Document:

modn-ex101_24.htm

Exhibit 10.1

Form of

Change in Control and Severance Agreement

This Change in Control and Severance Agreement (the “Agreement”) is entered into by and between _________________ (the “Executive”) and Model N, Inc., a Delaware corporation (the “Company”), on _______________ (the “Effective Date”). 

1.Term of Agreement.

This Agreement shall terminate the earlier of the third (3rd) anniversary of the Effective Date (the “Expiration Date”) or the date the Executive’s employment with the Company terminates for a reason other than a Qualifying Termination or CIC Qualifying Termination; provided however, if a definitive agreement relating to a Change in Control has been signed by the Company on or before the Expiration Date, then this Agreement shall remain in effect through the earlier of: 

(a)The date the Executive’s employment with the Company terminates for a reason other than a Qualifying Termination or CIC Qualifying Termination, or

(b)The date the Company has met all of its obligations under this Agreement following a termination of the Executive’s employment with the Company due to a Qualifying Termination or CIC Qualifying Termination.

This Agreement shall renew automatically and continue in effect for three (3) year periods measured from the initial Expiration Date, unless the Company provides Executive notice of non-renewal at least three (3) months prior to the date on which this Agreement would otherwise renew. For the avoidance of doubt, and notwithstanding anything to the contrary in Section 2 or 3 below, the Company’s non-renewal of this Agreement shall not constitute a Qualifying Termination or CIC Qualifying Termination, as applicable.

2.Qualifying Termination.  If the Executive is subject to a Qualifying Termination, then, subject to Sections 4, 8, and 9 below, Executive will be entitled to the following benefits:

(a)Severance Benefits.  The Company shall pay the Executive six (6) months of his/her monthly base salary (at the rate in effect immediately prior to the actions that resulted in the Qualifying Termination).  The Executive will receive his or her severance payment in a cash lump-sum in accordance with the Company’s standard payroll procedures which will be made on the first business day occurring after the sixtieth (60th) day following the Separation, provided that the Release Conditions have been satisfied.

(b)Continued Employee Benefits.  If Executive timely elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Company shall pay the full amount of Executive’s COBRA premiums on behalf of the Executive for the Executive’s continued coverage under the Company’s health, dental and vision plans, including coverage for the Executive’s eligible dependents, for the same period that the Executive is paid severance benefits pursuant to Section 2(a) following the Executive’s Separation or, if earlier, until Executive is eligible to be covered under another substantially equivalent medical insurance plan by a subsequent employer.  Notwithstanding the foregoing, if the Company, in its sole discretion, determines that it cannot provide the foregoing subsidy of COBRA coverage without potentially violating or causing the Company to incur additional expense as a result of noncompliance with applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall provide to Executive a taxable monthly payment in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue the group health coverage in effect on the date of the Separation (which amount shall be based on the premium for the first month of COBRA coverage), which payments shall be made regardless of whether Executive elects COBRA continuation coverage and shall commence on the later of (i) the first day of the month following the month 

 

 

in which Executive experiences a Separation and (ii) the effective date of the Company’s determination of violation of applicable law, and shall end on the earlier of (x) the effective date on which Executive becomes covered by a health, dental or vision insurance plan of a subsequent employer, and (y) the last day of the period that the Executive is paid severance benefits pursuant to Section 2(a) after the Separation, provided that, any taxable payments under Section 2(b) will not be paid before the first business day occurring after the sixtieth (60th) day following the Separation and, once they commence, will include any unpaid amounts accrued from the date of Executive’s Separation (to the extent not otherwise satisfied with continuation coverage).  However, if the period comprising the sum of the sixty (60)-day period described in the preceding sentence and the ten (10)-day period described in Section 7(e)(3) below spans two calendar years, then the payments which constitute deferred compensation subject to Section 409A will not in any case be paid in the first calendar year.  Executive shall have no right to an additional gross-up payment to account for the fact that such COBRA premium amounts are paid on an after-tax basis.

3.CIC Qualifying Termination.  If the Executive is subject to a CIC Qualifying Termination, then, subject to Sections 4, 8, and 9 below, Executive will be entitled to the following benefits:

(a)Severance Payments.  The Company or its successor shall pay the Executive six (6) months of his/her monthly base salary (at the rate in effect immediately prior to the actions that resulted in the Separation).  Such payment shall be paid in a cash lump sum payment in accordance with the Company’s standard payroll procedures, which payment will be made on the first business day occurring after the sixtieth (60th) day following the Separation, provided that the Release Conditions have been satisfied. 

(b)Equity.  Each of Executive’s then outstanding Equity Awards, including awards that would otherwise vest only upon satisfaction of performance criteria, shall accelerate and become vested and exercisable as to 100% of the then unvested shares subject to the Equity Award. Subject to Section 4, the accelerated vesting described above shall be effective as of the Separation. 

(c)COBRA; Pay in Lieu of Continued Employee Benefits.  Continuation of COBRA or a cash benefit, in both cases on the same terms as set forth in Section 2(b) above, for the same period that the Executive is paid severance benefits pursuant to Section 3(a) following the Executive’s Separation or, if earlier, until Executive is eligible to be covered under another substantially equivalent medical insurance plan by a subsequent employer.

4.General Release.  Any other provision of this Agreement notwithstanding, the benefits under Section 2 and 3 shall not apply unless the Executive (i) has executed a general release (in a form prescribed by the Company) of all known and unknown claims that he or she may then have against the Company or persons affiliated with the Company and such release has become effective and (ii) has agreed not to prosecute any legal action or other proceeding based upon any of such claims.  The release must be in the form prescribed by the Company, without alterations (this document effecting the foregoing, the “Release”).  The Company will deliver the form of Release to the Executive within thirty (30) days after the Executive’s Separation.  The Executive must execute and return the Release within the time period specified in the form.

5.Accrued Compensation and Benefits.  Notwithstanding anything to the contrary in Section 2 and 3 above, in connection with any termination of employment (whether or not a Qualifying Termination or CIC Qualifying Termination), the Company shall pay Executive’s earned but unpaid base salary and other vested but unpaid cash entitlements for the period through and including the termination of employment, including unreimbursed documented business expenses incurred by Executive through and including the date of termination (collectively “Accrued Compensation and Expenses”), as required by law and the applicable Company plan or policy.  In addition, Executive shall be entitled to any other vested benefits earned by Executive for the period through and including the termination date of Executive’s employment under any other employee benefit plans and arrangements maintained by the Company, in accordance with the terms of such plans and arrangements, except as modified herein.

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6.Definitions.

(a)“Cause” shall have the same meaning as the definition of “Cause” as set forth in the Plan.

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

(c)“Change in Control.”  For all purposes under this Agreement, a Change in Control shall mean a “Corporate Transaction,” as such term is defined in the Plan, provided that the transaction (including any series of transactions) also qualifies as a change in control event under U.S. Treasury Regulation 1.409A-3(i)(5).

(d)“CIC Qualifying Termination” means a Separation within twelve (12) months following a Change in Control resulting from (A) the Company or its successor terminating the Executive’s employment for any reason other than Cause or (B) the Executive voluntarily resigning his or her employment for Good Reason. A termination or resignation due to the Executive’s death or disability shall not constitute a CIC Qualifying Termination.  

(e)“Good Reason” means, without the Executive’s consent, (i) a material reduction in Executive’s duties or responsibilities that is inconsistent with Executive’s position, provided that a mere change of title alone shall not constitute such a material reduction, (ii) a material reduction in Executive’s base salary (other than in connection with a general decrease in the salary of all similarly situated employees or to the extent necessary to make Executive’s salary commensurate with those of other employees of the Company or its successor entity or parent entity who are similarly situated with Executive following a Change in Control), or (iii) a relocation of Executive’s principal workplace that increases Executive’s one-way commute by at least 40 miles.  For the Executive to receive the benefits under this Agreement as a result of a voluntary resignation under this subsection (e), all of the following requirements must be satisfied: (1) the Executive must provide notice to the Company of his or her intent to assert Good Reason within thirty (30) days of the initial existence of one or more of the conditions set forth in subclauses (i) through (iii); (2) the Company will have thirty (30) days from the date of such notice to remedy the condition and, if it does so, the Executive may withdraw his or her resignation or may resign with no benefits; and (3) any termination of employment under this provision must occur within ten (10) days of the earlier of expiration of the thirty day company cure period or written notice from the Company that it will not undertake to cure the condition.  Should the Company remedy the condition as set forth above and then one or more of the conditions arises again within twelve months following the occurrence of a Change in Control, the Executive may assert Good Reason again subject to all of the conditions set forth herein.

(f)“Plan” means the Company’s 2013 Equity Incentive Plan, as may be amended from time to time.

(g)“Release Conditions” mean the following conditions:  (i) Company has received the Executive’s executed Release and (ii) any rescission period applicable to the Executive’s executed Release has expired.

(h)“Qualifying Termination” means a Separation that is not a CIC Qualifying Termination, but which results from (i) the Company terminating the Executive’s employment for any reason other than Cause or (ii) the Executive voluntarily resigning his or her employment for Good Reason. A termination or resignation due to the Executive’s death or disability shall not constitute a Qualifying Termination.

(i)“Separation” means a “separation from service,” as defined in the regulations under Section 409A of the Code.

7.Successors.

(a)Company’s Successors.  The Company shall require any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or 

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substantially all of the Company’s business and/or assets, by an agreement in substance and form satisfactory to the Executive, to assume this Agreement and to agree expressly to perform this Agreement in the same manner and to the same extent as the Company would be required to perform it in the absence of a succession.  For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets or which becomes bound by this Agreement by operation of law.

(b)Executive’s Successors.  This Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

8.Golden Parachute Taxes.

(a)Best After-Tax Result.  In the event that any payment or benefit received or to be received by Executive pursuant to this Agreement or otherwise (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this subsection (a), be subject to the excise tax imposed by Section 4999 of the Code, any successor provisions, or any comparable federal, state, local or foreign excise tax (“Excise Tax”), then, subject to the provisions of Section 8, such Payments shall be either (A) provided in full pursuant to the terms of this Agreement or any other applicable agreement, or (B) provided as to such lesser extent which would result in no portion of such Payments being subject to the Excise Tax (“Reduced Amount”), whichever of the foregoing amounts, taking into account the applicable federal, state, local and foreign income, employment and other taxes and the Excise Tax (including, without limitation, any interest or penalties on such taxes), results in the receipt by Executive, on an after-tax basis, of the greatest amount of payments and benefits provided for hereunder or otherwise, notwithstanding that all or some portion of such Payments may be subject to the Excise Tax.  Unless the Company and Executive otherwise agree in writing, any determination required under this Section shall be made by independent tax counsel designated by the Company and reasonably acceptable to Executive (“Independent Tax Counsel”), whose determination shall be conclusive and binding upon Executive and the Company for all purposes.  For purposes of making the calculations required under this Section, Independent Tax Counsel may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code; provided that Independent Tax Counsel shall assume that Executive pays all taxes at the highest marginal rate.  The Company and Executive shall furnish to Independent Tax Counsel such information and documents as Independent Tax Counsel may reasonably request in order to make a determination under this Section.  The Company shall bear all costs that Independent Tax Counsel may reasonably incur in connection with any calculations contemplated by this Section.  In the event that Section 8(a)(ii)(B) above applies, then based on the information provided to Executive and the Company by Independent Tax Counsel, Executive may, in Executive’s sole discretion and within thirty (30) days of the date on which Executive is provided with the information prepared by Independent Tax Counsel, determine which and how much of the Payments (including the accelerated vesting of equity compensation awards) to be otherwise received by Executive shall be eliminated or reduced (as long as after such determination the value (as calculated by Independent Tax Counsel in accordance with the provisions of Sections 280G and 4999 of the Code) of the amounts payable or distributable to Executive equals the Reduced Amount).  If the Internal Revenue Service (the “IRS”) determines that any Payment is subject to the Excise Tax, then Section 8(b) hereof shall apply, and the enforcement of Section 8(b) shall be the exclusive remedy to the Company.

(b)Adjustments.  If, notwithstanding any reduction described in Section 8(a) hereof (or in the absence of any such reduction), the IRS determines that Executive is liable for the Excise Tax as a result of the receipt of one or more Payments, then Executive shall be obligated to surrender or pay back to the Company, within one-hundred twenty (120) days after a final IRS determination, an amount of such payments or benefits equal to the “Repayment Amount.”  The Repayment Amount with respect to such Payments shall be the smallest such amount, if any, as shall be required to be surrendered or paid to the Company so that Executive’s net proceeds with respect to such Payments (after taking into account the payment of the Excise Tax imposed on such Payments) shall be maximized.  Notwithstanding the foregoing, the Repayment Amount with respect to such Payments shall be zero (0) if a Repayment Amount of more than zero (0) would not eliminate the Excise Tax imposed on such Payments or if a Repayment Amount of 

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more than zero would not maximize the net amount received by Executive from the Payments.  If the Excise Tax is not eliminated pursuant to this Section 8(b), Executive shall pay the Excise Tax.

9.Miscellaneous Provisions.

(a)Section 409A.  To the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code and (ii) Executive is deemed at the time of such termination of employment to be a “specified” employee under Section 409A of the Code, then such payment or payments shall not be made or commence until the earlier of (i) the expiration of the six (6)-month period measured from the Executive’s Separation; or (ii) the date of Executive’s death following such Separation; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Executive, including (without limitation) the additional twenty percent (20%) tax for which Executive would otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral.  Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to Executive or Executive’s beneficiary in one lump sum (without interest).  Except as otherwise expressly provided herein, in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which Executive incurred such expenses.  To the extent that any provision of this Agreement is ambiguous as to its exemption or compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder are exempt from Section 409A to the maximum permissible extent.  To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A.  Payments pursuant to this Agreement (or referenced in this Agreement) are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the regulations under Section 409A.

(b)Other Arrangements.  This Agreement supersedes any and all cash severance arrangements under any agreement governing severance and salary continuation arrangements, programs and plans which were previously offered by the Company to the Executive, including employment agreement or offer letter, and Executive hereby waives Executive’s rights to such other benefits.  In no event shall any individual receive cash severance benefits under both this Agreement and any other severance pay or salary continuation program, plan or other arrangement with the Company.  For the avoidance of doubt, in no event shall Executive receive payment under both Section 2 and Section 3 with respect to Executive’s Separation. The vesting acceleration provisions set forth in any employment agreement or letter or similar agreement between the Company and Executive in effect on the Effective Date, to the extent more favorable to the Executive, will continue to apply to the equity awards held by the Executive on such date.

(c)Dispute Resolution.  To ensure rapid and economical resolution of any and all disputes that might arise in connection with this Agreement, Executive and the Company agree that any and all disputes, claims, and causes of action, in law or equity, arising from or relating to this Agreement or its enforcement, performance, breach, or interpretation, will be resolved solely and exclusively by final, binding, and confidential arbitration, by a single arbitrator, in Santa Clara County, and conducted by Judicial Arbitration & Mediation Services, Inc. (“JAMS”) under its then-existing employment rules and procedures.  Nothing in this section, however, is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration.  Each party to an arbitration or litigation hereunder shall be responsible for the payment of its own attorneys’ fees.

(d)Notice.  Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or deposited with Federal Express Corporation, with shipping charges prepaid.  In the case of the Executive, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing.  

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In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(e)Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(f)Withholding Taxes.  All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law.

(g)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(h)No Retention Rights.  Nothing in this Agreement shall confer upon the Executive any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or any subsidiary of the Company or of the Executive, which rights are hereby expressly reserved by each, to terminate his or her service at any time and for any reason, with or without Cause.

(i)Choice of Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California (other than its choice-of-law provisions).

 

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

			
	
EXECUTIVE
	
MODEL N, INC.

	
 
	
 

	
 
	
By:
	
 

	
 
	
Title:Exhibit 4.23

 

The
securities represented by this instrument have not been registered under the Securities Act of 1933, as amended, and may not be
sold, transferred, assigned, pledged, or hypothecated unless and until registered under such act, or unless the Debtor has received
an opinion of counsel or other evidence, satisfactory to the Debtor and its counsel, that such registration is not required.

 

THIS
NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT AS DEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO THE INFORMATION REPORTING REQUIREMENTS SET FORTH IN TREASURY REGULATION 1.1275-3.

 

UPON
WRITTEN REQUEST TO KIRK HONOUR OF MINN SHARES INC., AT 315 LAKE STREET E., SUITE 301, WAYZATA, MN 55391 INFORMATION REGARDING
THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY WILL PROMPTLY BE MADE AVAILABLE.

 

THIS
SECURED BRIDGE NOTE IS ONE IN A SERIES OF SECURED BRIDGE NOTES BEING ISSUED IN CONNECTION WITH A BRIDGE FINANCING OF UP TO $1,500,000,
INCLUDING, WITHOUT LIMITATION, THOSE CERTAIN SECURED BRIDGE NOTES BY TITAN CNG LLC IN FAVOR OF EACH OF RED OCEAN CONSULTING, LLC,
Thomas J. Abood RevocABLE TRUST U/A DATED AUGUST 17, 2012, AS AMENDED, JAMES JACKSON,
THE ALPETER FAMILY LIMITED PARTNERSHIP, DAVID M. LEAVENWORTH, AND BONITA BEACH BLUES, INC. (COLLECTIVELY, THE “OTHER BRIDGE
LENDERS”) AND ANY PAYMENTS AND ACCESS TO COLLATERAL WILL BE ON A PARI PASSU BASIS WITH SUCH OTHER SECURED BRIDGE NOTES.

 

SECURED
BRIDGE NOTE

 

	$400,000.00	January
    31, 2017
	 	Minneapolis,
    Minnesota

 

FOR
VALUE RECEIVED, TITAN CNG LLC, a Delaware limited liability company (the “Debtor”), promises to pay to the order of
the Richard H. Enrico Revocable Trust Dated June 9, 1998 (“Holder”), the principal sum of $400,000.00, together with
interest, in the manner provided in this Note.

 

1.       Repayment
of Principal. All outstanding principal, if not previously paid, will be due and payable on April 30, 2017 (the “Stated
Maturity Date”); provided, however, that if no default or Event of Default has occurred and is continuing Debtor may, in
Debtor’s sole discretion upon providing written notice to Holder, (i) extend the Stated Maturity Date to July 31, 2017 by
paying Holder an additional fee equal to 1% of the then-outstanding balance due on this Note; and (ii) if the Stated Maturity
Date was extended to July 31, 2017 as provided in the foregoing clause, subsequently extend the Stated Maturity Date to October
31, 2017 by paying Holder an additional fee equal to 1% of the then-outstanding balance due on this Note.

 

     

     

    

 

2.       Interest.

 

2.1       Interest
will accrue on all outstanding unpaid amounts evidenced by this Note at an interest rate of 16% per year; provided that
if written notice is given by Holder to Debtor of the occurrence of an Event of Default (as defined below), and if Debtor fails
to cure the Event of Default within ten (10) days after receipt of such notice, the interest rate will increase to 18% per year.

 

2.2       All
interest will be computed on the basis of a 365-day year containing 12 months, counting the actual number of days in each month.
Prior to the occurrence of any Event of Default (in which case this Note shall be due and payable in full), payments of interest
only will be made on the last business day of each calendar month beginning on February 28, 2017 until the Stated Maturity Date
(as the same may be extended as provided above) at which time the entire balance due on this Note shall be due and payable in
full (unless previously converted).

 

2.3       Upon
execution of this Note, Debtor will pay Holder an origination fee equal to 1% of the principal amount of this Note.

 

2.4       Notwithstanding
anything to the contrary herein, if the aggregate amount of accrued but unpaid interest (including payable in kind interest) on
this Note and all unpaid original issue discount on this Note as of the Stated Maturity Date would, but for this provision, exceed
an amount equal to the product of:

 

(a)      the
issue price (as defined in Sections 1273(b) and 1274(a) of the Internal Revenue Code of 1986, as amended (the “Code”))
of this Note; and

 

(b)      the
yield to maturity (interpreted in accordance with Section 163(i) of the Code) of this Note (such product, the “Maximum Accrual”),

 

then
all accrued and unpaid interest (including the payable in kind interest) and original issue discount on this Note in excess of
an amount equal to the Maximum Accrual shall be paid in cash prior to the Stated Maturity Date.

 

It
is the intent of the parties that the cash payments required by this Section 2.4 will cause this Note to not be classified as
“applicable high yield discount obligations” within the meaning of Section 163(i) of the Code. To the extent that
for any reason these provisions do not accomplish this purpose, the parties may modify the payment terms in this Section 2.4 to
accomplish the purpose.

 

3.       Method
of Payment for Principal and Interest. All payments with respect to this Note will be made by wire transfer, in immediately
available funds, to such account as Holder may specify in writing, without any presentation of this Note. Each payment with respect
to this Note will be applied (i) first, to any fees, expenses or other amounts (other than principal and interest) due under this
Note, (ii) second, to accrued interest, and (iii) third, to outstanding principal. Whenever any payment to be made under this
Note is due on a Saturday, Sunday or holiday for banks under the laws of the State of Delaware, such payment may be made on the
next succeeding bank business day, and such extension of time will in such case be included in the computation of the amount of
interest due.

 

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4.       Equity.
From and after the occurrence of any Event of Default and until such Event of Default is remedied to the reasonable satisfaction
of Holder, Minn Shares Inc. will issue Holder 87,919 shares of common stock, par value $0.0001, on the date of such Event of Default
and each 90 day interval thereafter until all amounts due and owing under this Note have been paid in full.

 

5.       Events
of Default. An “Event of Default” means any of the following:

 

5.1       The
failure to pay any principal of, and interest on or any other amount due under this Note when and as the same will become due
and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise
and such failure continues unremedied for a period of two business days.

 

5.2       A
material default by Debtor or any entity in which Debtor controls or owns a majority of the outstanding equity interest therein
(each a “Subsidiary” and collectively along with each other Subsidiary and the Debtor, the “Debtor Group”
and each individually a “Debtor Group Member”) in the performance or observance of any covenant, condition, undertaking
or agreement contained in this Note, the Second Amended and Restated Security Agreement dated on or about the date hereof among
Holder, other holders of Secured Bridge Notes and the Debtor Group Members (the “Security Agreement”), or the Pledge
Agreement dated on or about the date hereof between Holder and Debtor (the “Pledge Agreement”), and such default continues
for a period of 30 days after notice by Holder to Debtor of such default.

 

5.3       If,
pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency
or relief of debtors (a “Bankruptcy Law”), a Debtor Group Member (a) commences a voluntary case or proceeding; (b)
consents to the entry of an order for relief against a Debtor Group Member in an involuntary case; (c) consents to the appointment
of a trustee, receiver, assignee, liquidator or similar official; (d) makes an assignment for the benefit of the creditors of
any Debtor Group Member; or (e) admits in writing Debtor Group Member’s inability to pay its debts as they become due.

 

5.4       If
a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (a) is for relief against a Debtor Group
Member in an involuntary case, (b) appoints a trustee, receiver, assignee, liquidator or similar official for Debtor or substantially
all of a Debtor Group Member’s properties, or (c) orders the liquidation of a Debtor Group Member and in each case the order
or decree is not dismissed within 90 days.

 

5.5       A
Debtor Group Member shall fail to discharge within a period of thirty (30) days after the commencement thereof any attachment,
sequestration, or similar proceeding or proceedings involving an aggregate amount in excess of One Hundred Thousand and No/100
Dollars ($100,000.00) against any of its assets or properties.

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5.6       A
Debtor Group Member shall fail to satisfy and discharge promptly any judgment or judgments against it for the payment of money
in an aggregate amount in excess of One Hundred Thousand and No/100 Dollars ($100,000.00).

 

5.7       A
Debtor Group Member shall default in the payment of any of its indebtedness having an aggregate principal amount in excess of
One Hundred Thousand and No/100 Dollars ($100,000), beyond any applicable grace period, or shall default, in any material respect,
in its performance of any material agreement binding upon it or its property.

 

6.       Remedies.

 

6.1       From
and after the occurrence of any Event of Default, Holder will be entitled to: (a) by written notice to the Debtor, declare all
indebtedness evidenced by this Note to be immediately due and payable; (b) by written notice to the Debtor, require Debtor and
each applicable Subsidiary to execute and deliver one or more leasehold mortgages to Holder in form and substance reasonably acceptable
to Debtor and Holder to secure the Debtor Group Members’ obligations under the Security Agreement; (c) apply any and all
amounts owed to Debtor by the Holder to the payment of this Note; (d) exercise and enforce its rights and remedies under this
Note, the Security Agreement, and the Pledge Agreement; and (e) proceed to protect and enforce its rights under applicable law.

 

6.2       No
course of dealing on the part of Holder or any delay or failure on the part of Holder to exercise any right will operate as a
waiver of such right or otherwise prejudice the Holder’s rights, powers and remedies.

 

6.3       Debtor
will pay to Holder such additional amounts as are sufficient to cover the costs and expenses, including, without limitation, reasonable
attorneys’ fees, incurred by Holder in collecting any sums due on account of this Note or otherwise in enforcing its rights
hereunder.

 

7.       Optional
Prepayments. The indebtedness evidenced by this Note may be prepaid, in whole or in part, at any time without penalty.

 

8.       General.

 

8.1       Payment
of principal or interest on this Note may only be made to, or upon the order of, the registered Holder. This Note is transferable
only by surrender of this Note to the Debtor, duly endorsed or accompanied by a written instrument of transfer executed by the
registered Holder. Upon surrender of this Note for transfer as provided above, Debtor will issue a new Note to, and register such
new Note in the name of, the transferee and such new Note must contain the same legend as provided in this Note.

 

8.2       Debtor:

 

(a)      except
as provided in Section 6, waives diligence, presentment, demand for payment, notice of dishonor, notice of non-payment, protest,
notice of protest, and any and all other demands in connection with the delivery, acceptance, performance, default or enforcement
of this Note;

 

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(b)      agrees
that Holder will have the right, without notice, to grant any extension of time for payment of any indebtedness evidenced by this
Note or any other indulgence or forbearance whatsoever;

 

(c)      agrees
that no failure on the part of Holder to exercise any power, right or privilege hereunder, or to insist upon prompt compliance
with the terms of this Note, will constitute a waiver of that power, right or privilege; and

 

(d)      agrees
that the acceptance at any time by Holder of any past due amounts will not be deemed to be a waiver of the requirement to make
prompt payment when due of any other amounts then or hereafter due and payable.

 

8.3       This
Note will be construed and enforced in accordance with the substantive laws of the State of Delaware without giving effect to
the conflicts of laws principles of any jurisdiction.

 

8.4       AT
THE OPTION OF HOLDER, THIS NOTE MAY BE ENFORCED IN ANY STATE OR FEDERAL COURT SITTING IN MINNEAPOLIS OR ST. PAUL, MINNESOTA, AND
DEBTOR CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.
IN THE EVENT DEBTOR COMMENCES AN ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS NOTE, OR ALLEGING ANY BREACH OF THIS NOTE, HOLDER AT ITS OPTION IS ENTITLED TO
HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES DESCRIBED ABOVE, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER
APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

 

8.5       DEBTOR
WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION BASED ON OR PERTAINING TO THIS NOTE.

 

8.6       This
Note is secured by the Security Agreement and the Pledge Agreement.

 

8.7       Debtor
and Holder agree that (a) this Note and the shares of Minn Shares Inc. being issued to Holder pursuant to the Subscription Agreement
constitute an “investment unit” for purposes of Section 1273(c)(2)(A) of the Internal Revenue Code of 1986, as amended,
(b) the total issue price of the investment unit being issued to Holder is equal to the principal amount of this Note, and (c)
for tax purposes, the allocation of the total issue price among this Note and the shares in proportion to its fair market value
results in an original issue discount. None of the parties will take any position in its tax returns or otherwise that is inconsistent
with this paragraph.

 

8.8       Acknowledgement
of Bridge Financing. Holder acknowledges and agrees that (a) this Note is one in a series of Secured Bridge Notes (collectively,
the “Bridge Financing”), (b) Debtor may seek up to $1,500,000 in connection with the Bridge Financing, and (c) Holder
will exchange this Note and the documents and agreements executed in connection herewith for updated documents and agreements
that reflect any change to Holder’s pro rata percentage of the outstanding balance under the Bridge Financing.

 

8.9       Fees.
The Company shall pay for all reasonable legal fees and related costs incurred by Holder in connection with the preparation of
this Note and related documents.

 

*
* * * *

 

    	 	5	 

     

    

 

IN
WITNESS WHEREOF, Debtor has caused this Note to be signed by a duly authorized officer and dated as of the date first above written.

 

	 	 	 	TITAN
    CNG LLC
	 	 	 	 	 
	 	 	 	By:	/s/
    Kirk S. Honour
	 	 	 	 	Name:
    Kirk S. Honour
	 	 	 	 	Its:
    President
	 	 	 	 	 
	Acknowledged
    and Agreed:	 	MINN
    SHARES INC.
	 	 	 	 	 
	RICHARD
    H. ENRICO REVOCABLE	 	By:	/s/
    Kirk S. Honour
	TRUST
    DATED JUNE 9, 1998	 	 	Name:
    Kirk S. Honour
	 	 	 	 	Its:
    President
	 	 	 	 	 
	By:	/s/
    Richard H. Enrico	 	 	 
	 	Richard
    H. Enrico	 	 	 
	 	Trustee	 	 	 

 

 

 

[Signature
Page to Bridge Note]

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