	

ARTICLE I. DEFINITIONS

	

1

	

Section 1.1

	

Defined Terms Used in this Agreement

	

1

	

Section 1.2

	

Terms Generally

	

13

	

ARTICLE II. PURCHASE AND SALE

	

13

	

Section 2.1

	

Sale and Purchase of Series A Preferred Units

	

13

	

Section 2.2

	

Closings

	

13

	

Section 2.3

	

Use of Proceeds

	

15

	

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF COMPANY

	

16

	

Section 3.1

	

Representations and Warranties of the Company

	

16

	

Section 3.2

	

Organization, Good Standing, Power and Qualification

	

16

	

Section 3.3

	

Capitalization

	

16

	

Section 3.4

	

No Subsidiaries

	

17

	

Section 3.5

	

Authorization

	

17

	

Section 3.6

	

Issuance of Series A Preferred Units

	

17

	

Section 3.7

	

Governmental Consents and Filings

	

17

	

Section 3.8

	

Litigation

	

18

	

Section 3.9

	

Intellectual Property

	

18

	

Section 3.10

	

Compliance with Other Instruments; No Conflict

	

18

	

Section 3.11

	

Project Contracts; Material Agreements; Other Actions

	

19

	

Section 3.12

	

Certain Transactions

	

19

	

Section 3.13

	

Rights of Registration and Voting Rights

	

20

	

Section 3.14

	

Title to Assets

	

20

	

Section 3.15

	

Projections

	

20

	

Section 3.16

	

Employee Matters

	

20

	

Section 3.17

	

Tax Returns and Payments

	

22

	

Section 3.18

	

Insurance

	

22

	

Section 3.19

	

Permits; DDRDP Grants

	

22

	

Section 3.20

	

Real Property Holding Company

	

22

	

Section 3.21

	

Environmental and Safety Laws

	

23

	

Section 3.22

	

Disclosure

	

23

	

Section 3.23

	

Foreign Corrupt Practices Act

	

23

	

Section 3.24

	

Money Laundering

	

23

	

Section 3.25

	

Contractors, Subcontractors and Suppliers

	

24

	

ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
PURCHASER

	

24

	

Section 4.1

	

Representations and Warranties of the Purchaser

	

24

	

Section 4.2

	

Authorization

	

24

	

Section 4.3

	

Purchase for Own Account

	

25

	

Section 4.4

	

Restricted Securities

	

24

	

Section 4.5

	

No Public Market

	

24

	

Section 4.6

	

Legends

	

25

	

Section 4.7

	

Accredited Investor

	

26

	

Section 4.8

	

No General Solicitation

	

26

	

Section 4.9

	

Foreign Investors

	

26

	

Section 4.10

	

[Reserved]

	

26

	

Section 4.11

	

Reliance

	

26

 

 

i

 

 

	

ARTICLE V. CLOSING CONDITIONS

	

26

	

Section 5.1

	

Conditions to the Purchaser’s Obligations at Initial Closing
and Each Other Closing of a Purchase Under the Initial
Tranche

	

26

	

Section 5.2

	

Conditions to Purchaser’s Obligations at Subsequent Closing
and Each Other Closing of a Purchase Under the Second
Tranche

	

29

	

ARTICLE VI. COVENANTS

	

30

	

Section 6.1

	

Information Reporting and Monitoring

	

31

	

Section 6.2

	

Certain Notifications Until Final Redemption Date

	

34

	

Section 6.3

	

Preference Payments

	

35

	

Section 6.4

	

Liquidation; Deemed Liquidation.

	

35

	

Section 6.5

	

Conversion

	

36

	

Section 6.6

	

Voting Generally

	

38

	

Section 6.7

	

Board

	

39

	

Section 6.8

	

Series A Preferred Units Protective Provisions

	

39

	

Section 6.9

	

Redemption

	

41

	

Section 6.10

	

Preemptive Rights

	

42

	

Section 6.11

	

Closing Fee

	

43

	

Section 6.12

	

Unit Ownership Ledger

	

43

	

Section 6.13

	

D&O and Other Insurance

	

43

	

Section 6.14

	

Financial Covenants

	

44

	

Section 6.15

	

Operational Covenants

	

44

	

Section 6.16

	

Other Covenants

	

46

	

Section 6.17

	

Collateral

	

46

	

Section 6.18

	

Post-Closing Obligations

	

47

	

ARTICLE VII. TRIGGER EVENTS AND REMEDIES

	

47

	

Section 7.1

	

Trigger Events

	

48

	

Section 7.2

	

Redemption and other Remedies upon Trigger Event

	

49

	

Section 7.3

	

Mandatory Redemption on Bankruptcy Trigger Event

	

50

	

Section 7.4

	

Application of Funds

	

50

	

ARTICLE VIII. MISCELLANEOUS

	

50

	

Section 8.1

	

Survival of Warranties

	

50

	

Section 8.2

	

Successors and Assigns

	

51

 

 

ii

 

 

	

Section 8.3

	

Governing Law

	

51

	

Section 8.4

	

Counterparts

	

51

	

Section 8.5

	

Titles and Subtitles

	

51

	

Section 8.6

	

Notices

	

51

	

Section 8.7

	

No Finder’s Fees

	

51

	

Section 8.8

	

Fees and Expenses; Taxes; Indemnification

	

52

	

Section 8.9

	

Time of the Essence

	

53

	

Section 8.10

	

Amendments and Waivers

	

54

	

Section 8.11

	

Severability

	

54

	

Section 8.12

	

Delays or Omissions; Independence of Covenants

	

54

	

Section 8.13

	

Entire Agreement

	

54

	

Section 8.14

	

Corporate Securities Law

	

54

	

Section 8.15

	

Termination of Closing Obligations

	

55

	

Section 8.16

	

Submission to Jurisdiction; Jury Trial Waiver

	

55

	

Section 8.17

	

No Commitment for Additional Financing

	

56

	

Section 8.18

	

Press Releases and Announcements

	

56

	

Section 8.19

	

Replacement of Certificates

	

56

	

Section 8.20

	

Remedies

	

56

	

Section 8.21

	

No Advisory or Fiduciary Responsibility

	

57

	

Section 8.22

	

Payments Set Aside

	

57

	

Section 8.23

	

Payments Generally

	

57

	

Section 8.24

	

Acknowledgments

	

58

 

EXHIBITS

 

Exhibit A 

FUNDING
TRANCHES

Exhibit B 

DISCLOSURE
SCHEDULE

Exhibit C 

FORM OF LEGAL
OPINION OF COUNSEL TO COMPANY

Exhibit D 

FORM OF PURCHASE
REQUEST

Exhibit E 

FORM OF MONTHLY
REPORT

Exhibit F 

MANAGEMENT SERVICES
AGREEMENT

Exhibit G 

INDEMNIFICATION
AGREEMENT

Exhibit H 

PROJECT
BUDGET

Exhibit I 

GANTT
CHART

Exhibit J 

FORM OF COMPLIANCE
CERTIFICATE

Exhibit K 

FORM OF WEEKLY
REPORT

 

ANNEXES

 

Annex I

ADDITIONAL
CONDITIONS PRECEDENT

Annex II 

ASSUMPTIONS
SCHEDULE

Annex III 

USE OF PROCEEDS
SCHEDULE

Annex IV 

POST-CLOSING
OBLIGATIONS OF COMPANY

 

 

iii

 

 

SERIES A PREFERRED UNIT PURCHASE AGREEMENT

 

THIS
SERIES A PREFERRED UNIT PURCHASE AGREEMENT (this
“Agreement”), is
made as of the 20th day of December, 2018 (the “Signing Date”), by and among
AEMETIS BIOGAS LLC, a Delaware limited liability company (the
“Company”),
PROTAIR-X AMERICAS, INC., a Delaware corporation (the
“Purchaser”),
and THIRD EYE CAPITAL CORPORATION, as agent for the Purchaser (in
such capacity, the “Agent”).

 

WHEREAS, as of the
date hereof, the Company and Aemetis (as defined below) have
adopted that certain Amended and Restated Limited Liability Company
Agreement of the Company (the “Company Agreement”), dated as of
the date hereof, which, among other things, authorizes the issuance
by the Company of the Series A Preferred Units to be purchased by
the Purchaser hereunder.

 

WHEREAS, to finance
the Project (as defined below), the Company and the Purchaser
desire to enter into this Agreement pursuant to which the Purchaser
shall purchase from the Company, and the Company shall issue and
sell to the Purchaser, up to six million (6,000,000) Series A
Preferred Units (as defined below) in the aggregate to be issued in
separate Closings for an aggregate purchase price of up to
$30,000,000.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:

 

ARTICLE I. 

DEFINITIONS

 

Section
1.1 Defined
Terms Used in this Agreement. In addition to
the terms defined above, the following terms used in this Agreement
shall be construed to have the meanings set forth or referenced
below.

 

“Action” means an action, charge,
claim, complaint, dispute, suit, arbitration, inquiry, notice of
violation, investigation, or proceeding (including, without
limitation, an informal investigation or partial proceeding, such
as a deposition), whether commenced, threatened, legal, civil,
criminal, administrative, regulatory or otherwise.

 

“Additional Digesters” means nine
(9) dairy covered lagoon digesters to be built on certain dairy
premises, for the portion of the Project that will be Developed
pursuant to the Additional Digester Contracts. Each Additional
Digester shall have an average size of 2,200 WCE per
dairy.

 

“Additional Digester Contracts”
means contracts entered or to be entered into by the Company with
dairies for building and operating the Additional Digesters that
are in addition to the Initial Digesters.

 

“Additional Mortgages” has the
meaning specified in Section 5.3(e).

 

 “Aemetis”
means Aemetis, Inc., a Nevada corporation.

 

“Aemetis Advanced Fuels” means
Aemetis Advanced Fuels, Inc., a California
corporation.

 

 

1

 

 

“Affiliate” means, with respect to
any specified Person, any other Person who, directly or indirectly,
controls, is controlled by, or is under common control with such
Person, including, without limitation, any general partner,
managing member, officer, director or trustee of such Person, or
any venture capital fund or registered investment company now or
hereafter existing that is controlled by one or more general
partners, managing members or investment advisers of, or shares the
same management company or investment adviser with, such
Person.

 

“Agent” has the meaning specified
in the preamble of this Agreement.

 

“Agent’s Account” means an
account at a bank in Toronto, Ontario, Canada designated by the
Agent from time to time as the account into which the Company shall
make all payments to the Agent under this Agreement and the other
Transaction Documents.

 

“Agreement” has the meaning
specified in the preamble of this Agreement.

 

“Applicable Securities Laws” means
the Securities Act and any applicable state securities Laws of the
United States.

 

“Assumptions Schedule” means Annex
II of this Agreement.

 

“Bankruptcy Event” means, with
respect to any Person, the occurrence of one or more of the
following events: (a) such Person (i) admits in writing its
inability to pay its debts as they become due, (ii) files, or
consents or acquiesces by answer or otherwise to the filing against
it of a petition for relief or reorganization or rearrangement,
readjustment or similar relief or any other petition in bankruptcy,
for liquidation or to take advantage of any bankruptcy, insolvency,
dissolution, reorganization, moratorium or other similar Law of any
jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v)
is adjudicated as bankrupt or as insolvent or to be liquidated,
(vi) gives notice to any Governmental Authority of insolvency or
pending insolvency, or (vii) takes corporate action for the
purpose of any of the foregoing; or (b) a court of Governmental
Authority of competent jurisdiction enters an order appointing,
without consent by such Person, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with
respect to any substantial part of its property, or constituting an
order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency
Law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of such Person, or a petition or involuntary case with
respect to any of the foregoing shall be filed or commenced against
such Person.

 

 “Bankruptcy
Trigger Event” means the occurrence of an actual or
deemed entry of an order for relief with respect to the Company
under the Bankruptcy Code of the United States.

 

“Board” means the Board of Managers
of the Company.

 

“Budget” has the meaning specified
in Section
6.1(a)(i)(y).

 

“Business Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or Canada or any day on which banking
institutions in Canada or the State of California are authorized or
required by Law or other governmental Action to close.

 

“Certificate of Formation” means
the Certificate of Formation of the Company filed with the Delaware
Secretary of State.

 

 

2

 

 

“Change of Control” means any of
the following events:

 

(a) Aemetis shall at
any time fail to directly own, legally and beneficially (free and
clear of all Liens except Liens created or permitted pursuant to
the Note Purchase Agreement), at least one hundred percent (100%)
of the issued and outstanding Common Units of the Company;
or

 

(b) Eric McAfee shall
cease to be active in the management of the Company;
or

 

(c) a sale, lease,
exclusive license or other disposition, in a single transaction or
series of related transactions, of all or substantially all of the
assets of the Company and its Subsidiaries on a consolidated basis;
or

 

(d) any sale or other
disposition of the Keyes Plant; or

 

(e) the Company shall
consummate a Delaware LLC Division; or

 

(f) the consummation,
whether through a single transaction or series of related
transactions, of a merger or consolidation of the Company with or
into another Person or any other reorganization or sale of Units or
other Equity Securities, if Persons who were not Members (or
Affiliates of Members) immediately prior to such merger,
consolidation, reorganization or sale own immediately after such
merger, consolidation, reorganization or sale a majority of the
voting power of the outstanding Equity Securities of the continuing
or surviving Person (or, if the continuing or surviving Person is a
wholly owned Subsidiary of a Person, any direct or indirect parent
of such continuing or surviving Person).

 

“Closing” means the Initial
Closing, the Subsequent Closing or the closing of any other
Purchase, as applicable.

 

“Closing Date” means the Initial
Closing Date, the Subsequent Closing Date or the date of any other
Closing, as applicable.

 

“CNG Transportation Agreements” has
the meaning specified in Section 6.16(b).

 

“Code” means the Internal Revenue
Code of 1986, as amended.

 

“Collateral” means all present and
future assets of the Company, including the Project.

 

“Collateral Documents” means,
collectively, the Security Agreement, the Mortgages and any other
agreements, instruments and documents executed in connection with
this Agreement that are intended to create, perfect, preserve,
protect or evidence Liens securing or intended to secure the
Obligations, including, without limitation, all other security
agreements, mortgages, deeds of trust, pledge agreements, powers of
attorney, consents, landlord and mortgagee waivers, lien waivers,
consents, subordinations, non-disturbance and other agreements, and
financing statements.

 

“Common Unit” means a Unit in the
Company designated as a “Common Unit” and which shall
provide the holder thereof with the rights and obligations
specified with respect to a Common Unit in the Company
Agreement.

 

“Company” has the meaning specified
in the preamble of this Agreement.

 

“Company Agreement” has the meaning
specified in the first recital of this Agreement.

 

“Compliance Certificate” means a
certificate substantially in the form of Exhibit J or such other form as
may be approved by the Agent.

 

 

3

 

 

“Conversion Price” means $5.00 per
Series A Preferred Unit.

 

“Conversion Time” has the meaning
specified in Section
6.5(c).

 

“Conversion Units” means the Common
Units issuable upon conversion of Series A Preferred
Units.

 

“DDRDP” means the California
Department of Food and Agriculture Dairy Digester Research and
Development Program.

 

“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
affecting the rights of creditors generally.

 

“Deemed Liquidation” has the
meaning specified in Section 6.4(b).

 

“Delaware LLC Act” means the
Delaware Limited Liability Company Act, as amended.

 

“Delaware LLC” means any limited
liability company organized or formed under the laws of the State
of Delaware.

 

“Delaware LLC Division” means the
statutory division of any Delaware LLC into two or more Delaware
LLCs pursuant to Section 18-217 of the Delaware LLC
Act.

 

“Development” means the
development, engineering, ownership, financing, occupation,
construction, equipping, testing, commissioning, alteration,
repair, operation, maintenance and use of the Project, and
“Developed”
shall have a meaning correlative thereto.

 

“Digesters” means, collectively,
the Initial Digesters and the Additional Digesters.

 

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

 

“Environmental Laws” means any and
all foreign, Federal, state, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Law (including
common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in
effect.

 

“Equity
Securities” means, with
respect to the Company, all of the Units of (or other ownership or
profit interests in) the Company, all the warrants, options or
other rights for the purchase or acquisition of Units from (or
other ownership or profit interests in) the Company, all securities
and/or instruments (including, without limitation, bonds, notes or
other obligations) convertible into or exchangeable for Units of
(or other ownership or profit interests in) the Company, all
warrants, rights or options for the purchase or acquisition from
the Company of Units (or other ownership or profits interests), and
all of the other ownership or profit interests in the Company
(including Member interests therein), whether voting or nonvoting,
and whether or not such Units, warrants, options, rights or other
interests are outstanding on any date of
determination.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended or modified from time to time, and
the rules and regulations promulgated
thereunder.

 

 

4

 

 

“ERISA
Affiliate” means any
trade or business (whether or not incorporated) under common
control with the Company 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 the Company 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
the Company 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 Sections 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings
to terminate a Pension Plan; (f) any event or condition which
constitutes grounds under Section 4042 of ERISA for the termination
of, or 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 Internal Revenue Code
or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due
but not delinquent under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate.

 

“Fair Market
Value” of any asset shall
mean the fair value thereof as of the date of valuation as
determined by the Board in good faith on the basis of an orderly
sale to a willing, unaffiliated buyer in an arm’s length
transaction occurring on the date of valuation and, in the
case.

 

“Final Redemption
Date” has the meaning
specified in Section
6.9(b).

 

“Final Redemption
Price” has the meaning
specified in Section
6.9(b).

 

“Free Cash
Flow” means, for any
period, the sum of Operating Cash Flow plus (i) DDRDP, California
Department of Food and Agriculture or any such alternative
government grants; plus (ii) proceeds from any financing
(other than loans, grants, or guarantees from the United States
Department of Agriculture (“USDA”)); less (iii) Preference Payments paid in
cash, less (iv) the amount necessary to maintain the WC Reserve and
fund capital expenditures in excess of the initial budget in such
period, in each case calculated for the Company for such period in
accordance with GAAP.

 

“Fully Exercising
Member” has the meaning
specified in Section
6.10(c).

 

“GAAP” means United States
generally accepted accounting principles in effect from time to
time.

 

“Gantt Chart” means the collective
reference to the detailed project management Gantt charts,
including planning, design, construction, commissioning and
operationalization stages, and detailing tasks, timelines and
interdependencies of the Project, copies of which are attached
hereto as Exhibit
I, as the same may be amended, modified or supplemented from
time to time (including the addition from time to time of Gantt
Charts for Additional Digesters), in each case with the prior
written approval of both the Agent and the Third Party
Consultant.

 

“Governmental Authority” means any
federal, state, local or foreign government or political
subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated
organization or other non-governmental regulatory authority or
quasi-governmental authority (to the extent that the rules,
regulations or orders of such organization or authority have the
force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.

 

 

5

 

 

“Guarantee” by any Person means any
obligation or liability, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person as well as any obligation or
liability, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or
liability (whether arising by virtue of partnership arrangements,
by agreement to keep well, to purchase assets, goods, securities or
services, to operate property, to take or pay, or to maintain net
worth or working capital or other financial statement conditions or
otherwise) or (b) entered into for the purpose of indemnifying or
assuring in any other manner the obligee of such Indebtedness or
other obligation or liability of the payment thereof or to protect
the obligee against loss in respect thereof (in whole or in part),
provided that the
term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business. The term
“Guarantee” used
as a verb has a corresponding meaning.

 

“Hazardous Substances” 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, without
duplication, (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes or other similar
instruments or debt securities, (c) all obligations under swaps,
hedges or similar instruments, (d) all obligations for the deferred
purchase price of any property or services (other than trade
accounts payable and accrued expenses incurred in the ordinary
course of business), (d) all obligations created or arising under
any conditional sale or other title retention agreement, (f) all
obligations secured by a Lien, (g) all obligations under leases
which shall have been or should be, in accordance with GAAP,
recorded as capital leases, (h) all obligations in respect of
bankers’ acceptances or letters of credit, (i) all guarantees
of any of the foregoing, and (j) all interest, principal,
prepayment penalties, premiums, fees or expenses due or owing in
respect of any item listed in clauses (a) through (i)
above.

 

“Indemnification Agreement” means
the Indemnification Agreement, dated as of the date hereof, in
substantially the form of Exhibit G, to be executed by
the Company in favor the member of the Board appointed by the
Purchaser.

 

“Indemnitee” has the meaning
specified in Section
8.8(d) hereof.

 

“Initial Closing” has the meaning
specified in Section
2.2(a) hereof.

 

“Initial Closing Date” has the
meaning specified in Section 2.2(a)
hereof.

 

“Initial Digesters” means two (2)
dairy covered lagoon digesters to be Developed on certain dairy
premises known as the Ahlem Farms Jerseys Dairy and the Double D
Dairy in accordance with the Gantt Chart and the Project Budget.
Each Initial Digester shall have an average size of 2,200 WCE per
dairy.

 

“Initial Mortgages” has the meaning
specified in Section
5.1(i).

 

“Insurance Policies” has the
meaning specified in Section 3.18.

 

“Intellectual Property” has the
meaning specified in Section 3.9.

 

“Initial Purchase” means the
Purchase by the Purchaser of 1,600,000 Series A Preferred Units on
the Initial Closing Date for $8,000,000.

 

 

6

 

 

“Initial Tranche” means the
“Initial Tranche” described on Exhibit A.

 

“Initial Tranche Request” means a
request for a Purchase pursuant to the Initial
Tranche.

 

“Initial Units” has the meaning
specified in Section
2.2(a).

 

“Junior Securities” means any class
or series of Equity Securities that, with respect to dividends and
distributions on such Equity Securities, the redemption of such
Equity Securities and distributions upon the liquidation,
dissolution and winding up of the Company, ranks junior to the
Series A Preferred Units, and the term “Junior
Securities” shall include all Common Units.

 

“Keyes Plant” means Aemetis’
ethanol facility located in Keyes, California.

 

“Knowledge of the
Company” or the “Company’s Knowledge”
or any other similar knowledge qualification, means the actual or
constructive knowledge of any manager or officer of the Company,
after due inquiry.

 

“Law” 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, authorizations and permits of,
and agreements with, any Governmental Authority, in each case
whether or not having the force of law.

 

“Lease” means, with respect to each
Digester, the lease and manure supply agreement and any comparable
agreements between the Company, the fee owner of the real property
on which such Digester is or will be located, and/or the operator
or owner of the dairy on such real property. Each Lease and all
related documents must be satisfactory in form and substance to the
Agent, including, in the case of a Lease that is a sublease, the
related primary lease.

 

“Lien” means a lien, charge,
pledge, security interest, encumbrance, option, right of first
refusal, preemptive right, or other restriction of any kind,
including any restriction on use, voting, receipt of income or
exercise of any other attribute of ownership.

 

“Liquidation” has the meaning
specified in Section
6.4(a).

 

“Liquidation Value” means, on any
date, $15.00 per Series A Preferred Unit (as adjusted for any
splits, recapitalizations or similar transaction with respect to
the Series A Preferred Units).

 

“Maas Energy” means Maas Energy
Works, Inc., a corporation organized under the laws of the State of
Washington.

 

“Maas Energy Contract” means the
Development and Operations & Maintenance Agreement, dated
February 9, 2018, between Maas Energy and Aemetis Advanced Fuels,
which has been assigned by Aemetis Advanced Fuels to the Company
pursuant to an Assignment and Assumption Agreement dated as of
September 28, 2018, between Aemetis Advanced Fuels and the Company
and consented to by Mass Energy.

 

 “Manager”
means, at any time, a then current member of the Board, who will be
deemed a “manager” (as defined in the Delaware LLC
Act), but will be subject to the rights, obligations and
limitations set forth in the Company Agreement.

 

 

7

 

 

“Management Agreement” means the
Management Services Agreement, dated December 14, 2018 between the
Company and Aemetis.

 

“Material Adverse Effect” means any
condition or circumstance which, in the opinion of the Purchaser or
the Agent, acting reasonably, has had, or could reasonably be
expected to have, (a) a material adverse effect on (i) the
Project; or (ii) the property, assets, nature of assets, business,
results of operations, performance, liabilities or condition
(financial or otherwise) of the Company; or (iii) the rights or
remedies of the Agent or the Purchaser under the Transaction
Documents or the ability of the Company to perform its obligations
to the Agent or the Purchaser in connection with the each Purchase
and under the Transaction Documents; or (b) an effect that prevents
or materially impairs the ability of the Company to perform its
obligations under the Project Contracts or to complete the Project
in accordance with the Project Budget and the Gantt
Chart.

 

“Maximum Permitted Rate” has the
meaning specified in Section 6.9(c).

 

“Member” means each of the Persons
listed on the Unit Ownership Ledger attached to the Company
Agreement and any Person admitted to the Company as a substituted
Member or additional Member; but in each case only for so long as
such Person is shown on the Company’s books and records as
the owner of one or more Units. The Members shall constitute the
“members” (as defined in the Delaware LLC Act) of the
Company.

 

“Milestones” means the activities
to be performed by the Company in relation to the Development of
the Project, including the delivery of equipment, construction of
the Project, entering into contracts with dairy farms for manure
supply, biogas collection and discharge of effluents, obtaining
pipeline rights of way, application and receipt of government
grants from the State of California, the application for and
receipt of Permits for the Development of the Project, and budgets
and time frames for all such activities, all as more particularly
set out in the Gantt Chart.

 

“Money Laundering Laws” has the
meaning specified in Section 3.24.

 

“Mortgages” means each of the
leasehold deeds of trust made or to be made by the Company in favor
of the Agent for the benefit of itself and the other Secured
Parties, which cover or will cover all or part of the Project. Each
Mortgage must be satisfactory in form and substance to the
Agent.

 

“Multiemployer Plan” means any
employee benefit plan of the type described in Section 4001(a)(3)
of ERISA, to which the Company 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.

 

“Note Purchase Agreement” means the
Amended and Restated Note Purchase Agreement, dated July 6, 2012,
among Aemetis Advanced Fuels Keys, Inc. and Keyes Facility
Acquisition Corp., as borrower, Aemetis, as the parent, and Third
Eye Capital Corporation, as administrative agent.

 

“Obligations” means all liabilities
(including interest, fees, expenses, charges, reimbursement
obligations and indemnities), obligations (including redemption
obligations), covenants and duties of, the Company arising under
this Agreement or any other Transaction Document, in each case
whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising and including all
interest, fees, expenses, charges, reimbursement obligations and
indemnities that accrue after the commencement by or against the
Company 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, fees, expenses, charges,
reimbursement obligations or indemnities are allowed claims in such
proceeding.

 

“OFAC” has he meaning specified in
Section
3.23(c).

 

 

8

 

 

“Offer Notice” has the meaning
specified in Section
6.10(b).

 

“Operating Cash Flow” means for any
period the sum of (i) all revenues, including revenues from the
sale of natural gas production, sales of Low Carbon Fuel Standard
(“LCFS”)
credits, and sales of Renewable Identification Number
(“RIN”) credits;
less (ii) all operating costs (other than management fees paid to
Aemetis), operating and maintenance fees, insurance costs,
engineering and construction bonuses, taxes, and any unfunded
capital expenditures, in each case calculated for the Company for
such period in accordance with GAAP.

 

“Parent Consent” has the meaning
specified in Annex
I.

 

“PBGC” means the Pension
Benefit Guaranty Corporation.

 

“PCBs” has the meaning specified in
Section
3.21.

 

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

 

“Permits” means all permits,
licenses, franchises, approvals, authorizations, registrations,
certificates, licenses, variances and similar rights obtained, or
required to be obtained, from Governmental Authorities in
connection with the Development of the Project and/or the operation
of the Company’s business.

 

“Person” means an individual or
corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock
company, Governmental Authority or other entity of any
kind.

 

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

 

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

 

“Preemptive Right Member” has the
meaning specified in Section 6.10(a).

 

“Preference Payments” means the
fixed quarterly payments due on the Series A Preferred Units at the
rate of $0.50 per such Unit per annum as indicated in Section 6.3
hereof.

 

“Project” means the development,
construction, completion and operation by the Company of a cluster
of eleven (11) dairy Digesters to collect biogas from manure ponds
located near the Keyes Plant, which will be purified and compressed
into natural gas for sale to transport fleets and
utilities.

 

“Project Budget” means the detailed
monthly cash flow and capital expenditures budget for the
construction and completion of the Project, a copy of which is
attached hereto as Exhibit
H, as the same may be modified from time to time with the
approval of both the Agent and the Third Party
Consultant.

 

 

9

 

 

“Project Contracts” means,
collectively, the Maas Energy Contract, the Additional Digester
Contracts, the Leases, the professional services contract with the
Third Party Consultant, all construction supply and build contracts
with respect to the Project, all interconnection and pipeline
agreements, the CNG Transportation Agreements, all DDRDP grants,
the Management Agreement and all other agreements relating to the
Development of the Project.

 

“Purchase” means each purchase by
the Purchaser of Series A Preferred Units at a Closing pursuant to
this Agreement.

 

“Purchase Price” means $5.00 per
Series A Preferred Unit. The Purchase Price for each Purchase shall
be an amount equal to $5.00 per Series A Preferred Unit multiplied
by the number of Series A Preferred Units purchased.

 

“Purchase Request” has the meaning
specified in Section
2.2(d)(i).

 

“Purchaser” has the meaning
specified in the preamble of this Agreement.

 

 “Qualified
Public Offering” means any initial underwritten sale
of Units or other Equity Securities (or the common stock or other
equity securities of any Person that holds, directly or indirectly,
all of the equity interests of the Company or the successor to the
Company) pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission on
Form S-1 (or a successor form) under the Securities Act after which
sale of such Units or Equity Securities (or the common stock or
other equity securities of such Person) are (a) listed on a
national securities exchange and (b) registered under the
Securities Exchange Act.

 

“Quarterly Redemption Date” has the
meaning specified in Section 6.9(a).

 

“Quarterly Redemption Price” has
the meaning specified in Section 6.9(a).

 

“Redemption Date” means a Quarterly
Redemption Date, the Final Redemption Date, or the date on which a
Bankruptcy Trigger Event occurs.

 

“Redemption Price” means a
Quarterly Redemption Price, the Final Redemption
Price.

 

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

 

“Second Tranche” means the
“Second Tranche” described on Exhibit A.

 

“Second Tranche Request” means a
request for a Purchase pursuant to the Second Tranche.

 

“Secured Parties” means the Agent,
the Purchaser, each holder of Series A Preferred Units, and each
Indemnitee.

 

“Security Agreement” means the
Security Agreement, dated as of the date hereof, from the Company
in favor of the Agent, for the benefit of the Secured Parties. The
Security Agreement shall be satisfactory in form and substance to
the Agent.

 

 

10

 

 

“Series A Preferred Unit” means a
Unit in the Company designated as a “Series A Preferred
Unit” and which shall provide the holder thereof with the
rights and obligations specified with respect to a Series A
Preferred Unit in the Company Agreement and this
Agreement.

 

“Series A Preferred Units Manager”
has the meaning specified in Section 6.7(a).

 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

“Signing Date” has the meaning
specified in the preamble of this Agreement.

 

“Stabilization Period” means a post
commissioning period of not less than 40 days where all operational
defects and problems have been resolved, to make the applicable
Digester capable of a continuous and stable operation in accordance
with design specifications (per Heat Mass balance tables in the
DDRDP submission) and further refined or improvised to maximize its
biogas output.

 

“Subsequent Closing” has the
meaning specified in Section 2.2(b).

 

“Subsequent Closing Date” has the
meaning specified in Section 2.2(b).

 

“Subsequent Closing Units” has the
meaning specified in Section 2.2(b).

 

“Subsidiary” means, as to any
Person, any corporation or other entity of which: (a) such Person
or a Subsidiary of such Person is a general partner or, in the case
of a limited liability company, the managing member or manager
thereof; (b) at least a majority of the outstanding equity or
ownership interests having by the terms thereof ordinary voting
power to elect a majority of the board of directors or similar
governing body of such corporation or other entity (irrespective of
whether or not at the time any equity or ownership interests of any
other class or classes of such corporation or other entity shall
have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more of its Subsidiaries; or
(c) any corporation or other entity as to which such Person
consolidates for accounting purposes. Unless otherwise qualified,
all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.

 

“Subscription Amount” has the
meaning specified in Section 2.1.

 

“Swap Contract” means (a) any and
all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, 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.

 

 

11

 

 

“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.

 

“Taxes” means all federal, state,
local, foreign and other income, gross receipts, sales, use,
production, ad valorem, transfer, franchise, registration, profits,
license, lease, service, service use, withholding, payroll,
employment, unemployment, estimated, excise, severance,
environmental, stamp, occupation, premium, property (real or
personal), real property gains, windfall profits, customs, duties
or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest, additions or penalties with
respect thereto and any interest in respect of such additions or
penalties.

 

“Tax Return” means any return,
declaration, report, claim for refund, information return or
statement or other document relating to Taxes, including any
schedule or attachment thereto, and including any amendment
thereof.

 

“Third Party Consultant” means
Hartman Engineering, Inc.

 

“Transaction” means, collectively,
(a) each Purchase, (b) the execution, delivery and performance by
the Company of the Project Contracts, (c) the Development of the
Project, (d) the execution, delivery and performance by the Company
of the Transaction Documents to which it is a party, and (e) the
payment of the fees and expenses incurred in connection with the
consummation of the foregoing.

 

“Transaction Documents” means this
Agreement, the Company Agreement, the Indemnification Agreement,
the Collateral Documents, the Parent Consent, all exhibits,
annexes, and schedules thereto and hereto and any other documents
or agreements executed in connection with the transactions
contemplated hereunder.

 

“Trigger Event” has the meaning
specified in Section
7.1.

 

 “Union”
has the meaning specified in Section 3.16(b).

 

“Unit” means a Unit of a Member in
the Company representing a fractional part of the interests in the
Company held by all Members and shall include, without limitation,
Series A Preferred Units and Common Units; provided that any class, group
or series of Units issued shall have the relative rights, powers
and obligations set forth in this Agreement and the Company
Agreement, and “Units” means all of the Units of (or
other ownership or profit interests in) the Company.

 

“Unitholder” means any owner of one
or more Units as reflected on the Company’s books and
records. Any owner who holds one or more Units but is not also a
Member shall not be entitled to exercise any rights of a Member
with respect to such Units, except as otherwise provided by
non-waivable provisions of applicable Law.

 

“Unit Ownership Ledger” has the
meaning specified in Section 6.12.

 

“USDA Loan Condition” has the
meaning specified in Section 6.16(c).

 

“Use of Proceeds Schedule” means
the schedule attached hereto as Annex III for the use of
proceeds of all Purchases hereunder of Series A Preferred
Units.

 

 

12

 

 

“WC Reserve” means $1,000,000 of
unencumbered (except for Liens in favor of Agent) cash or cash
equivalents held by the Company as a reserve amount for ongoing
working capital needs of the Project.

 

“WCE” or “Wet Cow Equivalent” means a
lactating dairy cow excreting Volatile Solids (VS) of 7.76kgs/day,
with dry cows and heifers each considered approximately 0.5 times
WCE.

 

Section
1.2 Terms
Generally. Definitions apply
equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun includes the
corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and
“including” are deemed to be followed by the phrase
“without limitation.” All references herein to
Articles, Sections, Exhibits and Annexes are deemed references to
Articles and Sections of, and Exhibits and Annexes to, this
Agreement unless the context shall otherwise require. Except as
otherwise expressly provided herein, any reference in this
Agreement to any Transaction Document means such document as
amended, restated, supplemented or otherwise modified from time to
time (subject to any restrictions on such amendments, restatements,
supplements or modifications set forth herein or in any other
Transaction Document). Words and abbreviations not otherwise
defined in this Agreement which have well-known technical or
design, engineering or construction industry meanings in the United
States and/or Canada are used in this Agreement in accordance with
those recognized meanings. Any reference herein to any Person shall
be construed to include such Person's successors and assigns. 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. Unless otherwise
specified, all references herein to times of day shall be
references to Toronto, Ontario time.

 

ARTICLE
II. 

PURCHASE AND SALE

 

Section
2.1 Sale
and Purchase of Series A Preferred Units. So long as no
Trigger Event or Potential Trigger Event exists and on the terms
and subject to the conditions of this Agreement, the Purchaser
agrees to purchase from the Company, and the Company agrees to sell
and issue to the Purchaser up to 6,000,000 Series A Preferred Units
at the Purchase Price, pursuant to Closings and Purchase Requests
in accordance with the Gantt Chart, the Project Budget and
Exhibit A hereto.
The aggregate consideration for all of the Series A Preferred Units
shall not exceed $30,000,000 (the “Subscription
Amount”).

 

Section
2.2 Closings.

 

(a) First Closing Under Initial
Tranche. On the terms and subject to the conditions set
forth in this Agreement, the first closing of a Purchase under the
Initial Tranche and the transactions contemplated herein (the
“Initial
Closing”) will take place on such date and time as the
Company, the Agent and the Purchaser may mutually agree. The time
and date on which the Initial Closing occurs is referred to in this
Agreement as the “Initial
Closing Date”. At the Initial Closing and pursuant to
the Initial Tranche, (i) the Company agrees to sell and transfer
1,600,000 Series A Preferred Units (the “Initial Units”) to Purchaser, free
and clear of any Liens, as evidenced by one or more certificates
dated the Initial Closing Date and bearing appropriate legends as
hereinafter provided for, and (ii) Purchaser will pay the Company
$8,000,000, the Purchase Price for the Initial Units, by wire
transfer of immediately available funds to an account designated by
the Company.

 

 

 

13

 

 

 

(b) First Closing Under Second
Tranche. On the terms and subject to the conditions set
forth in this Agreement, the first closing of a Purchase under the
Second Tranche (the “Subsequent Closing”) will take
place on the fifth Business Day following the date on which all of
the conditions set forth in Section 5.2 have been fulfilled
or waived (which shall be after the Initial Closing Date), or such
other date and time as the Company, the Agent and the Purchaser may
mutually agree. The Subsequent Closing shall take place at such
place and in such manner as the Company, the Agent and the
Purchaser may mutually agree. The time and date on which the
Subsequent Closing occurs is referred to in this Agreement as the
“Subsequent Closing
Date”. At the Subsequent Closing and pursuant to the
Second Tranche, (i) the Company agrees to sell and transfer a
minimum of 200,000 Series A Preferred Units (to fund the WC
Reserve) and such additional number of Series A Preferred Units
(such number of Series A Preferred Units plus the 200,000 Series A
Preferred Units, the “Subsequent Closing Units”) set
forth in a Purchase Request (as defined below) delivered to
Purchaser (with a copy to the Agent) and otherwise meeting the
conditions set forth in the Gantt Chart, the Project Budget and
Exhibit A hereto to
Purchaser, free and clear of any Liens, as evidenced by one or more
certificates dated the Subsequent Closing Date and bearing
appropriate legends as hereinafter provided for, and (ii) Purchaser
will pay the Company the Purchase Price with respect to the
Subsequent Closing Units, by wire transfer of immediately available
funds to an account designated by the Company. No more than
2,800,000 Series A Preferred Units in the aggregate may be
purchased at the Subsequent Closing.

 

(c) Additional Purchase
Requests.

 

(i) Additional Initial Tranche Purchase
Requests. On the terms and subject to the conditions set
forth in this Agreement, after the Initial Closing Date and
completion and approval of the Gantt Chart and Project Budget by
both the Agent and the Third Party Consultant, the Company may
request that the Purchaser acquire, in one or more Purchases
pursuant to the Initial Tranche, up to an aggregate of 1,600,000
additional Series A Preferred Units at the Purchase Price and in
amounts in accordance with and subject to the Gantt Chart, the
Project Budget and Exhibit
A hereto, provided that the aggregate
Purchases pursuant to Section 2.2(a) and this Section 2.2(c)(i)
shall not exceed 3,200,000 Series A Preferred Units.

 

(ii) Additional
Second Tranche Purchase Requests. On the terms and subject
to the conditions set forth in this Agreement, after the Subsequent
Closing Date, the Company may request that the Purchaser acquire,
in one or more Purchases pursuant to the Second Tranche, up to an
aggregate amount of Series A Preferred Units equal to 2,800,000
minus the Subsequent Closing Units at the Purchase Price and in
amounts in accordance with and subject to the Gantt Chart, the
Project Budget and Exhibit
A hereto (each, a “Second Tranche Request”);
provided that the
aggregate Purchases pursuant to Section 2.2(b) and this Section
2.2(c)(ii) shall not exceed 2,800,000 Series A Preferred
Units.

 

(d)           Purchase
Procedures.

 

(i)           Purchase
Request Notices. Each request for a Purchase shall be made
pursuant to an Initial Tranche Request or a Second Tranche Request
(each, a “Purchase
Request”) delivered to the Purchaser (with a copy to
the Agent). Each Purchase Request shall be in substantially the
form of Exhibit D,
shall be irrevocable and binding on the Purchaser and shall specify
(A) the requested date of the Purchase, which shall be a Business
Day, (B) the Tranche under which the Purchase will be made, and (C)
the aggregate amount of the number of Series A Preferred Units to
be purchased and the aggregate Purchase Price therefor. Purchases
of fractional Series A Preferred Units shall not be permitted.
Whether or not the Company is in compliance with the thresholds and
conditions set forth in the Gantt Chart, the Project Budget and
this Agreement with respect to the Purchase Request shall be
determined in the sole discretion of the Agent. For the avoidance
of doubt, the Purchaser shall not be obligated to make any Purchase
if the conditions precedent and the other requirements for such
Purchase Request contained herein are not met to the satisfaction
of the Agent. Each Purchase pursuant to a Second Tranche Request
shall occur prior to the first anniversary of the Initial Closing
Date.

 

 

 

14

 

 

(iii) Maximum
Number of Purchases. There will be a maximum of twenty-four
(24) Purchases under this Agreement. No more than one (1) Purchase
may be made during any calendar month, unless otherwise agreed by
the Agent at its sole discretion.

 

(iv) Minimum
Purchase Amounts. Purchases shall be made in minimum amounts
of $1,000,000 and in minimum increments of $200,000, unless
otherwise agreed by the Agent at its sole discretion.

 

(v) Satisfaction of Conditions
Precedent. Each Purchase Request shall be deemed a
representation and warranty by the Company that all of the
conditions precedent specified in Section 5.1 with respect to each
Initial Tranche Request and Section 5.2 with respect to each Second
Tranche Request have been satisfied on and as of the Closing Date
of the applicable Purchase.

 

(vi) Additional
Items. At the applicable Closing of each Purchase Request,
(i) the Company will deliver to the Purchaser the number of Series
A Preferred Units purchased by the Purchaser at such Closing, free
and clear of any Liens, as evidenced by one or more certificates
dated the applicable Closing Date and bearing appropriate legends
as hereinafter provided for, and (ii) the Purchaser will deliver to
the Company the applicable Purchase Price with respect to such
Series A Preferred Units, by wire transfer of immediately available
funds to an account designated by the Company. The Company shall
also deliver to the Agent any additional Collateral Documents
requested by the Agent. Any fees, costs or expenses incurred by
Purchaser and/or the Agent in connection with the Closing shall be
reimbursed to Purchaser or the Agent, as applicable, by the
Company, and the Purchaser and/or the Agent may withhold from the
Purchase Price the aggregate amount of such fees, costs and
expenses.

 

(vii) Reimbursement.
Company shall reimburse the Agent and Purchaser and hold the Agent
and Purchaser harmless from any loss or expense that they may
sustain or incur as a consequence of the failure of the Company to
issue the requested number of Series A Preferred Units in
accordance with a Purchase Request, including any such loss or
expense arising from the liquidation or re-employment of funds
obtained by the Agent or Purchaser to purchase the applicable
Units.

 

Section
2.3 Use
of Proceeds.

 

(a) Initial Purchase. The Company
shall use the proceeds from the Initial Purchase solely for the
following: (i) to pay up to $6,000,000 for the payment of
management fees owed by the Company to Aemetis, to be applied in
accordance with the Use of Proceeds Schedule, (ii) to pay to, or at
the direction of, the Purchaser, for its own account, a closing fee
in the amount of $900,000, (iii) up to $600,000 for third-party
closing costs satisfactory to the Agent and (iv) up to $500,000 for
mobilization, working capital and to complete the Project Budget
and the Gantt Chart.

 

(b) Subsequent Purchases. The
Company shall use the proceeds from each Purchase after the Initial
Closing Date in the following order: (i) to pay any Obligations
constituting accrued but unpaid Preference Payments, fees,
indemnities, expenses and other amounts (including fees, charges
and disbursements of counsel to the Agent) payable to the Purchaser
or Agent; and (ii) the balance, if any, strictly for the
development, design, construction and commissioning of the Initial
Digesters and the Additional Digesters in accordance with the Gantt
Chart and the Project Budget, which use of proceeds must be
approved by the Agent.

 

 

 

15

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF COMPANY

 

Section
3.1 Representations
and Warranties of the Company. The Company
hereby represents and warrants to the Purchaser and the Agent that
each of the following representations and warranties (i) is true
and correct as of the Signing Date (except as otherwise indicated)
and (ii) will be true and correct on and as of each Closing Date
(except as otherwise indicated):

 

Section
3.2 Organization,
Good Standing, Power and Qualification.  The Company is a limited liability
company duly organized, validly existing and in good standing under
the Laws of the State of Delaware and has all requisite power and
authority to own and use its assets and to carry on its business as
now conducted and as presently proposed to be conducted. The
Company is not in violation or default of any of the provisions of
its Certificate of Formation, Company Agreement or any of its other
organizational or charter documents. The Company is duly qualified
to transact business and is in good standing in the State of
California and in each other jurisdiction in which the failure to
so qualify would have a Material Adverse Effect, and no Action has
been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and
authority or qualification. The Company has furnished the Purchaser
and the Agent with true, correct and complete copies of the
Certificate of Formation of the Company and the Company Agreement.
The copies of the Company’s and each of its
Subsidiaries’ organizational documents which have been
furnished to the Purchaser and the Agent prior to the date hereof
reflect all amendments made thereto at any time prior to the date
of this Agreement and are correct and complete in all respects. The
Company is a newly formed limited liability company, and prior to
the Initial Closing Date, the Company has not conducted any
business or operations, entered into any contract or incurred any
liability.

 

Section
3.3 Capitalization.

 

(a) The authorized
Units of the Company, immediately prior to the Initial Closing,
consists of:

 

(i) 6,000,000 Common
Units are issued and outstanding immediately prior to the Initial
Closing and 5,000,000 Conversion Units have been reserved. Aemetis
is the direct legal and beneficial owner of 6,000,000 Common Units.
All of the outstanding Common Units have been duly authorized, are
fully paid and nonassessable (to the extent applicable) and were
issued in in accordance with the Company Agreement and in
compliance with all Applicable Securities Laws. 

 

(ii) 6,000,000
Series A Preferred Units, none of which are issued and
outstanding immediately prior to the Initial Closing. The rights,
privileges and preferences of the Series A Preferred Units are as
stated in this Agreement and the Company Agreement.

 

(iii) The
Company holds no Common Units, Series A Preferred Units or other
Units in its treasury.

 

(b) As of the date
hereof and effective immediately prior to the Initial Closing, no
Common Units are reserved by the Company for issuance except for
5,000,000 Conversion Units.

 

 

16

 

 

(c) Section 3.3(c) of
the Disclosure Schedule sets forth the capitalization of the
Company immediately following the Initial Closing including the
number of Units of the following: (i) all issued and outstanding
Common Units; (ii) all issued and outstanding Series A Preferred
Units; (iii) all granted Unit options, including vesting schedule
and exercise price; (iv) all Common Units reserved for future award
grants under any equity or other incentive plan; (v) all Common
Units issuable upon conversion of Series A Preferred Units; and
(vi) all, options, warrants or Unit purchase rights, if
any.  Except for
(A) the conversion privileges of the Series A Preferred Units
to be issued under this Agreement, and (B) the securities and
rights described in Section 3.3(c) of the Disclosure Schedule,
there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, to purchase or
acquire from the Company any Common Units, Series A Preferred
Units, or other Units or any Equity Securities convertible into or
exchangeable for Common Units, Series A Preferred Units or other
Units.

 

(d) Except as set forth
in this Agreement and the Company Agreement, the Company has no
obligation (contingent or otherwise) to purchase or redeem any of
its Units.

 

Section
3.4 No
Subsidiaries.  The Company does not, directly or
indirectly, own, control or have any interest in any shares or
other ownership interest in any other Person. The Company is not a
participant in any joint venture, partnership or similar
arrangement.

 

Section
3.5 Authorization. 
The Company has the requisite power and authority to enter into and
to consummate the Transaction and to execute and deliver
Transaction Documents and to carry out its obligations hereunder
and thereunder (which includes the issuance of the Series A
Preferred Units). The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and
the consummation by it of the Transaction have been duly authorized
by all necessary action on the part of the Company and no further
approval or authorization is required by the Company, the Board or
the Company’s Unitholders in connection herewith or
therewith. All action on the part of the Company necessary for the
execution and delivery of the Transaction Documents, the
performance of all obligations of the Company under the Transaction
Documents, and the issuance and delivery of the Series A Preferred
Units has been taken. The Transaction Documents, when executed and
delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company
in accordance with their respective terms except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other Laws of general application
relating to or affecting the enforcement of creditors’ rights
generally, and as limited by Laws relating to the availability of
specific performance, injunctive relief, or other equitable
remedies.

 

Section
3.6 Issuance
of Series A Preferred Units. The Series A Preferred Units are
duly authorized, and, when issued and delivered pursuant to this
Agreement, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens, Taxes and other
charges. Assuming the accuracy of the representations of the
Purchaser in Article
IV of this Agreement, the Series A Preferred Units will be
issued in compliance with all Applicable Securities Laws. The
Conversion Units have been duly authorized and reserved for
issuance upon conversion of Series A Preferred Units and when so
issued will be validly issued, fully paid and non-assessable, free
and clear of all Liens, Taxes and other charges. Based in part upon
the representations of the Purchaser in Article IV of this Agreement,
the Common Units issuable upon conversion of the Series A Preferred
Units will be issued in compliance with all Applicable Securities
Laws. The Company has no series or class of Units, whether or not
issued or outstanding, that will, upon issuance of the Series A
Preferred Units, rank senior to or pari passu with the Series A Preferred
Units with respect to the payment of Preference Payments or
distributions, redemption, or the distribution of assets in the
event of any dissolution, liquidation or winding up of the Company.
All of the outstanding Units are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with
all Applicable Securities Laws, and none of the outstanding Units
was issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase Equity
Securities of the Company (or is subject to any preemptive rights,
rights of first refusal or other similar rights to subscribe for or
purchase Equity Securities of the Company).

 

 

 

17

 

 

Section
3.7 Governmental
Consents and Filings. No consent,
approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any
Governmental Authority or other Person is required on the part of
the Company in connection with the execution, delivery and
performance of the Transaction Documents and the consummation of
the Transaction, except for filings pursuant to Regulation D
of the Securities Act, and applicable state securities Laws, which
have been made or will be made by the Company in a timely
manner.

 

Section
3.8 Litigation. 
Except as set forth in Section 3.8 of the Disclosure Schedule,
there is no Action pending or, to the Knowledge of the Company,
threatened against or affecting the Company or any Affiliate of the
Company or any of their respective properties before or by any
arbitrator or Governmental Authority which, individually or in the
aggregate, (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents, any
Transaction contemplated thereby or the Series A Preferred Units or
(ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any manager or officer thereof, is or has
been the subject of any Action involving a claim of violation of or
liability under Applicable Securities Laws or a claim of breach of
fiduciary duty. There has not been, and to the Knowledge of the
Company, there is not pending or contemplated, any investigation by
any Governmental Authority involving the Company or any current or
former manager or officer of the Company. Neither the Company nor,
to the Company’s Knowledge, any of its Affiliates, officers,
managers or employees is a party or is named as subject to the
provisions of any order, writ, injunction, judgment or decree of
any Governmental Authority (in the case of officers, directors or
employees, such as would affect the Company). There is no Action by
the Company pending or which the Company intends to
initiate.

 

Section
3.9 Intellectual
Property. The Company has, or has rights to
use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property
rights and similar rights (collectively, the “Intellectual Property”) as
necessary or required for use in connection with its business. The
Company has not received a notice (written or otherwise) that any
of, the Intellectual Property of the Company has expired,
terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within seven (7) years from the date of this
Agreement. The Company has not received a written notice of a claim
or otherwise have any Knowledge that the Intellectual Property of
the Company violates or infringes upon the rights of any Person.
All Intellectual Property of the Company is enforceable and there
is no existing infringement by another Person of any of the
Intellectual Property of the Company. The Company has taken
commercially reasonable security measures to protect the secrecy,
confidentiality and value of all of its Intellectual
Property.

 

Section
3.10 Compliance
with Other Instruments; No Conflict. The Company is
not in violation or default (i) of any judgment, order, writ or
decree, (ii) under any note, indenture or mortgage,
(iii) under any lease, agreement, contract or purchase order
to which it is a party or by which it is bound, or (iv) of any provision of any
Law applicable to the Company, in each case the violation of which
could have a Material Adverse Effect.

 

 

18

 

 

(a) The execution,
delivery and performance by the Company of this Agreement and the
other Transaction Documents to which it is a party, the issuance
and sale of any of the Series A Preferred Units, and the
consummation by the Company of the Transaction do not and will not:
(i) conflict with or violate any provision of the
Company’s Certificate of Formation or the Company Agreement
or any other organizational documents of the Company, (ii) conflict
with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the
Company (except Liens created in favor of the Agent pursuant to the
Transaction Documents), or give to others any rights of
termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a debt of the
Company or otherwise) or other understanding to which the Company
is a party or by which any property or asset of the Company is
bound or affected, or (iii) conflict with or result in a violation
of any Law or other restriction of any Governmental Authority to
which the Company is subject (including Applicable Securities
Laws), or by which any property or asset of the Company is bound or
affected.

 

Section
3.11 Project
Contracts; Material Agreements; Other Actions.

 

(a) Section 3.11(a)
of the Disclosure Schedule sets forth all Project Contracts and all
other material agreements and contracts to which the Company is a
party or is bound. The Company is not in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any Project Contract or
material agreement to which it is a party or (ii) any agreement or
instrument evidencing or governing Indebtedness.

 

(b) The Company has not
(i) declared or paid any dividends or distributions, or
authorized or made any distribution upon or with respect to any
class or series of its Units, provided that the Company has
authorized dividends, distributions and redemptions with respect to
the Series A Preferred Units as set forth in this Agreement,
(ii) incurred any Indebtedness or incurred any other
liabilities individually in excess of $25,000 or in excess of
$100,000 in the aggregate, (iii) made any loans or advances to
any Person, other than ordinary advances for travel expenses, or
(iv) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course
of business. For the purposes of (a) and (b) of this
Section 3.11, all
indebtedness, liabilities, agreements, understandings, instruments,
contracts and proposed transactions involving the same Person
(including Persons the Company has reason to believe are affiliated
with each other) shall be aggregated for the purpose of meeting the
individual minimum dollar amounts of such subsection.

 

(c) The Company is not
a guarantor or indemnitor of any Indebtedness of any
Person.

 

(d) The Company has not
engaged in the past twelve (12) months in any discussion with any
representative of any Person regarding (i) a sale or exclusive
license of all or substantially all of the Company’s assets,
or (ii) any merger, consolidation, business combination or other
Change of Control transaction of the Company with or into another
Person.

 

Section
3.12 Certain
Transactions.

 

 

19

 

 

(a) Other than (i)
standard employee benefits generally made available to all
employees, and (ii) standard manager and officer
indemnification agreements approved by the Board, in each instance,
approved in the written minutes of the Board (previously provided
to the Purchaser or its counsel), there are no agreements,
understandings or proposed transactions between the Company and any
of its officers, managers, consultants or employees, or any
Affiliate thereof.

 

(b) The Company is not
indebted, directly or indirectly, to any of its managers, officers
or employees or to their respective spouses or children or to any
Affiliate of any of the foregoing, other than in connection with
expenses or advances of expenses incurred in the ordinary course of
business or employee relocation expenses and for other customary
employee benefits made generally available to all employees. None
of the Company’s managers, officers or employees, or any
members of their immediate families, or any Affiliate of the
foregoing are, directly or indirectly, indebted to the Company or
have any (i) material commercial, industrial, banking, consulting,
legal, accounting, charitable or familial relationship with any of
the Company’s customers, suppliers, service providers, joint
venture partners, licensees and competitors, (ii) direct or
indirect ownership interest in any Person with which the Company is
affiliated or with which the Company has a business relationship,
or any firm or corporation which competes with the Company except
that directors, officers, employees or Unitholders of the Company
may own equity interests in (but not exceeding two percent (2%) of
the outstanding equity interests of) publicly traded companies that
may compete with the Company; or (iii) financial interest in
any material contract with the Company.

 

Section
3.13 Rights
of Registration and Voting Rights. The Company is
not under any obligation to register under the Securities Act any
of its currently outstanding Units or any Units issuable upon
exercise or conversion of its currently outstanding Equity
Securities. To the Company’s Knowledge, except as
contemplated in the Company Agreement and this Agreement, no
Unitholder of the Company has entered into any agreements with
respect to the voting of Units of the Company.

 

Section
3.14 Title
to Assets. The Company has
good and marketable title to all real property owned or leased by
it and good and marketable title in all personal property owned by
it that is material to the business of the Company, in each case
free and clear of all Liens, except for Liens permitted by the
Collateral Documents. Any real property and facilities held under
lease by the Company (including the Leases) are held by them under
valid, subsisting and enforceable leases with which the Company is
in compliance. All rights of way owned by the Company are valid,
subsisting and enforceable rights of way.

 

Section
3.15 Projections.
The projections of the Company that have been delivered to the
Purchaser prior to each Closing are a true and complete copy of the
latest projected statements of operating revenue, income, expenses
and cash flows of the Company for the periods specified therein.
Such projections (a) were based on the assumptions set forth
therein which were made in good faith and reasonable and fair at
the time they were made, and which continue to be reasonable and
fair as of the applicable Closing, and (b) are reasonable estimates
of the Company’s financial performance for the periods
indicated therein in light of the assumptions made.

 

Section
3.16 Employee
Matters.

 

 

20

 

 

(a) The Company is not
delinquent in payments to any of its employees, consultants, or
independent contractors for any wages, salaries, commissions,
bonuses, or other direct compensation for any service performed for
it to the date hereof or amounts required to be reimbursed to such
employees, consultants or independent contractors. The Company has
withheld and paid to the appropriate Governmental Authority or is
holding for payment not yet due to such Governmental Authority all
amounts required to be withheld from employees of the Company and
is not liable for any arrears of wages, Taxes, penalties or other
sums for failure to comply with any of the foregoing.

 

(b) The Company is not,
and has not been, a party to, bound by, or negotiating any
collective bargaining agreement or other contract with a union,
works council or labor organization (collectively,
“Union”), and
there is not, and has not been, any Union representing or
purporting to represent any employee of the Company, and no Union
or group of employees is seeking or has sought to organize
employees for the purpose of collective bargaining. There has never
been, nor has there been any threat of, any strike, slowdown, work
stoppage, lockout, concerted refusal to work overtime or other
similar labor disruption or dispute affecting the Company or any of
its employees. The Company has no duty to bargain with any
Union.

 

(c) The Company is and
has been in compliance with all applicable Laws pertaining to
employment and employment practices, including all Laws relating to
labor relations, equal employment opportunities, fair employment
practices, employment discrimination, harassment, retaliation,
reasonable accommodation, disability rights or benefits,
immigration, wages, hours, overtime compensation, child labor,
hiring, promotion and termination of employees, working conditions,
meal and break periods, privacy, health and safety, workers’
compensation, leaves of absence and unemployment insurance. All
individuals characterized and treated by the Company as independent
contractors or consultants are properly treated as independent
contractors under all applicable Laws. All employees classified as
exempt under the Fair Labor Standards Act and state and local wage
and hour Laws are properly classified. There are no Actions against
the Company pending, or to the Company’s Knowledge,
threatened to be brought or filed, by or with any Governmental
Authority or arbitrator in connection with the employment of any
current or former applicant, employee, consultant or independent
contractor of the Company, including, without limitation, any claim
relating to unfair labor practices, employment discrimination,
harassment, retaliation, equal pay, wage and hours or any other
employment related matter arising under applicable
Laws.

 

(d) None of the
Company’s employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any
court or administrative agency, that would materially interfere
with such employee’s ability to promote the interest of the
Company or that would conflict with the Company’s business.
Neither the execution or delivery of the Transaction Documents, nor
the carrying on of the Company’s business by the employees of
the Company, nor the conduct of the Company’s business as now
conducted and as presently proposed to be conducted, will, conflict
with or result in a breach of the terms, conditions, or provisions
of, or constitute a default under, any contract, covenant or
instrument under which any such employee is now
obligated.

 

(e) Section 3.16(e) of
the Disclosure Schedule
sets forth each employee benefit plan maintained, established or
sponsored by the Company, or which the Company participates in or
contributes to, which is subject to ERISA. The Company has made all
required contributions and has no liability to any such employee
benefit plan, other than liability for health plan continuation
coverage described in Part 6 of Title I(B) of ERISA, and has
complied in all material respects with all applicable Laws for any
such employee benefit plan.

 

 

21

 

 

Section
3.17 Tax
Returns and Payments. The Company has
filed, on a timely basis, all income Tax and other Tax Returns
required to be filed by it on or prior to the date hereof, and such
Tax Returns were true, correct and complete in all respects. The
Company has not extended the time within which to file any Tax
Return or agreed to any extension of time with respect to a Tax
assessment or deficiency. All Taxes (whether shown or not shown on
any income Tax Returns) that are due and payable by the Company or
asserted to be due and payable by the Company, have been timely
paid or will be timely paid in full on or before the Closing Date..
There are no accrued and unpaid federal, state, country, local or
foreign Taxes of the Company which are due, whether or not assessed
or disputed. There have been no examinations or audits of any Tax
returns or reports by any applicable federal, state, local or
foreign Governmental Authority. The Company is not a party to any
Action by any taxing authority. There is no pending or threatened
Actions by any taxing authority. The Company has withheld and paid
each Tax required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor,
creditor, customer, shareholder, member or other party, and
complied with all information reporting and backup withholding
provisions of applicable Law. The Company (i) has not been a member
of an affiliated group within the meaning of Section 1504(a) of the
Code or any similar group defined under a similar provision of
state, local or foreign law and (ii) has no liability for Taxes of
any Person other than the Company under U.S. Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor by contract or
otherwise. The Company is not a party to any Tax allocation or
sharing agreement as to indemnification for, contribution to,
reimbursement or payment of Taxes of any other Person (other than
pursuant to customary Tax indemnification provisions in commercial
contracts not primarily related to Taxes), nor has any liability
for the Taxes of any other Person as a transferee or successor, by
contract or otherwise.

 

Section
3.18 Insurance.
Section 3.18 of the Disclosure Schedule sets forth a true and
complete list of all current policies or binders of fire,
liability, product liability, umbrella liability, real and personal
property, workers’ compensation, vehicular, directors,
managers’ and officers’ liability, fiduciary liability
and other casualty and property insurance maintained by the Company
or its Affiliates and relating to the assets, business, operations,
employees, officers and directors of the Company (collectively, the
“Insurance
Policies”) and true and complete copies of such
Insurance Policies have been made available to the Purchaser. Such
Insurance Policies are in full force and effect and shall remain in
full force and effect following the consummation of the
transactions contemplated by this Agreement. Neither the Company
nor any of its Affiliates has received any written notice of
cancellation of, premium increase with respect to, or alteration of
coverage under, any such Insurance Policies. The Insurance Policies
are of the type and in the amounts customarily carried by Persons
conducting a business similar to the Company and are sufficient for
compliance with all applicable Laws and contracts to which the
Company is a party or by which it is bound. Except as set forth on
Section 3.18 of the Disclosure Schedule, there are no claims
related to the business of the Company pending under any such
Insurance Policies as to which coverage has been questioned, denied
or disputed or in respect of which there is an outstanding
reservation of rights.

 

Section
3.19 Permits;
DDRDP Grants.

 

 

22

 

 

(a) All Permits
required for the Company to conduct its business have been obtained
by it and are valid and in full force and effect. All fees and
charges with respect to such Permits as of the date hereof have
been paid in full. Section 3.19(a) of the Disclosure Schedule
lists: (a) all Permits issued to the Company for the Development of
the Project and the operation of its business, including the names
of the Permits and their respective dates of issuance and
expiration, and (b) all Permits that the Company expects to require
or request, to the best of its Knowledge after due inquiry, for the
Development of the Project and the operation of its business,
including the names of the Permits and the anticipated timing for
issuance. No event has occurred that, with or without notice or
lapse of time or both, would reasonably be expected to result in
the revocation, suspension, lapse or limitation of any Permit set
forth in Section 3.19(a) of the Disclosure Schedule.

 

(b) Section 3.11(b) of
the Disclosure Schedule sets forth all DDRDP grants with respect to
the Initial Digesters and the Additional Digesters which, as of the
Initial Closing Date, (i) the Company has obtained, (ii) have been
approved by the DDRDP, (iii) have been submitted and are pending
approval by the DDRDP, or (iv) the Company anticipates
submitting.

 

Section
3.20 Real
Property Holding Company. The Company is
not now and has never been a “United States real property
holding corporation” as defined in the Code and any
applicable regulations promulgated thereunder. The Company has
filed with the Internal Revenue Service all statements, if any,
with its United States income Tax returns which are required under
such regulations.

 

Section
3.21 Environmental
and Safety Laws. Except as could
not reasonably be expected to have a Material Adverse Effect,
(a) the Company is and has been in compliance with all
Environmental Laws; (b) there has been no release or
threatened release of any Hazardous Substance on, upon, into or
from any site currently or heretofore owned, leased or otherwise
used by the Company; (c) there have been no Hazardous
Substances generated by the Company that have been disposed of or
come to rest at any site that has been included in any published
U.S. federal, state or local “superfund” site list or
any other similar list of hazardous or toxic waste sites published
by any Governmental Authority in the United States; and
(d) there are no underground storage tanks located on, no
polychlorinated biphenyls (“PCBs”) or PCB-containing equipment
used or stored on, and no hazardous waste as defined by the
Resource Conservation and Recovery Act, as amended, stored on, any
site owned, leased or operated by the Company, except for the
storage of hazardous waste in compliance with Environmental Laws.
The Company has made available to the Purchaser true and complete
copies of all material environmental records, reports,
notifications, certificates of need, Permits, pending Permit
applications, correspondence, engineering studies and environmental
studies or assessments.

 

Section
3.22 Disclosure.
The Company has made available to the Purchaser and the Agent all
of the information reasonably available to the Company that the
Purchaser and the Agent have requested for deciding whether to
acquire the Series A Preferred Units. No representation or warranty
of the Company contained in this Agreement, and no certificate or
document furnished or to be furnished to the Purchaser and/or the
Agent pursuant to or in connection with this Agreement or at any
Closing contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the
circumstances under which they were made. There is no fact, event,
condition, occurrence, development or circumstance which has had or
could reasonably be expected to have a Material Adverse
Effect.

 

 

23

 

 

Section
3.23 Foreign
Corrupt Practices Act. Neither the
Company nor, to the Company’s Knowledge, any other Person
associated with or acting on behalf of the Company, including,
without limitation, any director, manager, member, officer, agent,
employee or Affiliate of the Company has (a) used any funds
for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity or to influence
official action; (b) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from
corporate funds; (c) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment; or (d) violated or is
in violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder;
and the Company has instituted and maintains policies and
procedures designed to ensure compliance therewith.

 

(a) To the
Company’s Knowledge, there is not now, and there has never
been, any employment by the Company of, or beneficial ownership in
the Company by, any governmental or political official in any
country in the world.

 

(b) The Company and, to
the Knowledge of the Company, the directors, managers, officers,
agent, employees, affiliates or Persons acting on behalf of the
Company has not been nor is currently subject to any United States
sanctions administered by the Office of Foreign Assets Control of
the United States Treasury Department (“OFAC”) and the Company will not
directly or indirectly use any proceeds of any Purchase, or lend,
contribute or otherwise make available such proceeds to the Company
or to any affiliated entity, joint venture partner or other Person
to finance any investments in, or make payments to, any country or
Person targeted by any of the sanctions of the United Sates
administered by OFAC.

 

Section
3.24 Money
Laundering. The operations of
the Company are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules
and regulations thereunder (collectively, the “Money Laundering Laws”), and no
Action by or before any Governmental Authority or any arbitrator
involving the Company with respect to the Money Laundering Laws is
pending or, to the Knowledge of the Company ,
threatened.

 

Section
3.25 Contractors,
Subcontractors and Suppliers. Section 3.25 of
the Disclosure Schedule lists all of the contractors,
subcontractors and suppliers that will be involved with the
Development of the Project.

 

ARTICLE IV. 

REPRESENTATIONS AND WARRANTIES OF
PURCHASER

Section
4.1 Representations
and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company that each of the
following representations and warranties (i) is true and correct as
of the Signing Date (except as otherwise indicated) and (ii) will
be true and correct on and as of each Closing Date (except as
otherwise indicated):

 

Section
4.2 Authorization.
The Purchaser has full power and authority to enter into the
Transaction Documents. The Transaction Documents to which the
Purchaser is a party, when executed and delivered by the Purchaser,
will constitute valid and legally binding obligations of the
Purchaser, enforceable in accordance with their terms, except as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and any other Laws of general
application affecting enforcement of creditors’ rights
generally, and as limited by Laws relating to the availability of
specific performance, injunctive relief or other equitable
remedies.

 

 

 

24

 

 

Section
4.3 Purchase
for Own Account. This Agreement is
made with the Purchaser in reliance upon the Purchaser’s
representation to the Company, which by the Purchaser’s
execution of this Agreement, the Purchaser hereby confirms, that
the Series A Preferred Units to be acquired by the Purchaser will
be acquired for investment for the Purchaser’s own account,
not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of Applicable
Securities Laws, and that the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing
the same in violation of Applicable Securities Laws. By executing
this Agreement, the Purchaser further represents that the Purchaser
does not presently have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect
to any of the Series A Preferred Units in violation of Applicable
Securities Laws (it being understood that the representation and
warranty contained in this Section shall not limit the
Purchaser’s right to sell the Series A Preferred Units in
compliance with Applicable Securities Laws).

 

Section
4.4 Restricted
Securities. The Purchaser
understands and acknowledges that the Series A Preferred Units and
the Common Units issuable thereunder have not been and will not be
registered under the U.S. Securities Act, or any applicable state
securities Laws of the United States, and that the sale
contemplated hereby is being made in reliance on a private
placement exemption to “accredited investors” as
defined in Rule 501(a) of Regulation D under the U.S. Securities
Act, in reliance on the exemption from registration under Section
4(a)(2) of the U.S. Securities Act and Rule 506(b) of Regulation D
thereunder. Accordingly, upon issuance, the Preferred Shares and
any Common Units will be “restricted securities” within
the meaning of Rule 144 under the U.S. Securities Act, and
therefore may not be offered or sold by it, directly or indirectly,
in the United States without registration under Applicable
Securities Laws, except in certain circumstances.

 

Section
4.5 No
Public Market. The Purchaser
understands that no public market now exists for the Series A
Preferred Units or the Common Units, and that the Company has made
no assurances that a public market will ever exist for the Series A
Preferred Units or the Common Units.

 

Section
4.6 Legends.
The Purchaser understands that the Series A Preferred Units and any
Common Units issued upon conversion of Series A Preferred Units,
shall contain the following legend:

 

“THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “33 ACT”), AND
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE 33 ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, QUALIFIES AS AN
EXEMPT TRANSACTION UNDER THE 33 ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.

 

THE
SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF THAT
CERTAIN AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT,
DATED AS OF DECEMBER 20, 2018, AS AMENDED FROM TIME TO TIME, BY AND
AMONG THE COMPANY AND THE MEMBERS IDENTIFIED THEREIN, INCLUDING
CERTAIN RESTRICTIONS ON TRANSFER. A COPY OF SUCH AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT HAS BEEN FILED WITH
THE SECRETARY OF THE COMPANY AND IS AVAILABLE UPON
REQUEST.”

 

 

25

 

 

Section
4.7 Accredited
Investor. As of the Signing
Date the Purchaser is, and on the applicable Closing Date and each
date on which it converts any of the Series A Preferred Units into
Common Units, the Purchaser will be, an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.

 

Section
4.8 No
General Solicitation. The Purchaser is
not purchasing the Series A Preferred Units as a result of any
advertisement, article, notice or other communication regarding the
Series A Preferred Units published in any newspaper, magazine or
similar media or broadcast over television, radio or the internet
or presented at any seminar or any other general solicitation or
general advertisement.

 

Section
4.9 Foreign
Investors. If the Purchaser
is not a United States person (as defined by
Section 7701(a)(30) of the Code), the Purchaser hereby
represents that it has satisfied itself as to the full observance
of the Laws of its jurisdiction in connection with any invitation
to subscribe for the Series A Preferred Units or any use of this
Agreement, including (i) the legal requirements within its
jurisdiction for the purchase of the Series A Preferred Units,
(ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may
need to be obtained, and (iv) the income Tax and other Tax
consequences, if any, that may be relevant to the purchase,
holding, redemption, sale, or transfer of the Series A Preferred
Units. The Purchaser’s subscription and payment for and
continued beneficial ownership of the Series A Preferred Units will
not violate any securities or other Laws of the Purchaser’s
jurisdiction.

 

Section
4.10 [Reserved].

 

Section
4.11 Reliance.
The Purchaser acknowledges that it is not relying upon any Person,
other than the Company and Aemetis and their respective officers,
managers, members, directors, advisors, agents and representatives
in making its investment or decision to invest in the
Company.

 

ARTICLE V. 

CLOSING CONDITIONS

 

Section
5.1 Conditions to the Purchaser’s
Obligations at Initial Closing and Each Other Closing of a Purchase
Under the Initial Tranche. The obligation of
the Purchaser to purchase Series A Preferred Units at the Initial
Closing and each other Closing of a Purchase under the Initial
Tranche is subject to the satisfaction, at or prior to such
Closing, of each of the following conditions precedent to the
satisfaction of the Agent in its sole discretion:

 

(a) Representations and Warranties.
The representations and warranties of the Company contained in this
Agreement and the other Transaction Documents shall be true and
correct in all respects on and as of the date of such Closing
(other than representations and warranties that by their terms
speak as of another date, which representations and warranties
shall be true and correct as of such date).

 

 

26

 

 

(b) No Trigger Event. No Trigger
Event or Potential Trigger Event shall exist.

 

(c) Qualifications. All Permits, if
any, of any Governmental Authority that are required in connection
with the consummation of the Transaction shall be obtained and
effective as of the Initial Closing.

 

(d) Material Adverse Effect. Since
the Signing Date, no fact, circumstance, event, change, occurrence,
condition or development shall have occurred that, individually or
in the aggregate, has had or could be reasonably likely to have a
Material Adverse Effect.

 

(e) Litigation; Illegality. None of
the Transactions shall have been enjoined by any Governmental
Authority, no Action challenging any of the Transactions shall have
been threatened or instituted and no investigation or other demand
shall have been made by any Governmental Authority, and no Law
shall have been enacted that prohibits, restrains or makes illegal
the consummation of any the Transactions.

 

(f) Lien Searches. The Agent shall
have received the results of a recent Lien search in the
jurisdiction of organization of the Company and each jurisdiction
where assets of the Company are located, and such searches shall
reveal no Liens on any of the assets of the Company.

 

(g) Indemnification Agreement. The
Agent shall have received the Indemnification Agreement duly
executed by the Company.

 

(h) Security Agreement. The Agent
shall have received the Security Agreement, duly executed by the
Company.

 

(i) Mortgages. The Agent shall have
received Mortgages covering the Leases for the Initial Digesters,
the leasehold estates created thereby and the improvements thereon,
duly executed by the Company (the “Initial Mortgages”). This
condition does not apply to the Initial Closing.

 

(j) Surveys. The Agent shall have
received ALTA surveys with respect to the Leases for the Initial
Digesters, which shall be prepared and certified to the Agent by a
surveyor acceptable to the Agent.

 

(k) Mortgage Title Policies. The
Agent shall have received an ALTA mortgagee’s title policy
for each of the Initial Mortgages, which shall be satisfactory to
the Agent.

 

(l) Fee Owner, Lessor and Mortgagee
Agreements. The Agent shall have received such (i)
non-disturbance agreements and other agreements as it may request
from the lessors and/or fee owners with respect to the Leases of
the Initial Digesters and the mortgagees of such lessors and/or fee
owners, and (ii) such lien waivers and other agreements from third
parties as it may request with respect to the
Collateral.

 

(m) Filings, Registrations and
Recordings. The Agent shall have received each document
(including any Uniform Commercial Code financing statement)
required by the Collateral Documents or under applicable Law or
requested by the Agent to be filed, registered or recorded in order
to create in favor of the Agent, for the benefit of itself and the
Purchaser, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person.

 

(n) Legal Opinions. The Purchaser
and the Agent shall have received a satisfactory legal opinion,
dated the Initial Closing Date, from the Structure Law Group, LLC,
counsel for the Company, substantially in the form of Exhibit C

 

 

27

 

 

(o) Insurance. The Agent shall have
received evidence of insurance coverage for the Company and its
assets in form, scope, and substance reasonably satisfactory to the
Agent and otherwise in compliance with the terms of this
Agreement.

 

(p) Board. The authorized size of
the Board shall be three (3) Managers.

 

(q) Closing Certificate. The
Secretary of the Company shall have delivered to the Purchaser a
certificate executed by the Secretary of the Company, in form and
substance satisfactory to the Purchaser, certifying (i) a certified
copy of the Company’s Certificate of Formation and all
amendments thereto, (ii) the Company’s Company Agreement in
effect at the time of such Closing, (iii) resolutions of the
Board authorizing the Transaction Documents and the Transaction,
(iv) a good standing certificate from the Secretary of the State of
the State of Delaware, dated a recent date before such Closing, (v)
a certificate from the Secretary of State of California as to the
good standing of the Company as a foreign limited liability company
in the State of California, and (vi) a certification as to the
incumbency of the officers of the Company.

 

(r) Reservation of Units. The
Company shall have duly authorized and reserved for issuance
5,000,000 Conversion Units.

 

(s) Delivery of Certificates Representing
Series A Preferred Units. The Company shall have executed
and delivered to the Agent one or more Unit certificates,
registered in the name of the Purchaser, representing the number of
Series A Preferred Units to be purchased at such
Closing.

 

(t) Company Agreement. The Company
and Aemetis shall have executed and delivered to the Purchaser a
counterpart of the Company Agreement in the form attached hereto as
Exhibit F, and the
Company Agreement shall be in full force and effect as of each
Closing Date in accordance with its terms.

 

(u) Gantt Chart. The Gantt Chart in
effect on the Initial Closing Date, which shall have been approved
by the both the Agent and the Third Party Consultant, certified by
the Company.

 

(v) Project Budget. The Project
Budget in effect on the Initial Closing Date, which shall have been
approved by both the Agent and the Third Party Consultant,
certified by the Company.

 

(w) Revenue Memorandum. The Agent
shall have received a satisfactory revenue memorandum addressed to
it and the Company with respect to the Project from
EcoEngineers.

 

(x) Consultant’s Agreement.
The Agent shall have received a copy of the consultant’s
agreement between the Company and the Third Party
Consultant.

 

(y) Management Agreement. The Agent
shall have received a copy of the Management
Agreement.

 

(z) Project Contracts. The Agent
shall have received executed copies of all Project Contracts in
effect on the Initial Closing Date, including Leases for the
Initial Digesters and memoranda of such Leases that have been
recorded in the appropriate real property records.

 

(aa) Consents
to Security Interests. The Agent shall have received from
each of Maas Energy and the Third Party Consultant a consent to the
security interests created pursuant to the Collateral Documents in
each Project Contract to which it is a party.

 

(bb) Permits.
The Agent shall have received a list of (i) all Permits that the
Company has obtained as of the Initial Closing Date, and (ii) all
Permits that will be required for the Development of the Project
and the anticipated dates of receipt.

 

 

28

 

 

(cc) Due
Diligence. The Agent shall have completed its due diligence
with respect to the Transaction.

 

(dd) Common
Units. The Agent shall have received evidence satisfactory
to it that Aemetis directly owns 6,000,000 Common
Units.

 

(ee) Closing
Fee. With respect to the Initial Closing, Company shall have
paid to the Purchaser, for its own account, in immediately
available funds, a closing fee equal to $900,000 to an account
designated by the Agent or the Purchaser, or a signed direction to
withhold such closing fee from the Subscription Amount payable at
the Initial Closing.

 

(ff) Expenses.
The Agent shall have received payment of all expenses for which
invoices have been presented (including the fees and expenses of
legal counsel, including local and special counsel), on or before
the date of such Closing. All such amounts will be paid with
proceeds of the Purchase on the Closing Date for such Closing and
will be reflected in the instructions given by the Company to the
Agent on or before such Closing Date.

 

(gg) Final
Use of Proceeds. The Agent shall have received a final use
of proceeds for the Subscription Amount, together with the
consolidated balance sheets for the Company.

 

(hh) Additional
Conditions. On or before the Initial Closing, each of the
conditions precedent identified on Annex I hereto shall have been
satisfied.

 

(ii) Additional
Documents. The Agent shall have received copies of such
other documents and agreements as the Agent may
request.

 

(jj) Proceedings
and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Initial
Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Agent, and the Agent (or
its counsel) shall have received all such counterpart original and
certified or other copies of such documents as reasonably
requested.

 

Section
5.2 Conditions
to Purchaser’s Obligations at Subsequent Closing and Each
Other Closing of a Purchase Under the Second
Tranche. The obligation of
the Purchaser to purchase Series A Preferred Units at, and to
consummate, the Subsequent Closing and each other Closing of a
Purchase under the Second Tranche, is subject to the satisfaction
at or prior to such Closing of each of the following conditions
precedent to the satisfaction of the Agent in its sole
discretion:

 

(a) Representations and Warranties.
The representations and warranties of the Company contained in this
Agreement and the other Transaction Documents shall be true and
correct in all respects as of such Closing (other than
representations and warranties that by their terms speak as of
another date, which representations and warranties shall be true
and correct as of such date).

 

(b) No Trigger Event. No Trigger
Event or Potential Trigger Event shall exist.

 

(c) Collateral Documents. The Agent
shall have received such Collateral Documents as it may
request.

 

(d) Additional Digesters. The
Company shall have entered into the Additional Digester Contracts
and delivered to the Agent certified copies of the Additional
Digester Contracts and all amendments thereto.

 

 

29

 

 

(e) Mortgages. The Agent shall have
received Mortgages covering the Leases for the Additional
Digesters, the leasehold estates created thereby and the
improvements thereon, duly executed by the Company (the
“Additional
Mortgages”).

 

(f) Surveys. The Agent shall have
received ALTA surveys with respect to the Leases for the Additional
Digesters, which shall be prepared and certified to the Agent by a
surveyor acceptable to the Agent.

 

(g) Mortgage Title Policies. The
Agent shall have received an ALTA mortgagee’s title policy
for each of the Additional Mortgages, which shall be satisfactory
to the Agent.

 

(h) Fee Owner, Lessor and Mortgagee
Agreements. The Agent shall have received such (i)
non-disturbance agreements and other agreements as it may request
from the lessors and/or fee owners with respect to the Leases of
the Additional Digesters and the mortgagees of such lessors and/or
fee owners, and (ii) such lien waivers and other agreements from
third parties as it may request with respect to the
Collateral.

 

(i) Output Stabilization and Maximization
of Initial Digesters. The output of the Initial Digesters
shall have been stabilized and maximized in accordance with their
design, and such stabilization and maximization of output shall be
acceptable to the Agent in its sole discretion.

 

(j) DDRP Government Grants. The
Agent shall have received within ten (10) months after the Initial
Closing Date in accordance with the Gantt Chart evidence that the
Company has received the approval of DDRDP government grants for:
(i) the Initial Digesters, and (ii) the Additional Digesters with
applications for the Additional Digesters to have been filed by no
later than the immediately next deadline for grant applications
following the Signing Date (and as set out on the DDRDP website
https://www.cdfa.ca.gov/oefi/ddrdp/ on the Signing Date) for total
DDRDP grant amounts equal to at least 50% of the related capital
expenditures in the Project Budget.

 

(k) Completion of Engineering, Etc.
The Agent shall have received within ten (10) months after the
Initial Closing Date in accordance with the Gantt Chart (i)
evidence of the completion of all engineering work, (ii) evidence
of the approval of all construction drawings by Hartman
Engineering, Inc., (iii) copies of the comprehensive and detailed
work program and activity schedule, (iv) copies of bill of
materials/services estimates, (v) a final list of vendors, and (vi)
evidence of the ordering of long lead time items, all in accordance
with the Project Budget.

 

(l) Project Budget Update. The
Agent shall have received an update to the Project Budget showing
all variances from the Project Budget with respect to the Initial
Digesters and, in the event of any cost overruns from the Project
Budget with respect to the completion of the Initial Digesters, the
Agent shall have received evidence that the Company has satisfied
all of the USDA Loan Conditions.

 

(m) Permits. The Agent shall have
received within ten (10) months after the Initial Closing Date, in
accordance with the Gantt Chart, evidence that the Company has
received all Permits required for installing, constructing,
building, connecting, completing, commissioning, and
operationalizing the Project.

 

(n) Delivery of Certificates Representing
Series A Preferred Units. The Company shall have executed
and delivered to the Agent Unit certificates, registered in the
name of the Purchaser, representing the number of Series A
Preferred Units purchased at such Closing.

 

(o) Project Contracts. The Agent
shall have received executed copies of all of the Project Contracts
for the Additional Digesters, including the Leases for the
Additional Digesters and memoranda thereof that have been recorded
in the appropriate real property records.

 

 

30

 

 

(p) Material Adverse Change. Since
the date of delivery of the most recent audited financial
statements of the Company, no fact, circumstance, event, change,
occurrence, condition or development shall have occurred that,
individually or in the aggregate, has had or could be reasonably
likely to have a Material Adverse Effect.

 

(q) Lien Searches. The Agent shall
have received satisfactory Lien searches with respect to the fee
owner(s) and operator of each dairy on which each Additional
Digester will be located.

 

(r) Additional Documents. The Agent
shall have received copies of such other documents and agreements
as the Agent may request.

 

(s) Proceedings and Documents. All
corporate and other proceedings in connection with the Transactions
contemplated at such Closing and all documents incident thereto
shall be reasonably satisfactory in form and substance to the
Agent, and the Agent (or its counsel) shall have received all such
counterpart original and certified or other copies of such
documents as reasonably requested.

 

ARTICLE VI.

COVENANTS

 

So long
as Purchaser shall have any obligation to purchase Series A
Preferred Units hereunder or any Obligation shall remain unpaid or
unsatisfied, the Company shall comply with the following
covenants:

 

Section
6.1 Information
Reporting and Monitoring.

 

(a) The Company shall
deliver to the Purchaser and the Agent:

 

(ii) Annual
Reporting.

 

(x) Financial Statements. As soon
as available, but in any event within ninety (90) days after the
end of each fiscal year of the Company (i) an unaudited balance
sheet as of the end of such year, (ii) unaudited statements of
income and of cash flows for such year, and a comparison between
(x) the actual amounts as of and for such fiscal year and (y)
the comparable amounts for the prior year and as included in the
Budget (as defined in Section 6.1(a)(y)) for such
year, with an explanation of any material differences between such
amounts and a schedule as to the sources and applications of funds
for such year, (iii) an unaudited statement of members’
equity as of the end of such year, all such financial statements to
be prepared in accordance with GAAP and certified by independent
public accountants of nationally recognized standing selected by
the Company and reasonably acceptable to the Agent, and (iv)
audited financial statements of Aemetis, Inc. as delivered under
the Note Purchase Agreement, containing an audit opinion on
supplemental financial statements of the Company.

 

(y) Budget. As soon as practicable,
but in any event thirty (30) days before the end of each fiscal
year of the Company, a budget and business plan of the Company for
the next fiscal year (collectively, the “Budget”), approved by the Board
(including the Series A Preferred Units Manager) and prepared on a
monthly basis, including balance sheets, income statements, and
statements of cash flow for such months and, promptly after
prepared, any other budgets or revised budgets prepared by the
Company.

 

 

31

 

 

(ii) Quarterly
Reporting.

 

(x) Financial Statements. As soon
as available, but in any event within forty five (45) days after
the end of each of the first three (3) quarters of each fiscal year
of the Company, unaudited statements of income and cash flows for
such fiscal quarter, and an unaudited balance sheet and a statement
of members’ equity as of the end of such fiscal quarter, all
prepared in accordance with GAAP and certified by an officer of the
Company as being true, correct and complete (except that such
financial statements may (i) be subject to normal period-end audit
adjustments; and (ii) not contain all notes thereto that may be
required in accordance with GAAP).

 

(y) Capital Structure. As soon as
available, but in any event within forty-five (45) days after the
end of each of quarter of each fiscal year of the Company, a
statement showing the number of shares of each class and series of
Units and Equity Securities convertible into or exercisable for
Units of the Company at the end of such quarter, the Common Units
issuable upon conversion or exercise of any outstanding Equity
Securities convertible or exercisable for Common Units and the
exchange ratio or exercise price applicable thereto, and the number
of Units of issued Unit options and Unit options not yet issued but
reserved for issuance, if any, all in sufficient detail as to
permit the Purchaser and the Agent to calculate the
Purchaser’s percentage equity ownership in the Company, and
certified by an officer of the Company as being true, complete, and
correct.

 

(iii) Monthly
Reporting.

 

(x) Progress Reports. As soon as
available, and in any event within ten (10) days after the end of
each calendar month ending after the Initial Closing Date, a
monthly report prepared by the Company, as certified by the Third
Party Consultant on the progress of Development of the Project and
achievement of Milestones in substantially the form of Exhibit E and in detail
reasonably satisfactory to the Agent, including: (i) Milestone
schedules, Milestones met and not met and, in the case of
Milestones not met, the reasons why such Milestones were not met,
targeted Milestones for the next month, and targeted Milestones for
the next ninety (90) days, (ii) a report as to the progress of the
Project, (iii) in the event of any material deviation or variance
from the Gantt Chart and/or the Project Budget, the reason for such
material deviation and such other information reasonably requested
by the Purchaser and/or the Agent in connection therewith;
(iv) any factors or events which have had, are having or could
reasonably be expected to have a Material Adverse Effect; (v) the
status of all Permits necessary for the Development of the Project,
including with respect to Permits which have not been obtained, the
dates of applications submitted or to be submitted and the
anticipated dates of actions by applicable Governmental Authorities
with respect to such Permits; and (vi) the status of all
grants (including DDRDP grants) by Governmental Authorities for the
Development of the Project, including with respect to grants that
have not been obtained, the dates of applications submitted or to
be submitted and the anticipated dates of action by applicable
Governmental Authorities with respect to such grants.

 

 

32

 

 

(iv)            

Weekly Reporting.

 

(x) As soon as
available, and in any event by no later than 12pm (Pacific Standard
Time) on Friday of each week, following the Stabilization Period, a
weekly report prepared by the Company in substantially the form of
Exhibit K and in
detail reasonably satisfactory to the Agent, of (i) all
construction activities, highlighting any delays and deviations
from the Gantt Chart together with timelines, underlying causes and
remedies and corrective action proposed, (ii) a weekly log of daily
biogas production for each of the Initial Digesters and Additional
Digesters (once operational); (iii) a weekly log of daily average
temperature of manure in each lagoon (at the surface and the
bottom) for each Digester; (iii) a weekly log of daily measurement
of volume of influents and effluents for each Digester; and
(iv) weekly checks on the number of WCE for each of the
dairies, manure collection methods and quantum of supply to each
Digester, as per the Leases or other contracts signed with each of
the related dairies.

 

(v)           Compliance
Certificate. Concurrently with the delivery of the financial
statements pursuant to Sections 6.1(a)(i)(x) and
6.1(ii)(x), a duly
completed Compliance Certificate signed by the chief executive
officer of the Company.

 

(vi)           Insurance.
Concurrently with the delivery of its audited financial statements
pursuant to Section
6.1(a)(i)(x), evidence of insurance coverage in form, scope,
and substance reasonably satisfactory to the Agent and otherwise in
compliance with the terms of this Agreement and the other
Transaction Documents.

 

(vii)           Other
Information. Such other information relating to the Project
and/or the condition (financial or otherwise), business, assets,
operations, prospects, or corporate affairs of the Company as the
Purchaser or the Agent may from time to time reasonably
request.

 

If, for
any period, the Company has any Subsidiary whose accounts are
consolidated with those of the Company, then in respect of such
period the financial statements delivered pursuant to the foregoing
sections shall be the consolidated and consolidating financial
statements of the Company and all such consolidated
Subsidiaries.

 

(b) Bank Account Reporting. Unless
the Agent has electronic viewing access to the Company’s bank
accounts, within five (5) Business Days after the end of each
calendar month, a statement issued by each bank for bank accounts
held by the Company showing balances and account history, including
the amount of cash and cash equivalents held in such bank
account.

 

(c) Inspection Rights. The Company
will, and will cause each Subsidiary to, (a) keep proper books of
record and account in which full, true and correct entries are made
of all dealings and transactions in relation to its business and
activities, and (b) permit any representatives designated by the
Agent (including employees of Agent or any consultants,
accountants, lawyers, auditors, engineers and appraisers retained
by the Agent), upon reasonable prior notice, to visit and inspect
the Project, conduct at the Project field examinations of the
Project, the Company’s assets, liabilities, books and
records, including examining and making extracts from its books and
records, environmental assessment reports and Phase I or Phase II
studies, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable
times and as often as reasonably requested. All such inspections
and examinations shall be at the sole cost and expense of the
Company.

 

 

33

 

 

(d) Monitoring. The Agent may
conduct monthly reviews of the Development of the Project with the
Third Party Consultant in consultation with such other engineer,
consultant or advisor, in Agent’s sole and reasonable
discretion, at the sole cost and expense of the
Company.

 

(e) Notices. The Company shall give
prompt written notice to the Agent of:

 

(i) the occurrence of
any Trigger Event or Potential Trigger Event;

 

(ii) any
(A) default or event of default under any contractual obligation of
the Company or any Subsidiary or (ii) any Action, that in either
case, if not cured or if adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse
Effect;

 

(iii) any
Action affecting the Company or any Subsidiary or the Project (A)
in which the amount involved is $50,000 or more and not covered by
insurance, (B) in which injunctive or similar relief is sought or
(C) which relates to any Transaction Document;

 

(iv) any
resignation or termination of any director, manager or any senior
officer of the Company, or the project manager hired for the
Project;

 

(v) any damage or
casualty to the Project or any part thereof;

 

(vi) the
commencement of any condemnation proceeding with respect to the
Project or any part thereof;

 

(vii) any
amendment, modification or termination of any DDRDP government
grant for or relating to the Project;

 

(viii) each
Additional Digester Contract entered into by the Company;
and

 

(ix) any
development or event that has had or could reasonably be expected
to have a Material Adverse Effect.

 

Each
notice pursuant to this paragraph (e) shall be accompanied by a
statement of the chief financial officer of the Company setting
forth details of the occurrence referred to therein and stating
what action the Company proposes to take with respect
thereto.

 

(f) Other Information. Upon the
request of the Agent, the Company shall promptly deliver he
following to the Agent (to the extent permitted by applicable Law):
(i) asset purchase reports and supporting invoices; (ii) detailed
production statistics; (iii) copies of all Project Contracts and
all other material contracts and authorizations; (iv)
organizational charts and compensation of all of the
Company’s personnel; (v) copies of reports sent to
Unitholders and the Board; and (vi) such further schedules,
reports, documents, and information as the Agent may
require.

 

Section
6.2 Certain
Notifications. The Company shall
promptly notify the Purchaser and the Agent of any fact, event or
circumstance of which the Company is aware and which would be
reasonably likely to cause any representation or warranty of the
Company contained in this Agreement to be untrue or inaccurate or
to cause any covenant or agreement of the Company contained in this
Agreement not to be complied with or satisfied; provided, however, that delivery of any
notice pursuant to this Section 6.2 shall not limit or
affect any rights of or remedies available to the Purchaser or the
Agent.

 

 

34

 

 

Section
6.3 Preference
Payments. Commencing on the
second anniversary (the “Second Anniversary”) of the
Initial Closing Date (and commencing on the date of issuance with
respect to any Series A Preferred Units issued on or after the
Second Anniversary), Preference Payments on each Series A Preferred
Unit shall accrue, whether or not there are funds legally available
for the payment of Preference Payments, on a daily basis at the
rate per annum of $0.50 per Series A Preferred Unit outstanding.
All accrued Preference Payments on any Series A Preferred Unit
shall be paid (a) on the last day of April, July, October and
January of each calendar year, or (b) upon a Liquidation or
redemption of the Series A Preferred Units in accordance with the
provisions of Section
6.4 or Section
6.9. All accrued and accumulated Preference Payments on the
Series A Preferred Units shall be prior and in preference to any
dividend or distribution on any Junior Securities and shall be
fully paid before any dividends are declared and paid, or any other
distributions or redemptions are made, on any other Junior
Securities. Except as otherwise provided herein, if at any time the
Company pays less than the total amount of Preference Payments then
accrued and accumulated with respect to the Series A Preferred
Units, such payment shall be distributed pro rata among the holders
of Series A Preferred Units based upon the aggregate accrued and
accumulated but unpaid Preference Payments on the Series A
Preferred Units held by each such holder.

 

Section
6.4 Liquidation; Deemed
Liquidation.

 

(a) Liquidation. In the event of
any voluntary or involuntary liquidation, dissolution or winding up
of the Company (collectively with a Deemed Liquidation, a
“Liquidation”),
the holders of Series A Preferred Units then outstanding shall be
entitled to be paid out of the assets of the Company available for
distribution to its Unitholders, before any payment shall be made
to the holders of Junior Securities by reason of their ownership
thereof, an amount in cash equal to the aggregate Liquidation Value
of all Series A Preferred Units held by such holder, plus all
unpaid accrued and accumulated Preference Payments on all Series A
Preferred Units.

 

(b) Deemed Liquidation. The occurrence of either a Change
of Control or a Qualified Public Offering (either such event, a
“Deemed
Liquidation”) shall be deemed a Liquidation for
purposes of this Section
6.4. Upon the consummation of any such Deemed Liquidation,
the holders of the Series A Preferred Units shall, in consideration
for cancellation of their Series A Preferred Units, be entitled to
the same rights such holders are entitled to under this
Section 6.4 upon
the occurrence of a Liquidation, including the right to receive the
full preferential payment from the Company of the amounts payable
with respect to the Series A Preferred Units under Section 6.4(a)
hereof.

 

(c) Deemed Liquidation Procedures.
In furtherance of the foregoing, the Company shall take such
actions as are necessary to give effect to the provisions of
Section 6.4(a) and
Section 6.4(b),
including, without limitation, (i) in the case of a Change of
Control structured as a merger, consolidation or similar
reorganization, causing the definitive agreement relating to such
transaction to provide for a rate at which Series A Preferred Units
are converted into or exchanged for cash, or (ii) in the case of a
Change of Control structured as an asset sale, as promptly as
practicable following such transaction, either dissolving the
Company and distributing the assets of the Company in accordance
with applicable Law or redeeming all outstanding Series A Preferred
Units and, in the case of both (i) and (ii), giving effect to the
preferences and priorities set forth in this Section 6.4. The Company shall
promptly provide to the holders of Series A Preferred Units such
information concerning the terms of such Change of Control, and the
value of the assets of the Company as may reasonably be requested
by the holders of Series A Preferred Units.

 

 

 

35

 

 

 

(d) Notice Requirement. In the
event of any Liquidation (or Deemed Liquidation), the Company
shall, within ten (10) days of the date the Board approves such
action, or no later than twenty (20) days of any Unitholders’
meeting called to approve such action, or within twenty (20) days
of the commencement of any involuntary proceeding, whichever is
earlier, give the Agent and each holder of Series A Preferred Units
written notice of the proposed action. Such written notice shall
describe the material terms and conditions of such proposed action,
including a description of the stock, cash and property to be
received by the holders of Series A Preferred Units upon
consummation of the proposed action and the date of delivery
thereof. If any material change in the facts set forth in the
initial notice shall occur, the Company shall promptly give written
notice to each holder of Series A Preferred Units of such material
change.

 

Section
6.5 Conversion.
The holders of the Series A Preferred Units shall have conversion
rights as follows:

 

(a) Right to Convert. Each Series A
Preferred Unit shall be convertible, at the option of the holder
thereof, at any time and from time to time, and without the payment
of additional consideration by the holder thereof, into one (1)
fully paid and non-assessable Common Unit, provided that (i) the total
number of Common Units into which Series A Preferred Units may be
converted shall not exceed 1,200,000 Common Units or, subject to
Section 7.2,
5,000,000 Common Units (subject in each case to appropriate
adjustment in the event of any distributions, Common Unit split,
reclassification, combination or other similar recapitalization
affecting such Units), and (ii) the Common Units into which Series
A Preferred Units are converted shall have terms and conditions
that are identical to the terms of the Common Units held by
Aemetis.

 

(b) Fractional Units. No fractional
Common Units shall be issued upon conversion of a Series A
Preferred Unit. In lieu of any fractional Units to which the holder
would otherwise be entitled, the Company shall pay cash equal to
such fraction multiplied by the Fair Market Value of a Common Unit.
Whether or not fractional Units would be issuable upon such
conversion shall be determined on the basis of the total number of
Series A Preferred Units the holder is at the time converting into
Common Units and the aggregate number of Commons Units issuable
upon such conversion.

 

(c) Notice of Conversion. In order
for a holder of Series A Preferred Units to voluntarily convert
Series A Preferred Units into shares of Common Units, such holder
shall provide written notice to the Company that such holder elects
to convert a number of such holder’s Series A Preferred Units
and, if applicable, any event on which such conversion is
contingent. Such notice shall state such holder’s name or the
names of the nominees in which such holder wishes the Common Units
to be issued. The close of business on the date of receipt by the
Company shall be the time of conversion (the “Conversion Time”), and the Common
Unit issuable upon conversion of the specified shares shall be
deemed to be outstanding of record as of such date. The Company
shall, as soon as practicable after the Conversion Time pay in cash
such amount as provided in Section 6.5(b) in lieu of any
fraction of a Common Unit otherwise issuable upon such conversion.
Any accrued but unpaid Preference Payments or distribution with
respect to each Series A Preferred Unit so converted shall become
payable to the holder as of the Conversion Time.

 

(d) Reservation of Units. The
Company shall at all times when any Series A Preferred Units shall
be outstanding, reserve and keep available out of its authorized
but unissued Units, for the purpose of effecting the conversion of
the Series A Preferred Units, such number of its duly authorized
Common Units as shall from time to time be sufficient to effect the
conversion of all outstanding Series A Preferred Units entitled to
conversion; and if at any time the number of authorized but
unissued Common Units shall not be sufficient to effect the
conversion of all then outstanding Series A Preferred Units
entitled to conversion, the Company and the Unitholders shall take
such action as may be necessary to increase its authorized but
unissued Common Units to such number of Common Units as shall be
sufficient for such purposes, including, without limitation,
engaging in best efforts to obtain the requisite approval of any
necessary amendment to the Company Agreement.

 

 

36

 

 

(e) Adjustments for Certain Diluting
Issues.

 

(i) Adjustments for Splits and
Combinations. If the Company shall at any time or from time
to time after the Initial Closing Date effect a subdivision of the
outstanding Common Units, the number of Common Units issuable on
conversion of the Series A Preferred Units shall be increased in
proportion to such increase in the aggregate number of Common Units
outstanding. If the Company shall at any time or from time to time
after the Initial Closing Date combine the outstanding Common
Units, the number of Common Units issuable on conversion of the
Series A Preferred Units shall be decreased in proportion to such
decrease in the aggregate number of Common Units
outstanding.

 

(ii) Adjustments
for Distributions. In the event the Company at any time or
from time to time after the Initial Closing Date shall make a
distribution payable in securities of the Company (including a
distribution of Common Units in respect of outstanding Common
Units) or in other property, then and in each such event the
holders of Series A Preferred Units shall receive, simultaneously
with the distribution, a distribution of such securities or other
property in an amount equal to the amount of such securities or
other property as they would have received if all outstanding
Series A Preferred Units entitled to convert into Common Units had
been converted into Common Units on the date of such
event.

 

(iii) Adjustment
for Merger or Reorganization, etc. If there shall occur any
reorganization, recapitalization, reclassification, consolidation
or merger involving the Company in which the Common Units (but not
the Series A Preferred Units) are converted into or exchanged for
securities, cash or other property (other than a transaction
covered by Section
6.5(e)(ii)), then, following any such reorganization,
recapitalization, reclassification, consolidation or merger, each
Series A Preferred Unit entitled to be converted shall thereafter
be convertible in lieu of the Common Unit into which it was
convertible prior to such event into the kind and amount of
securities, cash or other property which a holder of the number of
Common Units issuable upon conversion of one Series A Preferred
Unit immediately prior to such reorganization, recapitalization,
reclassification, consolidation or merger would have been entitled
to receive pursuant to such transaction; and, in such case,
appropriate adjustment (as determined in good faith by the Board)
shall be made in the application of the provisions in this
Section 6.5 with
respect to the rights and interests thereafter of the holders of
the Series A Preferred Units, to the end that the provisions set
forth in this Section
6.5 shall thereafter be applicable, as nearly as reasonably
may be, in relation to any securities or other property thereafter
deliverable upon the conversion of the Series A Preferred
Units.

 

(iv) Certificate
as to Adjustments. Upon the occurrence of each adjustment
pursuant to this Section
6.5(e), the Company at its expense shall, as promptly as
reasonably practicable but in any event not later than ten (10)
days thereafter, compute such adjustment in accordance with the
terms hereof and furnish to each holder of Series A Preferred Units
a certificate setting forth such adjustment (including the kind and
amount of securities, cash or other property into which the Series
A Preferred Units are convertible) and showing in detail the facts
upon which such adjustment or readjustment is based. The Company
shall, as promptly as reasonably practicable after the written
request at any time of any holder of Series A Preferred Units (but
in any event not later than ten (10) days thereafter), furnish or
cause to be furnished to such holder a certificate setting forth
the number of Common Units and the amount, if any, of other
securities, cash or property which then would be received upon the
conversion of a Series A Preferred Unit.

 

 

37

 

 

(v) Notice. In the event: (A) the
Company intends to take any action entitling or enabling
Unitholders to receive any dividend or other distribution, or to
receive any right to subscribe for or purchase any securities, or
to receive any other security; (B) the Company intends to effect
any capital reorganization of the Company, any reclassification of
the Common Units, or any Change of Control; or (C) of the voluntary
or involuntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will send or
cause to be sent to the holders of the Series A Preferred Units a
notice specifying, as the case may be, (i) the date for such
dividend, distribution or right, and the amount and character of
such dividend, distribution or right, or (ii) the effective
date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up is
proposed to take place, and the time, if any is to be fixed, as of
which the holders of record of Common Units (or such other capital
stock or securities at the time issuable upon the conversion of the
Series A Preferred Unit) shall, or shall be entitled to, exchange
their Common Units (or such other Equity Securities) for securities
or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up, and the amount per share and character
of such exchange applicable to the Series A Preferred Units and the
Common Units. Such notice shall be sent at least twenty (20) days
prior to the effective date for the event specified in such
notice.

 

(f) No
Charge or Payment. The Company shall pay any and all issue
and other similar Taxes that may be payable in respect of any
issuance or delivery of Common Units upon conversion of Series A
Preferred Units pursuant to this Section 6.5. The issuance of
certificates for Common Units upon conversion of Series A Preferred
Units pursuant to Section
6.5 shall be made without payment of additional
consideration by, or other charge, cost or Tax to, the holder in
respect thereof.

 

Section
6.6 Voting
Generally.

 

(a) Each holder of
outstanding Series A Preferred Units shall be entitled to one vote
per Series A Preferred Unit and to vote with holders of outstanding
Common Units, voting together as a single class, with respect to
any and all matters presented to the Unitholders of the Company for
their action or consideration (whether at a meeting of Unitholders
of the Company, by written action of Unitholders in lieu of a
meeting or otherwise), except as provided by Law or by the
provisions of Section
6.8 below. Each holder of outstanding Series A Preferred
Units shall be entitled to notice of all Unitholder meetings (or
requests for written consent) in accordance with the
Company’s Company Agreement.

 

(b) Any of the rights,
powers, preferences and other terms of the Series A Preferred Units
set forth herein may be waived on behalf of all holders of Series A
Preferred Units by the affirmative written consent or vote of the
holders of at least a majority of the Series A Preferred Units then
outstanding.

 

 

38

 

 

Section
6.7 Board.

 

(a) The Company shall
at all times have three (3) Managers. The holders of record of a
majority of the Series A Preferred Units (or if no Series A
Preferred Units are outstanding, but Series A Preferred Units have
been converted into Common Units, then a majority of the holders of
such Common Units resulting from such conversion), exclusively and
as a separate class, shall be entitled to elect one (1) Manager of
the Company (the “Series A
Preferred Units Manager”). The holders of record of
Common Units and the Series A Preferred Units, exclusively and
voting together as a single class, shall be entitled to elect the
two remaining Managers of the Company. Any Manager elected as
provided in the preceding sentence may be removed without cause by,
and only by, the affirmative vote of a majority of the holders of
the Units of the class or series of Units entitled to elect such
Manager, given either at a special meeting of such Unitholders duly
called for that purpose or pursuant to a written consent of the
relevant Unitholders. If the holders of Series A Preferred Units or
Common Units, as the case may be, fail to elect a sufficient number
of Managers to fill the Board for which they are entitled to elect
Managers, voting exclusively and as a separate class pursuant to
the first sentence of this Section 6.5, then any Manager
position not so filled shall remain vacant until such time as the
holders of the Series A Preferred Units or Common Units, as the
case may be, elect a person to fill such Manager position by vote
or written consent in lieu of a meeting; and no such Manager
position may be filled by Unitholders of the Company other than by
the Unitholders of the Company that are entitled to elect a person
to fill such Manager Position, voting exclusively and as a separate
class. Except as otherwise provided in this Section 6.7, a vacancy in any
Manager position filled by the holders of any class or series of
Units shall be filled only by vote or written consent in lieu of a
meeting of the holders of such class or series of Units. The
Company shall execute and deliver or cause to be executed and
delivered such further instruments and do and cause to be done such
further acts as may be necessary or proper in the reasonable
opinion of the Purchaser to effectually carry out this
provision.

 

(b) The Company shall
notify the Agent of the date and time for each regular and special
meeting of the Board or any committee thereof or of the adoption of
any resolutions by written consent (describing in reasonable detail
the nature and substance of such action) at the same time and in
the same manner that notice is provided to Managers of the Company
and provide to the Agent any materials delivered to the Managers of
the Company at the same time such materials are provided to such
Managers. The Board shall meet at least once per quarter. The Agent
shall be free to contact the Managers of the Company and discuss
the pending actions to be taken.

 

Section
6.8 Series
A Preferred Units Protective Provisions. For so long as
any Series A Preferred Units remain outstanding, the Company shall
not, either directly or indirectly by agreement, amendment, merger,
consolidation or otherwise, do any of the following without (in
addition to any other vote required by Law or the Company
Agreement) the written consent or affirmative vote of the holders
of at least a majority of the then outstanding Series A Preferred
Units, given in writing or by vote at a meeting, consenting or
voting (as the case may be) separately as a class:

 

(a) liquidate, dissolve
or wind-up the business and affairs of the Company or any
Subsidiary, or consent to or otherwise approve any of the
foregoing;

 

(b) take any action
that would result in a Bankruptcy Event; adopt a plan of
liquidation of the Company or any of its Subsidiaries; take any
action to commence any suit, case, proceeding or other action under
any existing or future Law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief of debtors seeking
to have an order for relief entered with respect to the Company or
any of its Subsidiaries, or seeking to adjudicate the Company or
any of its Subsidiaries as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to the
Company or any of its Subsidiaries; appoint a receiver, trustee,
custodian or other similar official for the Company or any of its
Subsidiaries, or for all or any material portion of the assets of
the Company or any of its Subsidiaries; or make a general
assignment for the benefit of the creditors of the Company or any
of its Subsidiaries;

 

 

39

 

 

(c) amend, modify,
alter or repeal any provision of the Certificate of Formation, the
Company Agreement or this Agreement in a manner that affects the
powers, preferences or rights of the Series A Preferred Units or
that increases or decreases the number of authorized Series A
Preferred Units;

 

(d) create, or
authorize the creation of, any additional class or series of Units
or reclassify or authorize the reclassification of any class or
series of Units (unless the same ranks junior in all respects to
the Series A Preferred Units with respect to the distribution of
assets on the liquidation, dissolution or winding up of the
Company, the payment of dividends and distributions, and redemption
rights) or increase or decrease the authorized number of Series A
Preferred Units or increase the authorized number of shares of any
additional class or series of Units (unless the same ranks junior
to the Series A Preferred Units with respect to the distribution of
assets on the liquidation, dissolution or winding up of the
Company, the payment of dividends and distributions, and redemption
rights);

 

(e) purchase, redeem or
otherwise acquire (or permit any Subsidiary to purchase, redeem or
otherwise acquire), or pay, declare or make any dividend or
distribution on, any Common Units;

 

(f) create any bonds,
notes or Equity Securities that are convertible into, or
exchangeable for, or have option rights to purchase or otherwise
acquire, any Units (or other ownership or profits interests) in the
Company that would rank senior to or pari passu with the Series A Preferred
Units with respect to the distribution of assets on the
liquidation, dissolution or winding up of the Company, the payment
of dividends and distributions, and redemption rights;

 

(g) create, incur,
assume, guarantee or authorize the creation, incurrence, guarantee,
or assumption of, or issue, or authorize the issuance of any
Indebtedness, or permit any Subsidiary to take any such action with
respect to any Indebtedness, except for current trade payables
incurred in the ordinary course of business, or amend, renew,
increase or otherwise alter in any material respect the terms of
any Indebtedness previously approved or required to be approved by
holders of Series A Preferred Units;

 

(h) increase or
decrease the authorized number of Managers constituting the Board
from three (3) or otherwise affects the composition or appointment
of the Board;

 

(i) engage in any line
of business other than the business conducted or proposed to be
conducted by the Company as of the Effective Date or use, or permit
the use of, the proceeds from the issuance of the Series A
Preferred Units for any purpose other than the purposes specified
in Section
2.3;

 

(j) enter into, or
become subject to or bound by, any agreement or instrument or other
obligation which by its terms restricts the Company’s ability
to perform any of its obligations under the Company Agreement
and/or this Agreement, including the ability of the Company to pay
dividends or distributions or make any redemption or liquidation
payments with respect to the Series A Preferred Units required
hereunder and/or under the Company Agreement;

 

(k) effect any
recapitalization, restructuring or reorganization or split or
combination of any Unit, Preferred Unit, or Common
Unit;

 

(l) effect or enter
into any agreement to effect any Change of Control;

 

(m) sell, transfer,
license, lease or otherwise dispose of, in any transaction or
series of related transactions, any assets of the Company or any
Subsidiary having a Fair Market Value in excess of $100,000, other
than inventory in the ordinary course of business;

 

 

40

 

 

(n) create, form or
acquire any Subsidiary; or

 

(o) take any action,
authorize or approve, or enter into any binding agreement with
respect to or otherwise commit to do any of the
foregoing.

 

Section
6.9 Redemption.

 

(a) Quarterly Mandatory Redemption.
On the last day of April, July, October and January of each
calendar year (each a “Quarterly Redemption Date”), the
Company shall mandatorily redeem, at their Liquidation Value, the
number of Series A Preferred Units equal to seventy-five percent
(75%) of Free Cash Flow (if positive) generated by the Company
during the calendar quarter then most recently ended divided by the
Liquidation Value (the aggregate redemption price on any such date
being a “Quarterly Redemption
Price”). In connection with the payment of each such
mandatory redemption, the Company shall provide a statement setting
forth the calculation of the Quarterly Redemption Price, along with
such supporting documentation as may be reasonably requested by the
Agent. To the extent that the Quarterly Redemption Price is subject
to a subsequent period-end audit adjustment, and either too little
or too much was redeemed, Company will either promptly pay
additional funds to the applicable Members, or Company will offset
present or future redemptions payable to Members. Mandatory
redemptions pursuant to this Section 6.9(a) shall be made in
immediately available funds and shall not exceed $90,000,000 in the
aggregate. If any Series A Preferred Units are not timely redeemed
pursuant to this Section 6.9(a), the unpaid Quarterly Redemption
Price for such unredeemed Units will bear interest at 10% per
annum, compounded daily, and any unpaid interest shall accrue and
shall be due and payable no later than the next Quarterly
Redemption Date (irrespective of whether the Company generates
positive Free Cash Flow on such next Quarterly Redemption Date or
is required to redeem any other Series A Preferred Units on such
date).

 

(b) Full Redemption. On the sixth
anniversary of the Signing Date (the “Final Redemption Date”), the
Company shall redeem all of the outstanding Series A Preferred
Units by paying to the Purchaser, in immediately available funds,
an aggregate amount equal to the Liquidation Value of all issued
and outstanding Series A Preferred Units plus all accrued and
unpaid Preference Payments on the Series A Preferred Units (the
“Final Redemption
Price”).

 

(c) Interest. If any Series A
Preferred Units required to be redeemed on any Redemption Date are
not redeemed in accordance with this Agreement, (i) all such
unredeemed Series A Preferred Units shall remain outstanding and
continue to have the rights, preferences and privileges provided in
this Agreement, including the accrual and accumulation of
Preference Payments, and (ii) the Company shall pay interest
on the Redemption Price applicable to such unredeemed Series A
Preferred Units at a per annum rate equal to ten percent (10%),
compounded daily; provided, however, that in no event shall
such interest exceed the maximum permitted rate of interest under
applicable law (the “Maximum
Permitted Rate”), provided, however, that the Company shall
take all such actions as may be necessary, including without
limitation, making any applicable governmental filings, to cause
the Maximum Permitted Rate to be the highest possible rate. In the
event any provision hereof would result in the rate of interest
payable hereunder being in excess of the Maximum Permitted Rate,
the amount of interest required to be paid hereunder shall
automatically be reduced to eliminate such excess; provided, however, that any subsequent
increase in the Maximum Permitted Rate shall be retroactively
effective to the applicable Redemption Date to the extent permitted
by law. Subject to Section 6.9(a), accrued and unpaid interest on
any past due Redemption Price shall be due and payable when such
Redemption Price is paid.

 

 

41

 

 

Section
6.10 Preemptive
Rights. Subject to the
terms and conditions of Section 6.8, this Section 6.10 and
Applicable Securities Laws, if the Company proposes to offer or
sell any Equity Securities, the Company shall first offer such
Equity Securities to each Member holding Series A Preferred Units
(excluding any such Member who is not an “accredited
investor” as defined in Regulation D promulgated under the
Securities Act) (each, a “Preemptive Right
Member”).

 

(a) The Company shall
give notice (the “Offer
Notice”) to each Preemptive Right Member, stating (i)
its bona fide intention to offer such Equity Securities, (ii) the
number of such Equity Securities to be offered, (iii) the price and
terms, if any, upon which it proposes to offer such Equity
Securities, and (iv) if the consideration to be paid for such
Equity Securities includes non-cash consideration, the Fair Market
Value thereof.

 

(b) By notification to
the Company within twenty (20) days after the Offer Notice is
given, each Preemptive Right Member may elect to purchase or
otherwise acquire, at the price and on the terms specified in the
Offer Notice, up to that portion of such Equity Securities which
equals the proportion that the Series A Preferred Units then held
by such Preemptive Right Member bears to the total Series A
Preferred Units then outstanding; provided that if the
consideration to be paid for such Equity Securities includes
non-cash consideration, each Preemptive Right Member shall be
entitled, at its option, to pay the price in cash in lieu of such
non-cash consideration. At the expiration of such twenty (20) day
period, the Company shall promptly notify each Preemptive Right
Member that elects to purchase or acquire all the shares available
to it (each, a “Fully
Exercising Member”) of any other Preemptive Right
Member’s failure to do likewise. During the ten (10) day
period commencing after the Company has given such notice, each
Fully Exercising Member may, by giving notice to the Company, elect
to purchase or acquire, in addition to the number of shares
specified above, up to that portion of the Equity Securities for
which Preemptive Right Members were entitled to subscribe but that
were not subscribed for by the Preemptive Right Members which is
equal to the proportion that the Series A Preferred Units then held
by such Fully Exercising Member bears to the Series A Preferred
Units then held by all Fully Exercising Members who wish to
purchase such unsubscribed shares. The closing of any sale pursuant
to this Section
6.9(c) shall occur within the later of ninety (90) days of
the date that the Offer Notice is given and the date of initial
sale of Equity Securities pursuant to Section 6.10(d).

 

(c) If all Equity
Securities referred to in the Offer Notice are not elected to be
purchased or acquired as provided in Section 6.10(c), the Company
may, during the ninety (90) day period following the expiration of
the periods provided in Section 6.10(c), offer and sell
the remaining unsubscribed portion of such Equity Securities to any
Person or Persons at a price not less than, and upon terms no more
favorable to the offeree than, those specified in the Offer Notice.
If the Company does not enter into an agreement for the sale of the
Equity Securities within such period, or if such agreement is not
consummated within thirty (30) days of the execution thereof, the
right provided hereunder shall be deemed to be revived and such
Equity Securities shall not be offered unless first reoffered to
the Preemptive Right Members in accordance with this Section 6.10.

 

(d) Subject to the
terms and conditions of this Section 6.9 and Applicable
Securities Laws, if any Subsidiary of the Company proposes to offer
or sell any Equity Securities, such Subsidiary shall first offer
such Equity Securities to each Member holding Series A Preferred
Units in accordance with the terms and conditions of this
Section 6.10,
mutatis
mutandis.

 

 

42

 

 

Section
6.11 Closing
Fee. At the Initial
Closing, the Company shall pay to the Agent, for its own account,
in immediately available funds, a closing fee equal to $900,000 to
an account designated by the Agent, or a signed direction to
withhold such closing fee from the Subscription Amount payable at
the Initial Closing. Once paid, such fee shall be deemed fully
earned and non-refundable.

 

Section
6.12 Unit
Ownership Ledger. The Company shall
create and maintain a ledger (the “Unit Ownership Ledger”) in
accordance with the Company Agreement.

 

Section
6.13 D&O
and Other Insurance.

 

(a) The Company shall
obtain and maintain from financially sound and reputable insurers
directors and officers liability insurance in an amount and on
terms and conditions satisfactory to the Board (which shall include
Side A Coverage), and will use commercially reasonable efforts to
cause such insurance policies to be maintained until such time as
the Board determines that such insurance should be discontinued.
Notwithstanding any other provision of this Section 6.13 to the contrary,
for so long as the Series A Preferred Units Manager is serving on
the Board, the Company shall maintain a directors and officers
liability insurance policy in an amount of at least $3,000,000
(with additional Side A coverage of at least $2,000,000) and
otherwise satisfactory to the Series A Preferred Units Manager, and
the Company shall annually, within one hundred twenty (120) days
after the end of each fiscal year of the Company, deliver to the
Purchaser and the Agent a certification that such a directors and
officers liability insurance policy remains in effect.

 

(b) The Company shall
maintain with financially sound and reputable carriers having a
financial strength rating of at least A- by A.M. Best Company (a)
insurance in such amounts (with no greater risk retention) and
against such risks (including, without limitation, loss, casualty
or damage by fire and loss in transit; theft, burglary, pilferage,
larceny, embezzlement, and other criminal activities; business
interruption; and general liability) and such other hazards, as is
customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar
locations and (b) all insurance required pursuant to the Collateral
Documents. Such insurance must be satisfactory to the Agent. The
Company will from time to time furnish to the Agent information in
reasonable detail as to the insurance so maintained.

 

(c) The Company shall
cause each contractor and subcontractor, prior to performing work
on the Project, to supply proper evidence of the types of insurance
as set forth in their respective contracts and will include, where
applicable, professional liability insurance. Such insurance
supplied by each contractor and subcontractor shall, with the
exception of workers compensation, where contractually able: (i)
add the Company and the Agent as additional insured; (ii) be
primary with respect to insurance provided the Company, the
Purchaser and the Agent as additional insured; (iii) waive rights
of subrogation against the Company and the Agent as additional
insured; and (iv) continue in force until all obligations of the
contractor or subcontractor are fulfilled.

 

 

43

 

 

Section
6.14 Financial
Covenants. The Company shall
comply with the following financial covenants:

 

(a) Operating Cash Flow per
Digester. Following the Stabilization Period of each
Digester, such Digester shall have minimum quarterly Operating Cash
Flow of $300,000.

 

(b) Total Operating Cash Flow. The
Company will cause minimum quarterly Operating Cash Flow on a
cumulative basis to be not less than the amounts specified below
for the periods specified below:

 

	

 

Calendar
Months following Initial Closing Date

	

 

Cumulative
Operating Cash Flow

	

15
months

	

$1,500,000

	

18
months

	

$2,300,000

	

21
months

	

$3,200,000

	

24
months

	

$7,900,000

	

27
months

	

$15,600,000

	

30
months

	

$21,100,000

	

33
months

	

$26,500,000

	

36
months

	

$32,900,000

	

39
months

	

$39,900,000

	

42
months

	

$46,000,000

	

45
months

	

$52,100,000

	

48
months

	

$59,300,000

	

51
months

	

$67,000,000

	

54
months

	

$73,000,000

	

57
months

	

$79,000,000

	

60
months

	

$86,000,000

 

(c) Minimum Biogas Output.
Commencing on October 18, 2019, the Company will cause the average
biogas output generated by the Digesters from cow manure and
reported monthly to be not less than 11 MMBTU per WCE per year on a
seasonally adjusted, annualized basis.

 

Section
6.15 Operational
Covenants. The Company shall
comply with the following covenants:

 

(a) The Company shall
comply with and shall enforce all of the terms of the Project
Contracts.

 

(b) The Company shall
not (i) cancel or terminate any Project Contract or consent to or
accept any cancellation or termination thereof; (ii) amend, modify
or change in any manner any term or condition of any Project
Contract or give any consent, waiver or approval thereunder;
(iii) waive any default under or any breach of any term or
condition of any Project Contract; or (iv) take any other action in
connection with any Project Contract that would impair the value of
the interest or rights of the Company thereunder or that would
impair the rights or interests of the Agent or the Purchaser
therein.

 

 

44

 

 

(c) The Company shall
comply with all applicable Laws and all of its contractual
obligations.

 

(d) The Company shall
pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the
Company.

 

(e) The Company shall
maintain a centralized monitoring and control system for data
collection comprising all key performance indicators and measured
parameters, with primary data feeds connected to a control console
to be located at the Keyes Plant with a connecting feed to Maas
Energy’s offices until such time as the Maas Energy Contract
expires in accordance with its terms.

 

(f) The Company may
transition operation and maintenance of the Project from Maas
Energy to another contractor, acceptable to the Agent, after the
first anniversary following the end of the Stabilization
Period.

 

(g) The Company shall
maintain regular contact with each dairy farmer to monitor and
notify the Agent of any changes in the feed to the cows at each
dairy.

 

(h) The Company shall
maintain an inventory of required spares and long lead time items
to ensure uninterrupted operations of the Digesters.

 

(i) At the
Agent’s request, and the Company’s sole expense, the
Company will engage and maintain a California- approved specialist
bioenergy consultant to maximize proceeds from the Company’s
LCFS and RIN credits.

 

(j) The Company shall
not create or acquire any Subsidiaries.

 

(k) The Company shall
not make any loans or advances to, or investments in, any other
Person, outside of prepaid or trade account arrangements typical
and reasonable to operate the business.

 

(l) The Company shall
not amend, restate, supplement or otherwise modify the Gantt chart
or the Project Budget without the prior written approval of the
Agent and the Third Party Consultant.

 

(m) The Company shall
maintain in full force and effect all Permits necessary or
desirable for the Development of the Project.

 

(n) The Company shall
establish and maintain proper procedures in accordance with
applicable law for obtaining conditional and final lien waivers
from all contractors and subcontractors performing work on the
Project, and the Company shall obtain, or cause to be obtained,
sworn lien waivers concurrently with each payment to each
contractor and subcontractor performing work on the Project. All
such lien waivers shall comply with applicable law and shall
evidence receipt of all payments made prior to the date thereof or
that are then due and payable.

 

(o) The Company shall
not make any payments to Aemetis pursuant to the Management
Agreement without the Agent’s prior written consent nor
during or following a Trigger Event.

 

(p) After the date
hereof, any DDRDP grants applied for by the Company with respect to
the Project shall be applied for by the Company and shall be
awarded directly to the Company.

 

 

45

 

 

Section
6.16 Other
Covenants. The Company shall
comply with the following covenants:

 

(a) The Company shall
provide the Agent as soon as practicable with all engineering
drawings in connection with construction and completion of the
Project, Project Contracts, materials estimates and takeoffs, plans
and specifications, Permits and approvals, the Project Budget,
Milestone and construction schedules, and bonding insurance, in
each case to be prepared or approved by Maas Energy and confirmed
by the Third Party Consultant.

 

(b) The Company agrees
to enter into, at least ninety (90) days prior to the end of the
Stabilization Period of the Initial Digesters, CNG and/or natural
gas supply agreements with one or more transportation and/or energy
companies (“CNG
Transportation Agreements”), including G&G and Al
Gilbert, satisfactory to the Agent, that allow for transport of
100% of biogas generated from the Project for a minimum term of six
(6) years.

 

(c) Upon completion of
the Initial Digesters, the Company agrees to cover any cost overrun
in the Project Budget, from time to time, by arranging USDA
guaranteed, low interest rate loans up to $20,000,0000 to avoid any
work stoppages during execution of the Project (the
“USDA Loan
Condition”), on terms acceptable to the
Agent.

 

Section
6.17 Collateral.

 

(a) Collateral Documents Generally.
To secure full and complete payment and performance of the
Obligations, the Company shall from time to time execute and
deliver, or cause to be executed and delivered, all Collateral
Documents required by the Agent to grant to the Agent, for the
benefit of the Secured Parties, a perfected, first priority lien on
and security interest in all present and future property of the
Company. The Company shall execute and cause to be executed such
further documents and instruments, including without limitation,
UCC financing statements, as the Agent, in its sole discretion,
deems necessary or desirable to create, evidence, preserve,
protect, and perfect its liens and security interests in the
Collateral.

 

(b) Mortgages. Promptly after
entering into a Lease with respect to each Additional Digester, the
Company shall, at the Company’s sole cost and expense,
promptly execute and deliver to the Agent a first priority Mortgage
in recordable form covering such Lease, the related leasehold
estate, all improvements on the leasehold estate and all
appurtenances thereto, together with the following documents, all
of which must be satisfactory in form and substance to the
Agent:

 

(i) an ALTA
mortgagee’s title policy with respect to such
Mortgage;

 

(ii) an
ALTA survey with respect to the real property covered by such
Mortgage, prepared and certified to the Agent by a surveyor
acceptable to the Agent;

 

(iii) evidence
satisfactory to the Agent that the property covered by such
Mortgage is not in a flood zone;

 

(iv) if
requested by the Agent, an environmental assessment of the real
property covered by such Mortgage prepared by an environmental
engineer reasonably acceptable to the Agent, and accompanied by
such reports, certificates, studies or data as the Agent may
reasonably require, which shall all be in form and substance
satisfactory to the Agent;

 

 

46

 

 

(v) an acknowledgement
and agreement in recordable form, in favor of the Agent, executed
by the lessor under such Lease and, if different from such lessor,
the owner and operator of the relevant dairy, with respect to such
Mortgage and such Lease;

 

(vi) a
consent and nondisturbance agreement executed by each prior
mortgagee of the premises covered by the Lease; and

 

(vii) such
other information, documents, and certificates as may be reasonably
required by the Agent.

 

(c) Further Assurances.  
Promptly upon request by the Agent, the Company shall
(a) correct any defect or error that may be discovered in any
Transaction Document or in the execution, acknowledgment, filing or
recordation thereof, and (b) do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and
all such further acts, deeds, certificates, assurances and other
instruments as the Agent may require from time to time in order to
(i) carry out more effectively the purposes of the Transaction
Document, (ii) subject the Company’s or any of its
Subsidiaries' properties, assets, rights or interests to the Liens
now or hereafter intended to be covered by any of the Collateral
Documents, (iii) perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (iv) assure, convey,
grant, assign, transfer, preserve, protect and confirm more
effectively unto the Secured Parties the rights granted or now or
hereafter intended to be granted to the Secured Parties under any
Transaction Document or under any other instrument executed in
connection with any Transaction Document to which the Company or
any of its Subsidiaries is or is to be a party, and cause each of
its Subsidiaries to do so.

 

(d) Obligations Secured by
Collateral. Notwithstanding anything to the contrary
contained in the Collateral Documents, the aggregate amount of the
Obligations secured by the Collateral shall be limited to an amount
equal to the sum of (i) $30,000,000, plus (ii) all interest, fees,
charges, expenses, reimbursement obligations and indemnification
obligations of the Company under the Transaction Documents, whether
absolute or contingent, due or to become due, or now existing or
hereafter arising or incurred, including, without limitation, all
fees, charges and disbursements of counsel to the Agent or to any
other Secured Party that are required to be paid by the Company
pursuant to any Transaction Document. Nothing contained in this
Section 6.17(d) shall limit or affect the absolute and
unconditional obligation of the Company to pay and perform when due
all of the Obligations.

 

(e) As-Built Surveys. Within thirty
(30) after the completion of construction of each Digester, the
Company, at the Company’s sole cost and expense, shall
deliver to the Agent a final “as-built” survey of such
Digester, certified to the Agent and the relevant title insurance
company, showing the completed Digester, which survey shall be in
form and substance satisfactory to the Agent and the title
insurance company, and shall disclose no easements, rights-of-way
or other encumbrances, except for those that are acceptable to the
Agent.

 

Section
6.18 Post-Closing
Obligations. The Company
agrees that it will timely perform all of its covenants and
agreements contained on Annex IV hereto. Any failure by
the Company to timely perform any of its covenants on Annex IV shall constitute an
immediate Trigger Event.

 

 

47

 

 

ARTICLE VII.

TRIGGER EVENTS AND REMEDIES

 

Section
7.1 Trigger
Events. The term
“Trigger Event”
means, wherever used herein any of the following events (whatever
the reason for such event and whether such event shall be voluntary
or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental
body):

 

(a) Non-Payment. The Company fails
to (i) redeem any of the Series A Preferred Units on the applicable
Redemption Date in accordance with this Agreement, or (ii) pay when
due, any interest or fee due hereunder, or (iii) pay when due any
other amount payable hereunder or under any other Transaction
Document; or

 

(b) Covenants. The Company fails to
perform or observe any term, covenant or agreement contained in any
of the Transaction Documents; or

 

(c) Other Defaults. The Company
ceases to carry on its business in the ordinary course, except
where such cessation occurs in connection with a sale of all or
substantially all of the assets of the Company, or a restructuring
or reorganization of the Company, which has been approved in
writing by the Agent; or

 

(d) Representations and Warranties.
Any representation, warranty, certification or statement of fact
made or deemed made by or on behalf of the Company herein, in any
other Transaction Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

 

(e) Cross-Default. (i) The Company
(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 having an aggregate
principal amount of more than $100,000, or (B) fails to
observe or perform any other agreement or condition relating to any
such Indebtedness or Guarantee 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, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, 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; 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 the Company or any Subsidiary thereof 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 the Company is an
Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by the Company as a result thereof is
greater than $100,000; or

 

(f) Insolvency Proceedings, Etc.
The Company institutes or consents to the institution of any
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
sixty (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 sixty (60) calendar days, or
an order for relief is entered in any such proceeding;
or

 

 

48

 

 

(g) Inability to Pay Debts;
Attachment. (i) The Company becomes insolvent or 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 thirty (30) days after its
issue or levy; or

 

(h) Judgments. There is entered
against the Company (i) one or more final judgments or orders
for the payment of money in an aggregate amount (as to all such
judgments and orders) exceeding $100,000 (to the extent not covered
by independent third-party insurance as to which the insurer is
rated at least “A” by A.M. Best Company, has been
notified of the potential claim and does not dispute coverage), 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) there is a period of ten
(10) 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 the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of
$100,000, or (ii) the Company 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 in excess of $100,000; or

 

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

 

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

 

(l) Collateral Documents. Any of
the Collateral Documents shall cease, for any reason, to be in full
force and effect, or the Company or any Affiliate of the Company
shall so assert, or any Lien created by any of the Collateral
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or

 

(m) Project Contracts. The Company
shall fail to perform or observe any term, covenant or agreement
contained in any Project Contract on its part to be performed or
observed where such failure could reasonably be expected to have a
Material Adverse Effect; or

 

(n) Material Adverse Effect. There
shall occur any event, condition or development that could, in the
sole opinion of the Agent, reasonably be expected to have a
Material Adverse Effect; or

 

(o) Note Purchase Agreement. A
default or event of default shall occur under the Note Purchase
Agreement.

 

Section
7.2 Redemption
and other Remedies upon Trigger Event. If any Trigger
Event occurs and is continuing, the Agent, at its option, may take
any or all of the following actions:

 

 

 

49

 

 

(a) terminate any
obligation of the Purchaser to purchase Series A Preferred Units
under this Agreement or otherwise;

 

(b) increase the
percentage in Section
6.9(a) from seventy-five percent (75%) to one hundred
percent (100%);

 

(c) increase the total
number of Common Units into which Preferred Units may be converted
from 1,200,000 Common Units to 5,000,000 Common Units;
and/or

 

(d) exercise any and
all rights and remedies available to it and the Purchaser under the
Transaction Documents.

 

Section
7.3 Mandatory
Redemption on Bankruptcy Trigger Event. Notwithstanding
anything to the contrary herein, and notwithstanding any conversion
that is then required or in process, upon any Bankruptcy Trigger
Event occurring prior to or following the Final Redemption Date,
the Company shall immediately redeem, in cash, each of the Series A
Preferred Units then outstanding at a redemption price equal to the
Final Redemption Price plus any all liquidated damages and other
costs, expenses or amounts due in respect of the Series A Preferred
Units or otherwise owing under this Agreement, without the
requirement for any notice or demand or other action by the Agent
or any other Person, provided that the Agent may, in its sole
discretion, waive such right to receive payment upon a Bankruptcy
Trigger Event, in whole or in part, and any such waiver shall not
affect any other rights of the Agent or any Unitholder hereunder,
including any other rights in respect of such Bankruptcy Trigger
Event, any right to conversion, and any right to payment of such
amounts, as applicable.

 

Section
7.4 Application
of Funds. After the
exercise of remedies provided for in Section 7.2, any amounts
received on account of the Obligations shall be applied by the
Agent in the following order (or as otherwise determined by the
Agent in its sole discretion):

 

First, to payment of that
portion of the Obligations constituting fees, indemnities, expenses
and other amounts (including fees, charges and disbursements of
counsel to the Agent) payable to the Agent in its capacity as
such;

 

Second, to payment of all other
Obligations in such order and manner as the Agent may elect in its
sole discretion; and

 

Last, the balance, if any,
after all of the Obligations have been indefeasibly paid in full,
to the Company or as otherwise required by Law.

 

ARTICLE VIII. 

MISCELLANEOUS

 

Section
8.1 Survival
of Warranties. Unless otherwise
set forth in this Agreement, the representations and warranties of
the Company and the Purchaser contained in or made pursuant to this
Agreement shall survive the execution and delivery of this
Agreement and each Closing and shall in no way be affected by any
investigation or knowledge of the subject matter thereof made by or
on behalf of the Purchaser or the Company.

 

 

 

50

 

 

Section
8.2 Successors
and Assigns. The terms and
conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties,
provided that the Company shall not assign any of its rights or
obligations under this Agreement. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any
rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided in this
Agreement.

 

Section
8.3 Governing
Law. This Agreement
shall be governed by, construed and enforced in accordance with the
laws of the State of Delaware.

 

Section
8.4 Counterparts.
This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts
may be delivered via facsimile, electronic mail (including pdf) or
other transmission method and any counterpart so delivered shall be
deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

Section
8.5 Titles
and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.

 

Section
8.6 Notices.
All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given
upon the earlier of actual receipt, or (a) personal delivery to the
party to be notified, (b) when sent, if sent by electronic mail or
facsimile during normal business hours of the recipient, and if not
sent during normal business hours, then on the recipient’s
next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) business day after deposit with a
nationally recognized overnight courier, freight prepaid,
specifying next business day delivery, with written verification of
receipt. All communications shall be sent to the respective parties
at their address as set forth on the signature pages hereto, or to
such e-mail address, facsimile number or address as subsequently
modified by written notice given in accordance with this
Section
8.6.

 

Section
8.7 No
Finder’s Fees. Each party
represents that it neither is nor will be obligated for any
finder’s fee or commission in connection with this Agreement.
The Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature
of a finder’s or broker’s fee arising out of the
Transaction (and the costs and expenses of defending against
such liability or asserted liability) for which the Purchaser or
any of its officers, employees or representatives is responsible.
The Company agrees to indemnify and hold harmless the Purchaser
from any liability for any commission or compensation in the
nature of a finder’s or broker’s fee arising out of the
Transaction (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of
its officers, employees or representatives
is responsible.

 

 

51

 

 

Section
8.8 Fees
and Expenses; Taxes; Indemnification.

 

(a) Whether or not any
Closing occurs, the Company shall pay on demand (i) all expenses
incurred by the Agent, the Purchaser and their respective
Affiliates, including the reasonable fees, charges and
disbursements of counsel (including local counsel) for the Agent,
in connection with the preparation, negotiation, execution,
delivery and administration of the Transaction Documents or any
amendments, modifications or waivers of the provisions of the
Transaction Documents (whether or not the transactions contemplated
hereby or thereby shall be consummated), and (ii) all expenses
incurred by the Agent, the Purchaser and their respective
Affiliates, including the fees, charges and disbursements of any
counsel (including local counsel) for the Agent, the Purchaser, and
their respective Affiliates in connection with the enforcement,
preservation or protection of their rights under or in connection
with the Transaction Documents, including all such expenses
incurred in connection with any Trigger Event or Potential Trigger
Event. Expenses being reimbursed by the Company under this Section
include, without limiting the generality of the foregoing, costs
and expenses incurred in connection with:

 

(i) appraisals, asset
valuations, and insurance reviews;

 

(ii) field
examinations and Collateral audits;

 

(iii) auditing,
monitoring and evaluating the Development of the
Project;

 

(iv) background
checks regarding senior management of the Company, as deemed
necessary or appropriate in the sole discretion of the
Agent;

 

(v) Taxes, fees and
other charges for (A) Lien and title searches and title insurance,
(B) surveys of property encumbered by the Mortgages, (C)
environmental audits, and (D) recording the Mortgages, filing
financing statements and continuations, and other actions to
perfect, protect, and continue the Agent's Liens;

 

(vi) sums
paid or incurred to take any action required of the Company under
the Transaction Documents that the Company fails to pay or take;
and

 

(vii) retaining
engineers, auditors, accountants, consultants, valuation experts,
and other advisors.

 

(b) All Units issued
hereunder by the Company shall be duly and validly issued, fully
paid and nonassessable, free and clear of all Taxes, Liens, and
charges with respect to the issuance thereof.

 

(c) All transfer,
documentary, sales, use, stamp, registration and other such Taxes,
and all conveyance fees, recording charges and other fees and
charges (including any penalties and interest) incurred in
connection with consummation of the transactions contemplated by
this Agreement shall be paid by the Company when due, and the
Company will, at its own expense, file all necessary Tax Returns
and other documentation with respect to all such Taxes, fees and
charges, and, if required by applicable Law, the Investor will, and
will cause their Affiliates to, join in the execution of any such
Tax Returns and other documentation.

 

 

52

 

 

(d) The Company shall
indemnify the Agent (and any sub-agent thereof) and the Purchaser
and each Related Party of any of the foregoing Persons (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 fees, charges and
disbursements of any counsel for any Indemnitee) incurred by any
Indemnitee or asserted against any Indemnitee by any third party or
by the Company or any Affiliate of the Company arising out of, in
connection with, or as a result of (i) the execution or delivery of
this Agreement, any other Transaction Document or any agreement or
instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated
hereby or thereby, or, in the case of the Agent (and any sub-agent
thereof) and its Related Parties only, the administration of this
Agreement and the other Transaction Documents, (ii) any Purchase or
the use or proposed use of the proceeds therefrom, (iii) any actual
or alleged presence or release of Hazardous Substance on or from
any property owned or operated by the Company or any of its
Subsidiaries, or any environmental liability related in any way to
the Company or any of its Subsidiaries, (iv) the Development of the
Project, or (v) any actual or prospective Action relating to
any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Company or any
or any of the Company’s Affiliates, managers, directors,
members, shareholders or creditors, 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 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. No Indemnitee shall be
liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it
through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other
Transaction Documents or the transactions contemplated hereby or
thereby.

 

(e) To the fullest
extent permitted by applicable law, the Company shall not assert,
and hereby waives, 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
Transaction Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any
Purchase or the use of the proceeds thereof. No Indemnitee referred
to in subsection (d) above shall be liable for any damages arising
from the use by unintended recipients of any information or other
materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Agreement
or the other Transaction Documents or the transactions contemplated
hereby or thereby other than for direct or actual damages resulting
from the gross negligence or willful misconduct of such Indemnitee
as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

 

(f) The provisions of
this Section shall survive any termination of this Agreement and
any redemption of the Series A Preferred Units.

 

(g) All amounts due
under this Section shall be payable not later than ten (10) days
after demand therefor.

 

Section
8.9 Time
of the Essence. Time is of the
essence of this Agreement and the other Transaction
Documents.

 

 

53

 

 

Section
8.10 Amendments
and Waivers. Any term of this
Agreement may be amended, terminated or waived only with the
written consent of the Company, the Agent and the holders of all of
the then outstanding Series A Preferred Units. Any amendment or
waiver effected in accordance with this Section 8.10 shall be binding
upon the Purchaser and each transferee of the Series A Preferred
Units (or the Common Units issuable upon conversion thereof), each
future holder of all such Units, the Agent and the
Company.

 

Section
8.11 Severability.
The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other
provision.

 

Section
8.12 Delays
or Omissions; Independence of Covenants.

 

(a) No delay or
omission to exercise any right, power or remedy accruing to any
party under this Agreement, upon any breach or default of any other
party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it
be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under
this Agreement or by Law or otherwise afforded to any party, shall
be cumulative and not alternative.

 

(b) All covenants of
the Company hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to,
or would otherwise be within the limitations of, another covenant
shall not avoid the occurrence of a Trigger Event or a Potential
Trigger Event if such action is taken or condition
exists.

 

Section
8.13 Entire
Agreement. This Agreement
(including the Exhibits and Annexes hereto), the Company Agreement
and the other Transaction Documents constitute the full and entire
understanding and agreement between the parties with respect to the
subject matter hereof, and any other written or oral agreement
relating to the subject matter hereof existing between the parties
are expressly canceled.

 

Section
8.14 Corporate
Securities Law. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS
AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING
OBTAINED UNLESS THE SALE IS SO EXEMPT.

 

 

54

 

 

Section
8.15 Termination
of Closing Obligations. The Purchaser
shall have the right to terminate its obligation to complete any
Closing, if prior to the occurrence thereof, any of the following
occurs:

 

(a) the Company
consummates a Deemed Liquidation Event; or

 

(b) a Trigger Event or
Potential Trigger Event exists.

 

Section
8.16 Submission
to Jurisdiction; Jury Trial Waiver.

 

(a) THE VALIDITY,
INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE. THE COMPANY AND
MEMBERS EACH HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF THE
CHANCERY COURT OF THE STATE OF DELAWARE FOR ALL PURPOSES IN
CONNECTION WITH ANY ACTION OR PROCEEDING WHICH ARISES OUT OF OR
RELATES TO THIS AGREEMENT AND AGREE THAT ANY ACTION INSTITUTED
UNDER THIS AGREEMENT SHALL BE BROUGHT ONLY IN THE CHANCERY COURT OF
THE STATE OF DELAWARE. IN THE EVENT OF A DIRECT CONFLICT BETWEEN
THE PROVISIONS OF THIS AGREEMENT AND ANY PROVISION OF THE
CERTIFICATE OF FORMATION OR ANY MANDATORY PROVISION OF THE DELAWARE
ACT, THE APPLICABLE PROVISION OF THE CERTIFICATE OF FORMATION OR
THE DELAWARE ACT SHALL CONTROL.

 

(b) EACH PARTY HEREBY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION
DOCUMENTS, THE PURCHASED UNITS OR THE SUBJECT MATTER HEREOF OR
THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS
(INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON
LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY
EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT
TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.

 

 

55

 

 

Section
8.17 No
Commitment for Additional Financing. The Company
acknowledges and agrees that the Agent and the Purchaser have not
made any representation, undertaking, commitment or agreement to
provide or assist the Company in obtaining any financing,
investment or other assistance, other than the purchase of the
Series A Preferred Units by the Purchaser as set forth herein and
subject to the conditions set forth herein. In addition, the
Company acknowledges and agrees that (i) no statements,
whether written or oral, made by the Agent or the Purchaser or
their representatives on or after the date of this Agreement shall
create an obligation, commitment or agreement to provide or assist
the Company in obtaining any financing or investment, (ii) the
Company shall not rely on any such statement by the Agent or the
Purchaser or their representatives, and (iii) an obligation,
commitment or agreement to provide or assist the Company in
obtaining any financing or investment may only be created by a
written agreement, signed by the Purchaser and the Company, setting
forth the terms and conditions of such financing or investment and
stating that the parties intend for such writing to be a binding
obligation or agreement. The Purchaser shall have the right, in its
sole and absolute discretion, to refuse or decline to participate
in any other financing of or investment in the Company, and shall
have no obligation to assist or cooperate with the Company in
obtaining any financing, investment or other
assistance.

 

Section
8.18 Press
Releases and Announcements. The Company may
issue a press release or otherwise make public statements related
to this Agreement that are consistent with past practice;
provided,
however, that the
Company shall not disclose in such press release or other public
statement the identity of the Agent or any Purchaser without prior
written consent of the Agent or the Purchaser.

 

Section
8.19 Replacement
of Certificates. If any
certificate or instrument evidencing any of the Series A Preferred
Units, or any of the Common Units resulting for a conversion of
Series A Preferred Units, is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation thereof (in the case of
mutilation), or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or
destruction.

 

Section
8.20 Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by Law, including recovery of damages, each of
the Company, the Purchaser and the Agent will be entitled to
specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for
any loss incurred by reason of any breach of obligations contained
in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such
obligation the defense that a remedy at Law would be
adequate.

 

 

56

 

 

Section
8.21 No
Advisory or Fiduciary Responsibility. In connection
with all aspects of the Transaction (including in connection with
any amendment, waiver or other modification of this Agreement or of
any other Transaction Document), the Company acknowledges and
agrees that: (i) (A) the services regarding this Agreement provided
by the Agent and the Purchaser are arm’s-length commercial
transactions between the Company and its Affiliates, on the one
hand, and the Agent, the Purchaser and their respective Affiliates,
on the other hand, (B) the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed
appropriate, and (C) the Company is capable of evaluating, and
understands and accepts, the terms, risks and conditions of the
Transaction; (ii) (A) the Agent and the Purchaser and each of
their respective Affiliates is and has been acting solely as a
principal and has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Company or any of its
Affiliates, or any other Person and (B) neither the Agent, the
Purchaser nor any of their respective Affiliates has any obligation
to the Company or any of its Affiliates with respect to the
Transaction except, in the case of the Agent and the Purchaser,
those obligations expressly set forth herein and in the other
Transaction Documents; and (iii) the Agent and the Purchaser and
their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the
Company and its Affiliates, and neither the Agent, the Purchaser
nor any of their respective Affiliates has any obligation to
disclose any of such interests to the Company or its Affiliates. To
the fullest extent permitted by law, the Company hereby waives and
releases any claims that it may have against the Agent, the
Purchaser and their respective Affiliates with respect to any
breach or alleged breach of agency or fiduciary duty in connection
with any aspect of any Transaction.

 

Section
8.22 Payments
Set Aside. To the extent
that the Company makes a payment or payments to the Agent, or the
Agent enforces any Lien or exercise its right of setoff, and such
payment or payments or the proceeds of such enforcement or setoff
or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid
to a trustee, receiver or any other Person under any bankruptcy
law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights
and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments
had not been made or such enforcement or setoff had not
occurred.

 

Section
8.23 Payments
Generally. All payments to
be made by the Company under this Agreement and the Collateral
Documents shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Company hereunder
and under the Collateral Documents shall be made to the
Agent’s Account, for the account of the Purchaser or other
Person to which such payment is owed, in Dollars and in immediately
available funds not later than 2:00 p.m. on the date specified
herein. All payments received by the Agent after 2:00 p.m. shall be
deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment
to be made by the Company 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 on computing
interest or fees, as the case may be.

 

 

57

 

 

Section
8.24 Acknowledgments.
The Company hereby represents, warrants and acknowledges
that:

 

(a) it has been advised
by its own legal counsel in the negotiation, execution and delivery
of the Transaction Documents;

 

(b) it has made an
independent decision to enter into this Agreement and the other
Transaction Documents to which it is a party, without reliance on
any representation, warranty, covenant or undertaking by the Agent
or the Purchaser, whether written, oral or implicit, other than as
expressly set out in this Agreement;

 

(c) there are no
representations, warranties, covenants, undertakings or agreements
by the Agent or the Purchaser as to the Transaction Documents
except as expressly set out in this Agreement;

 

(d) Condon Tobin Sladek
Thornton PLLC is counsel for the Agent only and is not counsel for
the Company or any of its Affiliates;

 

(e) should any Trigger
Event or Potential Trigger Event occur or exist, each of the Agent
and the Purchaser will determine in its discretion and for its own
reasons what remedies and actions it will or will not exercise or
take at that time;

 

(f) without limiting
any of the foregoing, the Company is not relying upon any
representation or covenant by the Agent or the Purchaser, or any
representative thereof, and no such representation or covenant has
been made, that the Agent or the Purchaser will, at the time of any
Trigger Event or Potential Trigger Event, or at any other time,
waive, negotiate, discuss, or take or refrain from taking any
action permitted under the Transaction Documents with respect to
any such Trigger Event or Potential Trigger Event or any other
provision of the Transaction Documents; and

 

(g) the Agent and the
Purchaser have all relied upon the truthfulness of the
acknowledgments in this Section in deciding to enter into this
Agreement.

 

 

[Signature Pages Follow]

 

 

58

 

IN
WITNESS WHEREOF, the parties have executed this Series A Preferred
Unit Purchase Agreement as of the date first written
above.

 

	
 

	
 

COMPANY:

 

AEMETIS
BIOGAS LLC

 

 

By:           
/s/ Eric
McAfee                                  

 

Name:      

Eric McAfee

 

(print)

 

Title:        

President

 

Address:

 

20400 Stevens Creek Blvd Suite
700 

Cupertino, CA
95014

 

Signature
Page to

Series
A Preferred Unit Purchase Agreement

 

 

	
 

	
PURCHASER:

 

PROTAIR-X
AMERICAS, INC.

 

 

 

By: /s/ Dev
Bhangui           

Dev
Bhangui

President

 

 

Address:

Brookfield Place,
TD Canada Trust Tower

3930
– 161 Bay Street

Toronto,
ON M5J 2S1

Canada

 

Email
dev@thirdeyecapital.com

 

Facsimile:
416-981-3393

 

 

Signature
Page to

Series
A Preferred Unit Purchase Agreement

 

 

	
 

	

AGENT:

 

THIRD
EYE CAPITAL CORPORATION,

as
Agent

 

 

By:           
/s/ Arif N.
Bhalwani                    

 

Name:      

Arif N. Bhalwani

 

(print)

 

Title:        

Managing Director

 

 

 

Address:

3930
– 161 Bay Street

Toronto,
ON M5J 2S1

Canada

Email
ops@thirdeyecapital.com

Facsimile:
416-981-3393

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