UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13D/A
 

Under the Securities Exchange Act of 1934
(Amendment No. 1)

 

Bloom Energy Corporation
(Name of Issuer)

 

Class A Common Stock, par value $0.0001 per share
(Title of Class of Securities)

 

093712107
(CUSIP Number)

 

Seongju Lim, SK ecoplant Co, Ltd. 19 Yulgok-ro 2-gil, Jongno-gu, Seoul 03149, +82-2-3700-9201
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
 
December  6, 2022
(Date of Event which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D/A, and is filing this schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box  ☐.

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See 240.13d-7(b) for other parties to whom copies are to be sent.

 

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
  

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

 

 

 

SCHEDULE 13D/A

 

CUSIP No. 093712107

 

1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
SK ecoplant Co., Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)  ☐

(b)  ☒

3 SEC USE ONLY
 
4 SOURCE OF FUNDS (See Instructions)
WC, BK
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Republic of Korea

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7 SOLE VOTING POWER
23,491,701 shares1
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
23,491,701 shares
10 SHARED DISPOSITIVE POWER
0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
23,491,701
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.6%
14 TYPE OF REPORTING PERSON (See Instructions)
CO

 

1SK’s beneficial ownership of the Issuer’s Class A Common Stock consists of (i) 10,000,000 shares of Class A Common Stock issued upon the conversion of 10,000,000 shares of the Issuer’s Series A Redeemable Convertible Preferred Stock on December 9, 2022; and (ii) 13,491,701 shares of Class A Common Stock to be acquired by SK pursuant to the Securities Purchase Agreement dated October 23, 2021 between the Issuer and SK, as further summarized below. All defined terms in this footnote have the meanings set forth in this Schedule 13D/A.
  
2As of December 9, 2022, based on information reported by the Issuer in its Quarterly Report on Form 10-Q, filed on November 3, 2022, and based on an assumed combined total of 202,870,627 shares of the Issuer’s Class A Common Stock outstanding as follows: (i) 179,378,926 shares of the Issuer’s Class A Common Stock outstanding; (ii) 10,000,000 shares of Class A Common Stock of Issuer issued to SK upon conversion of the Series A Redeemable Convertible Preferred Stock held by SK on December 9, 2022; and (iii) 13,491,701 shares of Class A Common Stock to be acquired by SK pursuant to the Securities Purchase Agreement dated October 23, 2021 between the Issuer and SK, SK’s beneficial ownership of voting stock of the Issuer is 6.5%.

 

Page 2

 

 

Explanatory Note

 

This Amendment No. 1 supplements and amends the Schedule 13D filed on October 4, 2022 and is made pursuant to Rule 13d-1(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). On October 23, 2021, SK ecoplant Co., Ltd. (“SK” or the “Reporting Person”) entered into that certain Securities Purchase Agreement (the “SPA”), by and between SK and Bloom Energy Corporation, a Delaware corporation (the “Issuer”), filed as Exhibit A, under which SK acquired 10,000,000 shares of Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share (the “RCPS”) of the Issuer, convertible by SK into shares of the Issuer’s Class A Common Stock, and an option for SK to purchase 13,491,701 shares of the Issuer’s Class A Common Stock. On August 10, 2022, SK delivered to the Issuer a notice to purchase in the future 13,491,701 shares of Class A Common Stock of the Issuer pursuant to the SPA, with the closing expected to be the latter of (i) the parties receiving clearance from the U.S. Department of Justice and the Federal Trade Commission of the purchase under the Hart-Scott-Rodino Antitrust Improvements Act of 1974, as amended, and (ii) December 6, 2022, pursuant to the Side Letter dated August 16, 2022, between SK and the Company (the “Side Letter”), filed as Exhibit B. On December 6, 2022, SK and the Issuer entered into an amendment of the Side Letter (the “Side Letter Amendment”), filed as Exhibit C, whereby SK and the Issuer mutually agreed to delay the Second Closing Date for the purchase of the 13,491,701 shares of Class A Common Stock of the Issuer until March 31, 2023, unless an earlier date is mutually agreed upon and assuming the satisfaction of applicable regulatory clearance. On December 9, 2022, each share of the RCPS was converted into 10,000,000 shares of Class A Common Stock.

 

Item 3.Source and Amount of Funds or Other Considerations

 

Item 3 of Schedule 13D is hereby amended and supplemented as follows:

 

The information set forth in Item 6 of this Schedule 13D/A is hereby incorporated herein by reference.

 

On December 29, 2021 (the “First Closing Date”), pursuant to the SPA, filed as Exhibit A, SK purchased from the Issuer, 10,000,000 shares of the Issuer’s RCPS at a purchase price of $25.50 per share, for an aggregate purchase price of $255,000,000. SK utilized its own funds and proceeds from financing facilities (as discussed in Item 6 herein) to purchase the RCPS. The RCPS was convertible at any time, at the option of SK, into such number of shares of Class A Common Stock determined by dividing the liquidation preference of the RCPS, which was equal to the original purchase price of $25.50 per share multiplied by the number of RCPS to be converted, by the conversion price determined at the time of conversion. Each share of the RCPS was converted into 10,000,000 shares of Class A Common Stock on December 9, 2022.

 

On August 10, 2022, SK delivered to the Issuer a notice to purchase in the future 13,491,701 shares of Class A Common Stock of the Issuer pursuant to the SPA. The closing of this purchase (the “Second Closing Date”) was expected to be the latter of the parties receiving clearance from the U.S. Department of Justice and the Federal Trade Commission of the purchase under the Hart-Scott-Rodino Antitrust Improvements Act of 1974, as amended (which is October 7, 2022), and December 6, 2022, pursuant to the Side Letter, which is filed as Exhibit B. On December 6, 2022, SK and the Issuer entered into the Side Letter Amendment, which is filed as Exhibit C, pursuant to which SK and the Issuer mutually agreed to delay the Second Closing Date for the purchase of the 13,491,701 shares of Class A Common Stock of the Issuer until March 31, 2023, unless an earlier date is mutually agreed upon and assuming the satisfaction of applicable regulatory clearance. The Side Letter Amendment adds that the Issuer would not be required to have a registration statement declared effective or to file a prospectus supplement that registers the resale of the securities held by the Reporting Person until six months after the earlier of March 31, 2023 or a later closing date resulting from the satisfaction of applicable regulatory clearance not being obtained by March 31, 2023.

 

SK currently expects to purchase the shares of Class A Common Stock on the Second Closing Date through a special purpose entity formed in the U.S. (the “SPV”), as contemplated by the SPA and the Investor Agreement. At this time, SK is currently the sole owner of the SPV, but SK continues to consider all possibilities regarding the structure through which it will purchase such shares of Class A Common Stock, if any, and the ownership of the SPV, including whether additional third parties may become part-owners of the SPV with SK.

 

Page 3

 

 

As of December 9, 2022, based on information reported by the Issuer in its Quarterly Report on Form 10-Q, filed on November 3, 2022 and after giving effect to (a) SK’s ownership of Class A Common Stock including the conversion of the RCPS and (b) SK’s purchase of Class A Common Stock on the Second Closing Date, SK beneficially owns approximately (x) 11.6% of the outstanding Class A Common Stock of the Issuer and (y) 6.5% of the outstanding voting stock of the Issuer, including for purposes of this calculation the Issuer’s outstanding Class B Common Stock.

 

The descriptions of the SPA, Side Letter and Side Letter Amendment contained in this Item 3 are not intended to be complete and are qualified in their entirety by reference to such agreement, the full text of which are filed as Exhibit A, Exhibit B, and Exhibit C hereto.

 

Item 4.Purpose of Transaction

 

Item 4 of Schedule 13D is hereby amended and supplemented as follows:

 

The information set forth in Item 6 of this Schedule 13D/A is hereby incorporated herein by reference.

 

The Reporting Person acquired the securities reported herein pursuant to the SPA for investment purposes. The purchase and conversion of the RCPS form part of a mutually beneficial and strategic business relationship between the Issuer and the Reporting Person. In addition to the SPA, the Reporting Person and the Issuer have entered into an Investor Agreement dated as of December 29, 2021 (the “Investor Agreement”) and other commercial agreements which have been summarized in Item 6 below.

 

In accordance with the terms of the SPA, filed as Exhibit A, SK has the right to purchase additional shares of Class A Common Stock of the Issuer on or prior to November 30, 2023 (the “Second Tranche Shares”). The maximum number of shares of Class A Common Stock which SK may purchase shall be the lesser of (i) 11,000,000 shares plus the number of shares that SK must hold in order to become the largest shareholder of the Issuer by no less than one percent (1%) of the Issuer’s issued and outstanding capital stock as of the Second Closing Date and (ii) fifteen percent (15%) of the Issuer’s issued and outstanding capital stock as of the Second Closing Date. Additionally, under the terms of the SPA, the Issuer is obligated to file a registration statement to register the resale of the securities issuable to SK and to use best efforts to maintain the effectiveness of such registration statement until all of such securities have been sold. The Side Letter Amendment adds that the Issuer would not be required to have a registration statement declared effective or to file a prospectus supplement that registers the resale of the securities held by the Reporting Person until six months after the earlier of March 31, 2023 or a later closing date resulting from the satisfaction of applicable regulatory clearance not being obtained by March 31, 2023.

 

On August 10, 2022, SK delivered to the Issuer a notice to purchase in the future 13,491,701 shares of Class A Common Stock of the Issuer pursuant to the SPA. The Second Closing Date was expected to be the later of the parties receiving clearance from the U.S. Department of Justice and the Federal Trade Commission of the purchase under the Hart-Scott-Rodino Antitrust Improvements Act of 1974, as amended, and December 6, 2022, pursuant to the Side Letter, which is filed as Exhibit B.

 

On December 6, 2022, SK and the Issuer entered into the Side Letter Amendment, which is filed as Exhibit C, pursuant to which SK and the Issuer mutually agreed to delay the Second Closing Date for the purchase of the 13,491,701 shares of Class A Common Stock of the Issuer until March 31, 2023, unless an earlier date is mutually agreed upon and assuming the satisfaction of applicable regulatory clearance.

 

The descriptions of the SPA, the Side Letter and the Side Letter Amendment contained in this Item 4 are not intended to be complete and are qualified in their entirety by reference to such agreements, the full text of which are filed as Exhibit A, Exhibit B and Exhibit C hereto.

 

The Reporting Person will continuously review its investment in Issuer, including evaluations of the Issuer’s business, strategies, prospects, management, governance, operations, performance, financial matters, capital structure, prospects, strategic and other transactions, as well as alternative investment opportunities, changes in law and/or regulations, general industry or economic conditions and all other factors that may be deemed relevant in determining whether additional securities of the Issuer will be acquired by the Reporting Person or whether the Reporting Person will dispose of any securities of the Issuer. Depending on such and other factors, at any time and subject to the terms of the Investor Agreement, the Reporting Person may acquire additional securities of the Issuer (in addition to (i) the shares of Class A Common Stock from the conversion of the RCPS and (ii) the Second Tranche Shares), or, at any time, some or all of the shares of Class A Common Stock or other securities beneficially owned by the Reporting Person may be sold in the open market, in privately negotiated transactions or otherwise.

 

Page 4

 

 

Investor Agreement

 

The Investor Agreement sets forth certain rights and restrictions in relation to the Reporting Person’s investment in the Issuer which are summarized below.

 

Board Nominee

 

Effective as of the Second Closing Date until the Reporting Person and its subsidiaries beneficially own less than five percent (5%) of the then issued and outstanding shares of common stock of the Issuer, SK has the right to designate one nominee to be nominated by the Issuer at each election of directors, subject to customary conditions such as, that the designee must meet all qualifications required of the Issuer’s directors. Until the termination of SK’s right to nominate a board nominee, the Issuer has agreed not to decrease the size of its Board of Directors if such decrease will necessitate the resignation of SK’s nominee to the board.

 

Pre-emptive Right

 

At any time after the Second Closing Date, if the Issuer proposes to issue new shares of common stock or common stock equivalents, SK has the right, to purchase up to such number of such new securities as required to maintain SK’s fully-diluted ownership as at immediately prior to the issuance of the new securities (the “Pre-emptive Right Shares”). The terms and conditions of the Pre-emptive Right Shares shall be the same as the terms and conditions granted to other purchasers of the new securities. If the Pre-emptive Right Shares are not registered, the Issuer shall, within 90 days of issuance of the securities to SK, file a registration statement covering the resale of the Pre-emptive Right Shares.

 

Standstill

 

Commencing as of the First Closing Date until the later of (i) the second anniversary of the Second Closing Date, (ii) the date on which SK ceases to have the right to designate a director to the Board of Directors of the Issuer, and (iii) the date on which SK and its subsidiaries beneficially own less than five percent (5%) of the then issued and outstanding shares of common stock of Issuer (such period, the “Standstill Term”), SK is prohibited, unless approved or waived by the Issuer, from, among other things, making a tender, exchange or other public offer to acquire the Issuer’s Common Stock or Common Stock equivalents; calling a meeting of the stockholders of Issuer or proposing any matter to be voted upon by stockholders of Issuer; proposing any person (excluding the person nominated by SK pursuant to the board nomination right) for election to the Board of Directors of the Issuer whose nomination has not been approved by the Board of Directors of Issuer; and proposing any merger, business combination, purchase of Issuer’s assets or any similar transaction that would result in a change in control without the written consent of the Board of Directors of Issuer.

 

Lock-Up

 

The Investor Agreement further provides for the securities of the Issuer held by the Reporting Person to be locked-up for a period of two years following the Second Closing Date, subject to specified exceptions.

 

Voting Agreement

 

Subject to specified exceptions, from the Second Closing Date until the termination of the Standstill Term, SK has agreed to, among other things, be present in person or by proxy at all meetings of stockholders of Issuer, vote all voting securities held by it or execute a written consent in accordance with the recommendations of a majority of the Issuer’s Board of Directors and as and when requested by the Issuer, execute an irrevocable proxy appointing the Issuer or its designees as proxy to vote or give consent with respect to all the voting securities held by SK.

 

Page 5

 

 

The description of the Investor Agreement contained in this Item 4 is not intended to be complete and is qualified in its entirety by reference to such agreement, the full text of which is filed as Exhibit D hereto.

 

Except as described herein, the Reporting Person does not have any current plans or proposals which relate to or would result in any of the actions described in Items 4(a)-(j) of Schedule 13D/A.

 

Item 5.Interest in Securities of the Issuer

 

Item 5 of Schedule 13D is hereby amended and supplemented as follows:

 

(a)-(b) The aggregate number and percentage of the Class A Common Stock beneficially owned by SK and the number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition are set forth on rows 7 through 11 and row 13 of the cover pages of this Schedule 13D/A and are hereby incorporated herein by reference. Calculations of the percentage of the shares of Class A Common Stock beneficially owned are based on 202,657,249 shares of Class A Common Stock of Issuer outstanding as of November 1, 2022, based on information reported by the Issuer in its Quarterly Report on Form 10-Q, filed on November 3, 2022, and include 10,000,000 shares of RCPS converted into 10,000,000 shares of Class A Common Stock on December 9, 2022.

 

On August 10, 2022, SK delivered to the Issuer a notice to purchase in the future 13,491,701 shares of Class A Common Stock of the Issuer pursuant to the SPA. The Second Closing Date was expected to be the later of the parties receiving clearance from the U.S. Department of Justice and the Federal Trade Commission of the purchase under the Hart-Scott-Rodino Antitrust Improvements Act of 1974, as amended (which is October 7, 2022), and December 6, 2022, pursuant to the Side Letter dated August 16, 2022 between SK and the Company, which is filed as Exhibit B.

 

On December 6, 2022, SK and the Issuer entered into the Side Letter Amendment, which is filed as Exhibit C, pursuant to which SK and the Issuer mutually agreed to delay the Second Closing Date for the purchase of the 13,491,701 shares of Class A Common Stock of the Issuer until March 31, 2023, unless an earlier date is mutually agreed upon and assuming the satisfaction of applicable regulatory clearance. The Side Letter Amendment adds that the Issuer would not be required to have a registration statement declared effective or to file a prospectus supplement that registers the resale of the securities held by the Reporting Person until six months after the earlier of March 31, 2023 or a later closing date resulting from the satisfaction of applicable regulatory clearance not being obtained by March 31, 2023.

 

As of December 9, 2022, based on information reported by the Issuer in its Quarterly Report on Form 10-Q, filed on November 3, 2022 and after giving effect to (a) SK’s ownership of Class A Common Stock including the conversion of the RCPS and (b) SK’s purchase of Class A Common Stock on the Second Closing Date, SK beneficially owns approximately (x) 11.6% of the outstanding Class A Common Stock of the Issuer and (y) 6.5% of the outstanding voting stock of the Issuer, including for purposes of this calculation the Issuer’s outstanding Class B Common Stock.

 

(c) Except as set forth in this Schedule 13D/A, SK has not effected any transactions in the Class A Common Stock in the past 60 days.

 

(d) Except as described in this Schedule 13D/A, no other person is known by SK to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the common stock beneficially owned by SK.

 

(e) Not applicable.

 

Page 6

 

 

Item 6.Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

Item 6 of Schedule 13D is hereby amended and supplemented as follows:

 

The information set forth in Items 3 and 4 of this Schedule 13D/A is hereby incorporated by reference in its entirety into this Item 6.

 

Joint Venture Agreement

 

On September 24, 2019, SK entered into a Joint Venture Agreement with the Issuer, which was subsequently amended on October 23, 2021 (as amended, the “JV Agreement”). Pursuant to the terms of the JV Agreement, SK and the Issuer agreed to establish a joint venture company in Korea to supply, assemble and manufacture the Issuer’s energy servers and ancillary products for the Korean market. The name of the joint venture company is Bloom SK Fuel Cell, LLC (the “JV Company”) and it is majority-owned and controlled by the Issuer. The JV Agreement contemplates the execution by the parties of additional commercial agreements, including an amendment to the Preferred Distributor Agreement (discussed below); a Bloom Energy License Agreement pursuant to which the Issuer agreed to grant a license to the JV Company as necessary for the JV Company’s business; and a Trademark License Agreement pursuant to which each of SK and the Issuer agreed to grant the JV Company the right to use certain brand names and trademarks for the business of the JV Company. The JV Agreement contains terms relating to additional capital contribution, management of the JV Company and liquidation, termination, among others.

 

The description of the JV Agreement contained in this Item 6 is not intended to be complete and is qualified in its entirety by reference to such agreements, the full texts of which are filed as Exhibit E and Exhibit F hereto.

 

Amended and Restated Preferred Distributor Agreement

 

On November 14, 2018, SK and the Issuer entered into a Preferred Distributor Agreement, which they amended and restated as of October 23, 2021 (as amended and restated, the “PDA”). Bloom SK Fuel Cell, LLC, the JV Company formed by SK and the Issuer, became a party to the restated PDA as of October 23, 2021. Pursuant to the terms of the PDA, SK committed to purchase, on a take or pay basis, specified volumes of the Issuer’s energy servers until the end of 2024. The PDA also sets forth the basis for determining the prices at which the Issuer’s energy servers and related components will be sold to SK. The PDA contains other commercial terms relating to the agreement between the parties, such as intellectual property, liability for liquidated damages, confidentiality and indemnification.

 

The description of the PDA contained in this Item 6 is not intended to be complete and is qualified in its entirety by reference to such agreement, the full text of which is filed as Exhibit G hereto.

 

Commercial Collaboration Agreement

 

On October 23, 2021, SK and the Issuer entered into a Commercial Collaboration Agreement (the “CCA”) with the intent to collaborate with each other in pursuing certain business opportunities. Among other things, the parties agreed to establish and operate two hydrogen innovation centers; one in the United States and one in the Republic of Korea, and to grant SK certain rights in connection with the sale and distribution of certain products specified in the CCA.

 

The description of the CCA contained in this Item 6 is not intended to be complete and is qualified in its entirety by reference to such agreement, the full text of which is filed as Exhibit H hereto.

 

Loan Agreements and Insurance Policy

 

On December 12, 2021, SK, as borrower, and BNP Paribas Hong Kong Branch (“BNP Paribas”), as lender, mandated lead arranger and book runner, entered into a K-Sure Overseas Investment Insurance (Investment Financing) Facility (the “BNP Paribas Facility”), in connection with SK’s acquisition of the RCPS. SK borrowed $95.0 million to finance the purchase of this stock. The loan is for a term of three years, is unsecured and bears interest at SOFR plus 0.65%, as customarily determined. The BNP Paribas Facility contains customary prepayment provisions, representations and warranties, conditions precedent (including regarding compliance with the insurance policy summarized below), events of default (including a cross-default provision) and remedies and other provisions. Under the BNP Paribas Facility, SK is required to pay the insurance premiums under the insurance policy described below. The BNP Paribas Facility is governed by English law.

 

Page 7

 

 

In connection with the entry into the BNP Paribas Facility, SK, BNP Paribas and the Korea Trade Insurance Corporation (“K-SURE”) entered into as of December 21, 2021 the Overseas Investment Insurance (Investment Financing) Policy that provides BNP Paribas, as the lender under the BNP Paribas Facility and as the beneficiary of the insurance policy, insurance if SK’s investment in the RCPS becomes impaired or there are payment problems with SK’s investment in the Issuer, such as due to expropriation, war and force majeure risks, among other things. The insurance policy is for approximately $97 million. The term of the insurance is from December 23, 2021 to December 23, 2024. Under the insurance policy, BNP Paribas pays insurance premiums, though SK is obligated to make these payments under the BNP Paribas Facility. The insurance policy contains conditions under which the beneficiary is covered, indemnification provisions, payment and reimbursement terms. The Insurance Policy is governed by Korean law.

 

In November 2021, SK and The Export-Import Bank of Korea (“KEXIM”) entered into a Loan (Credit) Transaction Agreement (the “Kexim Facility”) for long-term foreign currency loans for overseas investment. SK borrowed $95.0 million for the purpose of financing SK’s investment in the Issuer. The loan is for a term of three years and bears a variable interest rate at base rate plus 1.5% as customarily determined. The loan has a commitment fee rate of 0.5% per annum, and an early repayment fee rate of 1.5% of any early repayment amount. The Kexim Facility contains customary prepayment provisions, representations and warranties, conditions precedent, events of default and remedies and other provisions. The Kexim Facility is governed by Korean law.

 

The descriptions of the BNP Paribas Facility, K-SURE policy and Kexim Facility contained in this Item 6 are not intended to be complete and is qualified in their entirety by reference to such agreements, the full text of which are filed as Exhibit I, Exhibit J, and Exhibit K hereto.

 

Item 7.Material to Be Filed as Exhibits

 

Exhibit No.   Description
A   Securities Purchase Agreement, dated as of October 23, 2021, by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith).
B   Side Letter, dated August 16, 2022 by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith).
C   Amendment to Side Letter, dated December 6, 2022, by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith)
D   Investor Agreement, dated as of December 29, 2021, by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith).
E   Joint Venture Agreement, dated September 24, 2019, by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith).
F   Amendment to the Joint Venture Agreement, dated October 23, 2021, by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith).
G   Amended and Restated Preferred Distributor Agreement, dated October 23, 2021, by and between Bloom Energy Corporation, Bloom SK Fuel Cell, LLC and SK ecoplant Co., Ltd. (filed herewith).
H   Commercial Collaboration Agreement, dated October 23, 2021, by and between Bloom Energy Corporation and SK ecoplant Co., Ltd. (filed herewith).
I   K-Sure Overseas Investment Insurance (Investment Financing) Facility, dated December 12, 2021, by and between SK ecoplant Co., Ltd., as Borrower and BNP Paribas, as Lender, Mandated Lead Arranger and Bookrunner (filed herewith).
J   The Overseas Investment Insurance (Investment Financing) Policy dated as of December 21, 2021 among BNP Paribas Facility, SK, BNP Paribas and the Korea Trade Insurance Corporation (filed herewith).
K   Loan (Credit) Transaction Agreement between SK and The Export-Import Bank of Korea dated as of November 2021 (filed herewith).

 

Page 8

 

 

SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: December 12, 2022

 

  SK ecoplant Co., Ltd.
     
  By:  /s/ Kyung-il Park
    Name: Kyung-il Park
    Title: Chief Executive Officer

 

Page 9

 

 

SCHEDULE I

 

DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSON

 

Set forth below is the name and present principal occupation or employment of each director and executive officer of SK ecoplant Co., Ltd. The business address of each of the directors and executive officers is 19 Yulgok-ro 2-gil, Jongno-gu, Seoul 03149, Korea. Each person listed below is a citizen of the Republic of Korea.

 

Name   Present Principal Occupation
Lee Seung Ho   Outside Director of SK ecoplant Co., Ltd and Director of Daekyo, an educational institution located at 23 Boramae-ro 3-gil, Gwanak-gu, Seoul
Kim Yoon Mo   Outside Director and Vice Chairman of Nautic Investment, an investment company located at 10 Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul
Kim Jong Ho   Outside Director and Advisor of Shinhan Accounting Corporation, an accounting company located at 8 Uisadang-daero, Yeongdeungpo-gu, Seoul
Park Sun Kyu   Outside Director and professor of Sungkyunkwan University, 25-2 Seonggyungwan-ro, Jongno-gu, Seoul
Lee Sung Hyung   Non-standing Director and Chief Financial Officer of SK, Inc., located at 26, Jong-ro, Jongno-gu, Seoul
Park Kyung Il   Director and Chief Executive Officer of SK ecoplant Co., Ltd.
Pee Sung Hyun   Chief Financial Officer of SK ecoplant Co., Ltd.
Yoon Jang Suk   Chief Safety Officer of SK ecoplant Co., Ltd.

 

 

 

Page 10

 

Exhibit A

 

ConfidentialEXECUTION VERSION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SECURITIES PURCHASE AGREEMENT

 

By and Between

 

SK ECOPLANT CO., LTD.

 

AND

 

BLOOM ENERGY CORPORATION

 

Dated as of October 23, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

      Page
       
1. Definitions 1
       
  1.1 Defined Terms 1
       
2. Purchase and Sale of RCPS 7
       
  2.1 First Tranche Purchase Price and First Tranche Shares 7
  2.2 First Closing Date; Deliveries 8
       
3. Purchase and Sale of Common Stock 9
       
  3.1 Second Tranche Purchase Price and Second Tranche Share Amount 9
  3.2 Second Closing Date; Deliveries 9
       
4. Representations and Warranties of the Company 10
       
  4.1 Organization, Good Standing and Qualification 10
  4.2 Capitalization and Voting Rights 11
  4.3 Authorization 11
  4.4 No Defaults 12
  4.5 No Conflicts 12
  4.6 No Governmental Authority or Third Party Consents 13
  4.7 Valid Issuance of Securities 13
  4.8 Litigation 14
  4.9 Licenses and Other Rights; Compliance with Laws 14
  4.10 Title to Real and Personal Property 14
  4.11 Intellectual Property 14
  4.12 No Undisclosed Relationships 15
  4.13 Investment Company Act 15
  4.14 Taxes 15
  4.15 No Labor Disputes 15
  4.16 Compliance with and Liability under Environmental Laws 16
  4.17 Hazardous Materials 16
  4.18 eXtensible Business Reporting Language 17
  4.19 Insurance 17
  4.20 No Unlawful Payments 17
  4.21 Compliance with Anti-Money Laundering Laws 18
  4.22 No Conflicts with Sanctions Laws 18
  4.23 No Restrictions on Subsidiaries 18
  4.24 Cybersecurity; Data Protection 19
  4.25 Company SEC Documents; Financial Statements; NYSE 19
  4.26 Absence of Certain Changes 20

 

i

 

 

  4.27 Internal Controls; Disclosure Controls and Procedures 20
  4.28 Sarbanes-Oxley Act 21
  4.29 Accounting Controls 21
  4.30 Brokers’ or Finders’ Fees 21
  4.31 Critical Technologies; TID U.S. Business 21
       
5. Representations and Warranties of the Investor 22
       
  5.1 Organization; Good Standing 22
  5.2 Authorization 22
  5.3 No Conflicts 22
  5.4 No Governmental Authority or Third Party Consents 23
  5.5 Purchase Entirely for Own Account 23
  5.6 Disclosure of Information 23
  5.7 Investment Experience and Accredited Investor Status 23
  5.8 Acquiring Person 23
  5.9 Financial Assurances 24
       
6. Investor’s Conditions to First Closing 24
       
  6.1 Representations and Warranties 24
  6.2 Covenants 24
  6.3 Investor Agreement 24
  6.4 Registration Statement 24
  6.5 Other Deliverables 24
  6.6 No Material Adverse Effect 24
  6.7 Local Bank Reporting 24
       
7. Company’s Conditions to First Closing 25
       
  7.1 Representations and Warranties 25
  7.2 Covenants 25
  7.3 Investor Agreement 25
  7.4 Other Deliverables 25
       
8. Mutual Conditions to First Closing 25
       
  8.1 CFIUS Matters 25
  8.2 No Prohibition 25
  8.3 Market Listing 25
  8.4 Antitrust/Foreign Direct Investment 25
       
9. Investor’s Conditions to Second Closing 26
       
  9.1 Representations and Warranties 26
  9.2 Covenants 26
  9.3 Registration Statement 26
  9.4 Other Deliverables 26

 

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  9.5 No Material Adverse Effect 26
  9.6 Local Bank Reporting 26
       
10. Company’s Conditions to Second Closing 26
       
  10.1 Representations and Warranties 26
  10.2 Covenants 26
  10.3 Other Deliverables 27
       
11. Mutual Conditions to Second Closing 27
       
  11.1 HSR Act; Antitrust 27
  11.2 No Prohibition 27
  11.3 Market Listing 27
       
12. Termination 27
       
  12.1 Ability to Terminate Prior to the First Closing 27
  12.2 Ability to Terminate Prior to the Second Closing 28
  12.3 Effect of Termination 29
       
13. Additional Covenants and Agreements 29
       
  13.1 Investor Designee 29
  13.2 Market Listing 29
  13.3 Notification under the HSR Act and other Competition and Foreign Direct Investment Laws 30
  13.4 CFIUS Filing 31
  13.5 Registration 31
  13.6 Assistance and Cooperation 32
  13.7 Effect of Waiver of Condition to Closing 32
  13.8 Interim Operations of the Company 32
  13.9 Confidentiality 33
  13.10 Securities Law Disclosure; Publicity 33
  13.11 Conversion Shares 33
       
14. Miscellaneous 34
       
  14.1 Governing Law; Submission to Jurisdiction 34
  14.2 Dispute Resolution 34
  14.3 Waiver 34
  14.4 Notices 34
  14.5 Entire Agreement 35
  14.6 Amendments 35
  14.7 Headings; Nouns and Pronouns; Section References 35
  14.8 Severability 35
  14.9 Assignment 35
  14.10 Successors and Assigns 35

 

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  14.11 Counterparts 36
  14.12 Third Party Beneficiaries 36
  14.13 No Strict Construction 36
  14.14 Survival of Warranties 36
  14.15 Equitable Relief; Remedies 36
  14.16 Expenses 36

 

Exhibit A - Form of Cross Receipt
Exhibit B - Form of Investor Agreement
Exhibit C - Form of Certificate of Designation
Exhibit D - Notices

 

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SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of October 23, 2021, by and between SK ecoplant Co., Ltd. (the “Investor”), a company organized under the laws of the Republic of Korea (“Korea”), with its principal place of business at 32 Insa-dong 7-gil, Jongno-gu, Seoul 03149, Korea, and Bloom Energy Corporation (the “Company”), a Delaware corporation, with its principal place of business at 4353 North First Street, San Jose, CA 95134. Each of the Investor and the Company is referred to in this Agreement as a “party” and together as the “parties.”

 

WHEREAS, pursuant to the terms and subject to the conditions set forth in this Agreement, the Company desires to issue and sell to the Investor, and the Investor desires to subscribe for and purchase from the Company, (i) certain shares of Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “RCPS”) pursuant to an exemption from registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D promulgated thereunder and (ii) Class A common stock, par value $0.0001 per share, of the Company (the “Common Stock”), pursuant to an effective registration statement under the Securities Act (as defined below).

 

NOW, THEREFORE, in consideration of the following mutual promises and obligations, and for good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the Investor and the Company agree as follows:

 

1. Definitions.

 

1.1 Defined Terms. When used in this Agreement, the following terms shall have the respective meanings specified therefor below:

 

Affiliate” shall mean, with respect to any Person, another Person that controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if any of the following conditions is met: (i) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (ii) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities. For the purposes of this Agreement, in no event shall the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates, nor shall the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates. For the purposes of this Agreement, in no event shall (x) the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates; (y) the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates; and (z) any joint venture entity or any other Person formed pursuant to the Joint Venture Agreement (as defined in the Investor Agreement) or the Preferred Distributor Agreement (as defined in the Investor Agreement) be deemed an Affiliate of either the Company or the Investor.

 

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Agreement” shall have the meaning set forth in the Preamble, including all Exhibits attached hereto.

 

Anti-Money Laundering Laws” shall have the meaning set forth in Section 4.21.

 

Arbitration” shall have the meaning set forth in Section 14.2.

 

Award” shall have the meaning set forth in Section 14.2.

 

Business Day” shall mean a day on which commercial banking institutions in New York, New York and Seoul, Korea are open for business.

 

Certificate of Designation” shall have the meaning set forth in Section 2.1.

 

CFIUS” means the Committee on Foreign Investment in the United States or any successor entity, and any member agency thereof acting in such capacity.

 

CFIUS Clearance” means the parties shall have received (a) a written notice issued by CFIUS stating that CFIUS has concluded that the Transaction is not a “covered transaction” and not subject to review under applicable Law, (b) a written notice issued by CFIUS that it has determined that there are no unresolved national security concerns with respect to the Transaction, and has concluded all action under the DPA, (c) a written notice issued by CFIUS informing that it is not able to conclude action under the DPA with respect to the Transaction on the basis of the declaration and CFIUS has not requested that the Parties file a written joint voluntary notice of the Transaction, or (d) either (i) the President of the United States shall have determined not to use his powers pursuant to the DPA to unwind, suspend, condition or prohibit the consummation of the Transaction or (ii) the period allotted for presidential action under the DPA shall have passed without any determination by the President of the United States.

 

CFIUS Cooperation Actions” shall mean each party to this Agreement shall promptly inform the other, unless prohibited by applicable Law, of any communication from CFIUS or its member agencies regarding any of the transactions contemplated by this Agreement in connection with any CFIUS filing. In connection with and without limiting the foregoing, to the extent reasonably practicable and unless prohibited by applicable Law, each party shall (i) give each other reasonable advance notice of all meetings with CFIUS or its member agencies relating to the Transaction contemplated hereby, (ii) give each other an opportunity to participate in each of such meetings, (iii) keep such other Party reasonably apprised with respect to any oral communications with CFIUS regarding the transaction contemplated hereby, (iv) cooperate in the filing of any joint CFIUS notice and any presentations related thereto, (v) provide each other with a reasonable advance opportunity to review and comment upon, and consider in good faith the views of the other with respect to, all written communications with CFIUS, except for those that may include confidential business information or involve personal identifier information and (vi) provide each other (or counsel of each party, as appropriate) with copies of all written communications to or from CFIUS, except for those excluded above. Any such disclosures, rights to participate or provisions of information by one party to the other may be made on a counsel-only basis to the extent required under applicable Law or as appropriate to protect confidential business information.

 

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CFIUS Filing Actions” shall mean the parties to this Agreement submit or cause to be submitted (i) as soon as possible after the date of this Agreement, a joint declaration and other appropriate documents to CFIUS within the meaning of 31 C.F.R. §800.402 to obtain a CFIUS Clearance, (ii) if required by CFIUS, a formal voluntary notice of the transaction to CFIUS within the meaning of 31 C.F.R. §800.402 to obtain a CFIUS Clearance, and (iii) as soon as possible (and in any event in accordance with pertinent regulatory requirements) any other submissions that are formally requested by CFIUS to be made, or which the parties mutually agree should be made, in each case in connection with this Agreement and the Transaction contemplated hereby.

 

Class B common stock” shall have the meaning set forth in Section 4.2(a).

 

Common Stock” shall have the meaning set forth in the Recitals.

 

Company” shall have the meaning set forth in the Preamble.

 

Company SEC Documents” shall have the meaning set forth in Section 4.25(a).

 

Company SEC Filings” shall mean, with respect to the representations and warranties of the Company set forth in Section 4 (i) provided as of the date hereof and as of the First Closing, the Company SEC Documents filed prior to the date hereof and (ii) provided as of the date of the Second Closing, the Company SEC Documents filed prior to the date of the Second Tranche Exercise Notice.

 

Company Securities” shall have the meaning set forth in Section 4.2(c).

 

Competitor” shall mean a Person engaged, directly or indirectly (including through any Person, joint venture or similar arrangement (whether now existing or formed hereafter)), in the fuel cell or electrolyzer business; provided however, that in no event shall a Person be deemed to be “engaged” in a business solely because of a less than five (5%) percent passive investment in another Person without any right to nominate any member of the board of directors or similar governing body of such Person or any active participation in the business of such Person.

 

Confidential Information” shall have the meaning set forth in Section 13.9.

 

Conversion Shares” shall mean the Common Stock issuable upon conversion of the First Tranche Shares.

 

Cross Receipt” shall mean an executed document signed by each of the Company and the Investor, in substantially the form of Exhibit A attached hereto.

 

Dispute” shall have the meaning set forth in Section 14.2.

 

DOJ” shall have the meaning set forth in Section 13.3.

 

DPA” means Section 721 of the U.S. Defense Production Act of 1950, as amended, including the implementing regulations thereof, codified at 31 C.F.R. Parts 800 and 801.

 

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Environmental Laws” shall have the meaning set forth in Section 4.16(a).

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

First Closing” shall have the meaning set forth in Section 2.2(a).

 

First Closing Date” shall have the meaning set forth in Section 2.2(a).

 

First Closing Termination Date” shall have the meaning set forth in Section 12.1(b).

 

First Tranche Aggregate Purchase Price” shall have the meaning set forth in Section 2.1.

 

First Tranche Purchase Price” shall have the meaning set forth in Section 2.1.

 

First Tranche Shares” shall have the meaning set forth in Section 2.1.

 

FTC” shall have the meaning set forth in Section 13.3.

 

Governmental Authority” shall mean any court, agency, authority, department or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

 

Hazardous Materials” shall have the meaning set forth in Section 4.17.

 

HSR Act” shall have the meaning set forth in Section 4.6.

 

ICC Arbitration Rules” shall have the meaning set forth in Section 14.2.

 

Intellectual Property” shall have the meaning set forth in Section 4.11.

 

Investment Company Act” shall have the meaning set forth in Section 4.13.

 

Investor” shall have the meaning set forth in the Preamble.

 

Investor Agreement” shall mean that certain Investor Agreement by and between the SPV and the Company, to be dated as of the First Closing Date, in substantially the form of Exhibit B attached hereto, as the same may be amended from time to time.

 

IT Systems” shall have the meaning set forth in Section 4.24.

 

Knowledge of the Company” means the actual knowledge of each of the executive officers of the Company, after such individual shall have made reasonable inquiries from such individual’s direct reports (or their successors, if applicable).

 

Korea” shall have the meaning set forth in the Preamble. “LAS” shall have the meaning set forth in Section 4.6.

 

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Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

 

Lien” shall mean any charge, encumbrance, claim, community or other marital property interest, equitable ownership interest, collateral assignment, lien (statutory or otherwise), license, option, pledge, security interest, mortgage, deed of trust, attachment, right of way, easement, restriction, encroachment, servitude, right of first offer or first refusal, buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting (in the case of any equity interest), transfer, receipt of income or exercise of any other attribute of ownership of any kind or nature whatsoever affecting or attached to any asset.

 

Local Bank Reporting” shall mean the report required to be made by the Investor to its principal creditor bank on overseas direct investments in accordance with the Foreign Exchange Transactions Regulations of Korea.

 

Material Adverse Effect” shall mean any change, event or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have a material adverse effect on the business, properties, management, financial position, stockholders’ equity or results of operations or prospects of the Company and its Subsidiaries taken as a whole or on the performance by the Company of its obligations under this Agreement.

 

Maximum Second Tranche Share Amount” shall mean the lesser of (i) eleven million (11,000,000) shares of Common Stock plus the number of shares of Common Stock that the Investor must hold to become the largest shareholder of the Company by no less than one percent (1%) of the Company’s issued and outstanding capital stock as of the Second Closing Date and (ii) fifteen percent (15%) of the issued and outstanding capital stock of the Company as of the Second Closing Date.

 

Modified Clause” shall have the meaning set forth in Section 14.8.

 

NYSE” shall have the meaning set forth in Section 4.6.

 

Organizational Documents” shall mean (i) the Restated Certificate of Incorporation of the Company dated as of July 27, 2018, as may be amended from time to time and (ii) the Amended and Restated Bylaws of the Company dated as of November 5, 2020, as may be amended from time to time.

 

Person” shall mean any individual, partnership, limited liability company, firm, corporation, trust, unincorporated organization, government or any department or agency thereof or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

 

Personal Data” shall have the meaning set forth in Section 4.24.

 

Prospectus” shall mean the final prospectus filed for the Registration Statement.

 

RCPS” shall have the meaning set forth in the Recitals.

 

5

 

 

Registration Statement” shall mean the registration statement which will register the sale and resale of the Conversion Shares and the Second Tranche Shares issued to the Investor.

 

Registered Shares” means the Second Tranche Shares and the Conversion Shares.

 

Release” shall have the meaning set forth in Section 4.17.

 

Representatives” shall mean, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, potential debt and equity financing sources (excluding any co-investors), and other representatives. For the avoidance of doubt, potential debt and equity financing sources are Representatives, whether or not the Investor contacts any one of them before or after the First Closing Date.

 

Restricted SPV Investor” shall mean, at any relevant time, a Person who is engaged directly or indirectly in the fuel cell or electrolyzer business, provided however, that in no event shall a Person be deemed to be “engaged” in a business solely because of a less than five (5%) percent passive investment in another Person without any right to nominate any member of the board of directors or similar governing body of such Person or any active participation in the business of such Person.

 

Sanctioned Country” shall have the meaning set forth in Section 4.22.

 

Sanctions” shall have the meaning set forth in Section 4.22.

 

Sarbanes-Oxley Act” shall have the meaning set forth in Section 4.27.

 

Second Closing” shall have the meaning set forth in Section 3.2(a).

 

Second Closing Date” shall have the meaning set forth in Section 3.2(a).

 

Second Closing Termination Date” shall have the meaning set forth in Section 12.2(b).

 

Second Tranche Aggregate Purchase Price” shall have the meaning set forth in Section 3.1.

 

Second Tranche Exercise Notice” shall have the meaning set forth in Section 3.1.

 

Second Tranche Purchase Price” shall have the meaning set forth in Section 3.1.

 

Second Tranche Share Amount” shall have the meaning set forth in Section 3.1.

 

Second Tranche Shares” shall have the meaning set forth in Section 3.1.

 

Securities” shall mean the First Tranche Shares, the Conversion Shares and the Second Tranche Shares.

 

Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

6

 

 

SPV” shall mean a special purpose vehicle formed by the Investor to consummate the transactions contemplated by this Agreement and the Investor Agreement.

 

Subsidiary” shall mean, with respect to any Person, any other Person of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is directly or indirectly owned or controlled by such Person and/or by one or more of its Subsidiaries.

 

Third Party” shall mean any Person (other than a Governmental Authority) other than the Investor, the Company or any Affiliate of the Investor or the Company.

 

Trading Day” shall mean a day on which the relevant Trading Market is open for trading.

 

Trading Market” shall mean any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the NYSE (or any successors to any of the foregoing).

 

Transaction” shall mean the issuance and sale of the Securities by the Company, and the purchase of the Securities by the Investor, in accordance with the terms hereof.

 

Transaction Agreements” shall mean this Agreement, the Investor Agreement, the Commercial Cooperation Agreement (as defined in the Investor Agreement), and the agreements pursuant to which each of the Joint Venture Agreement (as defined in the Investor Agreement), the Preferred Distributor Agreement (as defined in the Investor Agreement) are revised.

 

Tribunal” shall have the meaning set forth in Section 14.2.

 

Volume-Weighted Average Closing Price” shall mean, for any period of Trading Days, the volume- weighted (based on the number of shares of Common Stock traded on each day that the closing price is used for this calculation) average of the closing sale price per share of the Common Stock on the relevant Trading Market during such period, as reported by Bloomberg.

 

2. Purchase and Sale of RCPS.

 

2.1 First Tranche Purchase Price and First Tranche Shares. Subject to the terms and conditions of this Agreement, at the First Closing, the Company shall issue and sell to the Investor, free and clear of all Liens, other than any liens arising as a result of any action by the Investor, and the Investor shall purchase from the Company, 10,000,000 shares of RCPS (the “First Tranche Shares”), at a purchase price of US $25.50 per share (the “First Tranche Purchase Price”) having the terms and conditions set forth on Exhibit C attached hereto (the “Certificate of Designation”), for an aggregate purchase price of US $255,000,000 (the “First Tranche Aggregate Purchase Price”); provided, that, in the event of any stock dividend, stock split, combination of shares or other similar change in the capital structure of the Company after the date hereof and on or prior to the First Closing which affects or relates to the RCPS or the Conversion Shares, the number of First Tranche Shares shall be adjusted proportionately.

 

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2.2 First Closing Date; Deliveries.

 

(a) First Closing Date. Subject to the satisfaction or waiver of all the conditions to the First Closing set forth in Sections 6, 7 and 8 hereof, the closing of the purchase and sale of the First Tranche Shares hereunder (the “First Closing”) shall be held virtually by telephonic meeting on the later of (i) November 30, 2021 and (ii) the date that is five (5) days after the satisfaction of the conditions to First Closing set forth in Sections 6, 7 and 8 (other than those conditions that by their nature are to be satisfied at the First Closing), at 7:00 a.m., Pacific Time, at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025, or at such other time, date and location as the parties may agree. The date the First Closing occurs is hereinafter referred to as the “First Closing Date.”

 

(b) Deliveries by the Company. At the First Closing, subject to the terms and conditions hereof, the Company shall instruct its transfer agent to deliver to the Investor the Shares via book-entry to the applicable account registered in the name of the Investor. The Company shall also deliver at the First Closing: (i) a duly executed Cross Receipt; (ii) a certificate in form and substance reasonably satisfactory to the Investor and duly executed on behalf of the Company by an authorized executive officer of the Company, certifying that the conditions to First Closing set forth in Section 6 of this Agreement have been fulfilled; (iii) a duly executed Investor Agreement; (iv) a copy of the executed Certificate of Designation, as filed with the Secretary of State of the State of Delaware and in effect at the First Closing; (v) the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act); and (vi) a certificate of the secretary of the Company dated as of the First Closing Date certifying (A) that attached thereto are true and complete copies of the Organizational Documents in effect on the First Closing Date; (B) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Company authorizing the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby as of the First Closing Date; and (C) as to the incumbency and specimen signature of any officer of the Company executing a Transaction Agreement on behalf of the Company.

 

(c) Deliveries by the Investor. At the First Closing, the Investor shall deliver, or cause to be delivered, to the Company the First Tranche Aggregate Purchase Price by wire transfer of immediately available United States funds to an account designated by the Company. The Company shall notify the Investor in writing of the wiring instructions for such account not less than ten (10) Business Days before the First Closing Date. The Investor shall also deliver, or cause to be delivered, at the First Closing: (i) a duly executed Cross Receipt; (ii) a certificate in form and substance reasonably satisfactory to the Company and duly executed by an authorized executive officer or a director of the Investor certifying that the conditions to First Closing set forth in Section 7 of this Agreement have been fulfilled; (iii) a duly executed Investor Agreement by the Investor; and (iv) a certificate of the director or officer of the Investor dated as of the First Closing Date certifying as to the incumbency and specimen signature of any officer or director executing a Transaction Agreement on behalf of the Investor.

 

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3. Purchase and Sale of Common Stock.

 

3.1 Second Tranche Purchase Price and Second Tranche Share Amount. On or prior to November 30, 2023, the Investor shall have the right (but not the obligation) to purchase a number of shares of Common Stock no greater than the Maximum Second Tranche Share Amount (the “Second Tranche Shares”) at the Second Tranche Purchase Price. At any time on or prior to August 15, 2023, if the Investor provides a written notice to the Company notifying it of Investor’s intent to purchase the Second Tranche Shares, within three (3) days from the date of such notice, the Company shall provide to the Investor a written response (the “Second Tranche Notice”) setting forth (i) the number of total issued and outstanding shares of capital stock of the Company and (ii) the name and the number of total issued and outstanding shares of capital stock of the Company held by the largest shareholder of the Company, in each case, as of the most practicable latest date. By no later than August 31, 2023, the Investor may elect to provide to the Company a written notice (the “Second Tranche Exercise Notice”) setting forth (a) the number of Second Tranche Shares elected to be purchased by the Investor (the “Second Tranche Share Amount”) and (b) the Second Tranche Purchase Price. “Second Tranche Purchase Price” shall mean the higher of (i) US$23 and (ii) one hundred and fifteen percent (115%) of the Volume-Weighted Average Closing Price of the twenty (20) consecutive Trading Day period immediately preceding the Second Tranche Exercise Notice. “Second Tranche Aggregate Purchase Price” shall mean an amount equal to the Second Tranche Purchase Price multiplied by the Second Tranche Share Amount. If the Investor so elects to purchase the Second Tranche Shares, subject to the terms and conditions of this Agreement, at the Second Closing, the Company shall issue and sell to the Investor, free and clear of all Liens, other than any liens arising as a result of any action by the Investor, and the Investor shall purchase from the Company, the Second Tranche Shares for the Second Tranche Aggregate Purchase Price. In the event of any stock dividend, stock split, combination of shares or other similar change in the capital structure of the Company after the date hereof and on or prior to the Second Closing which affects or relates to the Common Stock, the Second Tranche Share Amount shall be adjusted proportionately.

 

3.2 Second Closing Date; Deliveries.

 

(a) Second Closing Date. Subject to the satisfaction or waiver of all the conditions to the Second Closing set forth in Sections 9, 10 and 11 hereof, the closing of the purchase and sale of the Second Tranche Shares hereunder (the “Second Closing”) shall be held virtually by telephonic meeting on the 5th Business Day after the satisfaction of the conditions to Second Closing set forth in Sections 9, 10 and 11 (other than those conditions that by their nature are to be satisfied at the Second Closing), at 7:00 a.m., Pacific Time, at the offices of Latham & Watkins LLP, 140 Scott Drive, Menlo Park, California 94025, or at such other time, date and location as the parties may agree. The date the Second Closing occurs is hereinafter referred to as the “Second Closing Date.”

 

9

 

 

(b) Deliveries by the Company. At the Second Closing, subject to the terms and conditions hereof, the Company shall instruct its transfer agent to deliver to the Investor the Second Tranche Shares via book-entry to the applicable account registered in the name of the Investor. The Company shall also deliver at the Second Closing: (i) a duly executed Cross Receipt; (ii) a certificate in form and substance reasonably satisfactory to the Investor and duly executed on behalf of the Company by an authorized executive officer of the Company, certifying that the conditions to Second Closing set forth in Section 9 of this Agreement have been fulfilled; (iii) the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act); and (iv) a certificate of the secretary of the Company dated as of the Second Closing Date certifying (A) that attached thereto are true and complete copies of the Organizational Documents in effect on the Second Closing Date; (B) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Company authorizing the execution, delivery and performance of the Transaction Agreements and the transactions contemplated thereby, including the issuance of the Second Tranche Shares to the Investor, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated hereby as of the Second Closing Date; and (C) that attached thereto sets forth a true and correct capitalization of the Company immediately after the Second Closing.

 

(c) Deliveries by the Investor. At the Second Closing, the Investor shall deliver, or cause to be delivered, to the Company the Second Tranche Aggregate Purchase Price by wire transfer of immediately available United States funds to an account designated by the Company. The Company shall notify the Investor in writing of the wiring instructions for such account not less than three (3) Business Days before the Second Closing Date. The Investor shall also deliver, or cause to be delivered, at the Second Closing: (i) a duly executed Cross Receipt; and (ii) a certificate in form and substance reasonably satisfactory to the Company and duly executed by an authorized executive officer or a director of the Investor certifying that the conditions to Second Closing set forth in Section 10 of this Agreement have been fulfilled.

 

4. Representations and Warranties of the Company. The Company hereby represents and warrants the following to the Investor as of the date hereof, as of the First Closing Date and as of the Second Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date):

 

4.1 Organization, Good Standing and Qualification. The Company and each of its subsidiaries have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses as now conducted and as proposed to be conducted in the Company SEC Filings, except where the failure to be so qualified or in good standing or have such power or authority would not reasonably be likely to have a Material Adverse Effect. The Company does not own or control, directly or indirectly, any corporation, association, or other entity other than the subsidiaries listed in Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed as Company SEC Filings, except for those subsidiaries omitted from Exhibit 21.1 because, considered in the aggregate as a single subsidiary, they would not constitute a significant subsidiary within the meaning of Regulation S-X promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

 

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4.2 Capitalization and Voting Rights.

 

(a) The authorized capital of the Company as of September 30, 2021 consists of: (i) 600,000,000 shares of Common Stock of which, (1) 147,320,041 shares are issued and outstanding, (2) 24,435,235 shares are reserved for issuance pursuant to the Company’s equity incentive plans, (3) 4,125,345 shares of Common Stock are issuable upon the exercise of stock options outstanding, (4) 8,268,290 shares of Common Stock are issuable upon the vesting of restricted stock units and performance stock units (at target), (5) 12,940 shares of Common Stock are issuable upon the exercise of a warrant, and (6) 14,186,584 shares of Common Stock are issuable upon conversion of the 2.50% Green Convertible Senior Notes due August 2025 at an initial conversion rate of 61.6808 shares per $1,000 principal amount of such notes, (ii) 600,000,000 shares of Class B common stock, par value $0.0001 per share (the “Class B common stock”) of which, (1) 27,758,020 shares are issued and outstanding, and (2) 7,658,203 shares of Class B common stock are issuable upon the exercise of stock options outstanding, and (iii) 10,000,000 shares of preferred stock, par value $0.0001 per share, of which none have been issued and are outstanding. All of the issued and outstanding shares of Common Stock and Class B common stock (A) have been duly authorized and validly issued, (B) are fully paid and non-assessable, and (C) were issued in compliance with all applicable federal and state securities Laws. None of the issued and outstanding shares of Common Stock and Class B common stock were issued in violation of any preemptive rights arising under the Delaware General Corporation Law or the Organizational Documents.

 

(b) All of the authorized shares of Common Stock are entitled to one (1) vote per share. All of the authorized shares of Class B common stock are entitled to ten (10) votes per share. No authorized share of RCPS is entitled to vote.

 

(c) Except as described or referred to in Section 4.2(a) above, as provided in the Investor Agreement or as set forth in the Company SEC Filings, there are: (i) no outstanding shares of capital stock of, or other equity interests in, the Company, (ii) no outstanding securities of the Company convertible into or exchangeable for shares of capital stock of, or other equity interests in, the Company, and (iii) no outstanding options, warrants, rights or other commitments or agreements to acquire from the Company, or that obligate the Company to issue, any capital stock of, or other equity interests in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity interests in, the Company (the items in clauses (i), (ii) and (iii) being referred to collectively as “Company Securities”), other than any new grants of equity awards pursuant to the Company’s existing stock option plans or other employee compensation plans in the ordinary course of business or issuances of Common Stock as matching contributions under the Company’s 401(k) plan.

 

(d) Except as provided in the Investor Agreement, as set forth in the Company SEC Filings or the Organizational Documents, the Company is not a party to any stockholders’ agreement, voting agreement, registration rights agreement or other similar agreement or understanding relating to any Company Securities or any other agreement relating to the disposition, voting or dividends with respect to any Company Securities or the giving of written consents by a stockholder or director of the Company.

 

4.3 Authorization.

 

(a) All requisite corporate action on the part of the Company and its directors required by applicable Law for the authorization, execution and delivery by the Company of the Transaction Agreements and the performance of all obligations of the Company hereunder and thereunder, including the authorization, issuance and delivery of the Securities, has been taken.

 

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(b) As of the date hereof, the Transaction Agreements (other than the Investor Agreement) have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the other parties hereto, is a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy). As of the First Closing Date, the Investor Agreement shall be duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the other parties thereto, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy).

 

4.4 No Defaults. Neither the Company nor any of its Subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

4.5 No Conflicts. The execution, delivery and performance by the Company of each Transaction Agreement, the issuance and sale of the Securities by the Company and the consummation by the Company of the transactions contemplated by the Transaction Agreements will not (i) conflict or contravene with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon any property or assets of the Company or any of its Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, (ii) result in any violation of or contravention with the provisions of the charter or bylaws or similar organizational documents of the Company or any of its Subsidiaries or (iii) result in the violation of or contravention with any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, contravention, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect.

 

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4.6 No Governmental Authority or Third Party Consents. No consent, approval, authorization, order, license, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of each Transaction Agreement, the issuance and sale of the Securities by the Company and the consummation by the Company of the transactions contemplated by the Transaction Agreements, except such (i) those that have been granted or made, as the case may be, that are in full force and effect, (ii) as may be required under the securities or “Blue Sky” laws of U.S. state or non-U.S. jurisdictions or other non-U.S. laws applicable to the purchase of the Securities outside the U.S. in connection with the transactions contemplated by the Transaction Agreements, (iii) as may be required pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”) and under any foreign legal requirement relating to competition and foreign direct investment Laws, and (iv) with respect to the Securities, the filing with The New York Stock Exchange (“NYSE”) of, and the absence of unresolved issues with respect to, a Notification Form: Listing of Additional Shares (the “LAS”).

 

4.7 Valid Issuance of Securities. When issued, sold and delivered at the First Closing or the Second Closing, as applicable, in accordance with the terms hereof for the First Tranche Aggregate Purchase Price or the Second Tranche Purchase Price, as applicable, the First Tranche Shares or the Second Tranche Shares, as applicable, shall be duly authorized, validly issued, fully paid and nonassessable, free from any Liens, encumbrances or restrictions on transfer, including preemptive rights, rights of first refusal or other similar rights, other than as arising pursuant to the Transaction Agreements, as a result of any action by the Investor or under federal or state securities Laws. The Conversion Shares, when issued in accordance with the terms hereof and the Organizational Documents, will be validly issued, fully paid and nonassessable, free from any liens, encumbrances or restrictions on transfer, including preemptive rights, rights of first refusal or other similar rights, other than as arising pursuant to the Transaction Agreements, as a result of any action by the Investor or under federal or state securities Laws. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement, including the maximum number of Conversion Shares issuable upon the conversion of the First Tranche Shares. At the time the Registration Statement and any amendments thereto became effective and at the First Closing Date and the Second Closing Date, the Registration Statement and any amendments thereto or supplements thereto will conform in all material respects to the requirements of the Securities Act and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, including without limitation, the prospectus supplement, at the time the Prospectus or any amendment or supplement thereto when issued in connection with the issuance of the Conversion Shares and at the Second Closing Date, will conform in all material respects to the requirements of the Securities Act and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company at the time of the filing of the Registration Statement will be eligible to use Form S-3. The Company will be eligible to use Form S-3 under the Securities Act and it meets the transaction requirements of General Instruction I.B.1 of Form S-3.

 

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4.8 Litigation. Except as described in the Company SEC Filings, (i) there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its Subsidiaries is a party or to which any property of the Company or any of its Subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company or any of its Subsidiaries, could reasonably be expected to have a Material Adverse Effect; to the Knowledge of the Company, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others; and (ii) there are no current or pending legal, governmental or regulatory actions, suits or proceedings would restrain, enjoin, prevent or interfere with the consummation of any of the transactions contemplated by the Transaction Agreements.

 

4.9 Licenses and Other Rights; Compliance with Laws. The Company and its Subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Company SEC Filings, except where the failure to possess or make the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as described in the Company SEC Filings, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

 

4.10 Title to Real and Personal Property. The Company and its Subsidiaries have good and marketable title in fee simple (in the case of real property) to, or have valid and marketable rights to lease or otherwise use, all items of real and personal property and assets that are material to the respective businesses of the Company and its Subsidiaries taken as a whole, in each case, free and clear of all Liens (i) except as disclosed in the Company SEC Filings, and (ii) except those that do not materially interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries.

 

4.11 Intellectual Property. The Company and its Subsidiaries own or possess adequate rights to use all inventions, patents, trademarks, service marks, trade names, domain names, copyrights, licenses, technology, know-how, trade secrets and other intellectual property and proprietary rights or confidential information, systems or procedures (including all goodwill associated with, and all registrations and applications for registration of, the foregoing) (collectively, “Intellectual Property”) necessary for or material to the conduct of their respective businesses as currently conducted and as proposed to be conducted, and the conduct of their respective businesses has not and does not infringe, misappropriate or otherwise violate any Intellectual Property of others. There is no pending or, to the Knowledge of the Company, threatened action, suit, proceeding or claim and neither the Company nor any of its subsidiaries has received any written communication (a) challenging the Company’s rights in or to, or alleging the violation of any of the terms of, any Intellectual Property owned by or exclusively or co-exclusively licensed to the Company or any of its Subsidiaries; (b) alleging that the Company or any of its Subsidiaries has infringed, misappropriated or otherwise violated or conflicted with any Intellectual Property of any third party; or (c) challenging the validity, scope or enforceability of any Intellectual Property owned by or exclusively or co-exclusively licensed to the Company or any of its Subsidiaries; except, in the case of each of (a) through (c) above, where the outcome of which would not reasonably be expected to be material to the Company and its subsidiaries, taken as a whole. To the Knowledge of the Company, all such Intellectual Property owned by or exclusively or co-exclusively licensed to the Company or its Subsidiaries is valid and enforceable. The Company and/or its subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of Intellectual Property owned by or exclusively or co-exclusively licensed to the Company or its Subsidiaries, except where failure to do so would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole. No Intellectual Property owned by the Company or any of its Subsidiaries was developed, in whole or in part (i) pursuant to or in connection with the development of any professional, technical or industry standard, (ii) under contract with or using the resources of any Governmental Authority, academic institution or other entity that would subject such Intellectual Property to the rights of any Governmental Authority, academic institution or other entity, or (iii) under any grants or other funding arrangements with third parties.

 

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4.12 No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its Subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its Subsidiaries, on the other, that is required by the Securities Act to be described in a registration statement on Form S-1 or S-3.

 

4.13 Investment Company Act. The Company is not and, after giving effect to the offer, sale and issuance of the Securities and the application of the proceeds thereof received by the Company in conformity with the terms of this Agreement, will not be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).

 

4.14 Taxes. The Company and its Subsidiaries have paid all federal, state, local and foreign taxes, except for any tax that is being contested in good faith and for which an adequate reserve or accrual has been established in accordance with GAAP, and filed all tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in the Company SEC Filings, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its Subsidiaries or any of their respective properties or assets, except where the failure to pay or file, or when such deficiency, would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

 

4.15 No Labor Disputes. No labor disturbance by or dispute with employees of the Company or any of its Subsidiaries exists or, to the Knowledge of the Company, is contemplated or threatened, and to the Knowledge of the Company, there is no existing or imminent labor disturbance by, or dispute with, the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except as would not reasonably be expected to have a Material Adverse Effect.

 

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4.16 Compliance with and Liability under Environmental Laws.

 

(a) The Company and its Subsidiaries (i) are, and at all prior times were, except as disclosed in the Company SEC Filings, in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions, judgments, decrees, orders and the common law relating to pollution or the protection of the environment, natural resources or human health or safety, including those relating to the generation, storage, treatment, use, handling, transportation, release or threat of release of hazardous materials (collectively, “Environmental Laws”), (ii) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, (iii) have not received written notice of any actual or potential liability under or relating to, or actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any release or threat of release of hazardous materials, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, (iv) are not conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any Environmental Law at any location, and (v) are not a party to any order, decree or agreement that imposes any obligation or liability under any Environmental Law.

 

(b) There are no costs or liabilities associated with Environmental Laws of or relating to the Company or its Subsidiaries, except in the case of each of (i) and (ii) above, for any such matter, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(c) Except as described in the Company SEC Filings, (i) there are no proceedings that are pending, or that are known by the Company to be contemplated, against the Company or any of its Subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed against the Company or any of its subsidiaries, (ii) the Company and its Subsidiaries are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws, including the Release or threat of Release of Hazardous Materials, that could reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company and its Subsidiaries, and (iii) none of the Company and its Subsidiaries anticipates making capital expenditures relating to any Environmental Laws that are material to the Company and its Subsidiaries taken as a whole.

 

4.17 Hazardous Materials. Except for specific matters that are accurately described in the Company SEC Filings, there has been no storage, generation, transportation, use, handling, treatment, Release or threat of Release of Hazardous Materials by, relating to or caused by the Company or any of its Subsidiaries (or, to the Knowledge of the Company and its Subsidiaries, any other entity (including any predecessor) for whose acts or omissions the Company or any of its Subsidiaries is or could reasonably be expected to be liable) at, on, under or from any property or facility now or previously owned, operated or leased by the Company or any of its Subsidiaries, or at, on, under or from any other property or facility, in violation of any Environmental Laws or in a manner or amount or to a location that could reasonably be expected to result in any liability under any Environmental Law, except for any violation or liability which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. “Hazardous Materials” means any material, chemical, substance, waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount, including petroleum (including crude oil or any fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos containing materials, naturally occurring radioactive materials, brine, and drilling mud, regulated or which can give rise to liability under any Environmental Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into, from or through any building or structure.

 

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4.18 eXtensible Business Reporting Language. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Company SEC Filings has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

4.19 Insurance. The Company and its Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are prudent and customary in the respective businesses in which the Company and its Subsidiaries are engaged, including, but without limitation, directors and officers insurance coverage at least equal to the aggregate amount of $10,000,000; and neither the Company nor any of its Subsidiaries has (i) received written notice from any insurer or agent of such insurer that material capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business in all material respects. The Company intends to review its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue the respective businesses of the Company and its Subsidiaries.

 

4.20 No Unlawful Payments. Neither the Company nor any of its Subsidiaries, nor any director or officer or controlled Affiliate or, to the Knowledge of the Company, any non-controlled Affiliate or employee of the Company or any of its Subsidiaries nor, to the Knowledge of the Company or any of its Subsidiaries, any agent or other person associated with or acting on behalf of the Company or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government official or employee, including of any government- owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery or anti- corruption law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company, its subsidiaries and its controlled Affiliates have conducted their businesses in compliance with applicable anti- corruption laws and have instituted, maintained and enforced, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance with all applicable anti-bribery and anti-corruption laws. Neither the Company nor its subsidiaries will use, directly or indirectly, the proceeds of the offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any applicable anti-corruption laws.

 

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4.21 Compliance with Anti-Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions where the Company or any of its Subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the Knowledge of the Company, threatened.

 

4.22 No Conflicts with Sanctions Laws. Neither the Company nor any of its Subsidiaries, directors, officers or employees, nor, to the Knowledge of the Company or any of its Subsidiaries, any agent, Affiliate or other person associated with or acting on behalf of the Company or any of its Subsidiaries is, or is owned or controlled by one or more persons that is, (x) currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, the Swiss Secretariat of Economic Affairs, the Hong Kong Monetary Authority, the Monetary Authority of Singapore or other relevant sanctions authority (collectively, “Sanctions”), or (y) located, organized or resident in a country or territory that is the subject or target of Sanctions, including, without limitation, Cuba, Iran, North Korea, Syria and Crimea (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions. For the past five years, the Company and its Subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Country.

 

4.23 No Restrictions on Subsidiaries. Except as described in the Company SEC Filings, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other Subsidiary of the Company.

 

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4.24 Cybersecurity; Data Protection. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with the operation of the business of the Company and its Subsidiaries as currently conducted and, to the Knowledge of the Company, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and its Subsidiaries have implemented and maintained commercially reasonable controls, policies, procedures, and safeguards to maintain and protect their confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”)) used in connection with their businesses, and there have been no breaches, violations, outages, interruptions, or unauthorized uses of or accesses to the Company’s or its subsidiaries’ IT Systems or any Personal Data held by the Company or any of its Subsidiaries in the last six (6) years except for those that have been remediated without material cost or liability. The Company and its Subsidiaries are presently in material compliance with all applicable Laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification. Neither the Company nor any of its subsidiaries has received any notification or allegation from any competent authority (including any information or enforcement notice, or any transfer prohibition notice) alleging that the Company or any of its Subsidiaries has not complied in any respect with any applicable Laws, statutes, rules or regulations relating to the privacy and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data.

 

4.25 Company SEC Documents; Financial Statements; NYSE.

 

(a) The Company is subject to, and is in full compliance in all material respects with, the reporting requirements of Section 13 and Section 15(d), as applicable, of the Exchange Act. Since January 1, 2020, the Company has timely filed all required reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein), and any required amendments to any of the foregoing, with the SEC (the “Company SEC Documents”).

 

(b) The financial statements (including the related notes thereto) of the Company and its consolidated subsidiaries included (or incorporated by reference) in its Annual Report on Form 10-K filed as Company SEC Filings comply as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended. Except (i) as set forth in the Company SEC Filings or (ii) for liabilities incurred in the ordinary course of business subsequent to the date of the most recent balance sheet contained in the Company SEC Filings, the Company has no liabilities, whether absolute or accrued, contingent or otherwise, other than those that would not, individually or in the aggregate, reasonably be likely to have a Material Adverse Effect.

 

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(c) As of the date of this Agreement, the Common Stock is listed on NYSE, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from NYSE. As of the date of this Agreement, the Company has not received any notification that, and has no knowledge that, the SEC or NYSE is contemplating terminating such listing or registration.

 

4.26 Absence of Certain Changes. With respect to the First Closing, since the date of the most recent financial statements of the Company included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed with the Commission on August 6, 2021, and with respect to the Second Closing, since the date of the most recent financial statements of the Company included in the Company’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as applicable, for the quarter or year, as applicable, immediately preceding the Second Tranche Exercise Notice: (i) there has not been any change in the capital stock (other than the issuance of shares of Common Stock or Class B common stock upon exercise of stock options and warrants or the settlement of restricted stock units described as outstanding in, and the grant of options and awards under existing equity incentive plans described in, the Company SEC Filings, the short-term debt or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity or results of operations of the Company and its Subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the Company and its Subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its Subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any loss or interference with its business that is material to the Company and its Subsidiaries taken as a whole and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Company SEC Filings.

 

4.27 Internal Controls; Disclosure Controls and Procedures. The Company and its Subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that has been designed to comply with the requirements of the Exchange Act and to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure, and are in compliance with such disclosure controls and procedures in all material respects. Each of the principal executive officer and the principal financial officer of the Company has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), with respect to all reports, schedules, forms, statements and other documents required to be filed by the Company with the SEC during the past twelve (12) months.

 

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4.28 Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or, to the Knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to comply with any applicable provision of the Sarbanes-Oxley Act, including Section 402 related to loans.

 

4.29 Accounting Controls. The Company and its Subsidiaries, taken as a whole, maintain a system of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that has been designed to comply with the requirements of the Exchange Act and that has been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Company SEC Filings, there are no material weaknesses in the Company’s internal controls over financial reporting. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

 

4.30 Brokers’ or Finders’ Fees. No broker, finder, investment banker or other Person is entitled to any brokerage, finder’s or other fee or commission from the Company in connection with the transactions contemplated by the Transaction Agreements.

 

4.31 Critical Technologies; TID U.S. Business. The Company does not produce, design, test, manufacture, fabricate, or develop any “critical technologies” as that term is defined in 31 C.F.R. §800.215, nor is it otherwise a “TID U.S. business” as that term is defined in 31 C.F.R. §800.248.

 

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5. Representations and Warranties of the Investor. The Investor hereby represents and warrants the following to the Company as of the date hereof, as of the First Closing Date and as of the Second Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date):

 

5.1 Organization; Good Standing. The Investor is a company duly organized, validly existing and in good standing under the laws of Korea. The SPV, when formed, will be a duly organized entity, validly existing and in good standing under the laws of its jurisdiction of organization. Each of the Investor and the SPV, when formed, has or will have all requisite power and authority to enter into the Transaction Agreements, to purchase the Securities and to perform its obligations under and to carry out the other transactions contemplated by the Transaction Agreements.

 

5.2 Authorization. All requisite corporate or other action on the part of the Investor and the SPV, when formed, and their respective members, principals, partners, directors, officers and stockholders required by applicable Law for the authorization, execution and delivery by the Investor and the SPV, when formed, of the Transaction Agreements to which they are a party and the performance of all of their obligations under the Transaction Agreements to which they are a party, including the subscription for and purchase of the Securities by the Investor and the SPV, when formed, has or will have been taken as of the First Closing Date and the Second Closing Date, as applicable. This Agreement has been duly authorized, executed and delivered by the Investor and will be duly authorized, executed and delivered by the SPV, when formed, and, assuming due authorization, execution and delivery thereof by the other parties hereto, is and will be a valid and legally binding obligation of the Investor and the SPV, when formed, enforceable against the Investor and the SPV, when formed, in accordance with its terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy). The Investor Agreement has been duly authorized by the Investor and will be by the SPV, when formed, and, assuming due authorization, execution and delivery thereof by the other parties thereto, upon the execution and delivery of the Investor Agreement by the Investor, will constitute valid and legally binding obligations of the Investor and by the SPV, when formed, as the case may be, enforceable against the Investor and the SPV, when formed, in accordance with their terms (except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application relating to or affecting enforcement of creditors’ rights and (ii) rules of Law governing specific performance, injunctive relief or other equitable remedies and limitations of public policy).

 

5.3 No Conflicts. The execution, delivery and performance of the Transaction Agreements and compliance with the provisions hereof and thereof by the Investor and the SPV, when formed, to which they are a party do not and shall not: (a) violate any provision of applicable Law or any ruling, writ, injunction, order, permit, judgment or decree of any Governmental Authority, (b) constitute a breach of, or default under (or an event which, with notice or lapse of time or both, would become a default under) or conflict with, or give rise to any right of termination, cancellation or acceleration of, any agreement, arrangement or instrument, whether written or oral, by which the Investor, the SPV, when formed, or any of their respective assets, are bound, or (c) violate or conflict with any of the provisions of the organizational documents (including any articles or memoranda of organization or association, charter, bylaws or similar documents) of the Investor and the SPV, when formed, except as would not impair or adversely affect the ability of the Investor and the SPV to consummate the transactions contemplated by, and perform their obligations under, this Agreement and the Investor Agreement to which they are a party.

 

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5.4 No Governmental Authority or Third Party Consents. No consent, approval, authorization or other order of any Governmental Authority or other Third Party is required to be obtained by the Investor in connection with the authorization, execution and delivery of any of the Transaction Agreements or with the subscription for and purchase of the Frist Tranche Shares and the Second Tranche Shares, except for the Local Bank Reporting, and as may be required pursuant to the HSR Act and under any foreign legal requirement relating to competition and foreign direct investment Laws.

 

5.5 Purchase Entirely for Own Account. The Securities shall be acquired for investment for the Investor’s or SPV’s, own account, as applicable, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has no present intention, and the SPV, when formed, will not have any intention, of selling, granting any participation or otherwise distributing the Securities. The Investor does not have and the SPV, when formed, will not have as of the First Closing Date and the Second Closing Date, as applicable, any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participation to a Person any of the Securities.

 

5.6 Disclosure of Information. The Investor has had the opportunity to review the Company SEC Filings and has received or has had full access to all the information from the Company and its management that the Investor considers necessary or appropriate for deciding whether to purchase the Securities hereunder. The Investor has not relied on any statements or other information provided by Centerview Partners LLC, as financial advisor, concerning the Company or the Securities or the offer and sale of Securities. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the Company, its financial condition, results of operations and prospects and the terms and conditions of the offering of the Securities sufficient to enable it to evaluate its investment. The Investor can bear the economic and tax risk of (x) an investment in the Securities and (y) a total loss in respect of such investment.

 

5.7 Investment Experience and Accredited Investor Status. The Investor is an institutional “accredited investor” (as defined in Rule 501 under the Securities Act). The Investor has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of the investment in the Securities and of making an informed investment decision. The Investor is able to fend for itself in the transactions contemplated herein and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its prospective investment.

 

5.8 Acquiring Person. As of the date of this Agreement and immediately prior to the First Closing, neither the Investor nor any of its Affiliates, beneficially owns, or will beneficially own (as determined pursuant to Rule 13d-3 under the Exchange Act without regard for the number of days in which a Person has the right to acquire such beneficial ownership and without regard to the Investor’s rights under this Agreement), Common Stock or any other securities of the Company.

 

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5.9 Financial Assurances. The Investor will, as of the First Closing Date, have access to cash in an amount sufficient to pay to the Company the First Tranche Aggregate Purchase Price. The Investor will cause the SPV to have, and the SPV will have, as of the Second Closing Date, access to cash in an amount sufficient to pay to the Company the Second Tranche Aggregate Purchase Price.

 

6. Investor’s Conditions to First Closing. The Investor’s obligation to purchase the First Tranche Shares at the First Closing is subject to the fulfillment as of the First Closing of the following conditions (unless waived in writing by the Investor):

 

6.1 Representations and Warranties. The representations and warranties made by the Company in Section 4 hereof shall be true and correct in all material respects as of the date of this Agreement and as of the First Closing Date as though made on and as of such dates, except to the extent such representations and warranties (i) are already qualified by materiality, Material Adverse Effect or words of similar import, in which case such representations and warranties shall be true and correct as of such dates in all respects or (ii) are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date.

 

6.2 Covenants. All covenants and agreements contained in this Agreement to be performed or complied with by the Company on or prior to the First Closing Date shall have been performed or complied with in all material respects.

 

6.3 Investor Agreement. The Company shall have duly executed and delivered to the Investor, pursuant to Section 2.2(c) of this Agreement, the Investor Agreement, and (subject to execution by the Investor) such agreement shall be in full force and effect.

 

6.4 Registration Statement. The Registration Statement shall be effective and available for the issuance and sale of the Registered Shares hereunder and the Company shall have delivered to the Investor the Prospectus as required thereunder.

 

6.5 Other Deliverables. The Investor shall have received all items required to be delivered to the Investor pursuant to Section 2.2(b) of this Agreement (other than the Investor Agreement) at or prior to the First Closing.

 

6.6 No Material Adverse Effect. From and after the date of this Agreement until the First Closing Date, there shall have occurred no event that has caused or would reasonably be expected to cause a Material Adverse Effect.

 

6.7 Local Bank Reporting. The Local Bank Reporting shall have been completed by the Investor on or prior to the First Closing and be effective as of the First Closing Date.

 

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7. Company’s Conditions to First Closing. The Company’s obligation to issue and sell the First Tranche Shares at the First Closing is subject to the fulfillment as of the First Closing of the following conditions (unless waived in writing by the Company):

 

7.1 Representations and Warranties. The representations and warranties made by the Investor in Section 5 hereof shall be true and correct as of the date of this Agreement and as of the First Closing Date as though made on and as of such dates, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date.

 

7.2 Covenants. All covenants and agreements contained in this Agreement to be performed or complied with by the Investor on or prior to the First Closing Date shall have been performed or complied with in all material respects.

 

7.3 Investor Agreement. The Investor shall have delivered to the Company the Investor Agreement, duly executed by the Investor, pursuant to Section 2.2(c) of this Agreement, and (subject to execution by the Company) such agreement shall be in full force and effect.

 

7.4 Other Deliverables. The Company shall have received all items required to be delivered to the Company pursuant to Section 2.2(c) of this Agreement (other than the Investor Agreement) at or prior to the First Closing.

 

8. Mutual Conditions to First Closing. The obligations of the Investor and the Company to consummate the First Closing are subject to the fulfillment as of the First Closing Date of the following conditions:

 

8.1 CFIUS Matters. The parties shall have received the CFIUS Clearance or shall have otherwise determined to each of their reasonable satisfaction that CFIUS Clearance is not required under applicable Law.

 

8.2 No Prohibition. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the transactions contemplated by the Transaction Agreements.

 

8.3 Market Listing. The Registered Shares shall have been approved for listing on NYSE, subject to official notice of issuance.

 

8.4 Antitrust/Foreign Direct Investment. Any filings required under any foreign legal requirement relating to competition or foreign direct investment Laws, as applicable, in connection with this Agreement, shall have been made, and the applicable waiting periods and any extensions thereof obtained by request or other action of any Governmental Authority, shall have expired or been terminated, or consent, approval or clearance obtained prior to the First Closing Date, and no Party shall have received any written notice from any Governmental Authority that any investigation with respect to the transactions contemplated by the Transaction Agreements remains open and ongoing.

 

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9. Investor’s Conditions to Second Closing. The Investor’s obligation to purchase the Second Tranche Shares at the Second Closing is subject to the fulfillment as of the Second Closing of the following conditions (unless waived in writing by the Investor):

 

9.1 Representations and Warranties. The representations and warranties made by the Company in Section 4 hereof shall be true and correct in all material respects as of the date of this Agreement and as of the Second Closing Date as though made on and as of such dates, except to the extent such representations and warranties (i) are already qualified by materiality, Material Adverse Effect or words of similar import, in which case such representations and warranties shall be true and correct as of such dates in all respects or (ii) are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date.

 

9.2 Covenants. All covenants and agreements contained in this Agreement to be performed or complied with by the Company on or prior to the Second Closing Date shall have been performed or complied with in all material respects.

 

9.3 Registration Statement. The Registration Statement shall be effective and available for the issuance and sale of the Registered Shares hereunder and the Company shall have delivered to the Investor the Prospectus and the prospectus supplement as required thereunder.

 

9.4 Other Deliverables. The Investor shall have received all items required to be delivered to the Investor pursuant to Section 3.2(b) of this Agreement at or prior to the Second Closing.

 

9.5 No Material Adverse Effect. From and after the date of this Agreement until the Second Closing Date, there shall have occurred no event that has caused or would reasonably be expected to cause a Material Adverse Effect.

 

9.6 Local Bank Reporting. The Local Bank Reporting shall have been completed by the Investor on or prior to the Second Closing and be effective as of the Second Closing Date.

 

10. Company’s Conditions to Second Closing. The Company’s obligation to issue and sell the Second Tranche Shares at the Second Closing is subject to the fulfillment as of the Second Closing of the following conditions (unless waived in writing by the Company):

 

10.1 Representations and Warranties. The representations and warranties made by the Investor in Section 5 hereof shall be true and correct as of the date of this Agreement and as of the Second Closing Date as though made on and as of such dates, except to the extent such representations and warranties are specifically made as of a particular date, in which case such representations and warranties shall be true and correct as of such date.

 

10.2 Covenants. All covenants and agreements contained in this Agreement to be performed or complied with by the Investor on or prior to the Second Closing Date shall have been performed or complied with in all material respects.

 

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10.3 Other Deliverables. The Company shall have received all items required to be delivered to the Company pursuant to Section 3.2(c) of this Agreement (other than the Investor Agreement) at or prior to the Second Closing.

 

11. Mutual Conditions to Second Closing. The obligations of the Investor and the Company to consummate the Second Closing are subject to the fulfillment as of the Second Closing Date of the following conditions:

 

11.1 HSR Act; Antitrust. The filings required under the HSR Act and any filings required under any foreign legal requirement relating to competition or foreign direct investment Laws, and any extensions thereof obtained by request or other action of the FTC (as defined below) and/or the Antitrust Division of the DOJ (as defined below) or other foreign Governmental Authority, as applicable, in connection with this Agreement, shall have been made, and the applicable required waiting period thereby shall have expired or been terminated, or consent, approval or clearance shall have been obtained, prior to the Second Closing Date, and no Party shall have received any written notice from the DOJ, the FTC or any other Governmental Authority that any investigation with respect to the transactions contemplated by the Transaction Agreements remains open and ongoing.

 

11.2 No Prohibition. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, makes illegal or otherwise prohibits the consummation of the transactions contemplated by the Transaction Agreements.

 

11.3 Market Listing. The Second Tranche Shares shall have been approved for listing on NYSE, subject to official notice of issuance.

 

12. Termination.

 

12.1 Ability to Terminate Prior to the First Closing. This Agreement may be terminated at any time prior to the First Closing by:

 

(a) mutual written consent of the Company and the Investor;

 

(b) either the Company or the Investor, upon written notice to the other no earlier than three (3) Business Days after December 31, 2021 (the “First Closing Termination Date”), if the purchase of the Frist Tranche Shares pursuant to this Agreement shall not have been consummated by the First Closing Termination Date; provided, however, that the right to terminate this Agreement under this Section 12.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure to consummate the transactions contemplated hereby prior to the First Closing Termination Date; and provided further, that if on the First Closing Termination Date all of the conditions to First Closing shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the First Closing, which conditions shall be capable of being satisfied at such time), other than the conditions set forth in Section 8.1 and Section 8.4 then the First Closing Termination Date shall automatically be extended until March 31, 2022;

 

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(c) either the Company or the Investor, upon written notice to the other, if any of the mutual conditions to the First Closing set forth in Section 8 shall have become incapable of fulfillment by the First Closing Termination Date and shall not have been waived in writing by the other party; provided, however, that the right to terminate this Agreement under this Section 12.1(c) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure to consummate the transactions contemplated hereby prior to the First Closing Termination Date;

 

(d) the Company, upon written notice to the Investor, so long as the Company is not then in breach of its representations, warranties, covenants or agreements under this Agreement such that any of the conditions set forth in Section 6.1 or 6.2, as applicable, could not be satisfied by the First Closing Termination Date, (i) upon a breach of any covenant or agreement on the part of the Investor set forth in this Agreement, or (ii) if any representation or warranty of the Investor shall have been or become untrue, in each case such that any of the conditions set forth in Section 7.1, 7.2 or 7.3, as applicable, could not be satisfied by the First Closing Termination Date; or

 

(e) the Investor, upon written notice to the Company, so long as the Investor is not then in breach of its representations, warranties, covenants or agreements under this Agreement such that any of the conditions set forth in Section 7.1 or 7.2, as applicable, could not be satisfied by the First Closing Termination Date, upon a breach of any covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have been or become untrue, in each case such that any of the conditions set forth in Section 6.1, 6.2 , 6.3, 6.4, 6.5 or 6.6, as applicable, could not be satisfied by the First Closing Termination Date.

 

12.2 Ability to Terminate Prior to the Second Closing. This Agreement may be terminated at any time prior to the Second Closing by:

 

(a) mutual written consent of the Company and the Investor;

 

(b) either the Company or the Investor, upon written notice to the other, if the purchase of the Second Tranche Shares pursuant to this Agreement shall not have been consummated by December 31, 2023 (the “Second Closing Termination Date”);

 

(c) either the Company or the Investor, upon written notice to the other, if any of the mutual conditions to the Second Closing set forth in Section 11 shall have become incapable of fulfillment by the Second Closing Termination Date and shall not have been waived in writing by the other party; provided, however, that the right to terminate this Agreement under this Section 12.2(c) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure to consummate the transactions contemplated hereby prior to the Second Closing Termination Date;

 

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(d) the Company, upon written notice to the Investor, so long as the Company is not then in breach of its representations, warranties, covenants or agreements under this Agreement such that any of the conditions set forth in Section 9.1 or 9.2, as applicable, could not be satisfied by the Second Closing Termination Date, (i) upon a breach of any covenant or agreement on the part of the Investor set forth in this Agreement, or (ii) if any representation or warranty of the Investor shall have been or become untrue, in each case such that any of the conditions set forth in Section 10.1, or 10.2, as applicable, could not be satisfied by the Second Closing Termination Date; or

 

(e) the Investor, upon written notice to the Company, so long as the Investor is not then in breach of its representations, warranties, covenants or agreements under this Agreement such that any of the conditions set forth in Section 10.1 or 10.2, as applicable, could not be satisfied by the Second Closing Termination Date, upon a breach of any covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have been or become untrue, in each case such that any of the conditions set forth in Section 9.1, 9.2, 9.3, 9.4, or 9.5, as applicable, could not be satisfied by the Second Closing Termination Date.

 

12.3 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 12.1 or Section 12.2, as applicable, (a) this Agreement (except for this Section 12.3 and Section 14 hereof, and any definitions set forth in this Agreement and used in such sections) shall forthwith become void and have no effect, without any liability on the part of any party hereto or its Affiliates, and (b) all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the agency or other Person to which they were made or appropriately amended to reflect the termination of the transactions contemplated hereby; provided, however, that nothing contained in this Section 12.3 shall relieve any party from liability for fraud or any intentional or willful breach of this Agreement.

 

13. Additional Covenants and Agreements.

 

13.1 Investor Designee. Within ten (10) days after requested by the Company, the Investor shall provide the Company with the name, relevant background information and other information relating to the proposed Investor Designee (as defined in the Investor Agreement) as the Company may request.

 

13.2 Market Listing. From the date hereof through the Second Closing Date, Company shall use all reasonable best efforts to (a) maintain the listing and trading of the Common Stock on NYSE and (b) effect the listing of the Registered Shares on NYSE.

 

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13.3 Notification under the HSR Act and other Competition and Foreign Direct Investment Laws. Each party hereto shall use its reasonable best efforts to determine within thirty (30) days following the date of this Agreement whether any authorizations, consents, non-objections, orders and approvals of any Governmental Entities or Public Officials under any foreign legal requirement relating to competition or foreign direct investment Laws, other than a filing under the HSR Act, are necessary or advisable in connection with the consummation of the First Closing and the Second Closing. The parties shall, as soon as practicable, and, in any event, no later than forty- five (45) days prior to the conversion of the First Tranche Shares into the Common Stock in accordance with the Certificate of Designation, file or cause to be filed with the U.S. Federal Trade Commission (the “FTC”) and the U.S. Department of Justice (the “DOJ”) any notifications as may be required pursuant to the HSR Act with respect to the transactions contemplated by the Transaction Agreements, and as soon practicable after the date of this Agreement, file or cause to be filed with any other Governmental Authority any notifications required to be filed under any foreign legal requirement relating to competition or foreign direct investment Laws. In addition, the parties shall, within ten (10) days after the delivery of the Second Tranche Exercise Notice, file or cause to be filed with the FTC and the DOJ any additional notifications as may be required pursuant to the HSR Act with respect to the transactions contemplated by the Transaction Agreements, and as soon as practicable following the delivery of the Second Tranche Exercise Notice, file or cause to be filed with any other Governmental Authority any additional notifications required to be filed under any other antitrust or competition laws. The Investor and the Company will be responsible for equally sharing all filing fees associated with any notifications required to be filed under the HSR Act. The parties shall use commercially reasonable efforts to promptly obtain clearances under the HSR Act for the consummation of the transactions contemplated by the Transaction Agreements, including by requesting early termination of the HSR waiting period. The parties each agree not to take any action that will have the effect of delaying, impairing, or impeding, the early termination or expiration of the applicable waiting period under the HSR Act for the transactions contemplated by the Transaction Agreements. The parties commit to instruct their respective counsel to cooperate with each other and use commercially reasonable efforts to facilitate and expedite the expiration or termination of the applicable HSR Act waiting period at the earliest practicable date. Such commercially reasonable efforts and cooperation include, but are not limited to, each party undertaking (a) to promptly inform the other party of any material written or oral communication received from the DOJ, the FTC or any other Governmental Authority; (b) to respond as promptly as reasonably practicable to any request from the DOJ, the FTC or any other Governmental Authority for information, documents or other materials in connection with a review or investigation of the transactions contemplated by the Transaction Agreements; (c) to provide to the other party, and permit the other party to review and comment in advance of submission, all proposed correspondence, filings, and written communications to the DOJ, the FTC or any other Governmental Authority with respect to the transactions contemplated by the Transaction Agreements (other than the notifications required to be filed under the HSR Act); and (d) not to participate in any substantive meeting or discussion with the DOJ, the FTC or any other Governmental Authority in respect of an investigation or inquiry concerning the transactions contemplated by the Transaction Agreements unless it consults with the other party in advance and, except as prohibited by applicable Law or the DOJ, the FTC or any other Governmental Authority, gives the other party the opportunity to attend and participate therein; provided, however, that materials provided pursuant to this Section 13.3 may be redacted (x) to remove references concerning the valuation, (y) as necessary to comply with contractual arrangements, and (z) as necessary to address reasonable attorney-client or other privilege or confidentiality concerns. The parties will consider in good faith the views of one another, in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions, and proposals made or submitted by or on behalf of any party to the DOJ, the FTC or any other Governmental Authority, except as may be prohibited by or restricted by law. Notwithstanding anything to the contrary, nothing in this Section 13.3 or elsewhere in this Agreement, shall require the Investor or the Company, or any of their respective Affiliates to (or agree or commit to) (i) sell, divest or otherwise dispose of, convey, license, hold separate, or otherwise restrict or limit freedom of action with respect to, any assets, business, products, rights, licenses, investments, or assets, or interests therein, or (ii) defend any legal proceeding or investigation that is commenced or threatened to be commenced under the antitrust or competition laws or otherwise by the DOJ, the FTC or any other Governmental Authority or Person that challenges or questions the validity or legality of the transactions contemplated by the Transaction Agreements or seeks damages in connection therewith or if any Order (whether temporary, preliminary or permanent) is entered, enforced or attempted to be entered or enforced by the DOJ, the FTC or any other Governmental Authority or Person that would make consummation of the transactions contemplated by the Transaction Agreements illegal or otherwise delay or prohibit the consummation of the transactions contemplated by the Transaction Agreements, or take any and all actions to contest and defend against any such legal proceeding or investigation to avoid entry of, or to have vacated, lifted, reversed, repealed, rescinded or terminated, any Order (whether temporary, preliminary or permanent) that prohibits, prevents or restricts consummation of the transactions contemplated by the Transaction Agreements unless and until a nonappealable final Order is issued or otherwise results.

 

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13.4 CFIUS Filing. The parties shall use commercially reasonable efforts to (i) take the CFIUS Filing Actions and the CFIUS Cooperation Actions, (ii) obtain the CFIUS Clearance as promptly as practicable, (iii) comply at the earliest practicable date with any request for information or documentary material received by the Investor or any of its Affiliates from any governmental, regulatory or stock exchange authority, and (iv) avoid the entry of any governmental order whether temporary, preliminary or permanent, with respect to CFIUS Clearance, that would have the effect of prohibiting, preventing or restricting consummation of the transactions contemplated hereby, provided that for the avoidance of doubt, commercially reasonable efforts under clauses (i) to (iv) shall not require the Investor to accept any proposed mitigation agreement that would have an adverse economic impact on the Investor or any of its Affiliates or unduly limit the Investor’s governance rights in the Company. The Investor and its Affiliates shall pay the cost of all fees payable to a governmental, regulatory or stock exchange authority in connection with filings in connection with obtaining CFIUS Clearance.

 

13.5 Registration. The Company will prepare and file the Registration Statement in conformity with the requirements of the Securities Act on October 25, 2021. The Company will use best efforts to maintain the effectiveness of the Registration Statement until the date all Securities have been sold pursuant to such Registration Statement. At the time the Registration Statement and any amendments thereto become effective at the time the Conversion Shares are issued and at the Second Closing Date, the Registration Statement and any amendments thereto will conform in all material respects to the requirements of the Securities Act. The Prospectus and any amendments or supplements thereto, including without limitation, the prospectus supplement, at the time the Prospectus or any amendment or supplement thereto was issued and at the First Closing Date or the Second Closing Date will conform in all material respects to the requirements of the Securities Act.

 

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13.6 Assistance and Cooperation.

 

(a) Prior to the Second Closing, upon the terms and subject to the conditions set forth in this Agreement, and except as set forth in Section 13.3, each of the parties agrees to use all reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other party in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement, including using all reasonable best efforts to: (i) cause the conditions precedent set forth in Sections 6, 7, 8, 9, 10 and 11 to be satisfied; (ii) obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Authorities and make all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Authorities, if any); and (iii) obtain all necessary consents, approvals or waivers from Third Parties. The Investor shall use best efforts to complete the applicable Local Bank Reporting as soon as practicable after the date hereof, or after providing the Second Tranche Exercise Notice to the Company pursuant to Section 3.1, as applicable, and at the Company’s request, keep the Company reasonably informed of the status of the Local Bank Reporting.

 

(b) The Company and the Investor shall each, upon request by the other, furnish the other with all information concerning itself, its Affiliates, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of the Investor, the Company or any of their respective Affiliates to any Third Party and/or any Governmental Authority in connection with the Transaction.

 

(c) Subject to applicable Laws and as required by any Governmental Authority, the Company and the Investor shall each keep the other apprised of the status of matters relating to consummation of the transactions contemplated by the Transaction Agreements, including promptly furnishing the other with copies of notices or other communications received by the Investor or the Company, as the case may be, or any of its Affiliates, from any Third Party and/or any Governmental Authority with respect to such transactions.

 

13.7 Effect of Waiver of Condition to Closing. In the event that, as of the First Closing or the Second Closing, as applicable, the Investor waives the condition regarding a Material Adverse Effect set forth in Section 6.6 or Section 9.5 of this Agreement, as applicable, the Investor shall be deemed to have waived any right of recourse against the Company for, and agreed not to sue the Company in respect of, any and all events or inaccuracies in any representations or warranties of the Company (a) that, as of the First Closing or the Second Closing, as applicable, have caused or would reasonably be expected to cause such Material Adverse Effect and (b) of which the Investor had notice in writing from the Company immediately prior to the First Closing or the Second Closing, as applicable.

 

13.8 Interim Operations of the Company. From the date hereof until the First Closing and from the date of Second Tranche Exercise Notice until the Second Closing, except (a) as required by applicable Law, (b) as otherwise contemplated by this Agreement or (c) as the Investor may approve in writing, the Company shall not: (i) merge or consolidate the Company with any other Person or restructure, reorganize or completely or partially liquidate the Company or (ii) sell or otherwise dispose of any of the Company’s material assets other than in the ordinary course of business.

 

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13.9 Confidentiality. The Investor shall, and shall cause its Representatives to, keep confidential any information (including oral, written and electronic information) concerning the Company, its subsidiaries or its Affiliates that may be furnished to the Investor or its Representatives by or on behalf of the Company or any of its Representatives pursuant to this Agreement (the “Confidential Information”) and to use the Confidential Information solely in connection with the Investor’s investment in the Company; provided that the Confidential Information will not include information that (a) is, was or becomes available to the public (other than as a result of a breach of any confidentiality obligation by the Investor), (b) is or has been independently developed or conceived by the Investor without use of the Confidential Information or (c) is or has been made known or disclosed to the Investor by a Third Party without a breach of any confidentiality obligations such Third Party has to the Company that is known to the Investor; provided further that, the Investor may disclose the Confidential Information (i) to its Representatives in connection with its investment in the Company, (ii) to any prospective purchaser of any shares of Common Stock from the Investor and their respective Representatives, provided that such prospective purchaser agrees to be bound by a confidentiality or non-disclosure agreement with the Investor that is no less restrictive than the confidentiality obligations set forth herein and within seven (7) days of providing any Confidential Information to any such prospective purchaser, the Investor provides notice to the Company identifying such prospective purchaser, (iii) to any Investor’s Affiliates and their respective Representatives, in each case in the ordinary course of business (provided that the recipients of such Confidential Information are subject to a confidentiality and non-disclosure obligation no less restrictive than the confidentiality obligations set forth herein), or (iv) as may otherwise be required by law or legal, judicial or regulatory process, provided that the Investor provides prompt prior written notice to the Company notifying the Company of the manner, scope and justification for such disclosure. Notwithstanding anything to the contrary, nothing in this Section 13.9 or elsewhere in this Agreement, shall permit the Investor, or any of its respective Affiliates to disclose the Confidential Information to any Competitor including any Affiliate that is a Competitor.

 

13.10 Securities Law Disclosure; Publicity. No public release or announcement concerning the transactions contemplated hereby or by any other Transaction Agreement shall be issued by the Company or the Investor without the prior consent of the Company (in the case of a release or announcement by the Investor) or the Investor (in the case of a release or announcement by the Company) (which consents shall not be unreasonably withheld, conditioned or delayed), except for any such release or announcement as may be required by securities Law or other applicable Law or the applicable rules or regulations of any securities exchange or securities market, in which case the Company or the Investor, as the case may be, shall (to the extent permissible under applicable Law) allow the Investor or the Company, as applicable, reasonable time to comment on such release or announcement in advance of such issuance and the disclosing party shall consider the other party’s comments in good faith.

 

13.11 Conversion Shares. The Conversion Shares shall be issued free of all legends. If at any time following the request by Investor to convert its RCPS, the Registration Statement (or any subsequent registration statement registering the sale or resale of the Conversion Shares) is not effective or is not otherwise available for the sale or resale of the Conversion Shares, the Company shall immediately notify the Investor in writing that such registration statement is not then effective and thereafter shall promptly notify the Investor when the registration statement is effective again and available for the sale or resale of the Conversion Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or the Investor or the SPV, when formed, to sell, any of the Conversion Shares in compliance with applicable federal and state securities laws). The Company shall use best efforts to keep a registration statement (including the Registration Statement) registering the issuance or resale of the Conversion Shares effective.

 

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14. Miscellaneous.

 

14.1 Governing Law; Submission to Jurisdiction. The law, including the statutes of limitation, of the State of New York shall govern this Agreement, the interpretation and enforcement of its terms and any claim or cause of action (in law or equity), controversy or dispute arising out of or related to it or its negotiation, execution or performance, whether based on contract, tort, statutory or other law, in each case without giving effect to any conflicts-of-law or other principle requiring the application of the law of any other jurisdiction.

 

14.2 Dispute Resolution. The parties agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereby (a “Dispute”) shall be arbitrated pursuant to the provisions of the Rules of Arbitration of the International Chamber of Commerce (the “ICC Arbitration Rules”), by three arbitrators (the “Tribunal”) appointed in accordance with the ICC Arbitration Rules (the “Arbitration”). The arbitration will be conducted in English, and shall take place in New York, New York or such other location as the parties and the Tribunal may agree. The arbitral award (the “Award”) shall (a) be rendered within 120 days after the Tribunal’s acceptance of its appointment; (b) be delivered in writing; (c) state the reasons for the Award; (d) be the sole and exclusive final and binding remedy with respect to the Dispute between and among the parties without the possibility of challenge or appeal, which are hereby waived; and (e) be accompanied by a form of judgment. The Award shall be deemed an award of the United States, the relationship between the parties shall be deemed commercial in nature, and any Dispute arbitrated pursuant to this Section 14.2 shall be deemed commercial. The Tribunal shall have the authority to grant any equitable or legal remedies, including entering preliminary or permanent injunctive relief; provided, however, that the Tribunal shall not have the authority to award (and the parties waive the right to seek an award of) punitive or exemplary damages.

 

14.3 Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

 

14.4 Notices. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant party set forth on Exhibit D attached hereto and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or electronic mail, upon written confirmation of receipt by facsimile, electronic mail or otherwise, (b) on the first (1st) Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth (5th) Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. Any party may change its address by giving notice to the other parties in the manner provided above.

 

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14.5 Entire Agreement. This Agreement, the Investor Agreement (once executed) and other Transaction Agreements (together with all exhibits thereto) contain the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto.

 

14.6 Amendments. No provision in this Agreement shall be modified or amended except in a writing executed by an authorized representative of each of the parties hereto.

 

14.7 Headings; Nouns and Pronouns; Section References. Headings in this Agreement are for convenience of reference only and shall not be considered in construing this Agreement. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. References in this Agreement to a section or subsection shall be deemed to refer to a section or subsection of this Agreement unless otherwise expressly stated.

 

14.8 Severability. If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable best efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

 

14.9 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Investor or the Company without (a) the prior written consent of the Company in the case of any assignment by the Investor or (b) the prior written consent of the Investor in the case of an assignment by the Company; provided, however, that the Investor may assign or delegate its rights, obligations or liabilities under this Agreement in whole or in part to the SPV; provided further, however, that (i) such assignment or delegation shall not release the Investor from any of its duties or obligations hereunder and (ii) for so long as the SPV holds any share of the capital stock of the Company, the SPV shall obtain the prior written consent of the Company before a Restricted SPV Investor shall own any shares of capital stock of the SPV.

 

14.10 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

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14.11 Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, pdf or other electronic format, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

14.12 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any party hereto. No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

 

14.13 No Strict Construction. This Agreement has been prepared jointly and will not be construed against either party.

 

14.14 Survival of Warranties. The representations and warranties of the Company and the Investor contained in this Agreement (i) with respect to the First Closing shall survive the First Closing for twelve (12) months and (ii) with respect to the Second Closing shall not survive the Second Closing.

 

14.15 Equitable Relief; Remedies.

 

(a) The parties hereby acknowledge and agree that the rights of the parties hereunder are special, unique and of extraordinary character, and that if any party refuses or otherwise fails to act in accordance with the provisions of this Agreement, such refusal or failure would result in irreparable injury to the Company or the Investor as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation. Accordingly, if any party refuses or otherwise fails to act in accordance with the provisions of this Agreement, then, in addition to any other remedy which may be available to any damaged party at law or in equity, such damaged party will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction.

 

(b) The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

 

14.16 Expenses. Except as otherwise provided in this Agreement, each party shall pay its own fees and expenses in connection with the preparation, negotiation, execution and delivery of the Transaction Agreements. The Company shall pay all fees of its transfer agent in connection with the delivery of the Common Stock to the Investor.

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

  BLOOM ENERGY CORPORATION
   
  By: /s/ KR Sridhar
  Name: KR Sridhar
  Title: Chief Executive Officer
   
  SKECOPLANT CO., LTD.
   
  By: /s/ Kyung-il Park
  Name: Kyung-il Park
  Title: Chief Executive Officer

 

Signature Page to Securities Purchase Agreement

 

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EXHIBIT A

 

FORM OF CROSS RECEIPT CROSS RECEIPT

 

Bloom Energy Corporation hereby acknowledges receipt from [[SK ecoplant Co., Ltd.]/[SPV]] on [        ] of US $[        ], representing the purchase price for [        ] shares of [[Series A Redeemable Convertible Preferred Stock]/[Class A common stock]], par value $0.0001 per share, of Bloom Energy Corporation, pursuant to that certain Securities Purchase Agreement, dated as of [ ● ], 2021, by and between SK ecoplant Co., Ltd. and Bloom Energy Corporation.

 

  BLOOM ENERGY CORPORATION
     
  By:  
    Name:  Gregory Cameron
    Title: Chief Executive Officer

 

[[SK ecoplant Co., Ltd.]/[SPV]] hereby acknowledges receipt from Bloom Energy Corporation on [        ] of [        ] shares of [[Series A Redeemable Convertible Preferred Stock]/[Class A common stock]], par value $0.0001 per share, of Bloom Energy Corporation, delivered pursuant to that certain Securities Purchase Agreement, dated as of [ ● ], 2021, by and between SK ecoplant Co., Ltd. and Bloom Energy Corporation.

 

  [[SK ECOPLANT CO., LTD.]/[SPV]]
   
  By:  
    Name:             
    Title:  

 

A-1

 

 

EXHIBIT B

 

FORM OF INVESTOR AGREEMENT

 

B-1

 

 

EXECUTION VERSION

 

 

INVESTOR AGREEMENT

 

By and Between

 

SK ECOPLANT CO., LTD.

 

AND

 

BLOOM ENERGY CORPORATION

 

Dated as of [●], 2021

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

1. Definitions 1
       
2. Restrictions on Beneficial Ownership 6
       
  2.1 Standstill 6
  2.2 Waiver 8
  2.4 Termination of Standstill 8
       
3. Restrictions on Dispositions 8
       
  3.1 Lock-Up 8
  3.2 Termination of Lock-Up 9
  3.3 Effect of Prohibited Disposition 9
       
4. Voting Agreement 9
       
  4.1 Voting of Securities 9
  4.2 Quorum 10
  4.3 Exceptions 10
       
5. Board Composition 10
       
6. Preemptive Rights. 12
       
  6.1 General 12
  6.2 Procedures 12
  6.3 Registration Rights 13
       
7. Miscellaneous 13
       
  7.1 Governing Law; Submission to Jurisdiction 13
  7.2 Dispute Resolution 13
  7.3 Waiver 13
  7.4 Notices 13
  7.5 Entire Agreement 14
  7.6 Amendments 14
  7.7 Interpretation 14
  7.8 Severability 14
  7.9 Assignment 15
  7.10 Successors and Assigns 15
  7.11 Counterparts 15

 

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  7.12 Fees and Expenses 15
  7.13 Third Party Beneficiaries 15
  7.14 Remedies 15
  7.15 Specific Performance 15
  7.16 Confidentiality 16
  7.17 Further Assurances. 16
  7.18 Termination. 16

 

Exhibit A – Form of Irrevocable Proxy
Exhibit B – Notice Addresses

 

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INVESTOR
AGREEMENT

 

THIS INVESTOR AGREEMENT (this “Agreement”) is made as of [], 2021, by and between SK ecoplant Co., Ltd. (the “Investor”) and Bloom Energy Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, the Securities Purchase Agreement, dated as of October 23, 2021, by and between the Investor and the Company (the “Purchase Agreement”) provides for the issuance and sale by the Company to the Investor, and the purchase by the Investor, of the First Tranche Shares (as defined in the Purchase Agreement) and the Second Tranche Shares (as defined in the Purchase Agreement) (the First Tranche Shares, the Second Tranche Shares and the Conversion Shares (as defined in the Purchase Agreement), collectively, the “Purchased Securities”); and

 

WHEREAS, as a condition to consummating the transactions contemplated by the Purchase Agreement, the Investor and the Company have agreed upon certain rights and restrictions as set forth herein with respect to the Purchased Securities and other securities of the Company beneficially owned by the Investor, and it is a condition to the First Closing (as defined in the Purchase Agreement) that this Agreement be executed and delivered by the Investor and the Company.

 

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

 

(a) “Acceptance Notice” shall have the meanings set forth in Section 6.2.

 

(b) “Acquisition Proposal” shall have the meaning set forth in Section 2.1(d).

 

(c) “Affiliate” shall mean, with respect to any Person, another Person that controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if any of the following conditions is met: (i) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (ii) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities. For the purposes of this Agreement, in no event shall (x) the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates; (y) the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates; and (z) any joint venture entity or any other Person formed pursuant to the Joint Venture Agreement or the Preferred Distributor Agreement be deemed an Affiliate of either the Company or the Investor.

 

 

 

 

(d) “Agreement” shall have the meaning set forth in the Preamble, including all Exhibits attached hereto.

 

(e) “Arbitration” shall have the meaning set forth in Section 7.2.

 

(f) “Award” shall have the meaning set forth in Section 7.2.

 

(g) “beneficial owner,” “beneficially owns,” “beneficial ownership” and terms of similar import used in this Agreement shall, with respect to a Person, have the meaning set forth in Rule 13d-3 under the Exchange Act (i) assuming the full conversion into, and exercise and exchange for, shares of Common Stock of all Common Stock Equivalents beneficially owned by such Person and (ii) determined without regard for the number of days within which such Person has the right to acquire such beneficial ownership.

 

(h) “Board” shall mean the Board of Directors of the Company.

 

(i) “Business Combination” shall have the meaning set forth in Section2.1(g).

 

(j) “Business Day” shall mean a day on which commercial banking institutions in New York, New York and Seoul, the Republic of Korea are open for business.

 

(k) “Cap” shall mean fifteen percent (15%) of the issued and outstanding capital stock of the Company.

 

(l) “Change of Control” shall mean, with respect to the Company, any of the following events: (i) any Person is or becomes the beneficial owner (except that a Person shall be deemed to have beneficial ownership of all shares that any such Person has the right to acquire, whether such right which may be exercised immediately or only after the passage of time), directly or indirectly, of a majority of the total voting power represented by all shares of Common Stock and any other voting securities of the Company then issued and outstanding; (ii) the Company consolidates with or merges into another corporation or entity, or any corporation or entity consolidates with or merges into the Company, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) a majority of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person becomes the beneficial owner, directly or indirectly, of a majority of the total voting power of all shares of Common Stock and any other voting securities of the Company then issued and outstanding or (iii) the Company conveys, transfers or leases all or substantially all of its assets to any Person other than a wholly-owned Affiliate of the Company.

 

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(m) “Class A Common Stock” shall mean the Class A Common Stock of the Company, $0.0001 par value per share.

 

(n) “Class B Common Stock” shall mean the Class B Common Stock of the Company, $0.0001 par value per share.

 

(o) “Commercial Cooperation Agreement” shall mean the Commercial Cooperation Agreement, dated as of the date of the Purchase Agreement, by and between the Company and SK ecoplant Co., Ltd., as may be amended, modified and supplemented, from time to time.

 

(p) “Common Stock” shall mean the Class A Common Stock, the Class B Common Stock and any other class of common stock of the Company authorized whether now or hereafter.

 

(q) “Common Stock Equivalents” shall mean any options, warrants or other securities or rights convertible into or exercisable or exchangeable for, whether directly or following conversion into or exercise or exchange for other options, warrants or other securities or rights, shares of Common Stock.

 

(r) “Company” shall have the meaning set forth in the Preamble.

 

(s) “Derivative” shall have the meaning set forth in Section 2.1(a).

 

(t) “Director Conditions” shall have the meaning set forth in Section 5(b).

 

(u) “Director Period” shall mean the period commencing on the Second Closing Date and ending on the date on which the Investor (including SK ecoplant and the SPV) and its Subsidiaries beneficially own less than five percent (5.0%) of the shares of Common Stock then issued and outstanding.

 

(v) “Disposition” or “Dispose of” shall mean any (i) offer, sale, contract to sell, sale of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant for the sale of, or other disposition of or transfer of any shares of Common Stock, or any Common Stock Equivalents, including, without limitation, any “short sale” or similar arrangement, or (ii) hedge, swap or any other agreement or transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequence of ownership of shares of Common Stock, whether any such hedge, swap, agreement or transaction is to be settled by delivery of Common Stock, other securities, in cash or otherwise.

 

(w) “Dispute” shall have the meaning set forth in Section 7.2.

 

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(x) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

(y) “First Closing Date” shall have the meaning set forth in the Purchase Agreement.

 

(z) “Governmental Authority” shall mean any court, agency, authority, department, or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

 

(aa) “ICC Arbitration Rules” shall have the meaning set forth in Section 7.2.

 

(bb) “Investor” shall have the meaning set forth in the Preamble.

 

(cc) “Investor Designee” shall have the meaning set forth in Section 5(a).

 

(dd) “Joint Venture Agreement” shall mean the Joint Venture Agreement, dated September 24, 2019, by and between the Company and SK ecoplant Co., Ltd. (f/k/a SK Engineering & Construction Co., Ltd.), as may be amended, modified and supplemented, from time to time.

 

(ee) “Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

 

(ff) “Lock-Up Term” shall have the meaning set forth in Section 3.1.

 

(gg) “Modified Clause” shall have the meaning set forth in Section 7.8.

 

(hh) “New Securities” shall mean any shares of Common Stock or Common Stock Equivalents, except for (a) shares of Common Stock or Common Stock Equivalents that are issued pursuant to the Company’s stock option and incentive plans or other employee or director compensation plans; (b) shares of Common Stock or Common Stock Equivalents that are issued as matching contributions under the Company’s 401(k) plan; (c) shares of Common Stock or Common Stock Equivalents that are issued as a dividend or other distribution on outstanding securities of the Company; (d) shares of Common Stock or Common Stock Equivalents that are issued by reason of a stock split, split-up or other reorganization or recapitalization of the Company; (e) shares of Common Stock or Common Stock Equivalents issued as acquisition consideration pursuant to the acquisition of another Person by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement; and (f) the Preemptive Right Shares.

 

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(ii) “Offeror” shall have the meaning set forth in Section 2.1(d).

 

(jj) ”Permitted Purchases” shall mean purchases of Common Stock by the Investor, subject to compliance with Section 3.1 to the extent necessary to maintain its status as the largest shareholder of the Company by no less than one percent (1%) of the issued and outstanding capital stock of the Company, provided that in no event shall the Investor’s ownership exceed the Cap.

 

(kk) “Person” shall mean any individual, partnership, limited liability company, firm, corporation, trust, unincorporated organization, government or any department or agency thereof or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

 

(ll) “Preemptive Right Notice” shall have the meaning set forth in (mm) “Preemptive Right Shares” shall have the meaning set forth in Section 6.2.

 

(mm) “Preemptive Right Shares” shall have the meaning set forth in Section 6.1.

 

(nn) “Preferred Distributor Agreement” shall mean the Amended and Restated Preferred Distributor Agreement, dated as of the date of the Purchase Agreement, by and among the Company, SK ecoplant Co., Ltd. and Bloom SK Fuel Cell, LLC, as may be amended, modified and supplemented, from time to time.

 

(oo) “Purchase Agreement” shall have the meaning set forth in the Preamble, and shall include all Exhibits attached thereto.

 

(pp) “Purchased Securities” shall have the meaning set forth in the Preamble, and shall be adjusted for (i) any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization and (ii) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Securities.

 

(qq) “registers,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement or document by the SEC.

 

(rr) ”Registration Statement” means a registration statement filed by the Company with the SEC in compliance with the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder for the registration of securities.

 

(ss) “Representatives” shall mean, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, potential debt and equity financing sources (excluding any co-investors), and other representatives. For the avoidance of doubt, potential debt and equity financing sources are Representatives, whether or not the Investor contacts any one of them before or after the First Closing Date.

 

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(tt) “SEC” shall mean the United States Securities and Exchange Commission.

 

(uu) “Second Closing” shall have the meaning set forth in the Purchase Agreement.

 

(vv) “Second Closing Date” shall have the meaning set forth in the Purchase Agreement.

 

(ww) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

(xx) “SK ecoplant” shall mean SK ecoplant Co., Ltd.

 

(yy) “SPV” shall have the meaning set forth in the Purchase Agreement.

 

(zz) “Standstill Term” shall have the meaning set forth in Section 2.1.

 

(aaa) “Subsidiary” shall mean, with respect to any Person, any other Person of which such Person (either alone or through or together with any other subsidiary) owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities or securities carrying the voting power in the election of the board of directors or other governing body of such Person.

 

(bbb) “Third Party” shall mean any Person other than the Investor or any of its Affiliates.

 

(ccc) “Tribunal” shall have the meaning set forth in Section 7.2.

 

2. Restrictions on Beneficial Ownership.

 

2.1 Standstill. During the period (such period, the “Standstill Term”) commencing as of the First Closing Date and continuing until the later of (i) the second (2nd) anniversary of the Second Closing Date, (ii) the date on which the Investor ceases to have the right to designate a director to the Board pursuant to Section 5, and (iii) the date on which the Investor (including SK ecoplant and SPV) and its Subsidiaries beneficially own less than five percent (5.0%) of the shares of Common Stock then issued and outstanding, the Investor (including SK ecoplant and the SPV) and its Subsidiaries shall not do any of the following, except as approved, invited or waived by the Company or the Board, or as contemplated by this Agreement:

 

(a) other than Permitted Purchases and purchases of Preemptive Right Shares, directly or indirectly, acquire beneficial ownership of Common Stock and/or Common Stock Equivalents and/or any instrument that gives the Investor the economic equivalent of ownership of an amount of securities of the Company (a “Derivative”), except, nothing in this Section 2.1(a) shall prevent or prohibit the Investor from investing in a fund with respect to which the Investor does not have or share decision-making authority over investment or divestment decisions;

 

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(b) make a tender, exchange or other public offer to acquire Common Stock and/or Common Stock Equivalents;

 

(c) directly or indirectly, (i) seek to have called any meeting of the stockholders of the Company or propose any matter to be voted upon by the stockholders of the Company, or (ii) propose or nominate for election to the Board any person whose nomination has not been approved by a majority of the Board (excluding the Investor Designee, if any);

 

(d) directly or indirectly, encourage, accept or support a tender, exchange or other offer or proposal by any other Person or group (an “Offeror”) for securities of the Company (if such offer or proposal would, if consummated, result in a Change of Control of the Company, such offer or proposal is referred to as an “Acquisition Proposal”);

 

(e) directly or indirectly, solicit proxies or consents or propose or seek or become a participant in a solicitation (as such terms are defined in Regulation 14A under the Exchange Act), or seek to advise or influence any Person, with respect to voting of any securities of the Company;

 

(f) deposit any securities of the Company in a voting trust or subject any securities of the Company to any arrangement or agreement with respect to the voting of such securities, including the granting of any proxy (other than pursuant to this Agreement);

 

(g) propose (i) any merger, consolidation, business combination, tender or exchange offer, purchase of the Company’s assets or businesses, purchase of any securities of the Company or any Derivative, or any similar transaction involving the Company or (ii) any recapitalization, restructuring, liquidation or other extraordinary transaction with respect to the Company, in each case without the prior written consent of the Board (a transaction described in clauses (i) and (ii) that would result in a Change of Control, is referred to as a “Business Combination”);

 

(h) act in concert with any Third Party to take any action in clauses (a) through (g) above, or, directly or indirectly, form, join or in any way participate in a “partnership, limited partnership, syndicate, or other group” as such terms are used in the rules of the SEC with respect to the Company or any securities of the Company;

 

(i) request or propose to the Board or the Company (or any of its officers, directors, Affiliates employees, attorneys, accountants, financial advisors and other professional representatives), directly or indirectly, any amendment or waiver of any provision of this Section 2.1 (including this clause (i));

 

(j) make any public announcement regarding, or take any action that could require the Company to make a public announcement regarding, a potential Business Combination or any of the matters set forth in clauses (a) through (i) above; or

 

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(k) enter into discussions, negotiations, arrangements or agreements with any Person relating to the foregoing actions referred to in (a) through (i) above;

 

provided, however, that nothing contained in this Section 2.1 shall prevent, restrict, encumber, or limit in any manner: (A) the Investor or any of its Affiliates from making confidential, nonpublic proposals to the Board for a transaction involving a Business Combination following the public announcement by the Company after the Second Closing Date that it has entered into a definitive agreement with a Third Party for a transaction involving a Business Combination; (B) the Investor Designee from performing its duties as a member of the Board; or (C) the Investor or any of its Affiliates from exercising their respective rights, performing their respective obligations or otherwise consummating the transactions contemplated by this Agreement, the Purchase Agreement, Joint Venture Agreement, or the Preferred Distributor Agreement, in each case, in accordance with the terms hereof and thereof.

 

2.2 Waiver. Notwithstanding anything to the contrary set forth herein, including Section 2.1(i), upon request by Investor that Section 2.1(a) be waived, the Investor and the Company shall discuss in good faith whether such request shall be granted.

 

2.4 Termination of Standstill. Notwithstanding anything to the contrary contained in this Agreement, the Standstill Term shall terminate upon the occurrence of any of the following events:

 

(a) a Change of Control;

 

(b) the Company files a Schedule 14D-9 (or successor form of Tender Offer Solicitation/Recommendation Statement under Rule 14d-9 of the Exchange Act) recommending that stockholders accept any such offer filed after such offer has commenced; or

 

(c) a breach by the Company of any provision of the Purchase Agreement or this Agreement after the First Closing and prior to the Second Closing.

 

3. Restrictions on Dispositions.

 

3.1 Lock-Up. During the period (such period, the “Lock-Up Term”) commencing as of the Second Closing Date and continuing until the second (2nd) anniversary of the Second Closing Date, the Investor (including SK ecoplant and the SPV) and its Subsidiaries shall not, except with the prior consent of a majority of the Board (excluding the Investor Designee, if any):

 

(a) Dispose of any of the Purchased Securities or any other shares of Common Stock beneficially owned by it as of the date of this Agreement, together with any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization; or

 

(b) Dispose of any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the shares of Common Stock described in clause (a) above.

 

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3.2 Termination of Lock-Up. Notwithstanding anything to the contrary contained herein, the Lock-Up Term shall terminate upon the occurrence of any of the following events:

 

(a) a Change of Control; or

 

(b) the Company files a Schedule 14D-9 (or successor form of Tender Offer Solicitation/Recommendation Statement under Rule 14d-9 of the Exchange Act) recommending that stockholders accept any such offer filed after such offer has commenced.

 

3.3 Effect of Prohibited Disposition. If any Disposition is made or attempted contrary to the provisions of this Agreement, (a) such purported Disposition shall be void ab initio, (b) the Company shall have, in addition to all other legal or equitable remedies that it may have, the right to injunctive relief and specific performance to enforce the provisions of this Agreement, and (c) the Company shall have the right to refuse to recognize any transferee in a Disposition as a stockholder for any purpose.

 

4. Voting Agreement.

 

4.1 Voting of Securities. Subject to Section 4.3, from the Second Closing Date until termination or expiration of the Standstill Term, in any vote or action by written consent of the stockholders of the Company (including, without limitation, with respect to the election of directors), the Investor shall vote or execute a written consent with respect to all voting securities of the Company as to which it is entitled to vote or execute a written consent in accordance with the recommendation of a majority of the Board. In furtherance of this Section 4.1, the Investor shall, if and when requested by the Company from time to time, promptly execute and deliver to the Company an irrevocable proxy, substantially in the form of Exhibit A attached hereto, and irrevocably appoint the Company or its designees, with full power of substitution, its attorney, agent and proxy to vote (or cause to be voted) or to give consent with respect to, all of the voting securities of the Company as to which the Investor is entitled to vote, in the manner and with respect to the matters set forth in this Section 4.1. The Investor acknowledges that any such proxy executed and delivered shall be coupled with an interest, shall constitute, among other things, an inducement for the Company to enter into this Agreement, shall be irrevocable and binding on any successor in interest of the Investor and shall not be terminated by operation of Law upon the occurrence of any event. Such proxy shall operate to revoke and render void any prior proxy as to any voting securities of the Company heretofore granted by the Investor, to the extent it is inconsistent herewith. Such proxy shall terminate upon the earlier of the expiration or termination of the Standstill Term and this Section 4.1. For the avoidance of doubt, this Section 4.1 and the proxies granted pursuant to this Section 4.1 shall not apply to any voting securities of the Company held by an executive officer or director of the Investor for his or her personal account or to any matters to which Investor retains voting rights pursuant to Section 4.3.

 

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4.2 Quorum. In furtherance of Section 4.1, the Investor shall be present in person or represented by proxy at all meetings of stockholders to the extent necessary so that all voting securities of the Company as to which they are entitled to vote shall be counted as present for the purpose of determining the presence of a quorum at such meeting.

 

4.3 Exceptions. Notwithstanding anything to the contrary contained in this Agreement, the Investor may vote, or execute a written consent with respect to, any or all of the voting securities of the Company as to which it is entitled to vote or execute a written consent, as it may determine in its sole discretion with respect to any matter presented to the shareholders of the Company regarding any transaction between the Company and any Korean company operating in the Korean construction business.

 

5. Board Composition.

 

(a) Subject to the terms of this Section 5, effective as of the Second Closing Date, the Board will appoint a designee of the Investor (the “Investor Designee”) as a director of the Company for a term expiring at the Company’s next annual meeting of stockholders or upon such Investor Designee’s earlier death, disability, resignation or removal (including removal by operation of Law). The Company and the Investor agree that [●] shall be the initial Investor Designee. The Company agrees that, during the Director Period, the Board shall nominate the individual serving as such Investor Designee (or any individual subsequently designated by the Investor to serve as the Investor Designee) for election or re-election, as the case may be, as a director at each subsequent meeting of the Company’s stockholders at which directors are to be elected, and use commercially reasonable efforts to cause the Investor Designee to be elected or re-elected, including providing the same level of support as is provided for other nominees. Upon the end of the Director Period, the Investor shall cause the Investor Designee to tender to the Board, as soon as practicable and in any event within five (5) days following the end of the Director Period, his or her resignation from the Board. During the Director Period, the Board will not decrease the size of the Board if such decrease would require the resignation of the Investor Designee.

 

(b) As a condition to any appointment or nomination for election to the Board, each Investor Designee shall (i) meet the qualifications required of all directors of the Company by the Company’s Nominating and Corporate Governance Committee and those mandated by applicable Law, (ii) agree, in writing, to be bound by the terms and conditions of all of the Company’s policies applicable to its directors, (iii) make such acknowledgements and enter into such agreements as the Company requires of all directors, including, without limitation, with respect to confidentiality, the Company’s code of ethics, insider trading policy and Section 16 reporting procedures, and (iv) be able to dedicate sufficient time and resources for the diligent performance of the duties required of a member of the Board (the “Director Conditions”). Without limiting the foregoing, each proposed Investor Designee shall be subject to satisfaction of the criteria for Board membership established by the Nominating and Corporate Governance Committee of the Board, including the director qualification criteria thereof, as determined in the reasonable and good faith discretion of the Nominating and Corporate Governance Committee of the Board and the Board in the same manner as the Nominating and Corporate Governance Committee of the Board and the Board would consider any candidate for Board membership. The Board or the Nominating and Corporate Governance Committee of the Board will evaluate the Investor Designee for potential roles on the committees of the Board, consistent with evaluations of other directors for such positions and subject to applicable Law and the listing rules and requirements of The New York Stock Exchange.

 

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(c) If an Investor Designee resigns from the Board, is removed, or refuses or is unable to serve or fulfill his or her duties as a director because of death or disability, in each case prior to the expiration of the Director Period, the Investor shall have the right to select a replacement Investor Designee, reasonably acceptable to the Board and subject to compliance with the Director Conditions, and shall provide the Company with the name of and relevant background information for such replacement Investor Designee. Subject to the terms of this Section 5, within twenty (20) days following receipt of such information and compliance with the Director Conditions, the Board will appoint such replacement Investor Designee to the Board to replace the departing Investor Designee to serve the remaining term of the departing Investor Designee, and the replacement Investor Designee shall be considered an Investor Designee for all purposes of this Section 5.

 

(d) All confidential or proprietary information and data relating to the Company and its Affiliates provided by the Company to the Investor Designee shall be deemed confidential information and will be kept confidential and not disclosed to any Person outside of the Company. Notwithstanding the confidentiality obligations set forth in Section 5(b)(iii) and the foregoing, and subject to Section 7.16, the Investor Designee shall be permitted to disclose such confidential information to the executive officers and members of the board of directors (or equivalent governance body) of SK ecoplant and its Subsidiaries and their advisers (such as legal counsel) having a duty of confidentiality to the Investor, provided (i) such disclosure is made on a need-to-know basis solely for the purposes of, and to the extent necessary to, monitor and make decisions regarding the Investor’s investment in the Company, and (ii) that the Investor (whether SK ecoplant or the SVP) will be liable for any breach by any of such Persons of the confidentiality obligations applicable to the Investor Designee. Upon the resignation or removal of the Investor Designee from the Board and written request (including via email) from the Company, such Investor Designee shall either promptly (x) destroy all confidential information of the Company that he or she received in his or her capacity as a director in his or her possession or control and any copies thereof or (y) return to the Company all confidential information of the Company that he or she received in his or her capacity as a director in his or her possession or control and any copies thereof (but the Investor Designee need not purge electronic archives and backups), and, in either case, confirm in writing (which may be via email) to the Company that all such material has been destroyed or returned, as applicable, in compliance with this Section 5.

 

(e) If any Investor Designee is an employee of, or otherwise compensated by, the Investor or any of its Affiliates, such Investor Designee shall not be entitled to any compensation from the Company in connection with his or her role as a director or service on the Board or any committee. The Investor Designee will be entitled to reimbursement from the Company of out of pocket expenses in connection with his or her role as a director consistent with other directors on the Board.

 

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(f) Notwithstanding anything contained herein to the contrary, if the Board (or any committee thereof) shall consider (i) a proposed contract, transaction or other arrangement between the Investor or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand, (ii) the enforcement or waiver of the rights of the Company or any of its Affiliates under any agreement between the Investor or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand, or (iii) a matter which the Board determines in good faith presents an actual or potential conflict of interest for the Investor Designee, then the Investor Designee will, if directed by the chairperson of the Board or the remaining directors, be excluded from participation in such Board or committee meeting (or portion thereof, as applicable) at which such matters are to be discussed, and the Investor Designee will not be entitled to receive copies of the materials or other documents relating to such matter or meeting (or portion thereof, as applicable).

 

6. Preemptive Rights.

 

6.1 General. After the Second Closing Date, if the Company proposes to issue any New Securities, the Investor shall have the right to purchase up to such number of New Securities as required to maintain its fully-diluted ownership as at immediately prior to the issuance of such New Securities, on the same terms and conditions that are applicable to such New Securities, and at a price per share or security equal to the price paid by the purchaser(s) in such issuance of New Securities (such shares, the “Preemptive Right Shares”). For purposes of this Section 6, “fully-diluted ownership” shall mean the issued and outstanding Common Stock of the Company, assuming the conversion of all Common Stock Equivalents.

 

6.2 Procedures. After the Second Closing Date, in the event that the Company proposes to issue any New Securities, it shall, prior to such issuance of New Securities, deliver a written notice to the Investor (a “Preemptive Right Notice”), stating (a) the Company’s intention to issue New Securities; (b) the amount and type of New Securities that the Company proposes to issue, and correspondingly, the number of Preemptive Right Shares that the Investor is entitled to purchase and (c) the material terms and conditions of the proposed issuance, including without limitation, the price of such New Securities (or (i) if such price is not clearly identifiable, such effective price per share as is reasonably determined by the Company in good faith or (ii) in the case of issuance of restricted stock, the fair market value of such restricted stock as determined by the Company in the ordinary course in connection with such issuance). Within seven (7) Business Days following the receipt of the Preemptive Right Notice, the Investor may, by delivery of a written notice of acceptance to the Company (the “Acceptance Notice”), elect to purchase all, or any portion, of the Preemptive Right Shares that the Investor is entitled to purchase for the price indicated in the Preemptive Right Notice. The failure to so respond in writing within such seven (7) Business Day period by the Investor shall constitute a waiver of its rights under this Section 6 with respect to the purchase of such New Securities, but shall not affect its rights with respect to any future issuances of New Securities. Upon the Company’s issuance of any Preemptive Right Shares, such Preemptive Right Shares shall be validly issued, fully paid and nonassessable, duly authorized by all necessary corporate action of the Company.

 

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6.3 Registration Rights. If the Preemptive Right Shares are not issued to the Investor pursuant to an effective Registration Statement, and upon the Company’s issuance of any Preemptive Right Shares to the Investor, such Preemptive Right Shares have not been registered under an effective Registration Statement, then the Company shall, as soon as practicable, but in any event within 90 days of such issuance of such Preemptive Right Shares to the Investor, prepare and file with the SEC a Registration Statement covering the resale of such Preemptive Right Shares.

 

7. Miscellaneous.

 

7.1 Governing Law; Submission to Jurisdiction. The law, including the statutes of limitation, of the State of New York shall govern this Agreement, the interpretation and enforcement of its terms and any claim or cause of action (in law or equity), controversy or dispute arising out of or related to it or its negotiation, execution or performance, whether based on contract, tort, statutory or other law, in each case without giving effect to any conflicts-of-law or other principle requiring the application of the law of any other jurisdiction.

 

7.2 Dispute Resolution. The parties agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereby (a “Dispute”) shall be arbitrated pursuant to the provisions of the Rules of Arbitration of the International Chamber of Commerce (the “ICC Arbitration Rules”), by three arbitrators (the “Tribunal”) appointed in accordance with the ICC Arbitration Rules (the “Arbitration”). The arbitration will be conducted in English, and shall take place in New York, New York or such other location as the parties and the Tribunal may agree. The arbitral award (the “Award”) shall (a) be rendered within 120 days after the Tribunal’s acceptance of its appointment; (b) be delivered in writing; (c) state the reasons for the Award; (d) be the sole and exclusive final and binding remedy with respect to the Dispute between and among the parties without the possibility of challenge or appeal, which are hereby waived; and (e) be accompanied by a form of judgment. The Award shall be deemed an award of the United States, the relationship between the parties shall be deemed commercial in nature, and any Dispute arbitrated pursuant to this Section 7.2 shall be deemed commercial. The Tribunal shall have the authority to grant any equitable or legal remedies, including entering preliminary or permanent injunctive relief; provided, however, that the Tribunal shall not have the authority to award (and the parties waive the right to seek an award of) punitive or exemplary damages.

 

7.3 Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

 

7.4 Notices. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant party set forth on Exhibit B attached hereto and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or e-mail, upon written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. Any party may change its address by giving notice to the other parties in the manner provided above.

 

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7.5 Entire Agreement. This Agreement, the Purchase Agreement (once executed), the Joint Venture Agreement, the Preferred Distributor Agreement and the Commercial Cooperation Agreement (including all exhibits hereto and thereto) constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto. Notwithstanding anything to the contrary contained herein or elsewhere, Section 7.16 of this Agreement shall supersede and replace in its entirety Section 13.9 of the Purchase Agreement.

 

7.6 Amendments. No provision in this Agreement shall be modified or amended except in a writing executed by an authorized representative of each of the parties the Company and the Investor.

 

7.7 Interpretation. When a reference is made in this Agreement to a section, subsection, article, exhibit or schedule such reference shall be to a section, subsection, article, exhibit or schedule of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement or in any exhibit or schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any exhibit or schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. This Agreement has been prepared jointly and will not be construed against either party.

 

7.8 Severability. If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable best efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

 

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7.9 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Investor or the Company without (a) the prior written consent of the Company in the case of any assignment by the Investor (other than to the SPV) or (b) the prior written consent of the Investor in the case of an assignment by the Company, in each case, which consent shall not be unreasonably withheld or delayed.

 

7.10 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assignees of the parties.

 

7.11 Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, pdf or other electronic format, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

7.12 Fees and Expenses. Except as otherwise provided herein and therein, all fees and expenses incurred in connection with or related to this Agreement and the other Transaction Agreements and the transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not such transactions are consummated.

 

7.13 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any party hereto. No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

 

7.14 Remedies. The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

 

7.15 Specific Performance. The parties hereby acknowledge and agree that the rights of the parties hereunder are special, unique and of extraordinary character, and that if any party refuses or otherwise fails to act in accordance with the provisions of this Agreement, such refusal or failure would result in irreparable injury to the Company or the Investor as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation. Accordingly, if any party refuses or otherwise fails to act in accordance with the provisions of this Agreement, then, in addition to any other remedy which may be available to any damaged party at law or in equity, such damaged party will be entitled to obtain specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction. Each party hereto hereby further waives any defense in any action for specific performance that a remedy at law would be adequate.

 

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7.16 Confidentiality. The Investor shall, and shall cause its Representatives to, keep confidential any information (including oral, written and electronic information) concerning the Company, its subsidiaries or its Affiliates that may be furnished to the Investor or its Representatives by or on behalf of the Company or any of its Representatives pursuant to this Agreement (the “Confidential Information”) and to use the Confidential Information solely in connection with the Investor’s investment in the Company; provided that the Confidential Information will not include information that (a) is, was or becomes available to the public (other than as a result of a breach of any confidentiality obligation by the Investor), (b) is or has been independently developed or conceived by the Investor without use of the Confidential Information or (c) is or has been made known or disclosed to the Investor by a Third Party without a breach of any confidentiality obligations such Third Party has to the Company that is known to the Investor; provided further that, the Investor may disclose the Confidential Information (i) to its Representatives in connection with its investment in the Company, (ii) to any prospective purchaser of any shares of Common Stock from the Investor and their respective Representatives, provided that such prospective purchaser agrees to be bound by a confidentiality or non-disclosure agreement with the Investor that is no less restrictive than the confidentiality obligations set forth herein and within seven (7) days of providing any Confidential Information to any such prospective purchaser, the Investor provides notice to the Company identifying such prospective purchaser, (iii) to any Investor’s Affiliates and their respective Representatives, in each case in the ordinary course of business (provided that the recipients of such Confidential Information are subject to a confidentiality and non-disclosure obligation no less restrictive than the confidentiality obligations set forth herein), or (iv) as may otherwise be required by law or legal, judicial or regulatory process, provided that the Investor provides prompt prior written notice to the Company notifying the Company of the manner, scope and justification for such disclosure.

 

7.17 Further Assurances. Each party hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as may be reasonably required or desirable in order to carry out the intent and accomplish the purposes of this Agreement.

 

7.18 Termination. Any of Investor’s obligations set forth in this Agreement shall terminate once such Person no longer holds, directly or indirectly, any equity interest or voting power in the Company. This Agreement shall automatically terminate if the Second Closing does not occur on or prior to November 30, 2023. Section 7.16 shall survive the termination of this Agreement for two (2) years.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

  BLOOM ENERGY CORPORATION
   
  By:                        
    Name:
    Title:

 

Signature Page to Investor Agreement

 

 

 

 

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

  SK ECOPLANT CO., LTD.
   
  By:                 
    Name:
    Title:

 

Signature Page to Investor Agreement

 

 

 

 

EXHIBIT A

 

FORM OF IRREVOCABLE PROXY

 

[In order to secure the performance of the duties of the undersigned pursuant to Section 4.1 of the Investor Agreement, dated as of [__], 2021 (the “Agreement”), by and between Bloom Energy Corporation (the “Company”) and [_] (the “Investor”), the undersigned hereby irrevocably appoints [___] and [___], and each of them, the attorneys, agents and proxies, with full power of substitution in each of them, for the undersigned, and in the name, place and stead of the undersigned, to vote (or cause to be voted) or, if applicable, to give consent, in such manners as each such attorney, agent and proxy or his substitute shall in his sole discretion deem proper to record such vote (or consent) in the manners, and with respect to such matters as set forth in Section 4.1 of the Agreement (but in any case, in accordance with any written instruction from the undersigned, properly delivered under Section 4.1 of the Agreement, to vote or give consent as contemplated by Section 4.1 of the Agreement) with respect to all voting securities (whether taking the form of shares of Class A Common Stock, par value $0.0001 per share, or other voting securities of the Company), which the undersigned is or may be entitled to vote at any meeting of the Company held after the date hereof, whether annual or special and whether or not an adjourned meeting or, if applicable, to give written consent with respect thereto. This proxy is coupled with an interest, shall be irrevocable and binding on any successor in interest of the undersigned and shall not be terminated by operation of law upon the occurrence of any event. This proxy shall operate to revoke and render void any prior proxy as to voting securities heretofore granted by the undersigned which is inconsistent herewith. Notwithstanding anything to the contrary contained herein, this proxy shall (i) at all times be subject to Section 4.3 of the Agreement and (ii) terminate upon the earlier of the expiration or termination of the Standstill Term (as defined in the Agreement) and the voting agreement set forth in Section 4.1 of the Agreement.]

 

  [●]
   
  By:                                        
  Name:   
  Title:  

 

 

 

 

EXHIBIT B

 

NOTICE ADDRESSES

 

Company
Bloom Energy Corporation
Address: 4353 North First Street
San Jose, CA  95134
Attention: Shawn Soderberg, General Counsel
Telephone: 408-543-1191
Email: Shawn.Soderberg@bloomenergy.com
with a copy, with shall not constitute notice, to:
Latham & Watkins LLP
Address: 140 Scott Drive Menlo
Park, CA  94025
Attention: Tad Freese
Telephone: 650-463-3060
Email: Tad.Freese@lw.com
Investor
SK ecoplant Co., Ltd.
Address: 19, Yulgok-ro 2-gil,
Jongno-gu Seoul
03143, Korea
Attention: Wang Jae Lee, Head of Hydrogen Business Center
Telephone: +822 3700 7912
Email: justinwlee@sk.com
with a copy, with shall not constitute notice, to:
Dechert LLP
Address: 31/F Jardine
House One Connaught Place
Central, Hong Kong
Attention: David K. Cho
Telephone: +852 3518 4797
Email: david.cho@dechert.com

 

 

 

 

EXHIBIT C

 

FORM OF CERTIFICATE OF DESIGNATION

 

 

 

 

EXECUTION VERSION

 

CERTIFICATE OF DESIGNATION
OF
SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK
OF
BLOOM ENERGY CORPORATION

 

 

 

Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware

 

 

 

Bloom Energy Corporation (the “Corporation”), a corporation duly organized and existing under the General Corporation Law of the State of Delaware (the “General Corporation Law”), DOES HEREBY CERTIFY:

 

That, pursuant to authority conferred by the Corporation’s Restated Certificate of Incorporation (the “Certificate”), and by the provisions of Section 151 of the General Corporation Law, the board of directors of the Corporation (the “Board”), at a duly called meeting, at which a quorum was present and acted throughout, adopted the following resolutions, which resolutions remain in full force and effect on the date hereof, creating a series of 10,000,000 shares of Preferred Stock having a par value of $.0001 per share, designated as Series A Redeemable Convertible Preferred Stock:

 

RESOLVED, that in accordance with the provisions of the Certificate, the Board does hereby create, authorize and provide for the issuance of a series of Preferred Stock, par value $.0001 per share, of the Corporation, designated as “Series A Redeemable Convertible Preferred Stock,” having the voting rights, powers, preferences and relative, participating, optional and other special rights, preferences, and qualifications, limitations and restrictions thereof that are set forth as follows:

 

1. Designation and Amount. The shares of such series shall be designated as “Series A Redeemable Convertible Preferred Stock” (the “Series A Preferred Stock”), and the number of shares constituting such series shall be 10,000,000. Such number of shares may be increased or decreased by resolution of the Board (subject to Section 3.2 below), provided that no such increase shall increase the number of shares of the Series A Preferred Stock to a number higher than the total number of authorized shares of the class, and no such decrease shall reduce the number of shares of the Series A Preferred Stock to a number lower than the number of shares of such series then outstanding.

 

 

 

 

2. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

 

2.1 Payments to Holders of Series A Preferred Stock. Subject to the prior and superior rights of the holders of any shares of any other class or series of Preferred Stock, par value $0.0001 per share, of the Corporation (the “Preferred Stock”) ranking prior and superior to the shares of Series A Preferred Stock with respect to such transactions, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of the Corporation’s Common Stock, par value $.0001 (the “Common Stock”), by reason of their ownership thereof, each holder of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders, the greater of (x) such holder’s Liquidation Preference and (y) the amount such holder would receive pursuant to Section 2.2. “Liquidation Preference” means, as to any holder of Series A Preferred Stock, an amount equal to the number of shares of Series A Preferred Stock held by such holder multiplied by $25.50 (as adjusted for stock splits, combinations, reorganizations and the like with respect to the Series A Preferred Stock) (the “Original Issue Price”). If upon any such liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to which they are entitled under this Section 2.1, the holders of shares of Series A Preferred Stock shall share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Series A Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

2.2 Deemed Conversion of Series A Preferred Stock. For purposes of determining the amount each holder of shares of Series A Preferred Stock is entitled to receive with respect to any voluntary or involuntary liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation, each such holder of shares of Series A Preferred Stock shall be deemed to have converted into a number of shares of Class A Common Stock of the Corporation, par value $.0001 per share (the “Class A Common Stock”), immediately prior to the liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation equal to the quotient of (a) such holder’s Liquidation Preference as of immediately prior to the liquidation, dissolution or winding up or Deemed Liquidation Event of the Corporation divided by (b) the then current Conversion Price. The holder will receive the greater of the amount determined under this Section 2.2 and such holder’s Liquidation Preference.

 

2.3 Deemed Liquidation Events.

 

2.3.1 Definition. Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of at least a majority of the then outstanding shares of Series A Preferred Stock (voting as a separate series) elect otherwise by written notice sent to the Corporation at least five (5) days prior to the effective date of any such event:

 

(a) any transaction (other than (i) transfers of shares of capital stock of the Corporation between or among employees, consultants and/or directors of the Corporation and/or then existing stockholders of the Corporation and (ii) redemptions or repurchases of capital stock by the Corporation) as a result of which the stockholders of the Corporation immediately prior to such transaction no longer hold, immediately following such transaction, shares of capital stock of the Corporation, or equity securities issued upon conversion or exchange of such shares of capital stock, representing at least a majority, by voting power, of the equity securities of either the surviving or resulting party, or if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such transaction, the parent of such surviving or resulting party; provided that, for the purpose of this Section 2.3.1(a), all shares of Common Stock issuable upon conversion, exercise or exchange of any bonds, debentures, notes or other evidences of indebtedness, options, warrants, purchase rights or any other securities convertible into, exercisable for, or exchangeable for Common Stock outstanding immediately prior to such transaction shall be deemed to be outstanding immediately prior to such transaction for purposes of determining the stockholders immediately prior to such transaction and, if applicable, deemed to be converted or exchanged in such transaction on the same terms as the actual outstanding shares of Common Stock are converted or exchanged; and

 

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(b) the sale, lease, exclusive license, transfer or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, whether by purchase and sale, merger, consolidation or otherwise, or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, the sale or disposition (whether by merger or otherwise) of one or more subsidiaries of the Corporation, except where such sale, lease, exclusive license, transfer or other disposition is to the Corporation or one or more wholly owned subsidiaries of the Corporation.

 

2.3.2 Amount Deemed Paid or Distributed. The funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer or other disposition described in this Section 2 shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be deemed its fair market value. Any securities shall be valued as follows:

 

(a) Securities not subject to investment letter or other similar restrictions on free marketability covered by (b) below:

 

(i) If traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the twenty (20) trading day period ending three (3) trading days prior to the closing of the Deemed Liquidation Event;

 

(ii) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the twenty (20) trading day period ending three (3) trading days prior to the closing of the Deemed Liquidation Event; and

 

(iii) If there is no active public market, the value shall be the fair market value thereof, as determined by the Board.

 

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(b) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (a) (i), (ii) or (iii) to reflect the approximate fair market value thereof, as determined by the Board.

 

2.3.3 Remaining Assets. After payment or setting aside for payment of the full amounts specified in this Section 2 to the holders of the Series A Preferred Stock, any remaining assets of the Corporation legally available for distribution shall be distributed pro rata to the holders of Common Stock in proportion to the number of shares of Common Stock held by them.

 

2.3.4 Effect of Deemed Liquidation Event. Any share of Series A Preferred Stock in respect of which the holder thereof has received payment in full of the amounts specified in this Section 2 upon the occurrence of a Deemed Liquidation Event shall no longer be deemed to be outstanding, and all rights with respect to such share, including the rights, if any, to receive notices and to vote as Series A Preferred Stock, shall immediately cease and terminate at the time the payment in connection with such Deemed Liquidation Event shall have been made.

 

3. Voting.

 

3.1 General. Except as required by law or the Certificate (including any certificate of designation relating to any series of the Preferred Stock) and the matters set forth in Section 3.2, the Series A Preferred Stock shall have no voting rights and no holder thereof shall be entitled to vote on any matter.

 

3.2 Protective Provisions. At any time when any shares of Series A Preferred Stock originally issued pursuant to that certain Securities Purchase Agreement, dated as of October 23, 2021, by and among the Corporation and the purchaser named therein, as such agreement is amended from time to time (as adjusted for stock splits, combinations, reorganizations and the like with respect to the Series A Preferred Stock), remain outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate (including any certificate of designation relating to any series of the Preferred Stock)) the affirmative vote of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate series, unless waived pursuant to Section 8 hereof:

 

(a) increase the authorized number of shares of Series A Preferred Stock;

 

(b) authorize or create (by reclassification or otherwise) or issue or sell, or obligate itself to issue or sell, any new class or series of capital stock or any security convertible into or exercisable for any new class or series of capital stock having rights, preferences or privileges (including with respect to any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event set forth in the Certificate (including any certificate of designation relating to any series of Preferred Stock)), as then in effect, that are senior to or on a parity with the Series A Preferred Stock or increase or decrease the authorized number of shares of any such new class or series of capital stock;

 

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(c) amend, modify or repeal any provision of the Certificate (including any certificate of designation relating to any series of Preferred Stock), as then in effect, in a way that adversely affects the rights, preferences or privileges of the Series A Preferred Stock; or

 

(d) redeem the Series A Preferred Stock in accordance with Section 6.2 hereof.

 

4. Conversion. The holders of the Series A Preferred Stock shall have conversion rights as follows:

 

4.1 Right to Convert. Each holder of shares of Series A Preferred Stock then outstanding shall be entitled to convert, 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, some or all of such holder’s Series A Preferred Stock into such number of fully paid and nonassessable shares of Class A Common Stock as is determined by dividing (a) the Original Issue Price multiplied by the number of shares of Series A Preferred Stock presented for conversion by (b) the Conversion Price (as defined below) in effect at the time of conversion. The “Conversion Price” shall initially mean $25.50. The initial Conversion Price, and the rate at which shares of Series A Preferred Stock may be converted into shares of Class A Common Stock, shall be subject to adjustment as provided below.

 

4.2 Fractional Shares. No fractional shares of Class A Common Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Class A Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting into Class A Common Stock and the aggregate number of shares of Class A Common Stock issuable upon such conversion.

 

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4.3 Mechanics of Conversion.

 

4.3.1 Notice of Conversion. In order for a holder of Series A Preferred Stock to voluntarily convert shares of Series A Preferred Stock into shares of Class A Common Stock, such holder shall surrender the book-entry interests for such shares of Series A Preferred Stock through the facilities of The Depository Trust Company to the transfer agent for the Series A Preferred Stock (or to the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Series A Preferred Stock represented by such book-entry interests and, if applicable, any event on which such conversion is contingent (a “Contingency Event”). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes shares of Class A Common Stock to be issued. If required by the Corporation, book-entry interests surrendered for conversion shall be accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder’s attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such book-entry interests and notice (or, if later, the date on which all Contingency Events have occurred) shall be the time of conversion (the “Conversion Time”), and the shares of Class A Common Stock issuable upon conversion of the shares represented by such book-entry interests shall be deemed to be outstanding of record as of such time. The Corporation, as soon as reasonably practicable after the Conversion Time, shall deliver to such holder of Series A Preferred Stock, or to such holder’s nominees, book-entry interests for the number of full shares of Class A Common Stock issuable upon such conversion in accordance with the provisions hereof and shall pay in cash such amount as provided in Section 4.2 in lieu of any fraction of a share of Class A Common Stock otherwise issuable upon such conversion.

 

4.3.2 Reservation of Shares. The Corporation shall at all times while any share of Series A Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series A Preferred Stock, such number of its duly authorized shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Class A Common Stock shall not be sufficient to effect the conversion of all outstanding shares of Series A Preferred Stock, the Corporation shall take, or use its best efforts to cause such corporate action to be taken, as may be necessary to increase its authorized but unissued shares of Class A Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate (including this certificate of designation). Before taking any action that would cause an adjustment reducing the Conversion Price below the then par value of the shares of Class A Common Stock issuable upon conversion of the Series A Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary so that the Corporation may validly and legally issue fully paid and nonassessable shares of Class A Common Stock at such adjusted Conversion Price.

 

4.3.3 Effect of Conversion. All shares of Series A Preferred Stock that shall have been surrendered for conversion as provided herein, including in Section 4.10, shall no longer be deemed to be outstanding, and all rights with respect to such shares, including the rights, if any, to receive notices and to vote as Series A Preferred Stock, shall immediately cease and terminate at the Conversion Time (or the Mandatory Conversion Time (as defined below) in the case of a conversion pursuant to Section 4.10), except only the right of the holders thereof to receive shares of Class A Common Stock in exchange therefor and to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in this Section 4. Any shares of Series A Preferred Stock converted pursuant to this Section 4, including Section 4.10, shall be retired and cancelled and may not be reissued.

 

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4.4 Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the date on which the first share of Series A Preferred Stock is issued by the Corporation (such date referred to herein as the “Original Issue Date”) effect a subdivision of the outstanding Class A Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Class A Common Stock issuable on conversion of each share of Series A Preferred Stock shall be increased in proportion to such increase in the aggregate number of shares of Class A Common Stock outstanding. If the Corporation shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Class A Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Class A Common Stock issuable on conversion of each share of Series A Preferred Stock shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 4.4 shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

4.5 Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue shall make or issue, or fix a record date for the determination of holders of Class A Common Stock entitled to receive, a dividend or other distribution payable on the Class A Common Stock in additional shares of Class A Common Stock, then and in each such event the Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction:

 

(a) the numerator of which shall be the total number of shares of Class A Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; and

 

(b) the denominator of which shall be the total number of shares of Class A Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Class A Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing: (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date, and thereafter such Conversion Price shall be adjusted pursuant to this Section 4.5 as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of Series A Preferred Stock simultaneously receive (A) a dividend or other distribution of shares of Class A Common Stock in a number equal to the number of shares of Class A Common Stock that they would have received if all outstanding shares of Series A Preferred Stock had been converted into Class A Common Stock on the date of such event or (B) a dividend or other distribution of shares of Series A Preferred Stock which are convertible, as of the date of such event, into such number of shares of Class A Common Stock as is equal to the number of shares of Class A Common Stock that they would have received if all outstanding shares of Series A Preferred Stock had been converted into Class A Common Stock on the date of such event.

 

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4.6 Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Class A Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Class A Common Stock in respect of outstanding shares of Class A Common Stock), then and in each such event the holders of Series A Preferred Stock shall receive, simultaneously with the distribution to the holders of Class A Common Stock, a dividend or other distribution of such securities in an amount equal to the amount of such securities as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Class A Common Stock on the date of such event.

 

4.7 Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date, the Class A Common Stock issuable upon the conversion of any shares of Series A Preferred Stock is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification, or otherwise (other than by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 4.4, 4.5, 4.6 or 4.8 or in a Deemed Liquidation Event), then in any such event each holder of outstanding Series A Preferred Stock shall have the right thereafter to convert such stock into the kind and amount of stock and other securities receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Class A Common Stock into which such outstanding shares of Series A Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change.

 

4.8 Adjustment for Merger or Consolidation. Subject to the provisions of Section 2.2, if there shall occur any consolidation or merger involving the Corporation in which the Class A Common Stock (but not the Series A Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 4.4, 4.5, 4.6 or 4.7 or a Deemed Liquidation Event), then, following any such consolidation or merger, provision shall be made that each share of Series A Preferred Stock shall thereafter be convertible, in lieu of the Class A Common Stock 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 shares of Class A Common Stock of the Corporation issuable upon conversion of one outstanding share of Series A Preferred Stock immediately prior to such 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 4 with respect to the rights and interests thereafter of the holders of Series A Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of Series A Preferred Stock.

 

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4.9 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 4, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than thirty (30) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the Series A Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Series A Preferred Stock (but in any event not later than fifteen (15) days thereafter, furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price then in effect and (b) the number of shares of Class A Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of the Series A Preferred Stock.

 

4.10 Mandatory Conversion. On the first anniversary of the Original Issue Date (the “Mandatory Conversion Time”), all outstanding shares of Series A Preferred Stock shall automatically be converted into shares of Class A Common Stock, at the applicable ratio described in Section 4.1 as the same may be adjusted from time to time in accordance with Section 4, and such shares may not be reissued by the Corporation.

 

4.10.1 Procedural Requirements. All holders of record of shares of Series A Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Series A Preferred Stock in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Series A Preferred Stock shall surrender such holder’s book-entry interests for all such shares in the same manner provided for in Section 4.3.1 and shall thereafter receive the number of shares of Class A Common Stock to which such holder is entitled pursuant to this Section 4. As soon as practicable after the Mandatory Conversion Time and the surrender of the book-entry interests for Series A Preferred Stock, the Corporation shall issue and deliver to such holder, or to such holder’s nominee(s), book-entry interests (if any) for the number of full shares of Class A Common Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Section 4.2 in lieu of any fraction of a share of Class A Common Stock otherwise issuable upon such conversion.

 

5. Dividends. The holders of Series A Preferred Stock shall not be entitled to receive dividends.

 

6. Redemption.

 

6.1 Redemption upon Election by the Holders of Series A Preferred Stock. Shares of Series A Preferred Stock shall not be redeemable upon the election of the holders of Series A Preferred Stock.

 

6.2 Redemption upon Election by the Corporation. Subject to Section 3.2(d) hereof, each share of Series A Preferred Stock (and not fewer than all shares of Series A Preferred Stock) shall be redeemed by the Corporation out of funds lawfully available therefor at the Redemption Price (as defined below) in one installment commencing on a date (the “Redemption Date”) not less than sixty (60) days after and not more than ninety (90) days after the Corporation sends to the holders of all then outstanding shares of Series A Preferred Stock written notice of the redemption of all shares of Series A Preferred Stock (the “Redemption Notice”); provided that the Corporation shall not send the Redemption Notice until ten (10) months have passed from the Original Issue Date. The Redemption Notice shall be irrevocable and shall state (i) the number of shares of Series A Preferred Stock held by the holder that the Corporation shall redeem on the Redemption Date; (ii) the Redemption Date and the Redemption Price; and (iii) that the holder is to surrender to the Corporation, in the manner and at the place designated, such holder’s book-entry interests representing shares of Series A Preferred Stock to be redeemed. For purposes of this Section 6.2, “Redemption Price” shall mean $255,000,000 divided by the number of then outstanding shares of Series A Preferred Stock.

 

9

 

 

6.2.1 Surrender of Book-Entry Interests; Payment. On or before the Redemption Date, each holder of shares of Series A Preferred Stock to be redeemed, unless such holder has exercised such holder’s right to convert such shares as provided in Section 4 prior to the date that is thirty (30) days after the date of the Redemption Notice, shall surrender the book-entry interests representing such shares to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person indicated as the owner of such book-entry interests.

 

6.2.2 Rights Subsequent to Redemption. If the Redemption Notice shall have been duly given, and if on or prior to the Redemption Date the Redemption Price payable upon redemption of the shares of Series A Preferred Stock to be redeemed is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, then notwithstanding that the book-entry interests evidencing any of the shares of Series A Preferred Stock so called for redemption shall not have been surrendered, all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Price without interest upon surrender of their book-entry interests therefor.

 

7. Reissuance of Series A Preferred Stock. Any shares of Series A Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Series A Preferred Stock following redemption.

 

8. Waiver. Any of the rights, powers, privileges and other terms of the Series A Preferred Stock set forth herein may be waived on behalf of all holders of Series A Preferred Stock by a written waiver from the holders of at least a majority of the then outstanding shares of Series A Preferred Stock.

 

9. Notices. Except as otherwise provided herein, any notice required or permitted by the provisions of this Certificate of Designation to be given to a holder of shares of Series A Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission.

 

***************

 

10

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be executed on behalf of the Corporation by the undersigned authorized officer this      day of                         , 2021.

 

  Bloom Energy Corporation
   
  By:                    
  Name:   
  Title:  

 

11

 

 

EXHIBIT D

 

NOTICES

 

(a)If to the Investor and the SPV:

 

SK ecoplant Co., Ltd.

19, Yulgok-ro 2-gil, Jongno-gu

Seoul 03143, Korea

Attention: Wang Jae Lee, Head of Hydrogen Business Center

Email Address: justinwlee@sk.com

 

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

 

Dechert LLP

31/F Jardine House

One Connaught Place

Central, Hong Kong

Attention: David K. Cho

Email Address: david.cho@dechert.com

 

(b)If to the Company:

 

Bloom Energy Corporation

4353 North First Street San Jose, CA 95134

Attention: Shawn Soderberg, General Counsel

Email: Shawn.Soderberg@bloomenergy.com

 

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

 

Latham & Watkins LLP

140 Scott Drive Menlo Park, CA

94025 Attention: Tad Freese

Email: Tad.Freese@lw.com

 

 

1

 

 

Exhibit B

 

CONFIDENTIAL TREATMENT REQUESTED

 

Certain information identified in brackets is subject to a confidential treatment request and has been excluded from the exhibit because it is not material, is customarily kept private by the parties, and has not been disclosed by the parties. The information has been filed separately with the Commission.

 

SIDE LETTER

 

August 16, 2022

 

This Side Letter dated as of August 16, 2022 (this “Side Letter”) is being entered into between SK ecoplant Co., Ltd. (the “Investor”) and Bloom Energy Corporation (the “Company”).

 

Background

 

1. The parties to this Side Letter have entered into the Securities Purchase Agreement dated as of October 23, 2021 (the “SPA”), pursuant to which the Investor has delivered to the Company the Second Tranche Exercise Notice.

 

2. The parties to this Side Letter wish to (i) enter into certain agreements related to the Second Closing as set forth below and (ii) amend the SPA in accordance with Section 14.6 of the SPA. To the extent provisions of this Side Letter differ from those of the SPA, this Side Letter will govern and these changes will be deemed to be amendments to the SPA.

 

3. All capitalized terms that are not defined in this Side Letter have the meaning given to them in the SPA.

 

Agreement

 

In consideration of the mutual agreements and consideration contained in and contemplated by this Side Letter, the parties hereto agree as follows:

 

1. Schedule of Second Closing. With respect to, and in connection with, the Second Closing, the parties agree as follows:

 

(a) Schedule. The payment by the Investor for the Second Closing and the Second Closing shall be the later of (i) December 6, 2022 and (ii) clearance under the HSR Act of the sale of the Second Tranche Shares as contemplated by the Second Tranche Exercise Notice.

 

(b) HSR Deadline. The deadline for the parties hereto for the filing or submission with the FTC and the DOJ with respect to the Second Tranche purchase is 20 Business Days after the date of the Second Tranche Exercise Notice.

 

(c) Advanced Payment. The Company has an option of having the Investor make an advanced payment of $ 100,000,000 for the Second Tranche Purchase Price as set forth in this clause (c). If the Company elects that option, then it will be required to so by written notice to the Investor (the “Advanced Payment Notice”), whereupon the Investor agrees that it will pay to the Company such advanced payment for the Second Tranche Purchase Price within nine (9) Business Days following its receipt of such Advanced Payment Notice. On the date of the Second Closing, the Company shall pay $1,250,000 as interest, which interest shall be payable in cash without set-off against the Second Tranche Purchase Price. The forms and substance of the advanced payment will be agreed upon by the parties, working in good faith together to have a document that memorializes the parties’ understanding in this regard.

 

 

 

 

(d) Purchase Orders. The investor will issue purchase orders for [REDACTED]1, in the aggregate, of Energy Servers at the price of [REDACTED]2 by September 30, 2022 and pay the purchase price in respect thereof to the Company by January 31, 2023.

 

2. Press Release. The Company will issue a press release announcing the Second Closing, on, but not before, the date of the Second Closing, with the prior consultation of the Investor regarding the contents of the press release.

 

3. MNPI Confirmation. The Company hereby confirms to the Investor that the information communicated by the Company to the Investor regarding Project Columbia is not “material” information at this time, (within the meaning of U.S. federal securities laws).

 

4. Miscellaneous. Sections 14.1 through and including 14.16 are hereby incorporated by reference into this Side Letter, provided that: (a) Section 14.4 is not incorporated by reference into this Side Letter; (2) the term “Agreement” in the incorporated Sections means this Side Letter; (3) in Section 14.5 (Entire Agreement), the term “Transaction Documents” includes this Side Letter; and (4) with such other changes, mutatis mutandis, as intended.

 

The parties to this Side Letter have entered into it as of the first date above.

 

  BLOOM ENERGY CORPORATION
     
  /s/ Greg Cameron
  Name: Greg Cameron
  Title: Chief Financial Officer
     
  SK ECOPLANT CO., LTD.
     
  /s/ Wangjae (Justin) Lee
  Name:  Wangjae (Justin) Lee
  Title:   Managing Director of Eco Energy BU

 

 

 
1Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.
2Confidential Information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

 

 

 

 

 

Exhibit C

 

AMENDMENT TO THE SIDE LETTER

 

December 6, 2022

 

This Amendment to Side Letter, dated as of December 6, 2022 (this “Amendment”) is being entered into in connection with the Side Letter, dated as of August 16, 2022 (the “Side Letter”), between SK ecoplant Co., Ltd. (the “Investor”) and Bloom Energy Corporation (the “Company” and together with the Investor, the “Parties”).

 

Unless otherwise defined herein or the context requires otherwise, terms and expressions used in this Amendment shall have the meanings given to them in the Side Letter.

 

By countersigning this Amendment, the Parties have acknowledged and agreed to the following:

 

1.Section l(a) of the Side Letter shall be replaced with the following:

 

“(a) Schedule. The Parties agree that the targeted date for the Second Closing shall be March 31, 2023, (“Targeted Second Closing Date”) subject to obtaining clearance under the Federal Power Act and satisfying the conditions to closing in the SPA, including those set forth in Sections 9, 10 and 11 of the SPA; provided that the parties hereby acknowledge and agree clearance under the HSR Act has been obtained (the parties hereby acknowledge HSR Amendment and subsequent clearance under the HSR Act may be required in accordance with the Investor’s investment structure and in such event, Investor will file the HSR Amendment within five (5) days of identifying its financiers and investment structure and is responsible for paying for the filing provided that, in no event can the HSR Amendment be filed later than March 31, 2023) as of the date hereof (together, the “Closing Conditions”). If the HSR Amendment is not filed by March 31, 2023, then March 31· 2023 shall be the required Closing Date subject only to clearance under the Federal Power Act. Notwithstanding the foregoing, if clearance under the Federal Power Act and HSR Act has been obtained prior to the Targeted Second Closing Date and the other Closing Conditions can be satisfied, and the Investor sends a written notice requesting an earlier Second Closing Date, then the Parties will work collaboratively and in good faith to accomplish that earlier closing. Notwithstanding the above, if all closing conditions have been satisfied prior to March 31, 2023, and closing has not occurred within nine days of the Targeted Second Closing Date, then Company shall have the right, in its sole discretion to compel the Second Closing or to terminate Investor’s rights to effect the Second Closing. If clearance under the Federal Power Act or HSR Act (if filed by no later than March 31, 2023) has not occurred by the Targeted Second Closing Date, the parties shall close within nine days of receiving clearance under the Federal Power Act and HSR Act, subject to satisfaction of the other Closing Conditions (“Scheduled Second Closing Date”). If the parties have not closed within nine days of the Scheduled Second Closing Date, then Company shall have the right, in its sole discretion to compel the Second Closing or to terminate Investor’s rights to effect the Second Closing.”

 

2.The following shall be added as Section l(e) to the Side Letter:

 

“(e) Effectiveness of Registration Statement or Prospectus Supplement. The Parties agree that the Company shall not be required to have declared by the SEC an effective Registration Statement or file with the SEC a final prospectus supplement that, in each case, registers the resale of Registered Shares held by the Investor until six months following the earlier of the Targeted Second Closing Date or Scheduled Second Closing Date, as the case maybe, whereupon such obligations shall arise.”

 

3.Section l(c) of the Side Letter shall be replaced with the following, with the effect that there will be no Advanced Payment with respect to the purchase of Second Tranche Shares:

 

“(c) [Reserved.]”

 

[Signature page to follow.]

 

 

 

 

The Parties to this Amendment have entered into it as of the first date above.

 

  BLOOM ENERGY CORPORATION
   
  /s/ Greg Cameron
  Name:  Greg Cameron
  Title: Chief Financial Officer
   
  SK ECOPLANT CO., LTD.
   
  /s/ Wangjae (Justin) Lee
  Name: Wangjae (Justin) Lee
  Title: Managing Director of Eco Energy

 

[Signature page to Amendment to the Side Letter]

 

 

 

 

 

Exhibit D

 

EXECUTION VERSION

 

 

 

 

 

 

 

 

 

INVESTOR AGREEMENT

 

 

 

 

By and Between

 

 

SK ECOPLANT CO., LTD. AND

 

BLOOM ENERGY CORPORATION

 

 

 

 

 

 

Dated as of December 29, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

1. Definitions 1
2. Restrictions on Beneficial Ownership 6
  2.1 Standstill 6
  2.2 Waiver 7
  2.3 Termination of Standstill 8
3. Restrictions on Dispositions 8
  3.1 Lock-Up 8
  3.2 Termination of Lock-Up 8
  3.3 Effect of Prohibited Disposition 8
4. Voting Agreement 9
  4.1 Voting of Securities 9
  4.2 Quorum 9
  4.3 Exceptions 9
5. Board Composition 10
6. Preemptive Rights 11
  6.1 General 11
  6.2 Procedures 12
  6.3 Registration Rights 12
7. Miscellaneous 12
  7.1 Governing Law; Submission to Jurisdiction 12
  7.2 Dispute Resolution 12
  7.3 Waiver 13
  7.4 Notices 13
  7.5 Entire Agreement 13
  7.6 Amendments 13
  7.7 Interpretation 13
  7.8 Severability 14
  7.9 Assignment 14
  7.10 Successors and Assigns 14
  7.11 Counterparts 14
  7.12 Fees and Expenses 14
  7.13 Third Party Beneficiaries 14

 

i

 

 

  7.14 Remedies 15
  7.15 Specific Performance 15
  7.16 Confidentiality 15
  7.17 Further Assurances 16
  7.18 Termination 16

 

Exhibit A – Form of Irrevocable Proxy
 
Exhibit B – Notice Addresses

 

ii

 

 

INVESTOR AGREEMENT

 

THIS INVESTOR AGREEMENT (this “Agreement”) is made as of December 29, 2021, by and between SK ecoplant Co., Ltd. (the “Investor”) and Bloom Energy Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, the Securities Purchase Agreement, dated as of October 23, 2021, by and between the Investor and the Company (the “Purchase Agreement”) provides for the issuance and sale by the Company to the Investor, and the purchase by the Investor, of the First Tranche Shares (as defined in the Purchase Agreement) and the Second Tranche Shares (as defined in the Purchase Agreement) (the First Tranche Shares, the Second Tranche Shares and the Conversion Shares (as defined in the Purchase Agreement), collectively, the “Purchased Securities”); and

 

WHEREAS, as a condition to consummating the transactions contemplated by the Purchase Agreement, the Investor and the Company have agreed upon certain rights and restrictions as set forth herein with respect to the Purchased Securities and other securities of the Company beneficially owned by the Investor, and it is a condition to the First Closing (as defined in the Purchase Agreement) that this Agreement be executed and delivered by the Investor and the Company.

 

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set forth, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

 

(a) “Acceptance Notice” shall have the meanings set forth in Section 6.2.

 

(b) “Acquisition Proposal” shall have the meaning set forth in Section 2.1(d).

 

(c) “Affiliate” shall mean, with respect to any Person, another Person that controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, a Person shall be deemed to control another Person if any of the following conditions is met: (i) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (ii) in the case of non-corporate entities, direct or indirect ownership of more than fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities. For the purposes of this Agreement, in no event shall (x) the Investor or any of its Affiliates be deemed Affiliates of the Company or any of its Affiliates; (y) the Company or any of its Affiliates be deemed Affiliates of the Investor or any of its Affiliates; and (z) any joint venture entity or any other Person formed pursuant to the Joint Venture Agreement or the Preferred Distributor Agreement be deemed an Affiliate of either the Company or the Investor.

 

(d) “Agreement” shall have the meaning set forth in the Preamble, including all Exhibits attached hereto.

 

1

 

 

(e) “Arbitration” shall have the meaning set forth in Section 7.2.

 

(f) “Award” shall have the meaning set forth in Section 7.2.

 

(g) “beneficial owner,” “beneficially owns,” “beneficial ownership” and terms of similar import used in this Agreement shall, with respect to a Person, have the meaning set forth in Rule 13d-3 under the Exchange Act (i) assuming the full conversion into, and exercise and exchange for, shares of Common Stock of all Common Stock Equivalents beneficially owned by such Person and (ii) determined without regard for the number of days within which such Person has the right to acquire such beneficial ownership.

 

(h) “Board” shall mean the Board of Directors of the Company.

 

(i) “Business Combination” shall have the meaning set forth in Section 2.1(g).

 

(j) “Business Day” shall mean a day on which commercial banking institutions in New York, New York and Seoul, the Republic of Korea are open for business.

 

(k) “Cap” shall mean fifteen percent (15%) of the issued and outstanding capital stock of the Company.

 

(l) “Change of Control” shall mean, with respect to the Company, any of the following events: (i) any Person is or becomes the beneficial owner (except that a Person shall be deemed to have beneficial ownership of all shares that any such Person has the right to acquire, whether such right which may be exercised immediately or only after the passage of time), directly or indirectly, of a majority of the total voting power represented by all shares of Common Stock and any other voting securities of the Company then issued and outstanding; (ii) the Company consolidates with or merges into another corporation or entity, or any corporation or entity consolidates with or merges into the Company, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) a majority of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person becomes the beneficial owner, directly or indirectly, of a majority of the total voting power of all shares of Common Stock and any other voting securities of the Company then issued and outstanding or (iii) the Company conveys, transfers or leases all or substantially all of its assets to any Person other than a wholly-owned Affiliate of the Company.

 

(m) “Class A Common Stock” shall mean the Class A Common Stock of the Company, $0.0001 par value per share.

 

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(n) “Class B Common Stock” shall mean the Class B Common Stock of the Company, $0.0001 par value per share.

 

(o) “Commercial Cooperation Agreement” shall mean the Commercial Cooperation Agreement, dated as of the date of the Purchase Agreement, by and between the Company and SK ecoplant Co., Ltd., as may be amended, modified and supplemented, from time to time.

 

(p) “Common Stock” shall mean the Class A Common Stock, the Class B Common Stock and any other class of common stock of the Company authorized whether now or hereafter.

 

(q) “Common Stock Equivalents” shall mean any options, warrants or other securities or rights convertible into or exercisable or exchangeable for, whether directly or following conversion into or exercise or exchange for other options, warrants or other securities or rights, shares of Common Stock.

 

(r) “Company” shall have the meaning set forth in the Preamble.

 

(s) “Derivative” shall have the meaning set forth in Section 2.1(a).

 

(t) “Director Conditions” shall have the meaning set forth in Section 5(b).

 

(u) “Director Period” shall mean the period commencing on the Second Closing Date and ending on the date on which the Investor (including SK ecoplant and the SPV) and its Subsidiaries beneficially own less than five percent (5.0%) of the shares of Common Stock then issued and outstanding.

 

(v) “Disposition” or “Dispose of” shall mean any (i) offer, sale, contract to sell, sale of any option or contract to purchase, purchase of any option or contract to sell, grant of any option, right or warrant for the sale of, or other disposition of or transfer of any shares of Common Stock, or any Common Stock Equivalents, including, without limitation, any “short sale” or similar arrangement, or (ii) hedge, swap or any other agreement or transaction that transfers, in whole or in part, directly or indirectly, any of the economic consequence of ownership of shares of Common Stock, whether any such hedge, swap, agreement or transaction is to be settled by delivery of Common Stock, other securities, in cash or otherwise.

 

(w) “Dispute” shall have the meaning set forth in Section 7.2.

 

(x) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

(y) “First Closing Date” shall have the meaning set forth in the Purchase Agreement.

 

(z) “Governmental Authority” shall mean any court, agency, authority, department, or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or country or any supranational organization of which any such country is a member.

 

3

 

 

(aa) “ICC Arbitration Rules” shall have the meaning set forth in Section 7.2.

 

(bb) “Investor” shall have the meaning set forth in the Preamble.

 

(cc) “Investor Designee” shall have the meaning set forth in Section 5(a).

 

(dd) “Joint Venture Agreement” shall mean the Joint Venture Agreement, dated September 24, 2019, by and between the Company and SK ecoplant Co., Ltd. (f/k/a SK Engineering & Construction Co., Ltd.), as may be amended, modified and supplemented, from time to time.

 

(ee) “Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders, judgments, injunctions and/or ordinances of any Governmental Authority.

 

(ff) “Lock-Up Term” shall have the meaning set forth in Section 3.1.

 

(gg) “Modified Clause” shall have the meaning set forth in Section 7.8.

 

(hh) “New Securities” shall mean any shares of Common Stock or Common Stock Equivalents, except for (a) shares of Common Stock or Common Stock Equivalents that are issued pursuant to the Company’s stock option and incentive plans or other employee or director compensation plans; (b) shares of Common Stock or Common Stock Equivalents that are issued as matching contributions under the Company’s 401(k) plan; (c) shares of Common Stock or Common Stock Equivalents that are issued as a dividend or other distribution on outstanding securities of the Company; (d) shares of Common Stock or Common Stock Equivalents that are issued by reason of a stock split, split-up or other reorganization or recapitalization of the Company; (e) shares of Common Stock or Common Stock Equivalents issued as acquisition consideration pursuant to the acquisition of another Person by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement; and (f) the Preemptive Right Shares.

 

(ii) “Offeror” shall have the meaning set forth in Section 2.1(d).

 

(jj) “Permitted Purchases” shall mean purchases of Common Stock by the Investor, subject to compliance with Section 3.1 to the extent necessary to maintain its status as the largest shareholder of the Company by no less than one percent (1%) of the issued and outstanding capital stock of the Company, provided that in no event shall the Investor’s ownership exceed the Cap.

 

(kk) “Person” shall mean any individual, partnership, limited liability company, firm, corporation, trust, unincorporated organization, government or any department or agency thereof or other entity, as well as any syndicate or group that would be deemed to be a Person under Section 13(d)(3) of the Exchange Act.

 

4

 

 

(ll) “Preemptive Right Notice” shall have the meaning set forth in Section 6.2

 

(mm) “Preemptive Right Shares” shall have the meaning set forth in Section 6.1.

 

(nn) “Preferred Distributor Agreement” shall mean the Amended and Restated Preferred Distributor Agreement, dated as of the date of the Purchase Agreement, by and among the Company, SK ecoplant Co., Ltd. and Bloom SK Fuel Cell, LLC, as may be amended, modified and supplemented, from time to time.

 

(oo) “Purchase Agreement” shall have the meaning set forth in the Preamble, and shall include all Exhibits attached thereto.

 

(pp) “Purchased Securities” shall have the meaning set forth in the Preamble, and shall be adjusted for (i) any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization and (ii) any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the Purchased Securities.

 

(qq) “registers,” “registered,” and “registration” refer to a registration effected by preparing and filing a Registration Statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such Registration Statement or document by the SEC.

 

(rr) “Registration Statement” means a registration statement filed by the Company with the SEC in compliance with the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder for the registration of securities.

 

(ss) “Representatives” shall mean, with respect to any Person, its officers, directors, principals, partners, managers, members, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, potential debt and equity financing sources (excluding any co-investors), and other representatives. For the avoidance of doubt, potential debt and equity financing sources are Representatives, whether or not the Investor contacts any one of them before or after the First Closing Date.

 

(tt) “SEC” shall mean the United States Securities and Exchange Commission. Agreement. Purchase Agreement.

 

(uu) “Second Closing” shall have the meaning set forth in the Purchase Agreement.

 

(vv) “Second Closing Date” shall have the meaning set forth in the Purchase Agreement.

 

(ww) “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

5

 

 

(xx) “SK ecoplant” shall mean SK ecoplant Co., Ltd.

 

(yy) “SPV” shall have the meaning set forth in the Purchase Agreement.

 

(zz) “Standstill Term” shall have the meaning set forth in Section 2.1.

 

(aaa) “Subsidiary” shall mean, with respect to any Person, any other Person of which such Person (either alone or through or together with any other subsidiary) owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities or securities carrying the voting power in the election of the board of directors or other governing body of such Person.

 

(bbb) “Third Party” shall mean any Person other than the Investor or any of its Affiliates.

 

(ccc) “Tribunal” shall have the meaning set forth in Section 7.2.

 

2. Restrictions on Beneficial Ownership.

 

2.1 Standstill. During the period (such period, the “Standstill Term”) commencing as of the First Closing Date and continuing until the later of (i) the second (2nd) anniversary of the Second Closing Date, (ii) the date on which the Investor ceases to have the right to designate a director to the Board pursuant to Section 5, and (iii) the date on which the Investor (including SK ecoplant and SPV) and its Subsidiaries beneficially own less than five percent (5.0%) of the shares of Common Stock then issued and outstanding, the Investor (including SK ecoplant and the SPV) and its Subsidiaries shall not do any of the following, except as approved, invited or waived by the Company or the Board, or as contemplated by this Agreement:

 

(a) other than Permitted Purchases and purchases of Preemptive Right Shares, directly or indirectly, acquire beneficial ownership of Common Stock and/or Common Stock Equivalents and/or any instrument that gives the Investor the economic equivalent of ownership of an amount of securities of the Company (a “Derivative”), except, nothing in this Section 2.1(a) shall prevent or prohibit the Investor from investing in a fund with respect to which the Investor does not have or share decision-making authority over investment or divestment decisions;

 

(b) make a tender, exchange or other public offer to acquire Common Stock and/or Common Stock Equivalents;

 

(c) directly or indirectly, (i) seek to have called any meeting of the stockholders of the Company or propose any matter to be voted upon by the stockholders of the Company, or (ii) propose or nominate for election to the Board any person whose nomination has not been approved by a majority of the Board (excluding the Investor Designee, if any);

 

(d) directly or indirectly, encourage, accept or support a tender, exchange or other offer or proposal by any other Person or group (an “Offeror”) for securities of the Company (if such offer or proposal would, if consummated, result in a Change of Control of the Company, such offer or proposal is referred to as an “Acquisition Proposal”);

 

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(e) directly or indirectly, solicit proxies or consents or propose or seek or become a participant in a solicitation (as such terms are defined in Regulation 14A under the Exchange Act), or seek to advise or influence any Person, with respect to voting of any securities of the Company;

 

(f) deposit any securities of the Company in a voting trust or subject any securities of the Company to any arrangement or agreement with respect to the voting of such securities, including the granting of any proxy (other than pursuant to this Agreement);

 

(g) propose (i) any merger, consolidation, business combination, tender or exchange offer, purchase of the Company’s assets or businesses, purchase of any securities of the Company or any Derivative, or any similar transaction involving the Company or (ii) any recapitalization, restructuring, liquidation or other extraordinary transaction with respect to the Company, in each case without the prior written consent of the Board (a transaction described in clauses (i) and (ii) that would result in a Change of Control, is referred to as a “Business Combination”);

 

(h) act in concert with any Third Party to take any action in clauses (a) through (g) above, or, directly or indirectly, form, join or in any way participate in a “partnership, limited partnership, syndicate, or other group” as such terms are used in the rules of the SEC with respect to the Company or any securities of the Company;

 

(i) request or propose to the Board or the Company (or any of its officers, directors, Affiliates employees, attorneys, accountants, financial advisors and other professional representatives), directly or indirectly, any amendment or waiver of any provision of this Section 2.1 (including this clause (i));

 

(j) make any public announcement regarding, or take any action that could require the Company to make a public announcement regarding, a potential Business Combination or any of the matters set forth in clauses (a) through (i) above; or

 

(k) enter into discussions, negotiations, arrangements or agreements with any Person relating to the foregoing actions referred to in (a) through (i) above;

 

provided, however, that nothing contained in this Section 2.1 shall prevent, restrict, encumber, or limit in any manner: (A) the Investor or any of its Affiliates from making confidential, nonpublic proposals to the Board for a transaction involving a Business Combination following the public announcement by the Company after the Second Closing Date that it has entered into a definitive agreement with a Third Party for a transaction involving a Business Combination; (B) the Investor Designee from performing its duties as a member of the Board; or (C) the Investor or any of its Affiliates from exercising their respective rights, performing their respective obligations or otherwise consummating the transactions contemplated by this Agreement, the Purchase Agreement, Joint Venture Agreement, or the Preferred Distributor Agreement, in each case, in accordance with the terms hereof and thereof.

 

2.2 Waiver. Notwithstanding anything to the contrary set forth herein, including Section 2.1(i), upon request by Investor that Section 2.1(a) be waived, the Investor and the Company shall discuss in good faith whether such request shall be granted.

 

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2.3 Termination of Standstill. Notwithstanding anything to the contrary contained in this Agreement, the Standstill Term shall terminate upon the occurrence of any of the following events:

 

(a) a Change of Control;

 

(b) the Company files a Schedule 14D-9 (or successor form of Tender Offer Solicitation/Recommendation Statement under Rule 14d-9 of the Exchange Act) recommending that stockholders accept any such offer filed after such offer has commenced; or

 

(c) a breach by the Company of any provision of the Purchase Agreement or this Agreement after the First Closing and prior to the Second Closing.

 

3. Restrictions on Dispositions.

 

3.1 Lock-Up. During the period (such period, the “Lock-Up Term”) commencing as of the Second Closing Date and continuing until the second (2nd) anniversary of the Second Closing Date, the Investor (including SK ecoplant and the SPV) and its Subsidiaries shall not, except with the prior consent of a majority of the Board (excluding the Investor Designee, if any):

 

(a) Dispose of any of the Purchased Securities or any other shares of Common Stock beneficially owned by it as of the date of this Agreement, together with any shares of Common Stock issued in respect thereof as a result of any stock split, stock dividend, share exchange, merger, consolidation or similar recapitalization; or

 

(b) Dispose of any Common Stock issued as (or issuable upon the exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange or in replacement of, the shares of Common Stock described in clause (a) above.

 

3.2 Termination of Lock-Up. Notwithstanding anything to the contrary contained herein, the Lock-Up Term shall terminate upon the occurrence of any of the following events:

 

(a) a Change of Control; or

 

(b) the Company files a Schedule 14D-9 (or successor form of Tender Offer Solicitation/Recommendation Statement under Rule 14d-9 of the Exchange Act) recommending that stockholders accept any such offer filed after such offer has commenced.

 

3.3 Effect of Prohibited Disposition. If any Disposition is made or attempted contrary to the provisions of this Agreement, (a) such purported Disposition shall be void ab initio, (b) the Company shall have, in addition to all other legal or equitable remedies that it may have, the right to injunctive relief and specific performance to enforce the provisions of this Agreement, and (c) the Company shall have the right to refuse to recognize any transferee in a Disposition as a stockholder for any purpose.

 

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4. Voting Agreement.

 

4.1 Voting of Securities. Subject to Section 4.3, from the Second Closing Date until termination or expiration of the Standstill Term, in any vote or action by written consent of the stockholders of the Company (including, without limitation, with respect to the election of directors), the Investor shall vote or execute a written consent with respect to all voting securities of the Company as to which it is entitled to vote or execute a written consent in accordance with the recommendation of a majority of the Board. In furtherance of this Section 4.1, the Investor shall, if and when requested by the Company from time to time, promptly execute and deliver to the Company an irrevocable proxy, substantially in the form of Exhibit A attached hereto, and irrevocably appoint the Company or its designees, with full power of substitution, its attorney, agent and proxy to vote (or cause to be voted) or to give consent with respect to, all of the voting securities of the Company as to which the Investor is entitled to vote, in the manner and with respect to the matters set forth in this Section 4.1. The Investor acknowledges that any such proxy executed and delivered shall be coupled with an interest, shall constitute, among other things, an inducement for the Company to enter into this Agreement, shall be irrevocable and binding on any successor in interest of the Investor and shall not be terminated by operation of Law upon the occurrence of any event. Such proxy shall operate to revoke and render void any prior proxy as to any voting securities of the Company heretofore granted by the Investor, to the extent it is inconsistent herewith. Such proxy shall terminate upon the earlier of the expiration or termination of the Standstill Term and this Section 4.1. For the avoidance of doubt, this Section 4.1 and the proxies granted pursuant to this Section 4.1 shall not apply to any voting securities of the Company held by an executive officer or director of the Investor for his or her personal account or to any matters to which Investor retains voting rights pursuant to Section 4.3.

 

4.2 Quorum. In furtherance of Section 4.1, the Investor shall be present in person or represented by proxy at all meetings of stockholders to the extent necessary so that all voting securities of the Company as to which they are entitled to vote shall be counted as present for the purpose of determining the presence of a quorum at such meeting.

 

4.3 Exceptions. Notwithstanding anything to the contrary contained in this Agreement, the Investor may vote, or execute a written consent with respect to, any or all of the voting securities of the Company as to which it is entitled to vote or execute a written consent, as it may determine in its sole discretion with respect to any matter presented to the shareholders of the Company regarding any transaction between the Company and any Korean company operating in the Korean construction business.

 

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5. Board Composition.

 

(a) Subject to the terms of this Section 5, effective as of the Second Closing Date, the Board will appoint a designee of the Investor (the “Investor Designee”) as a director of the Company for a term expiring at the Company’s next annual meeting of stockholders or upon such Investor Designee’s earlier death, disability, resignation or removal (including removal by operation of Law). The Company and the Investor shall agree on the identity of the Investor Designee prior to the Second Closing Date and such agreement shall be a condition precedent to the obligation of each of the Company and the Investor to consummate the Second Closing. The Company agrees that, during the Director Period, the Board shall nominate the individual serving as such Investor Designee (or any individual subsequently designated by the Investor to serve as the Investor Designee) for election or re-election, as the case may be, as a director at each subsequent meeting of the Company’s stockholders at which directors are to be elected, and use commercially reasonable efforts to cause the Investor Designee to be elected or re-elected, including providing the same level of support as is provided for other nominees. Upon the end of the Director Period, the Investor shall cause the Investor Designee to tender to the Board, as soon as practicable and in any event within five (5) days following the end of the Director Period, his or her resignation from the Board. During the Director Period, the Board will not decrease the size of the Board if such decrease would require the resignation of the Investor Designee.

 

(b) As a condition to any appointment or nomination for election to the Board, each Investor Designee shall (i) meet the qualifications required of all directors of the Company by the Company’s Nominating and Corporate Governance Committee and those mandated by applicable Law, (ii) agree, in writing, to be bound by the terms and conditions of all of the Company’s policies applicable to its directors, (iii) make such acknowledgements and enter into such agreements as the Company requires of all directors, including, without limitation, with respect to confidentiality, the Company’s code of ethics, insider trading policy and Section 16 reporting procedures, and (iv) be able to dedicate sufficient time and resources for the diligent performance of the duties required of a member of the Board (the “Director Conditions”). Without limiting the foregoing, each proposed Investor Designee shall be subject to satisfaction of the criteria for Board membership established by the Nominating and Corporate Governance Committee of the Board, including the director qualification criteria thereof, as determined in the reasonable and good faith discretion of the Nominating and Corporate Governance Committee of the Board and the Board in the same manner as the Nominating and Corporate Governance Committee of the Board and the Board would consider any candidate for Board membership. The Board or the Nominating and Corporate Governance Committee of the Board will evaluate the Investor Designee for potential roles on the committees of the Board, consistent with evaluations of other directors for such positions and subject to applicable Law and the listing rules and requirements of The New York Stock Exchange.

 

(c) If an Investor Designee resigns from the Board, is removed, or refuses or is unable to serve or fulfill his or her duties as a director because of death or disability, in each case prior to the expiration of the Director Period, the Investor shall have the right to select a replacement Investor Designee, reasonably acceptable to the Board and subject to compliance with the Director Conditions, and shall provide the Company with the name of and relevant background information for such replacement Investor Designee. Subject to the terms of this Section 5, within twenty (20) days following receipt of such information and compliance with the Director Conditions, the Board will appoint such replacement Investor Designee to the Board to replace the departing Investor Designee to serve the remaining term of the departing Investor Designee, and the replacement Investor Designee shall be considered an Investor Designee for all purposes of this Section 5.

 

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(d) All confidential or proprietary information and data relating to the Company and its Affiliates provided by the Company to the Investor Designee shall be deemed confidential information and will be kept confidential and not disclosed to any Person outside of the Company. Notwithstanding the confidentiality obligations set forth in Section 5(b)(iii) and the foregoing, and subject to Section 7.16, the Investor Designee shall be permitted to disclose such confidential information to the executive officers and members of the board of directors (or equivalent governance body) of SK ecoplant and its Subsidiaries and their advisers (such as legal counsel) having a duty of confidentiality to the Investor, provided (i) such disclosure is made on a need-to-know basis solely for the purposes of, and to the extent necessary to, monitor and make decisions regarding the Investor’s investment in the Company, and (ii) that the Investor (whether SK ecoplant or the SVP) will be liable for any breach by any of such Persons of the confidentiality obligations applicable to the Investor Designee. Upon the resignation or removal of the Investor Designee from the Board and written request (including via email) from the Company, such Investor Designee shall either promptly (x) destroy all confidential information of the Company that he or she received in his or her capacity as a director in his or her possession or control and any copies thereof or (y) return to the Company all confidential information of the Company that he or she received in his or her capacity as a director in his or her possession or control and any copies thereof (but the Investor Designee need not purge electronic archives and backups), and, in either case, confirm in writing (which may be via email) to the Company that all such material has been destroyed or returned, as applicable, in compliance with this Section 5.

 

(e) If any Investor Designee is an employee of, or otherwise compensated by, the Investor or any of its Affiliates, such Investor Designee shall not be entitled to any compensation from the Company in connection with his or her role as a director or service on the Board or any committee. The Investor Designee will be entitled to reimbursement from the Company of out of pocket expenses in connection with his or her role as a director consistent with other directors on the Board.

 

(f) Notwithstanding anything contained herein to the contrary, if the Board (or any committee thereof) shall consider (i) a proposed contract, transaction or other arrangement between the Investor or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand, (ii) the enforcement or waiver of the rights of the Company or any of its Affiliates under any agreement between the Investor or any of its Affiliates, on the one hand, and the Company or any of its Affiliates, on the other hand, or (iii) a matter which the Board determines in good faith presents an actual or potential conflict of interest for the Investor Designee, then the Investor Designee will, if directed by the chairperson of the Board or the remaining directors, be excluded from participation in such Board or committee meeting (or portion thereof, as applicable) at which such matters are to be discussed, and the Investor Designee will not be entitled to receive copies of the materials or other documents relating to such matter or meeting (or portion thereof, as applicable).

 

6. Preemptive Rights.

 

6.1 General. After the Second Closing Date, if the Company proposes to issue any New Securities, the Investor shall have the right to purchase up to such number of New Securities as required to maintain its fully-diluted ownership as at immediately prior to the issuance of such New Securities, on the same terms and conditions that are applicable to such New Securities, and at a price per share or security equal to the price paid by the purchaser(s) in such issuance of New Securities (such shares, the “Preemptive Right Shares”). For purposes of this Section 6, “fully-diluted ownership” shall mean the issued and outstanding Common Stock of the Company, assuming the conversion of all Common Stock Equivalents.

 

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6.2 Procedures. After the Second Closing Date, in the event that the Company proposes to issue any New Securities, it shall, prior to such issuance of New Securities, deliver a written notice to the Investor (a “Preemptive Right Notice”), stating (a) the Company’s intention to issue New Securities; (b) the amount and type of New Securities that the Company proposes to issue, and correspondingly, the number of Preemptive Right Shares that the Investor is entitled to purchase and (c) the material terms and conditions of the proposed issuance, including without limitation, the price of such New Securities (or (i) if such price is not clearly identifiable, such effective price per share as is reasonably determined by the Company in good faith or (ii) in the case of issuance of restricted stock, the fair market value of such restricted stock as determined by the Company in the ordinary course in connection with such issuance). Within seven (7) Business Days following the receipt of the Preemptive Right Notice, the Investor may, by delivery of a written notice of acceptance to the Company (the “Acceptance Notice”), elect to purchase all, or any portion, of the Preemptive Right Shares that the Investor is entitled to purchase for the price indicated in the Preemptive Right Notice. The failure to so respond in writing within such seven (7) Business Day period by the Investor shall constitute a waiver of its rights under this Section 6 with respect to the purchase of such New Securities, but shall not affect its rights with respect to any future issuances of New Securities. Upon the Company’s issuance of any Preemptive Right Shares, such Preemptive Right Shares shall be validly issued, fully paid and nonassessable, duly authorized by all necessary corporate action of the Company.

 

6.3 Registration Rights. If the Preemptive Right Shares are not issued to the Investor pursuant to an effective Registration Statement, and upon the Company’s issuance of any Preemptive Right Shares to the Investor, such Preemptive Right Shares have not been registered under an effective Registration Statement, then the Company shall, as soon as practicable, but in any event within 90 days of such issuance of such Preemptive Right Shares to the Investor, prepare and file with the SEC a Registration Statement covering the resale of such Preemptive Right Shares.

 

7. Miscellaneous.

 

7.1 Governing Law; Submission to Jurisdiction. The law, including the statutes of limitation, of the State of New York shall govern this Agreement, the interpretation and enforcement of its terms and any claim or cause of action (in law or equity), controversy or dispute arising out of or related to it or its negotiation, execution or performance, whether based on contract, tort, statutory or other law, in each case without giving effect to any conflicts-of-law or other principle requiring the application of the law of any other jurisdiction.

 

7.2 Dispute Resolution. The parties agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereby (a “Dispute”) shall be arbitrated pursuant to the provisions of the Rules of Arbitration of the International Chamber of Commerce (the “ICC Arbitration Rules”), by three arbitrators (the “Tribunal”) appointed in accordance with the ICC Arbitration Rules (the “Arbitration”). The arbitration will be conducted in English, and shall take place in New York, New York or such other location as the parties and the Tribunal may agree. The arbitral award (the “Award”) shall (a) be rendered within 120 days after the Tribunal’s acceptance of its appointment; (b) be delivered in writing; (c) state the reasons for the Award; (d) be the sole and exclusive final and binding remedy with respect to the Dispute between and among the parties without the possibility of challenge or appeal, which are hereby waived; and (e) be accompanied by a form of judgment. The Award shall be deemed an award of the United States, the relationship between the parties shall be deemed commercial in nature, and any Dispute arbitrated pursuant to this Section 7.2 shall be deemed commercial. The Tribunal shall have the authority to grant any equitable or legal remedies, including entering preliminary or permanent injunctive relief; provided, however, that the Tribunal shall not have the authority to award (and the parties waive the right to seek an award of) punitive or exemplary damages.

 

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7.3 Waiver. No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. Any agreement on the part of any party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such party.

 

7.4 Notices. All notices, instructions and other communications hereunder or in connection herewith shall be in writing, shall be sent to the address of the relevant party set forth on Exhibit B attached hereto and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or e-mail, upon written confirmation of receipt by facsimile, e-mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. Any party may change its address by giving notice to the other parties in the manner provided above.

 

7.5 Entire Agreement. This Agreement, the Purchase Agreement (once executed), the Joint Venture Agreement, the Preferred Distributor Agreement and the Commercial Cooperation Agreement (including all exhibits hereto and thereto) constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous arrangements or understandings, whether written or oral, with respect hereto and thereto. Notwithstanding anything to the contrary contained herein or elsewhere, Section 7.16 of this Agreement shall supersede and replace in its entirety Section 13.9 of the Purchase Agreement.

 

7.6 Amendments. No provision in this Agreement shall be modified or amended except in a writing executed by an authorized representative of each of the parties the Company and the Investor.

 

7.7 Interpretation. When a reference is made in this Agreement to a section, subsection, article, exhibit or schedule such reference shall be to a section, subsection, article, exhibit or schedule of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement or in any exhibit or schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any exhibit or schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All exhibits and schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice-versa. This Agreement has been prepared jointly and will not be construed against either party.

 

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7.8 Severability. If, under applicable Laws, any provision hereof is invalid or unenforceable, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement in any jurisdiction (“Modified Clause”), then, it is mutually agreed that this Agreement shall endure and that the Modified Clause shall be enforced in such jurisdiction to the maximum extent permitted under applicable Laws in such jurisdiction; provided that the parties shall consult and use all reasonable best efforts to agree upon, and hereby consent to, any valid and enforceable modification of this Agreement as may be necessary to avoid any unjust enrichment of either party and to match the intent of this Agreement as closely as possible, including the economic benefits and rights contemplated herein.

 

7.9 Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Investor or the Company without (a) the prior written consent of the Company in the case of any assignment by the Investor (other than to the SPV) or (b) the prior written consent of the Investor in the case of an assignment by the Company, in each case, which consent shall not be unreasonably withheld or delayed.

 

7.10 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assignees of the parties.

 

7.11 Counterparts. This Agreement may be executed in two or more counterparts, and by facsimile, pdf or other electronic format, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

7.12 Fees and Expenses. Except as otherwise provided herein and therein, all fees and expenses incurred in connection with or related to this Agreement and the other Transaction Agreements and the transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not such transactions are consummated.

 

7.13 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party, including any creditor of any party hereto. No Third Party shall obtain any right under any provision of this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any party hereto.

 

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7.14 Remedies. The rights, powers and remedies of the parties under this Agreement are cumulative and not exclusive of any other right, power or remedy which such parties may have under any other agreement or Law. No single or partial assertion or exercise of any right, power or remedy of a party hereunder shall preclude any other or further assertion or exercise thereof.

 

7.15 Specific Performance. The parties hereby acknowledge and agree that the rights of the parties hereunder are special, unique and of extraordinary character, and that if any party refuses or otherwise fails to act in accordance with the provisions of this Agreement, such refusal or failure would result in irreparable injury to the Company or the Investor as the case may be, the exact amount of which would be difficult to ascertain or estimate and the remedies at law for which would not be reasonable or adequate compensation. Accordingly, if any party refuses or otherwise fails to act in accordance with the provisions of this Agreement, then, in addition to any other remedy which may be available to any damaged party at law or in equity, such damaged party will be entitled to obtain specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction. Each party hereto hereby further waives any defense in any action for specific performance that a remedy at law would be adequate.

 

7.16 Confidentiality. The Investor shall, and shall cause its Representatives to, keep confidential any information (including oral, written and electronic information) concerning the Company, its subsidiaries or its Affiliates that may be furnished to the Investor or its Representatives by or on behalf of the Company or any of its Representatives pursuant to this Agreement (the “Confidential Information”) and to use the Confidential Information solely in connection with the Investor’s investment in the Company; provided that the Confidential Information will not include information that (a) is, was or becomes available to the public (other than as a result of a breach of any confidentiality obligation by the Investor), (b) is or has been independently developed or conceived by the Investor without use of the Confidential Information or (c) is or has been made known or disclosed to the Investor by a Third Party without a breach of any confidentiality obligations such Third Party has to the Company that is known to the Investor; provided further that, the Investor may disclose the Confidential Information (i) to its Representatives in connection with its investment in the Company, (ii) to any prospective purchaser of any shares of Common Stock from the Investor and their respective Representatives, provided that such prospective purchaser agrees to be bound by a confidentiality or non-disclosure agreement with the Investor that is no less restrictive than the confidentiality obligations set forth herein and within seven (7) days of providing any Confidential Information to any such prospective purchaser, the Investor provides notice to the Company identifying such prospective purchaser, (iii) to any Investor’s Affiliates and their respective Representatives, in each case in the ordinary course of business (provided that the recipients of such Confidential Information are subject to a confidentiality and non-disclosure obligation no less restrictive than the confidentiality obligations set forth herein), or (iv) as may otherwise be required by law or legal, judicial or regulatory process, provided that the Investor provides prompt prior written notice to the Company notifying the Company of the manner, scope and justification for such disclosure.

 

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7.17 Further Assurances. Each party hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as may be reasonably required or desirable in order to carry out the intent and accomplish the purposes of this Agreement.

 

7.18 Termination. Any of Investor’s obligations set forth in this Agreement shall terminate once such Person no longer holds, directly or indirectly, any equity interest or voting power in the Company. This Agreement shall automatically terminate if the Second Closing does not occur on or prior to November 30, 2023. Section 7.16 shall survive the termination of this Agreement for two (2) years.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

  BLOOM ENERGY CORPORATION
     
  By: /s/ Gregory Cameron
  Name:  Gregory Cameron
  Title: EVP, Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Investor Agreement

 

 

 

 

IN WlTNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.

 

  By: /s/ Kyung-il Park
  Name:  Kyung-il Park
  Title: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Investor Agreement

 

 

 

 

EXHIBIT A

 

FORM OF IRREVOCABLE PROXY

 

[In order to secure the performance of the duties of the undersigned pursuant to Section 4.1 of the Investor Agreement, dated as of [     ], 2021 (the “Agreement”), by and between Bloom Energy Corporation (the “Company”) and [     ] (the “Investor”), the undersigned hereby irrevocably appoints [     ] and [     ], and each of them, the attorneys, agents and proxies, with full power of substitution in each of them, for the undersigned, and in the name, place and stead of the undersigned, to vote (or cause to be voted) or, if applicable, to give consent, in such manners as each such attorney, agent and proxy or his substitute shall in his sole discretion deem proper to record such vote (or consent) in the manners, and with respect to such matters as set forth in Section 4.1 of the Agreement (but in any case, in accordance with any written instruction from the undersigned, properly delivered under Section 4.1 of the Agreement, to vote or give consent as contemplated by Section 4.1 of the Agreement) with respect to all voting securities (whether taking the form of shares of Class A Common Stock, par value $0.0001 per share, or other voting securities of the Company), which the undersigned is or may be entitled to vote at any meeting of the Company held after the date hereof, whether annual or special and whether or not an adjourned meeting or, if applicable, to give written consent with respect thereto. This proxy is coupled with an interest, shall be irrevocable and binding on any successor in interest of the undersigned and shall not be terminated by operation of law upon the occurrence of any event. This proxy shall operate to revoke and render void any prior proxy as to voting securities heretofore granted by the undersigned which is inconsistent herewith. Notwithstanding anything to the contrary contained herein, this proxy shall (i) at all times be subject to Section 4.3 of the Agreement and (ii) terminate upon the earlier of the expiration or termination of the Standstill Term (as defined in the Agreement) and the voting agreement set forth in Section 4.1 of the Agreement.]

 

  [●]
     
  By:  
  Name:   
  Title:  

 

 

 

 

EXHIBIT B NOTICE ADDRESSES

 

Company
 
Bloom Energy Corporation
 
Address: 4353 North First Street San Jose, CA 95134
   
Attention: Shawn Soderberg, General Counsel
Telephone: 408-543-1191
Email: Shawn.Soderberg@bloomenergy.com
   
with a copy, with shall not constitute notice, to:
 
Latham & Watkins LLP
 
Address:

140 Scott Drive

Menlo Park, CA 94025

   
Attention: Tad Freese
Telephone: 650-463-3060
Email: Tad.Freese@lw.com
   
Investor
 
SK ecoplant Co., Ltd.
 
Address: 19, Yulgok-ro 2-gil, Jongno-gu Seoul 03143, Korea
   
Attention: Wang Jae Lee, Head of Hydrogen Business Center
Telephone: +822 3700 7912
Email: justinwlee@sk.com
   
with a copy, with shall not constitute notice, to:
 
Dechert LLP
 
Address: 31/F Jardine House One Connaught Place Central, Hong Kong
   
Attention: David K. Cho
Telephone: +852 3518 4797
Email: david.cho@dechert.com

 

 

 

 

Exhibit E

 

JOINT VENTURE AGREEMENT

 

THIS JOINT VENTURE AGREEMENT (this “Agreement”) is entered into this 24th day of September, 2019 (the “Effective Date”) by and between:

 

Bloom Energy Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware, United States of America with its head corporate office at 4353 North 1st Street, San Jose, California 95134 (“Bloom Energy”); and

 

SK Engineering & Construction Co., Ltd., joint stock company (chusik hoesa in Korean) duly organized and validly existing under the laws of the Republic of Korea (“Korea”) with its registered office at Insa-dong7gil 32, Jongno-gu, Seoul, Republic of Korea (“SK”); and

 

Each of SK and Bloom Energy are referred to individually as a “Party,” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Bloom Energy researches and develops, manufactures, supplies, operates, and maintains a proprietary solid oxide fuel cell generation solution known as the Bloom Energy Server®;

 

WHEREAS, SK develops, permits, arranges financing for, and sponsors electricity generation projects in Korea utilizing Bloom Energy Servers® and provides engineering, procurement, and construction services for such projects;

 

WHEREAS, Bloom Energy has appointed SK as one of its preferred distributors of Bloom Energy Servers® in Korea pursuant to that certain Preferred Distributor Agreement with SK dated as of November 14, 2018, as amended by that certain Amendment No. 1 to Preferred Distributor Agreement dated December 19, 2018, and that certain Amendment No. 2 to Preferred Distributor Agreement dated January 30, 2019 (as amended, amended and restated, or modified from time to time in accordance with its terms, the “PDA”);

 

WHEREAS, the Parties desire to establish and operate a joint venture company in Korea (the “JV Company”) in order to increase the portion of the Korean supply, assembly and manufacture of the Systems distributed in Korea; and

 

WHEREAS, the Parties desire to enter into this Agreement to regulate their respective rights and obligations with respect to the operations and management of the business and affairs of the JV Company in accordance with the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual premises and covenants set forth below, the Parties hereby agree as follows:

 

AGREEMENT

 

ARTICLE 1. DEFINITIONS AND INTERPRETATION

 

1.1 Definitions. As used in this Agreement, capitalized terms used in this Agreement shall have the meanings given to them in Schedule 1.

 

1.2 Interpretations. The interpretation principles set forth in Schedule 1 shall apply to the interpretation of this Agreement.

 

 

 

 

Execution Version

 

ARTICLE 2. PURPOSE

 

2.1 Purpose. The purpose of this Agreement is for the Parties to jointly promote the business of the JV Company through the establishment, ownership and operation of the JV Company by the Members. The Members shall work together to ensure that the JV Company (and, where applicable, the Management Team, the Board of Directors, and the employees of the JV Company) complies with the terms of this Agreement, and that the JV Company:

 

(a) and the Business (as defined below) is operated, managed, administered and conducted in accordance with this Agreement, the Articles of Incorporation and other JV Transaction Documents, and applicable Laws;

 

(b) is operated in a manner to protect the intellectual property and trade secrets of the Members;

 

(c) is operated in a commercially reasonable manner, to maximize the JV Company’s economic return and to ensure its efficiency, productivity and competitiveness; and

 

(d) conducts its business in cooperation with the Members.

 

2.2 Joinder Agreement of the JV Company. Upon the establishment and incorporation of the JV Company in accordance with the terms and conditions contained herein, the Members shall cause the JV Company to enter into a joinder agreement in the form and substance attached hereto as Exhibit A, such that the JV Company shall be bound by, and shall assume all rights and obligations applicable to it as the JV Company under, this Agreement as if this Agreement were entered into by and among SK, Bloom Energy and the JV Company. For the avoidance of doubt, SK and Bloom Energy hereby agree that this Agreement shall immediately be valid and effective among them upon the execution of this Agreement by them, even before the execution of the joinder agreement by the JV Company.

 

2.3 No Impairment. The Members shall ensure that the JV Company does not, by amendment of the Articles of Incorporation or of any of its other organizational documents, or through any reorganization, recapitalization, transfer of assets, consolidation, merger, distribution, 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 Agreement, or impair or seek to impair the rights of the Members hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Agreement and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Members against such impairment.

 

ARTICLE 3. FORMATION OF THE JV COMPANY

 

3.1 Incorporation. As soon as practicable (but in no event later than twenty (20) Business Days) following the satisfaction (or waiver by the Members entitled to the benefit thereof) of the Member’s respective Conditions Precedent to contribute their respective portion of the Initial Capital Contributions to the JV Company, as set forth in Section 3.4 below, the Members shall establish and incorporate the JV Company under the Laws of Korea as a limited liability company (yuhan hoesa in Korean). The Members shall cooperate with each other with respect to the incorporation process, and the Members and the JV Company shall each bear their respective fees and expenses incurred during the process of incorporation of the JV Company.

 

3.2 Units. The ownership interests of the JV Company shall be composed of units, consisting of Class A Units and Class B Units.

 

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3.3 Initial Capital Contributions. At the time the JV Company is incorporated, Bloom Energy and SK shall each contribute to the JV Company an aggregate amount set forth opposite such Party’s name below (the “Initial Capital Contributions”) for the subscription of that number of Class A Units and/or Class B Units, as applicable, set forth opposite such Party’s name below.

 

Member Name Initial Capital Contribution Amount Units Control Ratio
Class A Units
Bloom Energy KRW 120,000,000 100,000 51.24%
SK KRW 114,000,000 95,000 48.67%
Class B Units
Bloom Energy * * *
SK KRW 846,000,000 705,000 0.09%
Total
Bloom Energy   100,000 51.24%
SK   800,000 48.76%

 

Each Member shall make payment of the its Initial Capital Contribution by wire transfer in immediately available funds in Korean Won to the JV Company’s bank account.

 

3.4 Conditions Precedent. The obligation of each Member to consummate the transactions contemplated hereby, including without limitation contributing its respective portion of the Initial Capital Contributions, shall be subject to the satisfaction (or waiver by the Member entitled to the benefit thereof) of the following conditions (each, a “Condition Precedent”):

 

(a) each of the representations and warranties of the other Member contained herein shall be true and correct in all material respects on and as of the Effective Date and the date of the Initial Capital Contributions;

 

(b) all Governmental Approvals and corporate authorizations, consents, and approvals required for the transactions contemplated hereby, including for the Initial Capital Contributions, shall have been obtained and remain in effect; and

 

(c) no decision, injunction, judgment, settlement or order (whether oral or written) rendered by any governmental entity shall be pending or threatened which (i) challenges to or seeks to prohibit, delay or restrict the consummation of any of the transactions contemplated under this Agreement or (ii) questions the validity or legality of any of the transactions contemplated under this Agreement.

 

(d) The Parties have reached mutual agreement on all terms and conditions of each JV Transaction Document and each JV Transaction Document has been executed.

 

3.5 Corporate Name. The name of the JV Company shall be “Bloom SK Fuel Cell, Ltd.” Notwithstanding the foregoing, if Bloom Energy or SK no longer holds and owns any Units, then the Member who no longer holds the Units shall have the right, in its sole discretion, to require the JV Company to immediately: (a) omit its name from the JV Company’s corporate name; and (b) cease using its name, trademarks or trade names in any manner whatsoever in connection with the Business. The Member which no longer holds the Units may exercise the foregoing right by providing written instructions to the JV Company and the other Member. In such case, the JV Company and the Members hereby agree to take all necessary action in order to implement the foregoing, including convening a General Meeting and voting their respective Units to approve the name change of the JV Company to comply with this Section 3.5.

 

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3.6 Place of Business. The registered and principal place of business of the JV Company shall be located at a place to be determined by the Members. Subject to the approval by the Board of Directors in accordance with this Agreement, the JV Company may establish from time to time branches and/or other business offices.

 

3.7 Units and Certificates. The Units issued by the JV Company shall be in registered form. The JV Company shall issue certificates evidencing the Units and shall maintain a unitholders registry, which shall identify the Members along with the number of Units held by each Member.

 

ARTICLE 4. ADDITIONAL CAPITAL CONTRIBUTIONS

 

4.1 Additional Capital Contributions. If, at any time, the JV Company (1) has available cash of less than the KRW equivalent of USD $720,000 (the “Minimum Cash Balance”) on a given date at the Applicable Exchange Rate on such given date; or (2) is, based on a three (3) month forecast to be conducted on a rolling monthly basis, is forecasted by the JV Company to lack the Minimum Cash Balance during the three (3) month forecast period for a given rolling monthly forecast (each, an “SK Additional Contribution Trigger”), SK shall make an SK Additional Contribution in accordance with this Article 4.

 

(a) SK Additional Contribution Cap Amount. In no event shall SK’s liability for an SK Additional Contribution required pursuant to this Article 4 exceed the then applicable SK Additional Contribution Cap Amount, both amounts of which shall be determined as of the date such SK Additional Contribution is made. In the event that the funding needs of the JV Company exceed the SK Additional Contribution Cap Amount, Bloom Energy, SK and the JV Company shall discuss and determine the manner in which to address such additional funding needs of the JV Company; provided, that in no event shall such funding result in the voting rights of Bloom Energy (through its Class A Units) falling below the voting requirements set forth in Section 4.1(e)(i).

 

(b) SK Additional Contribution Method. The JV Company may, upon the occurrence of an SK Additional Contribution Trigger, deliver written notice to SK (the “Contribution Call Notice”) stating:

 

(i) the applicable SK Additional Contribution Trigger (together with information and materials that substantiate the trigger of the applicable SK Additional Contribution Trigger);

 

(ii) the aggregate amount of cash (in USD) to be contributed by SK pursuant to this Article 4 (the “Additional Contribution Amount”), which shall be an amount equal to the amount required by the JV Company to maintain the Minimum Cash Balance upon contribution of the Additional Contribution Amount; provided, that the Additional Contribution Amount shall not exceed an amount that would result in the Outstanding SK Additional Contribution Amount to exceed the SK Additional Contribution Cap following the contribution of such Additional Contribution Amount (such contribution, the “SK Additional Contribution”); and

 

(iii) the date on which the SK Additional Contribution is to be made, which shall be (A) within fifteen (15) days of the Contribution Call Notice in the event the Contribution Call Notice is being delivered pursuant to Section 4.1(1), and (B) within thirty (30) days of the Contribution Call Notice in the event the Contribution Call Notice is being delivered pursuant to Section 4.1(2); provided, that if the date on which the SK Additional Contribution is due falls on a Saturday, Sunday, or holiday on which banks are closed (in each case, in Korea), then such due date shall be deemed to be the immediately preceding Business Day (in Korea).

 

SK Additional Contributions shall be made in Korean Won using the Applicable Exchange Rate on the date five (5) Business Days prior to the date of the General Meeting of Members to approve the issuance of the Class B Units applicable to the relevant SK Additional Contribution.

 

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(c) Governmental Approvals. The consummation of the SK Additional Contribution in accordance with the terms set forth in the foregoing shall be, subject to the receipt of all required Governmental Approvals (if any), consummated on or prior to the contribution date set forth in the Contribution Call Notice; provided, that such deadline shall be extended on a day-for-day basis if such SK Additional Contribution would violate applicable law in the absence of the receipt of all required Governmental Approvals (if required). SK shall, upon receipt of a Contribution Call Notice, immediately begin all processes necessary to obtain Governmental Approvals (if required) on or prior to the contribution date set forth in the Contribution Call Notice.

 

(d) Distribution Preference. In any given year, if and when the Members may declare a distribution of any cash as dividend in accordance with the Korean Commercial Code (the “KCC”) and Section 13.7, such distribution shall be paid to the Members as follows:

 

(i) First, to SK in its capacity as Class B Unit holder, prior to and in preference to any payment of any other cash distribution on the Class B Units and Class A Units, until such holder has received the amount equal to the aggregate accrued and unpaid Agreed Return (the “Agreed Return Distribution Preference”);

 

(ii) Second, after the SK has received the Agreed Return Distribution Preference, to SK in its capacity as Class B Unit holder, prior to and in preference to any payment of any other cash distribution on the Class A Units, until SK has received the aggregate Outstanding SK Additional Contribution Amount, recouped as permitted by the KCC (the “SK Additional Contribution Settlement”);

 

(iii) Third, after SK in its capacity as the Class B Unit holder has received the SK Additional Contribution Settlement, to SK in its capacity as Class A Unit holder, prior to and in preference to any payment of any other cash distribution on the Class A Units, until it has received the Overage amount calculated pursuant to Section 6.5(a)(iii) that have not yet been received by distribution (the “Overage Distribution Preference” and together with the Agreed Return Distribution Preference and the SK Additional Contribution Preference, the “Distribution Preference”); and

 

(iv) Fourth, after SK in its capacity as Class A Unit holder has received the Overage Distribution Preference, to Bloom Energy and SK in their capacities as the holders of Class A Units on a pro-rata basis in accordance with their respective voting interests in Class A Units.

 

The “Agreed Return” shall mean the aggregate amount derived from applying the agreed return rate of five point two percent (5.2%) per annum to the aggregate amount of (a) the Outstanding SK Additional Contribution Amount, together with (b) any accrued Agreed Return from prior fiscal years which remains undistributed pursuant to the Agreed Return Distribution Preference.

 

(e) Additional Capital Contribution Principles. The Parties shall adhere to the following principles in connection with SK Additional Contributions:

 

(i) For the avoidance of doubt and notwithstanding anything to the contrary, Bloom Energy shall continue to hold at least a majority of the voting rights of the JV Company pursuant to its ownership of the Class A Units and in no event shall any SK Additional Contribution, individually or in the aggregate, result in the voting rights of Bloom Energy (through its Class A Units) falling below fifty and one-hundredths percent (50.10%) of the total issued and outstanding voting Units of the JV Company.

 

(ii) The JV Company shall be prohibited from fulfilling any funding needs with debt financing unless otherwise agreed to by both the Members.

 

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ARTICLE 5. ARTICLES OF INCORPORATION

 

Promptly after the Effective Date, the Members shall negotiate in good faith the Articles of Incorporation to be adopted by the JV Company. The Articles of Incorporation shall be prepared in both Korean and in English and the English version shall prevail in the event of conflict or inconsistency between the Korean and English versions (in such case with the Korean version being amended to correspond to the English version). In the case of any discrepancy or conflict between this Agreement and the Articles of Incorporation, the terms of this Agreement shall prevail and the Members agree to amend, as necessary, the Articles of Incorporation so that the Articles of Incorporation reflect the terms and conditions of this Agreement. If such amendment is necessary, the Members shall prepare the Articles of Incorporation reflecting the terms and conditions of this Agreement, and shall cause the JV Company to convene a General Meeting and/or other relevant corporate proceedings/meetings in order to officially adopt the same.

 

ARTICLE 6. BUSINESS OF THE JV COMPANY

 

6.1 Business Purpose. The business purposes of the JV Company shall be to expand the overall market opportunity for the Business by increasing the portion of the Korean assembly and manufacture of the Systems distributed in Korea, and by achieving cost efficiency through the establishment of a local Korean supply chain and manufacturing presence. The business of the JV Company shall consist of (i) the manufacturing and assembly of the portion of the Systems in accordance with the JV Scope (as defined below), (ii) the undertaking of Applications R&D (as defined below), (iii) the sale and distribution of the JV Scope for stationary utility-scale and commercial & industrial applications in Korea in accordance with the terms of this Agreement and (iv) any other activities and businesses as agreed to among the Members and executed through the Board and Management Team (the “Business”).

 

6.2 JV Scope. The scope of the business of the JV Company involving manufacture and assembly shall consist of (a) the YFP portion of the Bloom Energy Server (each, as defined in the PDA); and (b) the Company-Required Ancillary Equipment (as defined in the PDA) (collectively, the “JV Scope”).

 

(a) Manufacturing Facilities. Upon satisfaction of all Conditions Precedent, Bloom Energy and SK shall commence development of the manufacturing facility of the JV Company, at a location with the capacity to expand (the “Manufacturing Facilities”). Provided that all Conditions Precedent are satisfied or waived in writing by all Parties, the commencement JV Scope activities at the Manufacturing Facilities shall be targeted for April, 2020 and the initial production capacity of the Manufacturing Facilities shall be determined based on the number of Systems that are or are expected to be Delivered (as such term is defined in the PDA) in 2019 and 2020 for deployment in Korea and fulfilled from the facilities of Bloom Energy located in Delaware, USA (the “Delaware Facilities”) and/or the JV Company. It is the understanding of the Parties that for the Manufacturing Facilities to be operational, the JV Company must receive a minimum Delivery volume of 50 MW each calendar year.

 

(b) Quality Standards. The components of the JV Scope procured, manufactured and/or assembled by the JV Company shall adhere to the same quality standards required by Bloom Energy and implemented for Systems manufactured and/or assembled elsewhere (the “Bloom Energy Quality Standards”).

 

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(c) Korean Supply Chain. The Parties hereby agree to cause the JV Company to source and procure components required for the JV Scope from suppliers in Korea to the extent that doing so is commercially reasonable. In addition, the Parties shall work collaboratively and exercise reasonable efforts to source and procure from suppliers in Korea components required for the Systems outside of the JV Scope, but which are otherwise as may be agreed to by the Members, if any. The scope of and terms and conditions to be applicable to the procurement of parts from suppliers in Korea shall be determined upon the mutual agreement of the Members.

 

(d) JV Scope Exclusions. For the avoidance of doubt, under no circumstance will the JV Company engage in the following:

 

(i) the manufacture of the Fuel Cell Stack or the Fuel Cell Stack integration components of the Hot Box.

 

(ii) the development of any Intellectual Property pertaining to the System other than the Application IP (as defined below) which is mutually agreed to in advance by Bloom Energy and SK.

 

(iii) monitoring, operation, maintenance, or replacement of any System.

 

In addition, all long-term service agreements for any System distributed pursuant to the PDA will be entered into by Bloom Energy, or a non-JV Company affiliate of Bloom Energy (such as Bloom Energy Korea, LLC).

 

6.3 Sell-Through Model. Sales and purchases with respect to the Systems (or components thereof), as among Bloom Energy, SK and the JV Company, shall be structured pursuant to the principles set forth below.

 

(a) Sales to SK.

 

(i) Sales to SK by the JV Company. The JV Scope associated with the first 50 MW of Systems Delivered (as defined in the PDA) in any calendar year to SK will be exclusively sold by the JV Company to SK, unless the Parties unanimously agree that in the case of a particular Delivery, an agreed portion of the JV Scope shall be delivered by Bloom Energy.

 

(ii) Sales to SK by Bloom Energy. The JV Scope associated with any Systems Delivered in any calendar year in excess of 50 MW shall be sold from Bloom Energy to SK, unless the Parties unanimously agree that in the case of a particular Delivery, an agreed portion of the JV Scope shall be delivered by the JV Company. Each component of the System that does not constitute JV Scope shall be exclusively sold by Bloom Energy to SK.

 

(iii) SK Procurement. SK shall continue to separately procure the Distributor-Procured Ancillary Equipment (as defined in the PDA) in accordance with the PDA.

 

(b) Sales to the JV Company.

 

(i) Sales to the JV Company by Suppliers. The JV Company shall directly source and procure the JV Scope in accordance with Section 6.2(c) to the extent possible and develop its own supply network.

 

(ii) Sales to the JV Company by Bloom Energy. The Parties anticipate that the JV Scope will be sourced from third parties to the JV Company, and as a result there will be no sale anticipated from Bloom Energy to the JV Company.

 

(iii) Sales to Bloom Energy or Third Parties. If, under the PDA, SK does not exercise the Distributor ROFR, there is an applicable Exclusion, or the Distributor ROFR is no longer effective (in each case, as defined by the terms of the PDA), then JV Scope associated with such Product (as defined in the PDA) sale may be sold directly from the JV Company to Bloom Energy or to a third party.

 

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6.4 Applications R&D. In the event that any member of the Board (each a “Director”) proposes that an Applications R&D be undertaken, such proposal shall be considered by the Board and with the unanimous approval of the Bloom Energy Directors, which may be withheld in their sole discretion, the Parties shall procure that the JV Company undertake such Applications R&D. The unanimous approval of the Bloom Energy Directors for an Applications R&D shall be required on a case-by-case basis, and any approval provided by the Bloom Energy Directors shall not serve as a “blanket” approval. For purposes hereof, “Applications R&D” shall mean research and development into how the Energy Server can be applied to discrete environments. For the avoidance of doubt, in no event shall any such research and development activities be conducted with respect to the Energy Server itself or any components thereof. In the event that an Applications R&D is approved by the Bloom Energy Directors and funded by SK (such decision to be at the election and agreement of SK), the Parties shall enter into a separate agreement that sets forth terms governing rights and obligations with respect to Application IP, which may include, without limitation, funding commitments, licensing grants or restrictions, and exclusivity or preferential exploitation of such Applications R&D.

 

6.5 Additional JV Transaction Documents.

 

(a) PDA.

 

(i) The intention of the Members as to the PDA is to keep it relatively unchanged. The PDA will be amended only to reflect the sell-through sales structure while preserving the substantive risk allocation between Bloom Energy and SK (the “PDA Amendment”). For example, warranties or other performance guarantees applicable following the commencement of commercial operation will continue to be the standard Bloom Energy warranties and guarantees. Such commitments will continue to be long-term service agreements between the end-use customer and Bloom Energy (or, as Bloom Energy may determine, a non-JV affiliate of Bloom Energy such as Bloom Energy Korea, LLC). The Distributor Excess Performance LD Commitment and related LD Backstop Payment, and Pre-Commissioning Completion Warranty and related Warranty Correction (each, as defined in each PDA) shall continue to apply.

 

(ii) Under the PDA Amendment, the price paid to Bloom Energy for the Bloom Energy Server (less the YFP) shall be the difference between (a) the Product Pr1tldice (as defined in the PDA), less (b) the Benchmark Price for the JV Scope.

 

(iii) Under the PDA Amendment, the price paid to the JV Company for the JV Scope shall be not less than the greater of (i) the JV Transfer Price; or (ii) the Benchmark Price for the JV Scope. If SK pays the JV Transfer Price to the JV Company, then the difference between the JV Transfer Price and the Benchmark Price shall be recorded as an “Overage” for purpose of the Overage Distribution Preference.

 

(b) Bloom Energy License Agreement. A non-exclusive, non-transferrable, non-sublicensable, royalty-free license will be granted by Bloom Energy to the JV Company (but not to any other member) to the extent necessary for the JV Company to perform the JV Scope (the Bloom Energy License Agreement”). Such license cannot be used to create any Intellectual Property, except as permitted Applications R&D, and is revocable upon any breach of the license conditions or in the event of bankruptcy of the JV Company.

 

(c) Trademark License. Each Member (or its Affiliates) will enter into (or procure the execution by an applicable Affiliate or) a trademark license agreement with the JV Company (the “Trademark License Agreement”) in order to allow the JV Company to fulfill the purpose of the Business and the implement the Business Plan. The Trademark License Agreement of each Member (or its Affiliates) shall grant to the JV Company the right to use certain brand names, services marks, trademarks, trade dress or other business identifiers, as agreed to among the Members, including “SK” or other marks of SK (or its Affiliates) (the “SK Marks”) and “Bloom” or other marks of Bloom Energy (or its Affiliates) (the “Bloom Energy Marks”).

 

6.6 Execution of JV Transaction Documents. If and when the Parties reach mutual agreement on all terms and conditions of each JV Transaction Document, all JV Transaction Documents shall be finalized as forms and attached to a binding written instrument the (“JV Transaction Documents Agreement”). Execution of the JV Transaction Documents Agreement shall be a condition precedent to adoption of the Articles of Incorporation of the JV Company, and the Members shall, and the Members shall cause the JV Company and its applicable Affiliates to execute the remaining JV Transaction Documents as soon as practicable (but in no event later than 2 Business Days) following the establishment of the JV Company.

 

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ARTICLE 7. PREEMPTIVE RIGHTS

 

Any changes in capital structure of the JV Company, including an issuance of any new Units or Equity Securities, shall only be made with the prior written agreement of all the Members. For the avoidance of doubt, the Members shall approve, and shall cause the respective Directors nominated by them to approve, the capital contributions under Section 3.2 above and capital contributions by Bloom Energy that preserve its voting control in accordance with Section 4.1(e)(i). In the event the JV Company issues any new Units or Equity Securities, then the JV Company shall provide and deliver notice to each of its Members, to offer the Members to use its pre-emptive rights wherein the Members shall have pre-emptive rights to subscribe for such new Units or Equity Securities of the JV Company in proportion to the number of Class A Units then held by such Member in the JV Company.

 

ARTICLE 8. UNIT TRANSFER RESTRICTION

 

8.1 Transfers and Encumbrances. Each Member covenants and agrees not to Transfer any of its Units and Equity Securities (including any Transfers to any Affiliate(s)), except with the prior written consent of the other Members in accordance with the terms and conditions set forth in this Agreement. The failure of any Member to comply with this Section 8.1 shall constitute a material breach of this Agreement and the non-breaching Member shall be entitled to terminate this Agreement as a result thereof in accordance with Section 16.2(j) below.

 

(a) Any Transfer permitted under this Agreement shall be subject to Section 8.2 below; provided, however, that for any Transfers to an Affiliate(s) of a Member: (i) the obligations of the transferor Member under this Agreement shall remain unaffected by the proposed Transfer; (ii) the transferee Affiliate executes and delivers a Joinder Agreement in accordance with Section 8.2 below; (iii) the transferor Member shall guarantee the performance by the transferee Affiliate of the obligations under the Joinder Agreement; and (iv) the transferee Affiliate undertakes to re-transfer the Units and Equity Securities back to the transferor Member in the event it is no longer an Affiliate of the transferee Affiliate, it being understood and agreed that failure to re-transfer such Units and Equity Securities within twenty (20) Business Days of the transferee Affiliate ceasing to be an Affiliate shall be deemed to be a material breach of this Agreement by the transferor Member and the transferee Affiliate.

 

8.2 Joinder. If, in accordance with and subject to the terms and conditions of this Agreement, a Member (“Transferor”) desires to Transfer any Units to a Person (“Transferee”), then the Member transferring Units shall require the transferee, as a condition of the Transfer, to execute and deliver to the JV Company and the other Members a joinder agreement in the form and substance attached hereto as Exhibit B and made a part hereof (the “Joinder Agreement”), confirming that it shall be bound by this Agreement as a Member in respect of each Units transferred thereto.

 

8.3 Contravention and Damages. Any Transfer of Units or other Equity Securities not made in conformance with this Agreement (i) shall be null and void ab initio, (ii) shall not be recorded in the books of the JV Company and shall not be recognized by the JV Company without the prior written consent of all the Parties and (iii) shall give the other Members and the JV Company the right to claim from the breaching Member all costs, damages and other expenses incurred by such other Members and/or the JV Company arising out of or relating to any such attempted or purported Transfer, including reasonable attorneys’ fees and any costs incurred by the other Members and/or the JV Company to repurchase the breaching Member’s Units and Equity Securities.

 

8.4 Termination of Obligation. Except in the event of a transfer pursuant to Section 8.1(a) above, if any Member duly Transfers all of its Units and Equity Securities in accordance with the provisions herein, then the obligations and liabilities of such Member under this Agreement shall terminate, except those liabilities accrued up to the date of the said termination, or as otherwise expressly provided in this Agreement, or as otherwise agreed by the Parties in writing.

 

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ARTICLE 9. GENERAL MEETING

 

9.1 The General Meetings. There shall be ordinary General Meetings and extraordinary General Meetings of Members. The JV Company shall hold ordinary General Meetings within three (3) months after the end of each fiscal year of the JV Company. The date, time and place of such General Meeting shall be determined by the Board. The Parties shall permit the JV Company to hold extraordinary General Meetings from time to time as determined by the Board, provided all necessary requirements (including the proper and timely notice of the meeting) have been duly satisfied. The Representative Director shall serve as the chairman of all General Meetings.

 

9.2 Notice. The Members shall cause the Representative Director to deliver a written notice of a General Meeting (the “General Meeting Notice”) to all members and other Persons entitled to receive the notice at least fourteen (14) days prior to the date set for the applicable General Meeting. The above period may be shortened or omitted with the written consent of all of the members of the JV Company before any such meeting. The notice shall state the agenda, date, time and place for the meeting. The General Meeting shall resolve only those matters stated in the notice of the meeting, unless all the members, whether present or not, unanimously agree otherwise.

 

9.3 Quorum. A quorum for a General Meeting shall be the presence of Bloom Energy and, if the matters to be voted on at such General Meeting require an interest greater than that owned by Bloom Energy, shall be both Bloom Energy and SK. No General Meeting shall be validly convened or constituted unless a quorum is present at such meeting.

 

9.4 Resolution. Except as otherwise provided in this Agreement (including Section 9.5) or where a greater majority is required by the applicable Laws or the Articles of Incorporation, all resolutions at the General Meeting shall be adopted by the affirmative vote of the majority of the voting Units represented, in person or by proxy, at the applicable General Meeting.

 

(a) Voting Rights. Holders of Class A Units shall be entitled to 4,000 votes for each unit of Class A Units held by such holder as of the applicable record date on any matter that is submitted to a vote of the members of the JV Company. Class B Units shall be entitled to 1 vote for each unit of Class B Units held by such holder as of the applicable record date on any matter that is submitted to a vote of the members of the JV Company.

 

9.5 Matters Requiring Unanimous Consent. Notwithstanding anything to the contrary contained in this Agreement, the consent of both Bloom Energy and SK shall be required for each of the actions of the JV Company listed in Schedule 3. Without limiting the generality of the foregoing, the Members and the JV Company shall take all necessary actions to implement the foregoing, including but not limited to, effecting any amendments to the Articles of Incorporation and other constitutional documents of the JV Company, to ensure that the affirmative vote of both Bloom Energy and SK at a General Meeting is required to adopt any of the items set out in Schedule 3.

 

9.6 Minutes. The proceedings of General Meetings and the results thereof shall be recorded in the minutes which shall be signed by the chairman of such meeting and the Directors present and kept at the registered head office of the JV Company.

 

ARTICLE 10. THE BOARD OF DIRECTORS

 

10.1 Board of Directors. Except as otherwise required by applicable Law, the Articles of Incorporation or this Agreement, the responsibility for the direction and supervision of the JV Company shall be vested in the Board of Directors. The Board may delegate its authorities to certain appropriate directors and officers of the JV Company in accordance with this Agreement, applicable Laws and the Articles of Incorporation, as may be applicable.

 

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10.2 Directors. Each of the Members shall exercise its respective voting rights in the JV Company and shall take such other steps as are necessary to ensure the following:

 

(a) The Board of Directors shall consist of five (5) Directors.

 

(b) Of the members of the Board, Bloom Energy shall be entitled to nominate and have elected three (3) Directors (the “Bloom Energy Directors”) and SK shall be entitled to nominate and have elected two (2) Directors (the “SK Directors”). The term for each Director shall be three (3) years; provided, however, that such term may be extended until the close of the ordinary General Meeting concerning the last fiscal year that ended during the term of the applicable Director. Any vacancy created in the Board shall be filled by the Member that originally nominated the absent Director causing the vacancy. The term of office for the newly nominated Director shall be for the remainder of the term of the prior Director. If Bloom Energy or SK wishes to change its nominated Director(s), with or without cause, the other Members shall vote its respective voting Units in compliance with the Member desiring to change its nominated Director(s).

 

(c) At the time of the completion of any Transfer of all of the Units held by a Member, unless for the Transfer to Affiliates pursuant to Section 8.1(a), such Member shall procure the resignation of each Director appointed by it.

 

(d) A Member may, at its sole discretion, remove at any time any Director nominated by such Member, in which event such Member shall have the power to nominate a substitute Director; provided, that, if the relevant Director does not resign from his or her office at the request of the nominating Member, the Members shall exercise their respective voting rights in the JV Company to adopt a resolution to dismiss the relevant Director from the position. Any Member removing a Director nominated by it shall fully indemnify and hold harmless the other Members (and its successors, permitted assigns, employees, directors and officers) and the JV Company from and against any and all losses suffered, sustained or incurred by or imposed upon any of them as a result of, relating to or arising out of or in connection with such removal.

 

(e) The remuneration, bonuses and severance pay of Directors (including the Representative Director) shall be determined by a resolution of the General Meeting.

 

(f) Bloom Energy shall appoint one of the Bloom Energy Directors as the chairperson of the Board.

 

10.3 Meeting of the Board of Directors. Meetings of the Board may be called by the Representative Director or the chairperson of the Board. Each Director shall have the right to request that a meeting of the Board be called by the Representative Director. The Board of Directors meeting may be held in or outside of Korea. Without limiting the generality of the foregoing, any Director may take part in the meeting of the Board by means of a communication system of transmitting and receiving sounds (“Audio Conferencing”), without the personal attendance at the meeting. A Director appearing by Audio Conferencing shall be deemed to have attended the meeting at which the Director has so appeared.

 

10.4 Notice. The JV Company and Bloom Energy shall cause the Representative Director to deliver a written notice stating the agenda, date, time and place of the Board meeting to all the Directors at least ten (10) Business Days prior to the date set for the applicable meeting of the Board. The above period may be shortened or omitted with the written consent of all the Directors prior to any such meeting. Unless all incumbent Directors waive such restriction, no matter may be voted upon at any Board meeting unless such matter is included in the agenda.

 

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10.5 Quorum. A quorum for a meeting of the Board of Directors shall be the presence of at least a majority of Directors then in office, including not less than three (3) Bloom Directors and one (1) SK Director. No meeting of the Board of Directors shall be validly convened or constituted unless the foregoing quorum is present at such meeting.

 

10.6 Resolutions. Unless otherwise required by the mandatory provisions of applicable Laws, the Articles of Incorporation or this Agreement (including Section 10.7 and Section 10.8), all actions and resolutions of the Board of Directors shall be adopted by the affirmative vote of a majority of the Directors present at a meeting of the Board. For the avoidance of doubt, the chairperson of the meeting of the Board of Directors shall not have a second or casting vote.

 

10.7 Matters Requiring Unanimous Approval. Notwithstanding anything to the contrary (other than Section 10.8), the unanimous approval of all Directors shall be required for each of the matters listed in Schedule 4. Without limiting the generality of the foregoing, the Members and the JV Company shall take all necessary actions to implement the foregoing, including but not limited to, effecting any amendments to the Articles of Incorporation and other constitutional documents of the JV Company, to ensure that the unanimous approval of all Directors is required to adopt any of the matters set out in Schedule 4.

 

10.8 Bloom Energy Director Matters. Notwithstanding anything to the contrary (including Section 10.7), matters affecting intellectual property and trade secrets shall solely belong to Bloom Energy Directors. Without limiting the generality of the foregoing, the Members and the JV Company shall take all necessary actions to implement the foregoing, including but not limited to, effecting any amendments to the Articles of Incorporation and other constitutional documents of the JV Company.

 

10.9 Minutes. Minutes of each meeting of the Board shall be signed by all of the Directors present at the meeting. Minutes of the meeting of the Board shall be kept at the JV Company’s head office.

 

10.10 Committees of the Board of Directors. The Board of Directors may establish such committees as it deems appropriate from time to time.

 

ARTICLE 11. MANAGEMENT TEAM; OTHER PERSONNEL

 

11.1 Representative Director

 

(a) The JV Company shall have one (1) Representative Director, who shall have a term of three (3) years. The Representative Director shall be appointed, removed and terminated by the Bloom Energy Directors.

 

(b) The Representative Director shall, in such capacity, be the chief executive officer (CEO) of the JV Company and have the power and authority to be in the general and active charge of the entire business and affairs of the JV Company, including general supervision, direction and control of the Business and the officers of the JV Company, including corporate policy and strategy, and shall have the obligation to manage the day-to-day operations of the JV Company and the respective Business (other than the matters tasked to the COO) and make decisions which do not require approval of the Board of the Members, as well as such other powers and authorities granted pursuant to applicable Laws and the Articles of Incorporation. All employees must be personally approved by the Representative Director (other than the COO).

 

11.2 Chief Operating Officer. The JV Company shall have one (1) Chief Operating Officer (the “COO”), who shall have a term of three (3) years and shall report to the Representative Director/CEO. The COO shall be appointed, removed and terminated by the SK Directors. The COO shall have the power and authority to implement the operational decisions of the Representative Director, as he or she deems proper, and shall be consulted on major matters affecting the JV Company.

 

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11.3 Finance Personnel. The Representative Director and the COO shall mutually agree on the individual to be hired by the JV Company as the finance employee of the JV Company, which shall be a non-executive level position tasked with undertaking the day-to-day finance matters of the JV Company. Such finance employee shall report to the Representative Director and may be removed and terminated by the Representative Director.

 

ARTICLE 12. INTELLECTUAL PROPERTY

 

12.1 Intellectual Property Creation. Except as may be created pursuant to permitted Applications R&D, it is not the intention of the Parties for the JV Company to create or procure any Intellectual Property. The JV Company shall only file patent applications or other Intellectual Property registration upon the unanimous consent of the Bloom Directors. The funding for the costs associated with any Intellectual Property protection for any Intellectual Property resulting from the Applications R&D shall be as mutually agreed to among the Members, as determined at the time that such Applications R&D is approved.

 

12.2 Joint Intellectual Property. The JV Company shall execute an agreement with Bloom Energy, in which (a) Intellectual Property developed by the JV Company pursuant to permitted Applications R&D (“Applications IP”) is jointly owned by Bloom Energy and the JV Company and (b) all other Intellectual Property developed by the JV Company, not in connection with permitted Applications R&D, is exclusively owned by Bloom Energy.

 

12.3 License to SK. A royalty-free license (subject to tax law requirements) for use of Applications IP will be granted to SK for uses that are not in competition with Bloom Energy or the deployment of the Energy Server.

 

ARTICLE 13. ACCOUNTING & FINANCIAL POLICIES

 

13.1 Fiscal Year. The fiscal year of the JV Company shall begin on January 1 of each year and end on December 31 of the same year; provided, however, that the first fiscal year of the JV Company shall begin on the applicable date of formation of the JV Company and end on the first December 31 occurring thereafter.

 

13.2 Financial Statements. The Representative Director of the JV Company shall submit to the Board the management accounts, financial statements, including the income statement, balance sheet and related cash flow statement, of the JV Company (the “Financial Statements”) on a monthly, quarterly and annual basis. The Financial Statements shall be prepared in accordance with US GAAP and K-IFRS within seven (7) days after the end of each month and fiscal quarter, and ten (10) days after the end of each fiscal year end for unaudited Financial Statements, and ninety (90) days after the end of each fiscal year end for audited Financial Statements.

 

13.3 Operating Plan. An operating plan with respect to the Business containing at least the following items (the “Operating Plan”) shall be prepared by the Representative Director and the COO on an annual basis (such initial Operating Plan for a given fiscal year implemented in the first quarter, the “Initial Operating Plan”), which shall be unanimously approved by all members of the Board of Directors. The Initial Operating Plan shall be monitored and updated by the Representative Director and approved by the Bloom Directors (subject to section (h) of Schedule 4) on a quarterly basis starting from the second quarter of a given fiscal year:

 

(a) Projected builds and sales of each product sold by the JV Company;

(b) Projected inventory levels;

(c) Operating budgets for capital and operating expenditures;

(d) A projected statement of revenues and expenses, and comparison of the prior quarter’s projected versus actual revenues and expenses;

 

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(e) Projected financial statements (balance sheet, income statement, and cash flow statement); and

(f) Projected funding plan for the JV Company, including any required SK Additional Contributions.

 

The Members shall jointly develop the first and initial Operating Plan for the Business. Thereafter, the Representative Director and the COO of the JV Company shall prepare and submit the Initial Operating Plan for a given fiscal year on an annual basis to the Board for unanimous approval in October of each year. Each Initial Operating Plan shall be subject to unanimous approval by the Board, and each quarterly update shall be subject to the approval only by the Bloom Energy Directors (subject to section (h) of Schedule 4). The Members shall work in full consultation with the Board in the implementation of any approved Operating Plan. In September of each fiscal year, SK shall provide the JV Company a forecast of product sales and related delivery schedule for the upcoming fiscal year, together with timing of receipt of associated sales proceeds.

 

13.4 Expense Policy. A policy relating to the manner in which costs and expenses of the directors, officers and employees of the JV Company are to be incurred and paid shall be prepared by the Representative Director, the initial policy and any amendments of which shall be unanimously approved by all members of the Board of Directors (the “Expense Policy”).

 

13.5 Inspection and Other Information. The Members agree to a reasonable open-book approach with respect to the verification of the financial statements of the JV Company. In connection with the above, each Member, through its authorized representatives, shall have at any time during normal business hours, the right (A) to inspect, copy and retain copies of the books and records of the JV Company, and (B) to inspect the properties and physical assets of the JV Company; provided, however, that the costs and expenses incurred from the foregoing inspection and access shall be borne by the Member conducting such inspection and access. All inspection or other activities conducted by a Member pursuant to this Section 13.5 shall be conducted in accordance with applicable Laws and so as not to unreasonably interfere with the conduct of the Business by the JV Company. Pursuant to the foregoing, upon prior reasonable request of a Member, the JV Company shall, and the Members shall cause the JV Company to, provide access to the financial books and records of the JV Company, including invoice records, transaction records and other documentation and information substantiating transactions as well as the following: (i) monthly, quarterly, bi-annual and annual financial statements consisting of the balance sheet, income statement, cash flow statement and statement of costs of goods manufactured, (ii) monthly, quarterly, bi-annual and annual bank statements (with transaction records), (iii) account statements, (iv) cost statements per order and (v) the Operating Plan.

 

13.6 Books and Records. The JV Company shall maintain, for a period of at least five (5) years from the expiration or termination of the Agreement, all records relating to the Business and its performance, including those set forth under Section 13.5(a) above and any and all records relating to payments made to government, local and foreign government/public officials, or international commercial representatives of the offices of the JV Company or of such other place as determined by the Board. The JV Company shall permit each Party with access to records relating to the JV Company, the Business or to this Agreement upon reasonable request, which shall be made available through hard copies as well as electronic copies, as applicable. At the end of every fiscal year of the JV Company, the books of accounts and records of the JV Company shall be audited at the expense of the JV Company by a Big 4 (or other accounting firm as agreed to by the Members) appointed by the Board who shall report their findings to the JV Company in their originals and to the Members in their duplicate copies.

 

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13.7 Dividend Policy. The Members may, in its discretion, declare what, if any, distribution or dividend of cash shall be paid from the surplus or from the net profit of the JV Company for the preceding fiscal year which is legally available for the purpose. Such cash distribution or dividend may be declared by the Members at any General Meeting, one time per year following receipt of audited financial statements for the preceding fiscal year and approval of the Initial Operating Plan for the following fiscal year pursuant to Section 13.3. Notwithstanding the foregoing, the Members may not, without unanimous Member consent, declare any distribution or dividend that is expected (at the time the determination is made) to result in failure to fully fund the Initial Operating Plan for the upcoming fiscal year without resulting in an SK Additional Contribution Trigger.

 

ARTICLE 14. DEADLOCK

 

14.1 Deadlock. In the event of a Deadlock, the provisions of this Article 14 shall apply.

 

14.2 Initial Consultations. In any case of Deadlock, the Deadlock shall be initially referred to a working group comprised of managerial-level representatives of each of Bloom Energy and SK (the “Member Managers”), who shall discuss the Deadlock in good faith to reach resolution. If the Member Managers cannot reach resolution within sixty (60) calendar days, then the Members shall form a senior executive group comprised of senior executive members of each of Bloom Energy and SK (the “Member Executives”) to engage in additional good faith discussions for an additional thirty (30) calendar days. If the Member Executives cannot reach resolution, then the decision of the Members with respect to the matter that gave rise to such Deadlock will be deemed to be a vote against such matter; provided however that (i) in the event the unresolved dispute involves the failure to approve the Initial Operating Plan, the then-current Operating Plan (with proper adjustments for inflation) shall be carried forward until the dispute is resolved and the Board of Directors agree on a new Initial Operating Plan, and (ii) the Parties shall continue operation of the JV Company in the ordinary course of business during the pendency of any unresolved dispute(s).

 

14.3 Liquidation. In the event that the Deadlock continues to persist and the Member Executives of each of Bloom Energy and SK are unable to resolve the Deadlock within the period stipulated in Section 14.2, the Parties shall cause the JV to be terminated and proceed with liquidation of the JV Company.

 

14.4 Conduct of Business. During the process of any Deadlock resolution, the JV Company shall continue to operate its respective Businesses in the ordinary course of business in accordance with the Business Plan and each Member shall cause the JV Company to continue to operate its respective Businesses in such manner.

 

ARTICLE 15. LIQUIDATION

 

15.1 Liquidation. The liquidation principles set forth under this Section 15.1 shall apply to any liquidation of the JV Company.

 

(a) Bloom Preference Assets: establish a structure (e.g. lease, license, passage of title, collateral security and/or other mechanics) under Korean bankruptcy law to provide Bloom Energy with maximum protection in the event of bankruptcy with respect to the following (the “Bloom Preference Assets”), which Bloom Energy shall purchase at fair market value in the event the value of such Bloom Preference Assets exceed the amount contributed into the JV Company by Bloom Energy.

 

(i) Intellectual Property. All Intellectual Property to which the JV may have any right, title, or interest.

 

(ii) Energy Servers. All Energy Servers (or components thereof).

 

(iii) IP Sensitive Equipment. Manufacturing, assembly, or equipment, firmware, and software which contains Intellectual Property of Bloom Energy or the JV.

 

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(b) Class B Units: After distribution of Bloom Preference Assets to Bloom Energy, the holders of Class B Units have preference in the distribution of all assets other than the Bloom Preference Assets, up to the then-existing Distribution Preference amount.

 

(c) Class A Units: Following distribution of the above, assets are distributed to holders of Class A Units in proportion with their voting percentages of Class A Units.

 

ARTICLE 16. TERM AND TERMINATION

 

16.1 Term. This Agreement shall become effective on the Effective Date and shall continue in full force and effect in perpetuity until this Agreement is terminated in accordance with this Article 16 or other applicable provisions hereof.

 

16.2 Termination. This Agreement may be terminated with immediate effect by providing written notice thereof to the other Party upon the occurrence of one (1) or more of the following events:

 

(a) by any Member (so long as the following event is not attributable to such Member exercising the right to terminate this Agreement), if the JV Company fails to be established and incorporated within four (4) months following the Effective Date, which can be extended by mutual written agreement of the Members;

 

(b) By Bloom Energy if SK fails to fund the JV Company as required by this Agreement and the JV Transaction Documents and does not remedy such failure within five (5) Business Days after receipt of written notice from Bloom Energy giving details of the failure and requiring SK to remedy such failure;

 

(c) By Bloom Energy if SK or its employees or agents breach the intellectual property restrictions in this Agreement, the JV Transaction Documents, or the PDA;

 

(d) By Bloom Energy if any entity within the SK group of companies (SK “gi-up-jib-dan in Korean) as determined by the Monopoly Regulation and Fair Trade Act competes with the JV Company or Bloom Energy by engaging in the fuel cell business at the time such entity is part of the SK group of companies (SK “gi-up-jib-dan in Korean) (the “SK Group”) or is under the Control of any member of such SK Group;

 

(e) By Bloom Energy if the Affiliation Restructuring is not completed within one (1) year of the Affiliation Designation or the Members determine that the Affiliation Restructuring is not possible; provided, that, Bloom Energy shall have the right to terminate immediately if in the reasonable judgement of Bloom Energy, the Affiliation Designation is expected to have a material adverse impact on Bloom Energy or its Affiliates (other than the JV Company);

 

(f) By the non-defaulting Member, in the event of violation of United States export control-related laws and regulations;

 

(g) By the non-defaulting Member, in the event of violation of Anti-Corruption Laws occurring after the Effective Date that has an adverse impact on the non-defaulting Member (as determined by the non-defaulting Member in its discretion);

 

(h) By the non-defaulting Member, in the event of a material violation of applicable laws of the Republic of Korea that has a material adverse impact on the JV Company;

 

(i) By the non-defaulting Member, in the event a Member or its employees or agents breach the confidentiality obligations set forth under Article 20 of this Agreement;

 

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(j) by any Member (so long as the following event is not attributable to such Member exercising the right to terminate this Agreement), if the other Member or its Affiliate, as the case may be, is in material breach of its obligation under this Agreement not set forth above or a material breach of its representations and warranties under Section 19.1(g), and if the breach is capable of remedy, fails to remedy the breach within forty-five (45) calendar days after receipt of written notice from the terminating Member giving details of the breach and requiring the other Member to remedy the breach, in which case the terminating Member shall be permitted to seek any and all of its remedies, in law and/or equity;

 

(k) by any Member (so long as the following event is not attributable to such Member exercising the right to terminate this Agreement), if the other Member becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency, or suffers or permits the commencement of any form of insolvency or receivership proceeding, or has any petition under bankruptcy Law filed against it, which petition is not dismissed within sixty (60) calendar days of such filing, or has a trustee, administer or receiver appointed for its business or assets or any part thereof;

 

(l) by any Member, in the event of a Deadlock event that occurs and is not resolved pursuant to Article 14;

 

(m) by SK, if the Bloom Energy or its Affiliates solicits, entices or induces the COO to terminate his/her employment with the JV Company; and by Bloom Energy, if any member of the SK Group solicits, entices or induces the Representative Director to terminate his/her employment with the JV Company;

 

(n) by mutual agreement between the Members.

 

ARTICLE 17. CONSEQUENCE OF TERMINATION

 

17.1 No Prejudice. The waiver of the right of termination under this Agreement shall not constitute a waiver of the right to claim damages or the right to terminate for any subsequent cause.

 

17.2 Liquidation of the JV Company. In the event of termination of this Agreement, the JV Company shall be liquidated. In the event that the JV Company is liquidated pursuant to this Section 17.2, the Members shall meet and agree in good faith with regard to the necessary course of action for any ongoing projects or other outstanding obligations of the JV Company and the Members shall use their best efforts to avoid insolvency of the JV Company.

 

17.3 Effect of Termination. Upon the termination of this Agreement, all rights and obligations under this Agreement shall become null, void and ineffective, except that the rights and obligations of any Party that have accrued prior to such termination shall not be affected thereby, and any other provisions (including Articles 1, 15, 17, and 20 through 24) which are intended to survive, explicitly or implicitly, shall survive the termination hereof. In the event of termination of this Agreement and liquidation of the JV Company pursuant to Section 17.2, the Parties shall upon request execute any instruments reasonably necessary under applicable Laws to ensure that (a) all Intellectual Property developed by the JV Company is exclusively owned by Bloom Energy; and (b) a royalty-free license (subject to tax law requirements) for use of Applications IP is granted to SK for uses that are not in competition with Bloom Energy or the deployment of the Energy Server, and that the agreements entered into with respect to Applications R&D pursuant to Section 6.4 are preserved.

 

17.4 Remedies. The right of the Members to terminate this Agreement is not an exclusive remedy, and upon breach of this Agreement, either Member shall be entitled alternatively or cumulatively to any available remedy against the other Member at law or in equity.

 

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ARTICLE 18. COVENANTS

 

18.1 Non-Competition; Non-Solicitation and Other Restrictions.

 

(a) Non-Competition. Without obtaining the prior written consent of the other Member, each Member agrees that during the period in which it remains a member of the JV Company, it shall not (and shall ensure that its Subsidiaries do not) directly or indirectly, compete with the manufacturing, assembly, sale and distribution of the JV Scope for stationary utility-scale and commercial & industrial applications in Korea, except in connection with any sale permitted pursuant to Section 6.3(b)(iii).

 

(b) Non-Solicitation and Other Restrictions. Without obtaining the prior written consent of the other Member, each Member agrees that during the period in which it remains a member of the JV Company, it shall not (and shall ensure that its Subsidiary do not) solicit, entice or induce any employee of the JV Company or the other Members to terminate his/her employment with the JV Company or the other Members, as applicable. For the avoidance of doubt, any individuals seconded by a Member to the JV Company shall not be considered to constitute “employees of the JV Company.”

 

(c) Reasonable Restriction. Each Member hereby acknowledges that it has carefully read and fully considered the restrictions imposed by the provisions of this Section 18.1, and agrees without reservation that (i) such restrictions are necessary and proper for the reasonable protection of the JV Company and the interests of the Members as members in the JV Company, (ii) each and every one of the restrictions is reasonable and appropriate in respect of subject matter as well as temporal and geographic scope and (iii) the restrictions will not unreasonably interfere with or limit its business opportunities or operations. In the event that any provision of this Section 18.1 is determined by a court of competent jurisdiction to be unenforceable by reason of its being extended over too great a period of time, too large a geographic area or too great a range of activities, but would be valid if deleted in part or reduced in application, such provision shall apply with such deletion or modification as may be necessary to make it valid and enforceable.

 

18.2 Compliance with Laws; Anti-Corruption Laws.

 

(a) Each Party shall comply with, and ensure that its officers and employees and contractors comply with, in carrying out the activities under or related to this Agreement or the operation of the JV Company, all laws and regulations of the United States, Korea and all other jurisdictions in which such Member carries out any business or activities, including, without limitation, all applicable Anti-Corruption Laws. In addition, the Parties shall, and the Parties shall cause the JV Company to, comply with all applicable Anti-Corruptions Laws in connection with any transactions involving the JV Company.

 

(b) To ensure compliance by all relevant officers, employees and contractors of the Parties who are involved in any transactions with or of the JV Company, the Parties agree to cause the JV Company to adopt as soon as practicable upon its establishment, policies and procedures and regular training programs sufficient to ensure compliance with the Anti-Corruption Laws. Each Party shall have audit and inspection rights to all documents pertaining to the JV Business as well as the activities conducted under the JV Transaction Documents to investigate and assess compliance with Anti-Corruption Laws. Neither Member shall involve directly or indirectly in the Business or any business conducted under any JV Transaction Document any officer or employee who has violated Anti-Corruption Laws, and the Parties agree to institute a rigorous and robust training program related to Anti-Corruption Laws for all those involved in the Business or business conducted under any JV Transaction Document.

 

18.3 Group Affiliation. The Members acknowledge and agree the Member’s intention is for the JV Company not to be deemed to be part of the SK group of companies under the antitrust laws and regulations of the Republic of Korea. If, at any time, the JV Company is determined by the Korean Fair Trade Commission to be part of the SK group of companies under the antitrust laws and regulations of the Republic of Korea (“Affiliation Designation”) or the Members mutually agree that an Affiliation Designation is likely to occur, then the Parties shall use their best efforts to restructure the terms of this Agreement to exclude the JV Company as part of the SK group of companies, the costs and expenses associated with such restructuring to be borne by SK (the “Affiliation Restructuring”).

 

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ARTICLE 19. REPRESENTATIONS AND WARRANTIES, INDEMNITY

 

19.1 Representations and Warranties. Each Member represents and warrants to the other Members that: (a) it has the full power and authority to enter into and to perform its obligations under this Agreement and this Agreement will constitute the legally valid and binding obligations on it in accordance with its terms; (b) this Agreement has been duly authorized and approved by all required corporate action; (c) the entry and delivery of, and the performance by it of this Agreement will not result in any breach or be in contravention of any applicable Law or any provision of its constitutional documents, or result in any claim by a third party; (d) that as of the date of issuance of the Class A Units as contemplated under this Agreement, it shall own the Units for its own account, free and clear of any and all Liens, other than, in the case of Bloom Energy, the Scheduled Liens (if any); (e) that as of the Effective Date, no Governmental Approval or action of, filing with or notice to any governmental authority on the part of such Member is required in connection with the execution, delivery and performance of this Agreement, other than, in the case of Bloom Energy, the Scheduled Governmental Approvals (if any); (f) that as of the Effective Date, it is not involved in any action, claim, litigation, suit or other legal proceeding before or investigation by any governmental authority, or to its knowledge, threatened against it that, if adversely determined, will, or is expected to have a material adverse impact on the Business and (g) to the extent there is any legal proceeding before or investigation by any governmental authority as of the Effective Date involving a violation by such Member or any of its officers or employees of anti-corruption and anti-bribery laws and regulations, it has provided information regarding the circumstances giving rise to such legal proceeding or investigation in reasonable detail, including through a meeting of representatives of each of the Members held on September 20, 2019 KST and has also provided, through such meeting, information regarding the circumstances giving rise to any threatened legal proceeding or investigation by any governmental authority as of the Effective Date involving a violation by such Member or any of its officers or employees of anti-corruption and anti-bribery laws and regulations, if any.

 

19.2 Indemnity. Each Party (except for the JV Company) shall defend, indemnify and hold harmless the other Party, and its respective directors, officers, employees, agents, successors and assigns (each an “Indemnified Party”) from and against and in respect of all losses, liabilities, obligations, damages, deficiencies, actions, suits, proceedings, demands, assessments, orders, judgments, fines, penalties, costs and expenses (including reasonable fees and disbursements of lawyers, accountants and other professional advisers) of any kind or nature whatsoever (whether or not arising out of third party claims and including all amounts paid in the investigation, defense or settlement of the foregoing) (the foregoing, collectively, “Losses”) sustained, suffered or incurred by or made against any Indemnified Party arising out of, based upon or in connection with (a) any material inaccuracy in or breach of a representation and warranty given or made by such Party in this Agreement, and/or (b) any material breach of any covenant, undertaking or agreement given or made by it in this Agreement. Such indemnity obligation shall survive the termination of this Agreement.

 

ARTICLE 20. CONFIDENTIALITY

 

20.1 Definition of Confidential Information. In this Article 20, “Confidential Information” means all proprietary and/or confidential information, which is stated as confidential, or known or considered as known to be confidential information (whether in writing, orally or by another means and whether directly or indirectly), and disclosed by a Party (the “Disclosing Party”) to another Party (the “Receiving Party”), whether before or after the date of this Agreement, including information relating to the Disclosing Party’s products, operations, processes, plans or intentions, product information, know-how, design rights, trade secrets, proprietary information, market opportunities and business affairs, the contents of this Agreement and all confidential proprietary information about the JV Company and the Business. For the avoidance of doubt, this Article 20 shall apply to the JV Company (as both a Disclosing Party and a Receiving Party) and the Confidential Information of the JV Company.

 

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20.2 Confidentiality. During the term of this Agreement and after the termination or expiration of this Agreement for three (3) years, the Receiving Party:

 

(a) may not use Confidential Information for any purpose other than the performance of its obligations under this Agreement;

 

(b) may not disclose the Confidential Information to any third party (including Affiliates) except with the prior written consent of the Disclosing Party; provided, that, each Member shall be permitted to disclose certain Confidential Information to certain Affiliates as follows: (a) in the case of SK, to disclose to SK Holdings Co., Ltd., Financial Statements prepared pursuant to Section 13.2, in the level of detail for the recipient to sufficiently assess the impact of the information; and (b) in the case of Bloom Energy, to disclose Confidential Information to Bloom Energy Korea, LLC.

 

(c) shall make every effort to prevent the unauthorized use or disclosure of the Confidential Information.

 

20.3 Disclosure to Directors, Officers and Employees. During the term of this Agreement, the Receiving Party may disclose Confidential Information to any of its directors, officers or employees of the Receiving Party (a “Recipient”) on a need to know basis and only to the extent that disclosure is reasonably necessary for the purposes of this Agreement. The Receiving Party shall ensure that a Recipient is made aware of and complies with the Receiving Party’s obligations of confidentiality under this Agreement as if the Recipient was a Party to this Agreement.

 

20.4 Return or Destruction. In the event of termination of this Agreement, or at any time at the request of the Disclosing Party, the Receiving Party shall as soon as reasonably practicable thereafter, at the Disclosing Party’s option, destroy or return to the Disclosing Party all Confidential Information on any media received by the Receiving Party hereunder, together with all partial or complete copies thereof, and the Receiving Party shall confirm in writing to the Disclosing Party that it has complied in all respects with this Article 20 if requested to do so by the Disclosing Party.

 

20.5 Exceptions to Confidentiality. Sections 20.1 through 20.4 above shall not apply to the Confidential Information which:

 

(a) is at the date of this Agreement, or at any time after that date becomes, publicly known other than by the Receiving Party’s or Recipient’s breach of this Agreement;

 

(b) can be shown by the Receiving Party to the Disclosing Party's reasonable satisfaction to have been known by the Receiving Party with written records before disclosure by the Disclosing Party to the Receiving Party;

 

(c) is received by the Receiving Party without restrictions from a third party without breach of any obligation of non-disclosure;

 

(d) is independently developed by the Receiving Party as shown to the satisfaction of the Disclosing Party by written records; or

 

(e) is required to be disclosed by Law or rules of a relevant stock exchange, in which case the Receiving Party shall inform the Disclosing Party in regard to the scope of Confidential Information that is required to be disclosed and the necessity of such disclosure and the Parties shall cooperate with each other in order to minimize the disclosure to the extent possible.

 

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20.6 The types of access, confidentiality, and related prohibitions set forth in the PDA and Bloom Energy’s standard long term service agreement will be adapted for the JV context. In particular, it is understood that Bloom Energy will retain control regarding procedures for individual employees and officers access to sensitive information. Further, this protection must survive any hypothetical event of JV bankruptcy; Bloom Energy must be able to terminate the license agreement and any JV assets that contain intellectual property and trade secrets must be returned or transferred to Bloom Energy.

 

ARTICLE 21. NOTICE

 

Each notice, demand or other communication to be given or made under this Agreement shall be in writing and delivered by hand, by registered mail or internationally recognized overnight air courier or transmitted by facsimile or e-mail to the relevant Party at its address, fax number or e-mail address set out in Schedule 5 hereto (or such other address or fax number or e-mail address as the addressee has by five (5) Business Days’ prior written notice specified to the other Parties in accordance with this Article 21). Any notice, demand or other communication so addressed to the relevant Party shall be deemed to have been duly given (a) if delivered by hand or internationally recognized overnight air courier, when actually delivered to the relevant address, (b) if delivered by registered mail, upon the fifth (5th) calendar day following the dispatch and (c) if transmitted by fax or e-mail, upon the receiving Party’s confirmation of transmission; provided that if such day is not a working day in the place to which it is sent, such notice, demand or other communication shall be deemed delivered on the next following working day at such place.

 

ARTICLE 22. DISPUTE RESOLUTION

 

The Parties agree to carry out this Agreement in a spirit of mutual cooperation and good faith, and shall attempt to resolve amicably through discussions among the Parties with regard to any differences, disputes or controversies, which may arise in connection with this Agreement. Any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation hereof or any arrangements relating hereto or contemplated herein or the breach, termination or invalidity hereof shall be finally settled by arbitration conducted by the Singapore International Arbitration Center (“SIAC”) in accordance with the rules of the SIAC. The number of arbitrators shall be one (to be appointed upon mutual agreement of the Parties), the seat, or legal place, of arbitral proceedings shall be Singapore and the language to be used in such arbitral proceedings shall be English.

 

ARTICLE 23. GOVERNING LAW

 

This Agreement shall be governed as to all matters, including validity, construction and performance, by and construed in accordance with the Laws of Korea.

 

ARTICLE 24. MISCELLANEOUS

 

24.1 Taxes and Expenses. Except as otherwise specifically set forth in this Agreement, each Party shall pay its own costs, charges and expenses, including, without limitation, any taxes and any fees and expenses of legal counsel, accountants, brokers, consultants, and other representatives used or hired by it, incurred in connection with the preparation, execution and implementation of this Agreement and the transactions contemplated hereby.

 

24.2 Severability. Should any provision of this Agreement be invalid or unenforceable, then such provision shall be given no effect and shall be deemed not to be included within the terms of this Agreement, but without invalidating any of the remaining terms of this Agreement as if the invalid or unenforceable portion was never a part of this Agreement when it was executed. The Parties shall then endeavor to replace the invalid or unenforceable provision by a valid or enforceable clause, which is closest to the original intent of the invalid or unenforceable provision.

 

24.3 Entire Agreement. This Agreement, together with the Schedules and Exhibits hereto, shall, as of the date set forth above, constitute the entire agreement and understanding of the Parties with respect to the subject matter hereof and supersede all previous representations, understandings or agreement, oral or written, between the Parties with respect to the subject matter hereof.

 

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24.4 Waiver. No waiver by any Party of any breach or failure to comply with any provision of this Agreement shall be construed as, or constitute, a continuing waiver of such provision or a waiver of any other breach of, or failure to comply with, any other provision of this Agreement.

 

24.5 Further Assurance. Upon the terms and subject to the conditions contained in this Agreement, each Party agrees: (i) to take or perform, or to use all reasonable efforts to be taken or performed, measures and matters necessary to consummate or effectuate the transactions contemplated under this Agreement, (ii) to prepare all the documents and certificates necessary or proper for the consummation of the transactions contemplated by this Agreement, and (iii) to cooperate with each other in connection with the foregoing in good faith.

 

24.6 Amendment. This Agreement may be amended, modified or superseded, and any of the terms, covenants or conditions hereof may be waived, only by a written instrument expressly referencing this Agreement as being amended, modified, superseded or waived, executed by all of the Parties, or, in the case of a waiver, by the Party waiving compliance.

 

24.7 Assignment. This Agreement shall be binding on and inure to the benefit of the successors and assigns of each of the Parties. Except as permitted in relation to the Transfer of Units consummated in accordance with the terms of this Agreement, neither this Agreement nor any rights and obligations hereunder shall be assignable by any Party without the prior written consent of the other Party. Any assignment or transfer of this Agreement by a Party in contravention of this clause shall be deemed null and void.

 

24.8 Time of the Essence. Time shall be of the essence in respect of any dates, times and periods specified in this Agreement, and in respect of any dates, times and periods which may be substituted for them in accordance with this Agreement or by a separate agreement in writing between the Members.

 

24.9 Specific Performance. The Parties hereby agree that the obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that in the event of a breach by any Party, damages would not be an adequate remedy, and each Member shall be entitled to specific performance and injunctive and other equitable relief in addition to any other remedy to which it may be entitled.

 

24.10 No Partnership or Agency. Except as otherwise specifically set forth in this Agreement, nothing in this Agreement will be deemed to constitute a partnership between the Parties nor, save as expressly set out herein, constitute either Party the agent of the other Party for any purpose.

 

24.11 Language/Counterparts. This Agreement is executed in the English language and may be executed in any number of counterparts, each of which shall be deemed an original. Unless it is prohibited under the applicable mandatory provisions of law, the English language text of this Agreement shall prevail over any other language version or any translation thereof.

 

(Signature Page Follows)

 

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Signature Page to the Joint Venture Agreement

 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized officer or representative as of the Effective Date.

 

Bloom Energy Corporation

 

BY:

/s/ KR Sridhar

 
Name:  KR Sridhar  
Title: Chairman & CEO  

 

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Signature Page to the Joint Venture Agreement

 

IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its duly authorized officer or representative as of the Effective Date.

 

SK Engineering & Construction Co., Ltd.

 

BY: /s/ Jaehyun Ahn  
Name:  Jaehyun Ahn  
Title: President & CEO  

 

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Schedule 1

 

Definitions and Interpretation

 

1.1 Definitions. For purposes of the Agreement the following capitalized terms shall have the respective meanings set forth below:

 

Affiliate” means, with respect to any Party, any Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with such Party at any time during the period for which the determination of affiliation is being made.

 

Ancillary Equipment” means (i) the site kit, (ii) the power distribution system, (iii) the External Modules.

 

Applicable Exchange Rate” means the Korea Exchange Bank KRW-USD or USD-KRW, as applicable, Standard Exchange Rate at market opening on the date of determination, as published by KEB Hana Bank at https://www.kebhana.com/cont/mall/mall15/mall1501/index.jsp

 

Articles of Incorporation” means the articles of incorporation to be adopted by the JV Company in accordance with Article 5 of this Agreement, as such may be amended from time to time.

 

Anti-Corruption Laws” means all applicable Laws of any jurisdiction applicable to either Party or the JV Company, concerning or related to anti-corruption or anti-bribery, such as the Act on the Prevention of Corruption and the Establishment and Management of the Anti-Corruption and Civil Rights Commission of Korea, and the Foreign Corrupt Practices Act of the United States of America.

 

Benchmark Price means the cost of the JV Scope, if it had been supplied by Bloom Energy’s Delaware manufacturing facility.

 

Big 4means the following accounting firms: KPMG, PricewaterhouseCoopers, Ernst & Young, and Deloitte.

 

Board” or “Board of Directors” means the board of directors of the JV Company in office at the applicable time, as appointed in accordance with the terms and conditions of this Agreement.

 

BOP” means the support systems that provide fuel, air, exhaust and water flows to and from the Hot Box.

 

Business Day” means any day other than a Saturday, a Sunday or a national holiday on which banks are required or authorized by law to be closed in California, USA or Seoul, Korea.

 

Class A Units” mean units of the JV Company having voting rights of 4,000 votes per unit and distribution rights as described in Section 4.1(d).

 

Class B Units” mean units of the JV Company having voting rights of 1 vote per unit and rights to the Distribution Preference.

 

Control” (including the terms “Controlled by” and “under common Control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management, policies or affairs of a Person, whether through ownership of voting securities or general partnership or managing member interests, by contract or otherwise.

 

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Deadlock” means (a) a situation in which: (i) one of the matters set forth under Section 9.5 or Section 10.7 of the Agreement is proposed for a General Meeting or a meeting of the Board of Directors, as the case may be, has not been approved at two (2) consecutive meetings; (ii) such resolution has not been carried at such meetings by reason of any of the following: (i) an inability to form a quorum; or (ii) an inability to pass the resolution as required under this Agreement, the Articles of Incorporation or applicable Law; and (iii) such resolution has not been withdrawn by the proposing Member or Director; or (b) a situation where the PDA has been terminated and the Members do not reach mutual agreement to continue to operate the JV Company.

 

Energy Server” means the Bloom Energy Server® composed of the YFP, YPE, YPM and YAC modules and all components therein.

 

Equity Securities” means any units or capital stock of or other ownership interests in, the JV Company or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such units or capital stock of or other ownership interests in the JV Company.

 

External Modules” mean (i) the telemetry cabinet and (ii) the water deionization module.

 

Fuel Cell Module” of “FCM” means (i) the Hot Box and (ii) the BOP.

 

Fuel Cell Stack” means the solid oxide stack portion of the Hot Box.

 

General Meeting” means either an annual or extraordinary general meeting of members of the JV Company.

 

Governmental Approval” means, with respect to an action or transaction, any approval, license (manufacturing, export, import or otherwise), certificate, authorization, consent, order, report, permit, qualification, exemption, waiver or other authorization, or registration or filing, in each case issued, granted, given, filed or otherwise made available by or under the authority of all relevant national, local or administrative authorities of the United States of America, the states thereof, or Korea, as applicable, and any other applicable jurisdiction with respect to such action or transaction.

 

Hot Box” means (i) the Fuel Cell Stack, (ii) the Fuel Cell Stack integration components and (iii) heat exchangers.

 

Intellectual Property” means, collectively, all intellectual property and other similar proprietary rights in any jurisdiction or under any international convention, whether owned or held for use under license, whether registered or unregistered, including without limitation such rights in and to: (i) all patents and applications therefore, including all continuations, divisionals, continuations-in-part, and provisionals and patents issuing thereon, and all reissues, reexaminations, substitutions, renewals and extensions therefore, and inventions, invention disclosures, discoveries and improvements, whether or not patentable, (ii) all trademarks, service marks, trade names, brand names, trade dress rights, logos, slogans, corporate names and other source or business identifiers, Internet domain names and general intangibles of a like nature, together with the goodwill associated with any of the foregoing, and all applications, registrations, renewals and extensions thereof, (iii) all copyrights, copyrightable works, works of authorship and moral rights, and all registrations, applications, renewals, extensions and reversions thereof, (iv) all trade secrets (including know-how, formulae, manufacturing and production processes and techniques, technical data, designs, drawings and specifications), all trade secret rights in any information, formula, pattern, compilation, program, device, method, technique, or process and market and other data, and rights to limit the use or disclosure of any of the foregoing by any Person, (v) all material software related to such Person’s business (including data and related documentation), (vi) all other intellectual property or proprietary rights in technology and other proprietary or confidential information, including customer lists, supplier lists, pricing and cost information, and business and marketing plans and proposals, and (vii) all claims, causes of action and defenses relating to the enforcement of any of the foregoing.

 

JV Transaction Documents” means, collectively, the Articles of Incorporation, the PDA Amendment, the Bloom Energy License Agreement and the Trademark License Agreements.

 

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JV Transfer Price” means all costs incurred by the JV Company to produce the JV Scope, including but not limited to cost to produce the JV scope, administrative costs, corporate income taxes and other taxes, together with transfer pricing as required by applicable law and prudent accounting practices.

 

K-IFRS” means International Financial Reporting Standards, as applied in the Republic of Korea.

 

Korean Wonor KRW” means the lawful currency of the Republic of Korea.

 

Law” means any law, statute, regulation, decree, ordinance, guidelines, directives, requirement, or other legally binding regulation, any holding, decision or order of a court, or any order of all relevant national, local or administrative authorities having competent jurisdiction.

 

Lien” means any mortgage, pledge, lien, encumbrance, security interest, claim, voting agreement, conditional sale agreement, title retention agreement, option, power of attorneys, authorizations, and restriction or limitation of any kind, nature, character or description whatsoever.

 

Management Team” means the Representative Director, , the COO, and all other employees of the JV Company at the top level of employment as identified and agreed by the Parties to be tasked with the day-to-day operations and management of the JV Company.

 

Members” means, collectively, Bloom Energy and SK, and “Member” means each of Bloom Energy and SK.

 

Outstanding SK Additional Contribution Amount” means the aggregate amount of all SK Additional Contributions that have been made and remain un-recouped by SK pursuant to a distribution made in accordance with Section 4.1(d)(ii), which amounts shall be recorded in USD based on the USD set forth in the applicable Contribution Call Notice, other than the Initial Capital Contribution for the subscription of the Class B Units by SK, which shall be deemed to be USD$705,000.

 

Permitted Transferee” means any Person who is permitted to acquire Units from a Member (as the case may be) in accordance with this Agreement, and executes a Joinder Agreement pursuant to Section 8.2 below.

 

Person” means any individual, partnership, limited liability company, corporation, association, joint stock company, trust, entity, joint venture, labor organization, unincorporated organization, or governmental authority.

 

Representative Director” means the chief executive officer of the JV Company with power and authority to conduct, oversee, manage and supervise the day-to-day activities of the JV Company, as the highest ranking employee of the JV Company.

 

Scheduled Governmental Approvals” means the Governmental Approvals or actions of, filings with or notices to any governmental authority applicable to Bloom Energy, if any, which will be provided by Bloom Energy in writing in accordance with Article 21 of this Agreement within twenty (20) Business Days of the execution of this Agreement.

 

Scheduled Liens” means Liens applicable to Bloom Energy, if any, which will be provided by Bloom Energy in writing in accordance with Article 21 of this Agreement within twenty (20) Business Days of the execution of this Agreement.

 

SK Additional Contribution Cap Amount” means, as of any date of determination, the difference between (a) USD$11,905,000; less (b) the then-applicable Outstanding SK Additional Contribution Amount.

 

Subsidiary” with respect to any Party, means any Person that is controlled by such Party at any time during the period for which the determination of affiliation is being made. For the purposes of this definition,” a Party shall be deemed to “control” such Person if such Party, directly or indirectly, owns or holds more than 50% of the voting equity securities in such Person.

 

System” means the system composed of (i) Energy Server and (ii) the Ancillary Equipment for the installation and operation of the Energy Server.

 

Territory” means Korea.

 

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Transfer” or “Transferring” (or any correlative term) with respect to any Units or Equity Securities means, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, subject to a Lien, hypothecate or otherwise transfer such Units or Equity Securities or any participation or interest therein, whether directly or indirectly and whether or not voluntarily, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, Lien, hypothecation, or other transfer of such Units or Equity Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

 

US GAAP” means United States generally accepted accounting principles, as in effect from time to time, consistently applied.

 

Units” shall mean the ownership interests of the JV Units, composed of Class A Units and Class B Units.

 

YAC” means the a/c inverter unit module.

 

YFP” means the fuel processing unit module.

 

YPE” means the power enclosure module, including power electronics.

 

YPM” means the power module, composed of (i) the Fuel Cell Module and (ii) the YPE.

 

United State Dollarsor US$” means the lawful currency of the United States of America.

 

USA” means United States of America.

 

1.2 Index of Other Defined Terms. In addition to the terms defined above, the following capitalized terms shall have the respective meanings given thereto in the Articles indicated below:

 

Additional Contribution Amount 4.1(b)(ii)
Affiliation Designation 18.3
Affiliation Restructuring 18.3
Agreed Return 4.1(d)
Agreed Return Distribution Preference 4.1(d)
Agreement Preamble
Applications IP 12.2
Applications R&D 6.4
Audio Conferencing 10.3
Bloom Energy Preamble
Bloom Energy Directors 10.2(b)
Bloom Energy License Agreement 6.5(b)
Bloom Energy Marks 6.5(c)
Bloom Energy Quality Standards 6.2(c)
Bloom Preference Assets 15.2(a)
Business 6.1
Condition Precedent 3.4
Confidential Information 20.1

 

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Contribution Call Notice 4.1(b)
COO 11.2
Delaware Facilities 6.2(a)
Director 6.4
Disclosing Party 20.1
Distribution Preference 4.1(d)
Effective Date Preamble
Expense Policy 13.4
Financial Statements 13.2
General Meeting Notice 9.2
Indemnified Party 19.2
Initial Capital Contributions 3.3
Initial Operating Plan 13.3
Joinder Agreement 8.2
JV Company Recitals
JV Scope 6.2
JV Transaction Documents Agreement 6.6
KCC 4.3(d)
Korea Preamble
Losses" 19.2
Manufacturing Facilities 6.2(a)
Member Managers 14.2
Member Executives 14.2
Minimum Cash Balance 4.1
Operating Plan 13.3
Overage Distribution Preference 4.1(d)
Party” or “Parties Preamble
PDA Recitals
PDA Amendment 6.5(a)
Receiving Party 20.1
Recipient 20.3
SIAC 22
SK Preamble
SK Additional Contribution 4.1(b)(ii)
SK Additional Contribution Settlement 4.1(d)
SK Additional Contributions Trigger 4.1
SK Directors 10.2(b)
SK Marks 6.5(c)
SK Group 16.2(d)
Trademark License Agreement 6.5(c)
Transferor 8.2
Transferee 8.2

 

1.3 Rules of Interpretation.

 

(a) Every part of this Agreement shall be deemed to be supplementary and complementary with every other part of this Agreement and shall be read with and construed as a whole as much as practical. This Agreement has been fully reviewed and negotiated by the Parties and in interpreting this Agreement, no weight shall be placed upon which Party or its legal advisor drafted the provision being interpreted.

 

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(b) Headings in this Agreement are for reference purposes only and are not intended to be used to interpret this Agreement.

 

(c) References in this Agreement to Articles, Sections, Preamble, Recitals, Schedules or Exhibits are to Articles, Sections, Preamble, Recitals, Schedules or Exhibits of this Agreement. All Appendices will be deemed to be incorporated in this Agreement as if set forth in full herein. All Schedules and Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.

 

(d) Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders.

 

(e) General references to this Agreement and to other agreements shall be deemed to cover all valid amendments, modifications and supplements, and to include any and all exhibits, schedules, and other attachments hereto and thereto, as the same may be in effect at the time such reference becomes operative.

 

(f) The words, “hereto,” “hereof,” “herein,” “hereunder,” “hereby” and other words of similar import shall be deemed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

(g) The words “include,” “includes” and “including” will be deemed to be followed by the phrase “without limitation,” and the word “or” is not exclusive.

 

(h) Save where the context otherwise requires, the word “agree” shall require the parties to agree in writing.

 

(i) Acronyms describing System components in this Agreement are based upon nomenclature from the “Yuma” generation of Systems. References herein to such System components shall not be limited to the “Yuma” generation, and as Bloom Energy advances the generation of Systems sold in the Republic of Korea, such acronyms shall be deemed to reference the similar component used in such future generation.

 

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Schedule 3

 

Matters Requiring Unanimous Consent

 

Notwithstanding anything to the contrary contained in this Agreement, the consent of all Members shall be required for each of the following actions of the JV Company:

 

(a) To pay dividends on the capital stock of the JV Company;

 

(b) To create a new subsidiary or associated company;

 

(c) To enter into any joint venture or alliance arrangement with another Person; and

 

(d) To effect any matters requiring special resolutions (at least three fourths) under Korean law.

 

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Schedule 4

 

Matters Requiring Unanimous Approval of all Directors

 

Notwithstanding anything to the contrary, the unanimous approval of all Directors shall be required for each of the matters listed below:

 

(a)To incur or guarantee debt;

 

(b)To make a loan to any third party, including without limitation, any employee or Director of the JV Company;

 

(c)To make any investment, capital expenditure, asset acquisition or any other transactions requiring expenditure or incurrence of a liability, indebtedness or guarantee in excess of the amounts approved in the applicable Initial Operating Plan, individually or in aggregate if carried out in a series of transactions;

 

(d)To enter into any transaction with management or any member of the Board, except for employment contracts approved by the Board and transactions entered at arms-length terms which are no less favorable to the JV Company than could be obtained from unrelated third parties;

 

(e)To commence, participate in, compromise or settle any material action with respect to any litigation, judicial, administrative or arbitration proceeding relating to the JV Company;

 

(f)To approve the Initial Operating Plan;

 

(g)To enter into any exclusive license, lease, sale, distribution or other disposition of any Applications IP of the JV Company;

 

(h)To enter into any procurement or sales agreement in connection with the Delivery of Systems in excess of the MW provided for in the applicable Initial Operating Plan;

 

(i)To adopt or materially amend any agreements, understanding or arrangement of the JV Company with any Member or any Affiliate(s) of a Member (not including, for the avoidance of doubt, delivery by the JV Company of a Contribution Call Notice, the receipt of a SK Additional Contribution, or the issuance of Class B Units to SK in accordance with applicable Laws in connection with an SK Additional Contribution).

 

(j)To enter into any transaction with Bloom Energy, an Affiliate(s) of Bloom Energy and/or any employee, officer or director of Bloom Energy, other than in connection with the payment for the purchase by the JV Company of components of the System contemplated by the JV Scope; and

 

(k)To approve the Expense Policy and any amendment thereof.

 

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Schedule 5

 

Contact Information for Notices

 

Bloom Energy

 

Bloom Energy Corporation

Address: 4353 North 1st Street

Attn.: San Jose, California 95134

Phone: +1 (408) 543-1500

Attention: General Counsel

Email: Shawn.Soderberg@bloomenergy.com

 

with a copy to:

 

Lee & Ko

Address: Hanjin Building 63, Namdaemun-ro Jung-gu Seoul 04532 Korea

Attn.: Nelson Ahn

Phone: +82 2 772 4000

Email: nelson.ahn@leeko.com

 

SK

 

SK Engineering & Construction Co., Ltd.

Address: 19 Yulgok-ro 2-gil, Jongno-gu Seoul 03143, Korea

Attn.: Head of Business Group, the Fuel Cell Business Group (Wang Jae (Justin) Lee)

Phone: +82.2.3700.7912

Email: justinwlee@sk.com

 

with a copy to:

 

Shin & Kim

Address: D-Tower (D2), 23F, 17 Jongno 3-gil, Jongno-gu, Seoul 03155, Korea

Attn.: Jae Young Chang

Phone: +82.2.316.4350

Fax: +82.2.756.6226

Email: jychang@shinkim.com

 

33

 

 

Exhibit A

 

Form of Joinder Agreement

(JV Company)

 

JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT (this “Agreement”) is entered into this ____ day of ______, 2016 by and among:

 

(1)Bloom Energy Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware, United States of America with its head corporate office at 4353 North 1st Street, San Jose, California 95134 (“Bloom Energy”); and

 

(2)SK Engineering & Construction Co., Ltd., joint stock company (chusik hoesa in Korean) duly organized and validly existing under the laws of the Republic of Korea (“Korea”) with its registered office at Insa-dong7gil 32, Jongno-gu, Seoul, Republic of Korea (“SK”); and

 

(3)Bloom SK Fuel Cell, Ltd., a limited liability company (yuhan hoesa in Korean) duly organized and validly existing under the laws of Korea with its registered office at [*] (the “JV Company”).

 

Each of Bloom Energy and SK are referred to herein individually as a “Member” and collectively as the “Members.” The Members and the JV Company are referred to herein individually as “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Members entered into that certain Joint Venture Agreement dated September 24, 2019 (the “Joint Venture Agreement”) to set forth the terms and conditions regarding the establishment, management and operation of the JV Company and the Members’ respective rights and obligations as members of the JV Company; and

 

WHEREAS, pursuant to Section 2.2 of the Joint Venture Agreement, the Members agreed to cause the JV Company to enter into this Agreement as set forth herein below.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained below, the Parties hereby agree as follows:

 

1. Definitions

 

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Joint Venture Agreement.

 

34

 

 

2. Joinder

 

The JV Company hereby confirms and acknowledges that it has been supplied with a copy of the Joint Venture Agreement. By executing this Agreement, the JV Company shall become a party to the Joint Venture Agreement, as of the date hereof, and the JV Company hereby agrees to be bound by the terms and conditions set forth in the Joint Venture Agreement applicable to the JV Company, and shall assume all rights and obligations applicable to it as the JV Company under the Joint Venture Agreement, with the same force and effect as if originally named therein.

 

Except as amended pursuant to this Agreement, all of the provisions in the Joint Venture Agreement shall remain in full force and effect as set forth therein.

 

3. Governing Law

 

This Agreement shall be governed as to all matters, including validity, construction and performance, by and construed in accordance with the Laws of Korea.

 

4. Effective Date

This Agreement shall become effective upon execution hereof.

 

5. Notice

 

Any notices given to the JV Company under the Joint Venture Agreement pursuant to Article 21 of the Joint Venture Agreement shall be made to the:

 

Address:[*]

Attn.: [*]

Phone: [*]

Fax: [*]

Email: [*]

 

6. Language/Counterparts

 

This Agreement is executed in the English language and may be executed in any number of counterparts, each of which shall be deemed an original. Unless it is prohibited under the applicable mandatory provisions of law, the English language text of this Agreement shall prevail over any other language version or any translation thereof.

 

(Signature Page Follows)

 

35

 

 

Signature Page to the JV Company Joinder Agreement

 

IN WITNESS WHEREOF, the authorized representatives of the parties hereto have executed this Agreement as of the date first written above.

 

Bloom Energy Corporation

 

BY:    
Name:     
Title:    

 

SK Engineering & Construction Co., Ltd.

  

BY:    
Name:     
Title:    

 

[*]

 

BY:    
Name:     
Title:    

 

36

 

 

Exhibit B

 

Form of Joinder Agreement

(Permitted Transferee)

 

JOINDER AGREEMENT

 

The undersigned, [name of transferee], is acquiring, simultaneously with the execution of the relevant unit purchase agreement concerned, _______ units of [Class [*] Units] of [*] (the “Units”) at the purchase price of ___________ per unit from [name of transferring member].

 

As a condition to the acquisition of the Units, the undersigned has agreed to join in a certain Joint Venture Agreement dated as of [*], 2019 (the “Joint Venture Agreement”) by and among Bloom Energy, SK and the JV Company (each as defined therein) by means of this Joinder Agreement.

 

The undersigned acknowledges and agrees that execution of this Joinder Agreement is a condition precedent to the acquisition of the Units pursuant to the unit purchase agreement concerned.

 

In all respects, the undersigned agrees to become a party to the Joint Venture Agreement and agrees to be bound by all of the terms and conditions thereof as a member to the full extent.

 

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement this ______th day of ________, 20 .

 

[                                                     ]

 

By:    
Name:     
Title:    

 

 

37

 

Exhibit F

 

EXECUTION VERSION

 

AMENDMENT TO THE JOINT VENTURE AGREEMENT

 

This Amendment (this “Amendment”) dated as of October 23, 2021, to that Joint Venture Agreement (“JVA”) dated as of September 24, 2019, is executed by and between SK ecoplant Co., Ltd. (f/k/a SK Engineering & Construction Co., Ltd.) (“SK”) and Bloom Energy Corporation (“Bloom Energy”). SK and Bloom Energy shall be referred to individually as a “Party” and collectively as “Parties.” Capitalized terms used but not defined herein have the meanings ascribed to them in the JVA.

 

RECITALS

 

WHEREAS, the Parties are entering into that Securities Purchase Agreement (“SPA”), dated as of the date hereof, pursuant to which SK (or its designee) shall purchase from Bloom Energy certain shares of capital stock of Bloom Energy; and

 

WHEREAS, concurrently with the execution of the SPA, the Parties are entering into this Amendment to expand the scope of the business of the JV Company and targeted markets and amend certain portions of the JVA as set forth herein.

 

NOW THEREFORE, the Parties agree as follows:

 

1. Definitions. The corresponding definitions in Section 1.1 of Schedule 1 are hereby amended and restated as follows:

 

a.Ancillary Equipment” has the meaning set forth in the JVA.

 

b.Energy Server” has the meaning set forth in the PDA.

 

c.YFP” means “Component EP” as such term is defined in the PDA.

 

d.YPE” means “Component PE” as such term is defined in the PDA.

 

e.YAC” means “Component AC” as such term is defined in the PDA.
  
f.YPM” means “Component PM” as such term is defined in the PDA.

 

2. JV Scope. The lead-in paragraph of Section 6.2 is hereby amended by deleting it in its entirety and replacing it with the following:

 

“The scope of the business of the JV Company involving manufacture and assembly, of the System shall consist of, (a) during the fourth quarter of 2021, assembly of the YFP (and its successors) and the YAC (and its successors) portions of the Energy Server, (b) during the course of 2022 and in any case before the end of 2022, preparing for full assembly of the Energy Servers, including by making the necessary capital improvements, so that full assembly of Energy Servers will begin in January 2023, which will include YPE (and its successors), BOP support systems that provide fuel, air, exhaust, and water flows to and from the Hot Box, FCM, integration of the YPM (and its successors), which consists of the YPE and the FCM, and any other component, module and/or equipment necessary to support or assist the Energy Server (the “Full Assembly”) and (c) at all times, the Ancillary Equipment (collectively, the “JV Scope”).

 

3. Manufacturing Facilities. Section 6.2(a) is hereby amended by deleting it in its entirety and replacing it with the following:

 

“(a) Manufacturing Facilities. Bloom Energy and SK shall commence development and expansion of the existing manufacturing facility of the JV Company or development of a new manufacturing facility (“Manufacturing Facilities”). The commencement of Full Assembly activities at the Manufacturing Facilities shall be targeted for January 2023. In case of 2024, sales, marketing, distribution and deployment of the System in Korea and Other Territory shall be fulfilled from the Manufacturing Facilities. It is the understanding of the Parties that the JV Company must receive Fuel Cell Stack or the Fuel Cell Stack integration components of the Hot Box in a volume equivalent to the Original Quarterly Quantity (as defined in the PDA) in 2022, 2023 and 2024.”

 

 

 

 

4. Sell-Through Model. Section 6.3 is hereby amended by deleting it in its entirety and replacing it with the following:

 

“6.3 Sell-Through Model. Sales and purchases with respect to the Systems (or components thereof), as among Bloom Energy, SK and the JV Company, shall be structured pursuant to the principles set forth below:

 

(a) Sales to SK.

 

(i) Sales to SK by the JV Company. Each component of the System that constitutes JV Scope and is available for sale by the JV Company at the time of sale shall be exclusively sold by the JV Company to SK.

 

(ii) Sales to SK by Bloom Energy. Each component of the System that does not constitute JV Scope at the time of sale shall be exclusively sold by Bloom Energy to SK.

 

(iii) SK Procurement. SK shall continue to separately procure the Distributor-Procured Ancillary Equipment (as defined in the PDA) in accordance with the PDA.

 

(b) Sales to the JV Company

 

(i) Sales to the JV Company by Suppliers. The JV Company shall directly source and procure the JV Scope in accordance with Section 6.2(c) to the extent possible and develop its own supply network, all in accordance with Bloom Energy’s supplier qualification process and with Bloom Energy’s prior written approval. Suppliers qualified by the JV Company shall not be exclusive to the JV Company.

 

(ii) Sales to the JV Company by Bloom Energy. The Parties anticipate that the JV Scope will be sourced by the JV Company from third parties once Bloom Energy is satisfied that: (1) an adequate procurement and supply-chain organization has been developed within the JV Company; (2) competitive pricing has been established between the JV Company and third-party vendors; and, (3) the entire sourcing function is ready to be transitioned to the JV Company. If the conditions set forth above have been met to Bloom Energy’s reasonable satisfaction, the Parties will reconvene to determine: (1) when and to what extent the sourcing function will be transitioned to the JV Company; and (2) whether, and to what extent, Bloom Energy will discontinue sales to the JV Company after such transition.

 

(iii) Sales to Bloom Energy or Third Parties. If, under the PDA, SK does not exercise the Distributor ROFR, there is an applicable Exclusion, or the Distributor ROFR is no longer effective (in each case, as defined by the terms of the PDA), then JV Scope associated with such Product (as defined in the PDA) sale may be sold directly from the JV Company to Bloom Energy or to a third party.”

 

5. Termination. Section 16.2(d) is hereby amended by deleting it in its entirety and replacing it with the following:

 

“(d) By Bloom Energy if SK or any of its majority-owned subsidiaries competes with the JV Company or Bloom Energy by engaging in the fuel cell business at the time such entity is under the Control of SK.”

 

2

 

 

6. Publicity. The following shall be added as Section 18.4:

 

“18.4 Publicity. No public release or announcement concerning the transactions contemplated hereby shall be issued by any of the Party or JV Company without the prior written consent of the other Parties (which consents shall not be unreasonably withheld, conditioned or delayed), except for any such release or announcement as may be required by securities Law or other applicable Law or the applicable rules or regulations of any securities exchange or securities market, in which case the respective Party, as the case may be, shall (to the extent permissible under applicable Law) allow the other Parties, as applicable, reasonable time to comment on such release or announcement in advance of such issuance and the disclosing party shall consider the other Party’s comments in good faith.”

 

7. Miscellaneous.

 

a. Except for any amendments to the JVA made pursuant to this Amendment, all terms and conditions of the JVA will continue in full force and effect in accordance with its provisions on the date of this Amendment.

 

b. To the extent of a conflict or inconsistency between the JVA and this Amendment, this Amendment will prevail.

 

c. References to the JVA will be to the JVA, as amended by this Amendment.

 

d. This Amendment shall be governed by the laws of the Republic of Korea.

 

e. This Amendment may be executed in any number of counterparts, each of which shall be considered an original, and all of such counterparts shall constitute one Amendment. To facilitate execution of this Amendment, each of the Parties may execute and exchange by e-mail as a portable document format or other electronic imaging, counterparts of the signature page, which shall be deemed original signatures for all purposes.

 

f. Articles 21 through 24 of the JVA shall apply mutatis mutadis to this Amendment.

 

[Signature pages follow]

 

3

 

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their respective officers or other representatives thereunto duly authorized as of the date first above written.

 

  SK ecoplant Co., Ltd.
   
  By: /s/ Wang Jae Lee
    Name:  Wang Jae Lee
    Title: Head of Hydrogen Business Center

 

[Signature Page to Amendment to the Joint Venture Agreement]

 

 

 

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their respective officers or other representatives thereunto duly authorized as of the date first above written.

 

  Bloom Energy Corporation.
   
  By: /s/ Gregory Cameron
    Name:   Gregory Cameron
    Title: Chief Financial Officer

 

[Signature Page to Amendment to the Joint Venture Agreement]

 

 

 

 

Exhibit G

 

Amended and Restated Preferred Distributor Agreement

 

This Amended and Restated Preferred Distributor Agreement (this “Agreement”) is entered into as of October 23, 2021 (the “Effective Date”) by and among Bloom Energy Corporation (“Bloom Corp”), a corporation established under the laws of the State of Delaware, United States of America, Bloom SK Fuel Cell, LLC (“JV”), a limited liability company organized under the laws of the Republic of Korea, and SK ecoplant Co., Ltd. (f/k/a SK Engineering & Construction Co., Ltd.) (“Distributor”), a corporation established under the laws of the Republic of Korea. Each of Bloom Corp, JV and Distributor are referred to herein as a “Party,” and together, as the “Parties.”

 

RECITALS

 

WHEREAS, Bloom Corp develops, manufactures and supplies certain Products in connection with electric power facilities. Distributor is experienced and engaged in the business of engineering, procuring, and constructing electric power facilities on a turnkey basis, including the distribution of electric power generation components integrated into such facilities;

 

WHEREAS, Bloom Corp and Distributor entered into a preferred distributor agreement dated November 14, 2018 (the “PDA”);

 

WHEREAS, Bloom Corp and Distributor agreed to amend the PDA on the terms of an amendment agreement dated December 19, 2018, an amendment agreement dated January 30, 2019 and a joinder and amendment agreement dated April 17, 2020 pursuant to which JV became a party to the PDA (such amendments, collectively, the “Amendments”); and WHEREAS, the Parties have further agreed to amend and restate the PDA (as amended by the Amendments) in its entirety as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the Parties agree as follows:

 

AGREEMENT

 

1. Definitions and Rules of Interpretation.

 

(a) Definitions.

 

Adjusted Quarterly Quantity” shall have the meaning given to it in Section 2(e)(ii)(1) hereof.

 

Ancillary Equipment” means, collectively, the Company-Required Ancillary Equipment and the Distributor-Procured Ancillary Equipment.

 

Bloom Corp” has the meaning set forth in the Preamble.

 

Bloom Energy Server” means the solid oxide fuel cell server manufactured by Company, consisting of the exterior box and all components inside, including without limitation the Fuel Cell Stack and power electronics.

 

1

 

 

Bundang Standard” means a limitation of liability in each service year equal to twenty- five percent (25%) of the annual LTSA service fee for such service year; provided, that if liability for liquidated damages in any year exceed the foregoing limitation, then such underperformance will be debited from the performance bank for the following service year.

 

CCA” means that certain Commercial Collaboration Agreement, dated as of the date hereof, by and between Bloom Corp and Distributor.

 

Claims” shall have the meaning given to it in Section 11(b) hereof.

 

Commissioning Capacity Specification” means the Rated Capacity specification required for Products to pass the Commissioning Test applicable to such Products, as defined in the Purchase Order for such Products.

 

Commissioning Completion” shall have the meaning given to it in Section 4(a) hereof.

 

Commissioning Duration Specification” means the period of time during which the Commissioning Test for Products is performed, as defined in the Purchase Order for such Products.

 

Commissioning Efficiency Specification” means the efficiency specification required for Products to pass the Commissioning Test applicable to such Products, as defined in the Purchase Order for such Products.

 

Commissioning Test” means the testing of the Products for a Project to determine whether it achieves the Commissioning Efficiency Specification when brought to the Commissioning Capacity Specification for the Commissioning Duration Specification, calculated by dividing (a) the AC electrical output (expressed in Therms) of the Products as measured at the Products’ transformers, by (b) the total LHV fuel input (expressed in Therms) of the Products, as measured at the Products’ Company-designated gas meter. The Commissioning Test includes the pre-power up check, fuel flow test, water system test, communication system test, and items as may be specified in a Purchase Order.

 

Company” means (a) Bloom Corp, with respect to rights, obligations, liabilities, and other terms and conditions applicable to Products supplied by Bloom Corp; and (b) JV, with respect to rights, obligations, liabilities, and other terms and conditions applicable to Products supplied by JV.

 

Company Performance LD Cap” shall have the meaning given to it in Section 3(c)(ii) hereof.

 

Company-Required Ancillary Equipment” means equipment for a Project, other than the Bloom Energy Server, which Distributor must purchase from Company to enable installation and operation, including without limitation equipment set forth on Exhibit A, as may be updated and delivered to Distributor from time to time.

 

2

 

 

Company Trademarks” shall have the meaning given to it in Section 9(f) hereof.

 

Component AC” means the a/c inverter unit module; as such module may be updated by Bloom Corp in current and future generations of Energy Server.

 

Component FP” means the fuel processing unit module; as such module may be updated by Bloom Corp in current and future generations of Energy Server.

 

Component PE” means the power enclosure module, including power electronics; as such module may be updated by Bloom Corp in current and future generations of Energy Server.

 

Component PM” means the power module; as such module may be updated by Bloom Corp in current and future generations of Energy Server.

 

Confidential Information” shall mean (i) any information disclosed by Company to Distributor that is in written, graphic, machine readable or other tangible form and is marked “Confidential,” “Proprietary” or in some other manner to indicate its confidential nature; (ii) oral information disclosed by Company to Distributor pursuant to this Agreement that is designated as confidential at the time of disclosure, and reduced to a writing marked as confidential and delivered by Company to Distributor within a reasonable time; (iii) any information a reasonable person in the circumstances would understand to be confidential, including without limitation non-public information contained in an RFP submission and the pricing terms of this Agreement. Notwithstanding any failure to so identify it, all non-public information embodied in the Products, including without limitation the source code underlying object code and bitmaps embodied in the Products, shall be Confidential Information.

 

Customer” means any third party that obtains a Product integrated into a stationary solid oxide fuel cell power facility in the Territory for the purpose of generating electricity, and not for further distribution or resale.

 

Customer Agreement” means an agreement between a Customer and Distributor for the supply of Products. Where Distributor is the EPC Contractor for a Project, the Customer Agreement may be an EPC Agreement. Where Distributor is not the EPC Contractor for a Project, the Customer Agreement is not required to be the EPC Agreement.

 

Deficiency” shall have the meaning given to it in Section 2(e)(ii)(1) hereof.

 

Delivery” and “Delivered” shall have the meanings given to them in Section 7(d)(i) hereof.

 

Distributor Excess Performance LD Commitment” shall have the meaning given to it in Section 3(d)(i) hereof.

 

Distributor-Procured Ancillary Equipment” means equipment for a Project, not including the Bloom Energy Server and Company-Required Ancillary Equipment, which Distributor may procure from suppliers other than Company, for use in the installation of a Project.

 

3

 

 

Documentation” means published written documentation related to the specifications, performance, installation, use or maintenance of the Products provided by Company or a Supplier under this Agreement.

 

Energy Server” and Bloom Energy Server are interchangeable and means the solid oxide fuel cell Bloom Energy Server®, composed of the Component FP, Component PE, Component PM and Component AC modules and all components therein; as such server may be updated by Bloom Corp from time to time in its discretion.

 

EPC” means “engineering, procurement, and construction.”

 

EPC Contractor” is the entity responsible for engineering, procuring and constructing each Project.

 

Exception” shall mean Exceptions to Distributor ROFR and Exceptions to Company ROFR.

 

Excess Performance LD Agreement” shall have the meaning given to it in Section 3(d)(i) hereof.

 

Excess Performance LD Requirements” means that such Project (a) is not a Non- EPC Project, (b) has a performance liquidated damages cap under the LTSA that is equal to or less than the Bundang Standard, and (c) has performance commitments under the LTSA that are not in excess of the Standard Performance Commitments.

 

Final Deficiency” shall have the meaning given to it in Section 2(e)(ii)(1) hereof.

 

Final Readjusted Quarterly Quantity” shall have the meaning given to it in Section 2(e)(ii)(1) hereof.

 

Force Majeure” means any act or circumstance that delays or interferes with the affected Party’s performance of its obligations in accordance with this Agreement, if such act or event is beyond the reasonable control, and not the result of the fault or negligence, of the affected Party. “Force Majeure” shall include the following acts or events:

 

(i) acts of God;

 

(ii) acts of civil or military authority, war, riot, or other civil disturbances;

 

(iii) fire or explosions not caused by the Products;

 

(iv) the elements, extraordinarily extreme weather, and acts of nature, or environmental factors including storms, floods, dust, lightning and earthquakes;

 

(v) failure to maintain gas pressure or gas quality requirements at the input of the Product;

 

4

 

 

(vi) a malfunction or failure of the electric grid at the applicable site of the Project (e.g. a brownout or blackout), including without limitation, the failure of the electric grid to comply with, as applicable, the standards set forth in the IEEE Standard 1547 for Interconnecting Distributed Resources with Electric Power System, as may be amended from time to time;

 

(vii) sabotage, vandalism, theft, accident or destruction caused by a third party (other than a contractor retainer by either Party), that materially impair either Party’s ability to perform its obligations under this Agreement;

 

(viii) any issues caused by the addition or operation of onsite generation or electrical infrastructure not comprising the Products;

 

(ix) strikes, walkouts, lockouts or similar labor actions or disputes;

 

(x) any other cause or causes which are beyond such Party’s reasonable control; or

 

(xi) the inability to connect to the internet, or any other failure or unavailability of internet connectivity or availability for any cause whatsoever, including fiber optic cable cuts, interruption or failure of digital transmission links, hacker attacks.

 

“Force Majeure” shall not include a Party’s financial inability to perform under this Agreement.

 

Bookings Target” shall have the meaning given to it in Section 2(e)(vi) hereof.

 

Fuel Cell Stack” shall have the meaning given to it in JVA.

 

GenCo” means a generation company owned by the government of the Republic of Korea.

 

Hot Box” shall have the meaning given to it in the JVA.

 

Indemnified Parties” shall have the meaning given to it in Section 11(b) hereof.

 

Indemnifying Party” shall have the meaning given to it in Section 11(b) hereof.

 

Initial Term” shall have the meaning given to it in Section 13(a) hereof.

 

Invoice Due Date” means, for invoices issued by Company (a) prior to January 1, 2019, within sixty (60) days of receipt of such invoice; and (b) on or after January 1, 2019, within forty- five (45) days of receipt of such invoice.

 

JV” has the meaning set forth in the Preamble.

 

JVA” means the Joint Venture Agreement, dated September 24, 2019, by and between Bloom Corp and SK ecoplant Co., Ltd. (f/k/a SK Engineering & Construction Co., Ltd.), as may be amended, modified and supplemented, from time to time.

 

JV Scope” shall have the meaning given to it in the JVA.

 

5

 

 

kW” means kilowatts, and “MW” means megawatts. All references to kW and MW of Projects refer to the rated output of such Projects.

 

LD Backstop Payment” shall have the meaning given to it in Section 3(d)(ii) hereof. “Licensed Material” means (a) the Products, and (b) all documentation delivered hereunder by Company to Distributor for use pursuant to the terms and conditions of this Agreement.

 

Limited License” shall have the meaning set forth in Section 9(b) hereof.

 

LTSA” means the “long term service agreement” pursuant to which O&M services for a Project are rendered.

 

Major Subcontract” means any subcontract or series of subcontracts for the performance of Distributor’s obligations under this Agreement or under a Customer Agreement, having an aggregate value in excess of fifty percent (50%) of the engineering and construction budget for such Project.

 

Market” means Projects in the Territory that are not subject to an Exception.

 

Marketing Materials” shall have the meaning set forth in Section 9(h) hereof. “Non-EPC Project” shall have the meaning given to it in Section 3(d)(iii) hereof.

 

Notice of Commissioning Completion” shall have the meaning given to it in Section 4(a) hereof.

 

O&M” shall have the meaning given to it in Section 3(a) hereof.

 

Original Quarterly Quantity” shall have the meaning given to it in Section 2(e)(i)

 

Performance Insurance” means a policy of insurance covering Company’s non-payment of amounts due to Customer pursuant to a LTSA in connection with a refund, repurchase, or similar consideration for passage of title and possession to the applicable Products to Company.

 

Permitted Subcontractor” means a subcontractor set forth on Exhibit B, or otherwise approved by Bloom Corp in writing (following the passing of appropriate due diligence of such subcontractor conducted by Bloom Corp), not to be unreasonably withheld, delayed, or denied; provided, however, that in no event shall a competitor or potential competitor to Bloom Corp be a Permitted Subcontractor.

 

Pre-Commissioning Completion Warranty” shall have the meaning given to it in Section 4(b)(i) hereof.

 

Pre-Commissioning Completion Warranty Period” shall have the meaning given to it in Section 4(b)(i) hereof.

 

Product” means any of the Energy Server and Company-Required Ancillary Equipment and any Software, Documentation or Updates provided pursuant to this Agreement.

 

Product Price” shall have the meaning given to it in Section 6(a)(i) hereof.

 

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Prohibited Activities” shall have the meaning set forth in Section 9(c) hereof.

 

Project” means a stationary utility-scale or commercial & industrial fuel cell energy generation project composed of Energy Servers, together with applicable Company-Required Ancillary Equipment and Distributor-Procured Ancillary Equipment.

 

Purchase Agreement” shall mean the Securities Purchase Agreement, dated as of the date of this Agreement, by and between Bloom Corp and Distributor, as may be amended and restated, supplemented, or otherwise modified from time to time in accordance with its terms.

 

Purchase Order” shall have the meaning given to it in Section 7(b) hereof.

 

Purchase Period” shall have the meaning given to it in Section 2(e)(ii)(1) hereof.

 

Rated Capacity” means the aggregate rated capacity (expressed in kW) of the Bloom Energy Servers included in the Project, as set forth in a duly-accepted Purchase Order.

 

Readjusted Quarterly Quantity” shall have the meaning given to it in Section 2(e)(ii)(1) hereof.

 

Renewal Term” shall have the meaning given to it in Section 13(a) hereof.

 

ROFR” shall have the meaning given to it in Section 2(a) hereof.

 

ROFR Exercise Period” shall have the meaning given to it in Section 2(a) hereof.

 

Second Distribution Agreement” means that certain preferred distributor agreement, dated as of January 30, 2019, by and between Company and Second Distributor, as may be amended and restated, supplemented, or otherwise modified from time to time in accordance with its terms.

 

Second Distributor” means SK D&D Co., Ltd.

 

Standard Performance Commitments” means:

 

(a)Performance Guarantee (i.e. remedy is payment of liquidated damages): (i) 95% lifetime cumulative total output factor with banking (pre- transformer); (ii) if required by Customer, 56% lifetime cumulative LHV efficiency with banking (pre-transformer); provided that in case Products of 7.5 Generation is successfully developed and commercialized, then such lifetime cumulative LHV efficiency shall be adjusted subject to mutual agreement between Bloom Corp and Distributor; and

 

7

 

 

 

(b)Performance Warranty (i.e. remedy is repair, replacement, repurchase): (i) 90% lifetime cumulative total output factor with banking (pre- transformer); (ii) if required by Customer, 54% lifetime cumulative LHV efficiency with banking (pre-transformer); provided that in case Products of 7.5 Generation is successfully developed and commercialized, then such lifetime cumulative LHV efficiency shall be adjusted subject to mutual agreement between Bloom Corp and Distributor.

 

SOEC” means the Company-developed solid oxide electrolyzer.

 

Software” means the software provided by Company or a Supplier pursuant to this Agreement

 

Subsequent Deficiency” shall have the meaning given to it in Section 2(e)(ii)(1)

 

Suppliers” means any providers of third party software that is included with Software provided under this Agreement.

 

Technical Advisor” shall have the meaning give to it in Section 4(c) hereof. “Term” shall have the meaning given to it in Section 13(a) hereof. “Territory” means the Republic of Korea.

 

Third Party Software” has the meaning given to it in Section 9(d) hereof.

 

Transfer Price” means the sum of (a) JV’s cost of supplying the applicable Product comprising JV Scope (including administrative costs), plus (b) an amount required to comply with all transfer pricing laws and regulations promulgated by the Republic of Korea and the United States of America and their respective political subdivisions and states, as applicable.

 

Tri-Party Agreement” means that certain Tri-Party Consent and Agreement, dated as of January 30, 2019, by and among Company, Distributor, and Second Distributor, as may be amended, amended and restated, supplemented, or otherwise modified from time to time in accordance with its terms.

 

Updates” means any corrections, enhancements, bug fixes or other modifications for the Products provided to Distributor by Company pursuant to this Agreement.

 

Warranty Correction” shall have the meaning given to it in Section 4(b)(ii) hereof.

 

(b) Rules of Interpretation. Unless a clear contrary intention appears, (i) the singular includes the plural and vice versa; (ii) “include” or “including” means including without limiting the generality of the description preceding such term; (iii) the word “or” is not exclusive, unless otherwise expressly stated; (iv) headings are provided for the convenience of the parties and shall not affect the interpretation of a provision; (v) all references to days or time shall mean such day or time in California, U.S.A., except as may be expressly set forth in a Purchase Order; (vi) all references to money shall be in United States dollars; except as may be expressly set forth in a Purchase Order; and (vii) all references to “Korea” refer to the Republic of Korea. References to sections, exhibits and schedules are, unless otherwise indicated, references to sections, exhibits, and schedules to this Agreement. References to an exhibit shall mean the referenced exhibit and any sub-exhibits, schedules, sub-parts, components or attachments included therewith. References to a section shall mean the referenced section and all sub-sections thereof. All exhibits attached to this Agreement are incorporated herein by this reference and made a part hereof for all purposes.

 

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2. ROFR; Appointment of Distributor.

 

(a) Mutual Right of First Refusal. Distributor shall have the right of first refusal during the Term (the “Distributor ROFR”) to serve as the distributor of the Products for any fuel cell generation project in the Territory that is not subject to an Exception to Distributor ROFR. The Parties will follow the framework set forth in the CCA for future SOEC distributorship rights for the Distributor. Company shall have the right of first refusal during the Term (the “Company ROFR”; and each of Distributor ROFR and Company ROFR, a “ROFR”) to serve as Distributor’s supplier of the generation equipment for any fuel cell generation project in the Territory that is not subject to an Exception to Company ROFR. Each ROFR is exercisable within ninety (90) days (“ROFR Exercise Period”) from the date that Company or Distributor, as applicable, delivers written notice to the counterparty, requesting such counterparty’s determination of whether it will exercise its ROFR for such project. When a Party requests the counterparty’s determination of whether it will exercise its ROFR for a project the Party requesting such determination shall continue to serve as the supplier or distributor (as applicable to Company or Distributor, respectively) for such project.

 

(b) A Party’s ROFR will automatically terminate, and the counterparty proposing such fuel cell generation project may determine whether to pursue such project, by itself or with third parties, without the involvement of Party holding such ROFR, if the Party holding such ROFR does not deliver written notice within the ROFR Exercise Period that it wishes to exercise its right to serve as supplier or distributor (as applicable to Company and Distributor, respectively), for such project. The ROFR is not a right to require that Company or Distributor consummate any particular sales or service transaction for any particular Project. Company and Distributor may each, in its sole discretion and for any reason, determine whether to pursue or consummate any Project and enter into a Purchase Order. If a Party chooses not to pursue or consummate any transaction for which it has exercised the ROFR within the ROFR Exercise Period, such Party shall not thereafter pursue or consummate such Project by itself or with a third party. For the avoidance of doubt, a Party shall have no right with respect to any project for which it does not exercise its right to serve as supplier or distributor (as applicable to Company and Distributor, respectively) within the ROFR Exercise Period.

 

(c) Exceptions to Right of First Refusal.

 

(i) During the Initial Term of this Agreement:

 

(1) The following projects are exempt from Distributor’s ROFR (each, an “Exception to Distributor ROFR”):

 

a. any project for which Distributor is ineligible to participate due to applicable law or applicable procurement rules (e.g. RFP rules) for such Project;

 

b. any project with an existing Company customer headquartered outside of the Republic of Korea requesting a commercial & industrial application;

 

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c. D&D Project pursuant to Second Distributions Agreement;

 

and

 

d. any project which is not a stationary utility-scale or commercial & industrial fuel cell generation project in the Territory.

 

(2) The following projects are exempt from Company’s ROFR (each, an “Exception to Company ROFR”):

 

a. the SKIPC Hydrogen Fuel Cell project with Doosan for phosphoric acid fuel cells under development as of the Effective Date.

 

(ii) Prior to the commencement of any Renewal Term, the Parties shall mutually agree in writing regarding the Exceptions to Distributor ROFR and Exceptions to Company ROFR to be applicable during such Renewal Term.

 

(iii) During the Term, the Parties can mutually agree to add, delete, or modify the Exceptions to Distributor ROFR and Exceptions to Company ROFR.

 

(d) Material Breach. If either Party offers a project that is subject to the counterparty’s ROFR (and is not subject to an applicable Exception) herein without first sending a notice to the Party holding such ROFR in accordance with Section 2(a), it shall constitute a material breach of this Agreement, but such breach may be cured by revoking such offer to the third party within five (5) days of written notice thereof and thereafter proceeding in accordance with ROFR procedures set forth in Section 2(a).

 

(e) Commitment.

 

(i) Commitment. Distributor shall purchase, on a take or pay basis, the following volume of Energy Servers for each of the periods set forth below (with respect to each quarter of each calendar year, the quantity indicated below for such quarter, the “Original Quarterly Quantity”):

 

Calendar Year

Quarter 1 (MW) Quarter 2 (MW) Quarter 3 (MW) Quarter 4 (MW)
2021 N/A N/A N/A 39.6
2022 20 20 20 40
2023 20 30 50 50
2024* 40 40 60 60

 

*2024 Original Quarterly Quantity subject to Section 2(e)(ii)(5) and 2(e)(iii).

 

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(ii) Commitment Shortfall.

 

(1) Roll Over; Limitation. With respect to any calendar quarter, in the event Distributor fails to accept Delivery of all of such quarter’s Original Quarterly Quantity (the amount of such deficiency for such quarter, the “Deficiency”), such Deficiency shall be rolled over to the subsequent quarter and be included in the Original Quarterly Quantity of such subsequent quarter (such adjusted Original Quarterly Quantity, “Adjusted Quarterly Quantity”), and if Distributor fails to accept Delivery all of the Adjusted Quarterly Quantity by the end of such quarter (the amount of such deficiency for such subsequent quarter, the “Subsequent Deficiency”), then such Subsequent Deficiency shall be rolled over to the subsequent quarter and be included in the Original Quarterly Quantity of such subsequent quarter (such adjusted Original Quarterly Quantity, “Readjusted Quarterly Quantity”), and if Distributor fails to accept Delivery of all of the Readjusted Quarterly Quantity by the end of such quarter (the amount of such deficiency for such subsequent quarter, the “Final Deficiency”), then such Final Deficiency shall be rolled over to the subsequent quarter and included in the Original Quarterly Quantity of such subsequent quarter (the “Final Readjusted Quarterly Quantity”). At the end of such quarter, Distributor shall either (i) accept Delivery of the Final Readjusted Quarterly Quantity or (ii) pay the Company the amount Distributor would have paid to Company had it accepted Delivery of the Final Readjusted Quarterly Quantity. Distributor’s failure to perform either (i) or (ii) of the immediately preceding sentence shall constitute a material breach by Distributor of this Agreement. The period commencing on the first day of the quarter in which a Deficiency occurs and ending on the day immediately preceding the first anniversary of such first day shall hereinafter be referred to as the “Purchase Period.” For illustrative purposes only, if Distributor fails to satisfy the Original Quarterly Quantity for the third quarter of 2022, and subsequently fails to satisfy the Adjusted Quarterly Quantity in the fourth quarter of 2022, then any such deficiency (whether rolled over from the first quarter or the second quarter of the Purchase Period) shall be satisfied by the end of the second quarter of 2023 and no further roll over of any deficiency shall be permitted.

 

(2) Premium. The Product Price applicable to any amount rolled over from the preceding quarter pursuant to Section 2(e)(ii)(1) above shall be increased by 5% per annum and shall begin to accrue from the first day of the quarter following the quarter in which the Deficiency occurred until paid (on a basis of a “first in, first out” principle such that the first volumes of orders following a quarter in which a deficiency occurs will deemed to be orders of the previous quarter’s deficiency until the previous quarter’s deficiency has been reduced to zero) (thePremium”).

 

(3) Excess. In the event that Distributor satisfies more than 100% of such quarter’s Original Quarterly Quantity, the excess shall be credited against the Original Quarterly Quantity of the subsequent quarter.

 

(4) Satisfaction of Commitment. For purposes of this Section 2(e), commitment shall be deemed satisfied when the Product is Delivered.

 

(5) 2024. Delivery of up to 50 MW in markets other than the Territory and U.S. may be credited against Distributor’s commitment to purchase Energy Servers in any quarter of year 2024 set forth in Section 2(e)(i) above and/or, sales, and/or distribution of SOEC equivalent (50 MW SOFC = 120 MW SOEC) at the Product Price of the Energy Server in 2024 multiplied by 2.6.

 

(iii) Commitment in Years 2023 and 2024. Notwithstanding anything to the contrary contained herein, if the JV cannot perform Full Assembly (as defined in the JVA) as contemplated by Section 6.2 of the JVA for reasons attributable directly and solely to Bloom Corp, which shall not include Force Majeure or any other reasons beyond Bloom Corp’s or the JV’s contemplation or control, then this Section 2(e) and the obligations to purchase Original Quarterly Quantities in 2024 set forth in this Section 2(e) shall be adjusted by agreement between the Parties and in direct proportion to the shortfall addressed in this Section 2(e)(iii).

 

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(iv) Amendment to Commitment and JV Scope. Notwithstanding anything to the contrary contained herein, if the Clean Hydrogen Energy Portfolio Standards and any other rules and regulations applicable or relevant to the Products that are promulgated or amended by the government of Korea deviate materially from the Parties’ economic-value expectations, which are that the Clean Hydrogen Energy Portfolio Standards incentive will be substantially similar to the existing renewable-portfolio-standard (RPS) incentive based on renewable energy credits (RECS) of at least one-hundred thousand Korean Won per megawatt hour (KRW 100,000/ MWh) then Distributor and Bloom Corp shall negotiate in good faith to amend the Original Quarterly Quantities set forth in Section 2(e)(i) above and the JV Scope.

 

(v) GenCo RFP. If Distributor delivers written notice to Company requesting Company’s determination of whether it will exercise its ROFR for a GenCo RFP, and is selected as the winner of such GenCo RFP but Company chooses not to execute a Purchase Order for such GenCo RFP, then the MW capacity of the transaction shall be applied to the annual target for such calendar year as though a Purchase Order had been executed; provided, however, that notwithstanding the foregoing, such MW capacity shall not be applied for such calendar year if the reason that Company chose not to exercise its ROFR or execute a Purchase Order arose from either (a) risks to protection of Company’s intellectual property; or (b) the lack of a Distributor Excess Performance LD Commitment for such transaction.

 

(vi) Bookings Target. By no later than two (2) months prior to the end of each calendar year, Distributor shall provide the Company with a twelve (12) month non-binding bookings target of its anticipated requirements for Product in the Territory for the subsequent calendar year, which may be updated by Distributor from time to time during the course of such subsequent year (each, a “Bookings Target”). Distributor’s initial Bookings Target is set forth below. Each Bookings Target is a non-binding estimate and shall not obligate Distributor to purchase the volume of Product set forth in such Bookings Target.

 

 

Calendar Year Quantity
2022 150 MW
2023 200 MW
2024 250 MW

 

(vii) Appointment.

 

(1) Subject to the terms and conditions of this Agreement and the Tri- Party Agreement, Company hereby appoints Distributor, for the Term, as an authorized distributor of the Products from Company for redistribution to Customers pursuant to each Project in the Territory for which Distributor has exercised the ROFR pursuant to Section 2(a). This appointment is nonexclusive with respect to Projects outside the Territory, Projects subject to an Exception, Projects for which Distributor has not exercised the ROFR pursuant to Section 2(a), and Projects for which contracted sales occur following the expiration of the Term or earlier termination of this Agreement in accordance with its terms. In such cases, Company reserves the right to license and distribute the Products directly and through any other remarketers, dealers, distributors, sales representatives or other channels and for any purposes. In such cases, Company reserves the right to market and sell upgrades for the Products and/or other products or services to any Customer that has previously obtained a licensed Product from Distributor. Subject to the terms and conditions of this Agreement, Distributor will be free to establish its own pricing for Products.

 

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(2) Each license of Products from Company to Distributor pursuant to this Agreement shall be subject to, and governed by, this Agreement, including without limitation the intellectual property provisions set forth in Section 9, and the export and import restrictions set forth in Section 14. Company shall not be bound by, and specifically objects to, any term, condition or other provision which is different from or in addition to the provisions of this Agreement and which is submitted by Distributor in any order, receipt, acceptance, confirmation, correspondence or otherwise, unless Company specifically agrees to such provision in a writing signed by Company.

 

(f) Second Distributor. The Parties acknowledge that: (a) Company and Second Distributor have entered into the Second Distribution Agreement; and, (b) the Parties and Second Distributor have entered into the Tri-Party Agreement. The Parties Agree that, notwithstanding anything in this Agreement to the contrary, including without limitation Section 2 hereof, Second Distributor may serve as a distributor of Company in the Territory and Company may supply Products and Ancillary Equipment to Second Distributor for Projects in the Territory, in each case without any obligation to notify or receive the consent of Distributor. Product and Ancillary Equipment purchases by Second Distributor shall not, however, be credited towards Distributor’s take-or-pay purchase obligations under this Agreement. The Parties agree that all disputes related to or arising out of Company’s relationship with Second Distributor or any supply or service transaction conducted between Company and Second Distributor shall be exclusively and finally resolved pursuant to the terms and conditions of the Tri-Party Agreement.

 

3. Resale Terms and Conditions.

 

(a) Intellectual Property.

 

(i) Distributor shall comply with all intellectual property limitations set forth in Section 9.

 

(ii) Distributor shall make best efforts to ensure that the intellectual property provisions of the Customer Agreement (and, if applicable, related RFP bid materials) comply with the following requirements, and shall receive Company’s written consent prior to executing a Customer Agreement (which may occur as early as submission of RFP bid materials) which does not comply with such provisions: (a) Company shall have the exclusive right to conduct all monitoring, control, operations, and maintenance activities (“O&M”) for each Project during the life thereof; (b) Customer and all third parties shall otherwise comply with the Prohibited Activities; (c) Company shall have a right of re-purchase upon abandonment, or attempted sale or transfer of the Products or Project; and (d) pursuant to the terms and conditions of the LTSA, Company shall have a right of re-purchase upon termination of the LTSA for any reason.

 

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(b) Customer Agreement.

 

(i) Responsibility. Any Customer Agreement consummated with respect to a Project shall be by and between Distributor and Customer, and Company shall have no obligation or liability thereunder. As between Distributor and Customer, Distributor shall be responsible for the performance of all obligations thereunder, including obligations with respect to development, permitting, engineering, procurement, and construction. Distributor shall not subcontract any obligation under the Customer Agreement or this Agreement unless such subcontractor is a Permitted Subcontractor; provided, however, that any and all Major Subcontracts shall be subject to Company’s prior written consent. Distributor shall be solely responsible for the engagement, management and payment of its subcontractors, and shall be solely responsible for the acts, omissions or defaults of its subcontractors and their agents, representatives and employees.

 

(ii) Terms and Conditions. In the event that Customer of a Project imposes unfavorable terms and conditions in its Customer Agreement that conflicts with or deviates from this Agreement, both Parties shall use best efforts to negotiate with Customer the terms and conditions of the Customer Agreement as the equal level with this Agreement.

 

(iii) EPC Contractor. The Parties intend that Distributor will be the EPC Contractor for any Project for which it has exercised the ROFR. However, if Company provides its prior written consent regarding the third party chosen to serve as the EPC Contractor for such Project (a Project for which Distributor is not the EPC Contractor, a “Non-EPC Project”) and the terms of such relationship, then Distributor may nonetheless exercise the ROFR for such Project and the Parties may execute a Purchase Order for such Project. All activities of any EPC Contractor (including without limitation Distributor) shall be subject to the intellectual property provisions set forth in Section 3(a), and Company (and not Distributor or any third party) shall perform all activities which require opening a Bloom Energy Server, including without limitation in connection with the commissioning of each Project. For the avoidance of doubt, EPC Contractor pricing shall be taken into consideration by Distributor when Distributor determines whether to exercise a ROFR, and the pricing set forth in Section 5 shall not be subject to change arising out of costs and expenses related to the EPC Contractor of a Project.

 

(iv) Buy-Down LDs. Liquidated damages commonly referred to as “buy-down liquidated damages” and assessed prospectively for future performance of a Project based upon performance during commercial operation of such Project (e.g. one (1) year or two (2) years of commercial operation), do not form part of Company’s offer for any Project. If buy-down liquidated damages are required by the rules of procurement for any project (e.g. the rules of a request for proposals), then the Parties may, by mutual written agreement, decide in writing to pursue such Project upon terms and conditions with respect to such buy-down liquidated damages which are mutually acceptable to the Parties; provided, that neither Party shall be under any obligation to enter into any such agreement.

 

(v) Performance Bond. If a Customer Agreement requires Distributor to post a “performance bond” or equivalent financial security to secure performance of the Delivery of the Products and the passage of the Commissioning Test (a “Performance Bond”), the Parties shall set forth in the applicable Purchase Order the requirements of such financial security, and the Parties’ respective responsibility therefor; provided, that in no event shall Company’s responsibility for posting a Performance Bond exceed the lesser of (a) the pro-rata percentage of the contract price under such Customer Agreement attributable to the supply of the Products; and (b) one hundred percent (100%) of the Product Price of such Products as set forth in the Purchase Order therefor. The contractual liability of Company for failure to timely Deliver the Products or for the Products to pass the Commissioning Test, together with the draw conditions for a Performance Bond posted by Company, shall be set forth in the Purchase Order. The Parties shall make best efforts to negotiate in the Customer Agreement to minimize exposure related to such liabilities.

 

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(c) LTSA.

 

(i) LTSA Negotiation. Company shall be solely authorized and responsible for all marketing (including bid materials), negotiation, and execution of any LTSA for any Project that is, or is proposed to be, subject to a Customer Agreement. Distributor may not, without Company’s prior written consent, make any representation on Customer’s behalf with respect to any LTSA, including without limitation representation regarding pricing, performance commitments, or limitations of liability. Distributor shall have the opportunity to participate in LTSA negotiations with Company and Customer for any LTSA that is subject to the Distributor Excess Performance LD Commitment. Distributor shall not have liability pursuant to any LTSA, except as set forth in an Excess Performance LD Agreement.

 

(ii) Company Performance Liquidated Damages. Notwithstanding anything to the contrary in this Agreement, Company’s total liability for performance liquidated damages for any Project that is not a Non-EPC Project, for the term of the LTSA of such Project, shall in no event exceed (a) during the first ten (10) years of commercial operation, a total of five percent (5%) of the pre-tax Bloom Energy Server equipment sale price from Company to Distributor; and (b) for each succeeding ten (10) year period, a total of five percent (5%) of the pre-tax Bloom Energy Server equipment sale price from Company to Distributor (the foregoing, collectively, the “Company Performance LD Cap”).

 

(d) Distributor Backstop.

 

(i) Distributor Excess Performance LD Commitment. Distributor shall sign an agreement with Customer (“Excess Performance LD Agreement”) for any Project which meets the Excess Performance LD Requirements, which Excess Performance LD Agreement shall provide that, in the event that Customer requires liquidated damages in excess of the Company Performance LD Cap, then (a) Distributor (and not Company) shall furnish such excess liquidated damages; (b) Customer’s sole recourse for such excess liquidated damages shall be to Distributor (and not to Company); and (c) such liquidated damages from Distributor shall be applied only after liquidated damages from Company (up to the Company Performance LD Cap) have been applied (the foregoing, collectively, the “Distributor Excess Performance LD Commitment”). The Parties will use best efforts to negotiate with such Customer a total performance liquidated damage cap under the LTSA that does not exceed the Bundang Standard. If the performance liquidated damage cap for a Project is equal to or less than the Bundang Standard, Distributor shall provide the Excess Performance LD Commitment, as described above. The Parties will also use best efforts to negotiate with such Customer an agreement that the Excess Performance LD Agreement will be a separate instrument from the LTSA.

 

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(ii) LD Backstop Payment. In consideration of such Distributor’s obligation to provide the Distributor Excess Performance LD Commitment, Company shall pay to Distributor Thirty Dollars per kilowatt of Rated Capacity per year (USD$30/kW/year) with respect to the Project subject to such LTSA (the “LD Backstop Payment”). If Company receives payments from Customer pursuant to the LTSA in Korean Won, then Company shall pay Distributor an amount equivalent to the LD Backstop Payment in Korean Won, at the foreign exchange rate used by the Customer to pay Company pursuant to the LTSA. Company shall pay the LD Backstop Payment on a pro-rata basis with the timing of payments received for such year by the Company from the Customer pursuant to the LTSA; provided, that each such pro-rata portion of the LD Backstop Payment shall be paid from Company to Distributor within thirty (30) days from receipt of the applicable Customer payment to Company. For illustrative purposes, if the Customer pays the LTSA fee to the Company on a quarterly basis (i.e. four (4) times per year), then the pro-rata quarterly LD Backstop Payment from Company to Distributor would be $7.50/kW/quarter.

 

(iii) Exceptions. The Parties intend that Distributor will be the EPC Contractor for each Project for which Distributor has exercised the ROFR. If Distributor is the EPC Contractor for any such Project, then Distributor shall provide the Distributor Excess Performance LD Commitment for such Project. If Distributor is not the EPC Contractor for any such Project, then Distributor shall not be required to provide the Distributor Excess Performance LD Commitment for such Non-EPC Project.

 

(iv) Confirmation Instrument. In connection with each Excess Performance LD Agreement that Distributor executes with a Customer, the Parties shall execute an instrument setting forth their respective obligations pursuant to this Section 3(d), which instrument shall not expire prior to the expiration of the Excess Performance LD Agreement.

 

4. Commissioning and Pre-Commissioning Completion Warranty.

 

(a) Commissioning. Company shall perform the Commissioning Test at the earliest practicable date after the Products are mechanically complete as a complete Project (or, if such Project is in phases, a complete phase of such Project), and have all governmental authorizations and third party consents required to bring such Project (or phase thereof, as applicable) to operational power levels and perform the Commissioning Test. Upon passage of the Commissioning Test, Company shall deliver to Distributor a notice of commissioning completion, substantially in the form set forth in Exhibit D (“Notice of Commissioning Completion” and the date of commencement of operations set forth therein, the “Commissioning Completion Date”). If the Products fails to pass the Commissioning Test, Distributor may submit a claim under the Pre-Commissioning Completion Warranty to Company for verification pursuant to Section 4(b).

 

(b) Pre-Commissioning Completion Warranty.

 

(i) Pre-Commissioning Completion Warranty. Subject to Section 4(b)(iii), Company warrants to Distributor, that, during the period commencing upon Delivery and continuing until the achievement of Commissioning of the Products for a Project (“Pre-Commissioning Completion Warranty Period”), such Products shall be free from physical defects in design, materials and workmanship that prevent such Products from achieving Commissioning Completion (the “Pre- Commissioning Completion Warranty”). The Pre-Commissioning Completion Warranty is not transferable to any third person, including a Customer, without Company’s prior written consent.

 

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(ii) Warranty Correction. If Products fail to satisfy the Pre-Commissioning Completion Warranty during the Pre-Commissioning Completion Warranty Period, Distributor shall make a written warranty claim to Company and Company shall verify whether such warranty claim is valid. Company shall either repair or replace (as determined by Company) the applicable Products (a “Warranty Correction”) and re-perform the Commissioning Test within times acceptable to Customer; provided, that if Company has commenced and thereafter diligently pursued such Warranty Correction, but the nature of the specific remedy cannot be performed at the time requested by Customer, then such period shall conform to terms and conditions under the Purchase Order. Company may, as it deems necessary or appropriate, re-perform a Warranty Correction within such period (as may be extended pursuant to the foregoing sentence). Upon completion of the Warranty Correction, Company shall notify Distributor in writing, and Commissioning Test shall be re- performed. Breach of the Pre-Commissioning Completion Warranty shall not be extended to the Pre- Commissioning Completion Warranty Period after the achievement of Commissioning Completion. If Company fails to provide a Warranty Correction within the time required by the Customer Agreement, and as a result Customer rejects the Products, then Company shall pay to Distributor, as Distributor’s sole and exclusive remedy, the Refund Amount. The “Refund Amount” is an amount equal to (a) amounts refunded from Distributor to Customer pursuant to such Customer Agreement caused by such rejection; plus (b) direct third party costs and expenses incurred by Distributor to restore such Site in satisfaction of the terms and conditions of such Customer Agreement (including amounts in connection with disassembling works constructed at the Site); provided, however, that in no event shall Company’s liability for a Refund Amount exceed the sum of (X) the aggregate Product Price of such Products, plus (Y) the costs incurred by Distributor to install such Products (without Distributor markup or margin), plus (Z) the direct third party costs incurred by Distributor to restore such Site (without Distributor markup or margin) (such sum, the “Refund Cap”).

 

(iii) Warranty of JV Scope. For the avoidance of doubt, Products constituting JV Scope shall be subject to the Pre-Commissioning Completion Warranty set forth in Section 4 of this Agreement. Warranty claims, if any, for Products constituting JV Scope shall be directed to either Bloom Corp or JV, as the supplier of such Products pursuant to the Purchase Order for such Products; and in the event the applicable defect underlying a warranty claim arises from the JV Scope supplied by JV, JV shall be responsible for the Pre-Commissioning Completion Warranty with respect to such defect and in the event the applicable defect underlying a warranty claim arises from Company- Required Ancillary Equipment supplied by Bloom Corp, Bloom Corp shall be responsible for the Pre- Commissioning Completion Warranty with respect to such defect.

 

(iv) Exclusions. The Pre-Commissioning Completion Warranty shall not cover any obligations on the part of Company to the extent caused by or arising from (a) the Products affected by loss, vandalism, or other third-party actions or omissions after Delivery; (b) any failure relating to failure of natural gas supply to conform to the required specifications; (c) removal of any safety device by any person other than Company, (d) accidents, abuse, improper third party testing, (e) Force Majeure events, or (f) commissioning, operation, repair, opening or accessing, or modification of the Products by anyone other than Company or Company’s authorized agents.

 

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(c) Technical Advisor. During the period of construction, Company shall make reasonably available an employee of Company or its affiliates during business hours (telephonically, via email, or at the Site, as may be mutually agreed and coordinated) to serve as technical advisor regarding Company technology (a “Technical Advisor”). Such Technical Advisor shall provide interpretive advice to Distributor regarding the technical specifications, installation manual, and other Product- specific information. Such advice shall exclude any supervision, management, or evaluation of Distributor’s or its contractors’ personnel, agents or subcontractors and work relating thereto, and any responsibility for planning, scheduling or management of Distributor’s work (including in connection with development or permitting).

 

5. Post-COD Warranty Matters. The Parties expect that, following Commissioning Completion of the Products (a) the Products shall not be within the scope of Distributor’s warranty to a Customer, as set forth in the Customer Agreement; and (b) Company’s performance commitments and financial responsibility under the LTSA do not include responsibility for damaged, defective, or otherwise underperforming Ancillary Equipment. If the foregoing expectation is not fulfilled in any Customer Agreement or LTSA, the Purchase Order for such Products shall reflect the Parties’ respective responsibility to the other Party, if any, for the damaged, defective, or otherwise underperforming Products or Ancillary Equipment.

 

6. Prices and Payment.

 

(a) Pricing.

 

(i) The “Product Price” applicable to Products and the services provided by Technical Advisors pursuant to this Agreement shall be as set forth in the table below, as applicable to Bloom Corp or JV, respectively, as supplier. In all cases, the “Product Price” shall be exclusive of taxes and the costs and expenses of Performance Insurance. The Parties will meet to discuss in good faith further updates to the Product Price and will incorporate any further changes to the Product Price in the table set forth below in a further amendment to this Agreement; provided that the price of Energy Server shall not be changed.

 

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UNTIL DECEMBER 31, 2022

 

 

  Bloom Corp JV
1 Energy Server $3,560/kW minus (A) minus (B) N/A
2 Component AC + Component FP N/A (A) The Transfer Price applicable to the Component AC + Component FP
3 Company-Required Ancillary Equipment N/A (B) The Transfer Price applicable to the Company- Required Ancillary Equipment
4 Technical Advisory Services (C) $80/kW N/A

 

FROM JANUARY 1, 2023 UNTIL DECEMBER 31, 2023

 

 

  Bloom Corp JV
1 Hot Box $3,430/kW minus (A) minus (B) N/A
2

JV Scope: Hot Box

Integration,

Component AC,
Component FP,

Component PE,

Company-Required

Ancillary Equipment

N/A (A) The Transfer Price applicable to the JV Scope
3 Technical Advisory Services (B) $80/kW N/A

 

FROM JANUARY 1, 2024 UNTIL DECEMBER 31, 2024

 

 

  Bloom Corp JV
1 Hot Box $3,230/kW minus (A) minus (B) N/A
2

JV Scope: Hot Box

Integration,
Component AC,

Component FP,

Component PE,

Company-Required

N/A (A) The Transfer Price applicable to the JV Scope

 

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(ii) Product Price Discussion. No later than June 30, 2023, Distributor and Company shall discuss whether an adjustment to the Product Price is appropriate for Projects with Purchase Orders to be executed in 2024, based upon market conditions, technological development, and other relevant factors. If the Parties do not enter into a mutual written amendment to this Agreement (which neither Party shall be under any obligation to conclude), then the above price shall continue to apply to Projects with Purchase Orders executed in 2024.

 

(b) GenCo RFPs. With respect to any Project to be bid into a request for proposals issued by a GenCo, Distributor may demonstrate to Company’s satisfaction, by delivery of a true and complete budget threshold document issued by such GenCo, that lower pricing is required to participate in such RFP. In such case, Company may determine whether to proceed with bidding such Project into the RFP upon lower pricing mutually-agreed with Distributor, or whether not to proceed with such bid. In addition, the Parties shall discuss the principal terms upon which they will participate in such RFP.

 

(c) Invoicing. Company shall invoice Distributor the Product Price applicable to the Products set forth in a Purchase Order as follows:

 

(i)Deposit: ten percent (10%), invoiced upon receipt of a Purchase Order.

 

(ii)Delivery: ninety percent (90%), invoiced upon Delivery of such Products.

 

(d) Payment. Except as expressly provided in this Agreement, payment obligations are non- cancellable, and payments made hereunder shall be irrevocable and non-refundable. Distributor shall pay all invoices by no later than the Invoice Due Date. If Distributor fails to make any payment when due, Company may, at its option and without prejudice to its other remedies, suspend performance, defer delivery or seek remedies available at law or in equity without liability to Company.

 

(e) Taxes. Taxes, duties or excises are not included in the fees charged for the Product, except as may be set forth in the Incoterm applicable to the shipment of such Product, as set forth in Section 7(d)(i)(1). If Company pays any taxes, duties or excises which are not included in the fees charged for the Product, Company shall itemize such taxes, duties or excises as a separate item on its invoices to Distributor, and Distributor shall reimburse Company for such taxes, duties or excises; provided, that Distributor shall not be required to make any such reimbursement if it provides a valid tax exemption certificate to Company prior to Delivery of such Product.

 

(f) Late Payments. Interest shall accrue daily on amounts which are not paid by the Party owing such amount when due pursuant to this Agreement at a rate equal to the lesser of six percent (6%) per year or the highest rate permitted by applicable law (if less than six percent (6%) per year). In the event that any payment to Company due hereunder is overdue, Company reserves the right to suspend performance until such delinquency is corrected.

 

7. Supply of Products.

 

(a) Forecasts. During the Term, Distributor shall provide Company with a good faith rolling twelve (12) month forecast, updated quarterly, for units of the Products (in kW) to be sold by Distributor hereunder during each month in such twelve (12) month period.

 

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(b) Purchase Orders. Distributor shall initiate purchases under this Agreement by submitting written purchase orders to Company substantially in the form set forth as Exhibit C (each, a “Purchase Order”). Purchase Orders shall state unit quantities, unit descriptions, requested delivery dates, shipping instructions, and other matters, which shall in each case be subject to the Parties’ mutual agreement. Neither Party shall be obligated to execute a Purchase Order, nor shall any Purchase Order be binding upon either Party until signed by each of Distributor and Company. Once executed by both Parties, Purchase Orders shall be non-cancelable for any reason other than due to a Force Majeure event that causes the cancellation of such Project or in Distributor’s participation in such Project. For the avoidance of doubt, JV shall not have authority to execute Purchase Orders on behalf of Bloom Corp, and Bloom Corp shall not have authority to execute Purchase Orders on behalf of JV. In no event shall Bloom Corp be required to include Company-Required Ancillary Equipment or services performed by Technical Advisors in a Purchase Order for Energy Servers.

 

(c) Packing. All Products shipped by Company to Distributor under this Agreement shall be packaged in accordance with instructions set forth in the applicable Purchase Order.

 

(d) Title; Risk of Loss; Acceptance; and Shipment.

 

(i) Delivery. Title, risk of loss, and acceptance of the Products shall pass from Company to Distributor upon Delivery.

 

(1) “Delivery” shall occur as follows:

 

a. Products Supplied by Bloom Corp: when Products supplied by Bloom Corp arrive at the named destination place in the Republic of Korea as stated in the relevant PO, the Products are “Delivered.”

 

b. Products Supplied by JV: when Products supplied by JV are made available Ex Works at JV’s manufacturing facilities, the Products are “Delivered.”

 

(2) Risk of Loss. The risk of loss specified in Section 7(d)(i)(1)(a) shall govern the Parties’ respective liabilities. As between Company and Distributor, the insurance of Distributor shall be responsible for insurable losses occurring on or after passage of risk of loss from Company to Distributor pursuant to Section 7(d)(i)(1).

 

(e) Product Updates. Company shall have the right to make design modifications to Products from time to time and in its sole discretion, at any time prior to the execution of a Purchase Order for such Product. Following execution of a Purchase Order for a Product, Company shall not, without the prior written consent of Distributor, make design modifications to the Products set forth in such Purchase Order that represent a material change to such Products’ form, fit, or function.

 

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8. Marketing and Administration.

 

(a) Independent Contractor. Distributor is an independent contractor, not an employee, agent, or representative of Company. Distributor is not authorized to, and will not attempt to, create or assume any obligation or liability, express or implied, in the name of or otherwise on behalf of Company. Without limiting the generality of the foregoing, Distributor will not enter into any contract, agreement or other commitment, make any warranty or guaranty, or incur any obligation or liability in the name or otherwise on behalf of Company. This Agreement will not be interpreted or construed as creating or evidencing any agency, franchise, association, joint venture or partnership among the Parties.

 

(b) Marketing. Distributor shall market, promote, and distribute the Products in the Territory as Company’s “preferred partner” in the Territory and as otherwise mutually agreed by the Parties. These efforts may include without limitation the use of mailings, advertising, seminars, and other customary marketing techniques. Company will provide support to Distributor for Market development activities, and may choose to engage in marketing activities.

 

(c) Feedback. Distributor shall provide Company with prompt written notification of any comments or complaints about the Products that are made by Customers, and of any problems with the Products or their use that Distributor becomes aware of. Such written notification shall be the property of Company, and shall be considered to be part of Company’s Confidential Information.

 

(d) Audit. Company shall have the right to inspect and audit Distributor’s marketing, use, deployment, and exploitation of the Products for compliance with the terms and conditions of this Agreement.

 

(e) Force Majeure. Neither Party shall be liable under any circumstance, nor be deemed to be in breach of this Agreement, for any delay or failure in performance or interruption of service resulting from Force Majeure. In the case of a delay due to an event of Force Majeure, affected deadlines shall be extended by a period of time equal to the time lost due to Force Majeure.

 

9. Ownership.

 

(a) Proprietary Rights. Company or its Suppliers own all right, title and interest (including without limitation all intellectual property rights), in and to the Products and any modifications or improvements thereto, whether or not made by Company. Distributor acknowledges that the licenses granted under this Agreement do not provide Distributor with title to or ownership of any intellectual property rights contained in or related to the Products, but only a right of limited use under the terms and conditions of this Agreement. Except as expressly set forth in Section 3 and this Section 9, Company reserves all rights and grants Distributor no licenses of any kind hereunder. Distributor hereby assigns to Company all information, including but not limited to feedback or suggestions, provided to Company with respect to the Products, and such information shall be deemed Confidential Information.

 

(b) License Grant. Subject to the terms and conditions of this Agreement, Company grants to Distributor a limited, non-exclusive, non-transferable, royalty-free license to market, sell and offer to sell the Products to Customers within the Market during the Term, including use of all Licensed Material for such purpose (the “Limited License”).

 

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(c) Restrictions. The Limited License does not include any rights to, and Distributor shall not (and shall not permit any Customer to) conduct any of the following activities (such activities, the “Prohibited Activities”):

 

(i) Disassemble, decompile or “unlock”, translate, decode or otherwise reverse engineer, or attempt in any manner to reconstruct or discover, any part of the Products or other Licensed Materials;

 

(ii) Modify, adapt, enhance, or create a derivative work of the Products or other Licensed Materials. Only Company shall have the right to modify, adapt, enhance or create a derivative work of the Products or any other Licensed Material;

 

(iii) Use the Licensed Materials to develop or manufacture a product that is similar to Products or other Licensed Materials;

 

(iv) Open the covering, access the interior, or give others the opportunity to open the covering or access the interior, of any Products. Only Company and its authorized representatives may open or access such interior;

 

(v) Copy or remove any proprietary notices, labels, or marks on Licensed Materials without Company’s prior written consent;

 

(vi) Except as expressly permitted by this Agreement, assign, sublicense, distribute, rent, lease, loan, sell, transfer, network, publish, make available, or permit any third party access to the Products or other Licensed Materials;

 

(vii) Develop intellectual property, or help any third party develop intellectual property, which could be asserted against Company’s intellectual property in the Products or other Licensed Materials;

 

(viii) File any action (or directly or indirectly support or be involved in any such action) in any court or agency which in any way attack the validity, enforceability, ownership, or protectability of any intellectual property of Company (including trade secrets), Confidential Information of Company, or other proprietary Company information; or

 

(ix) Cause or permit any third party to do any of the foregoing.

 

(d) Software. Distributor acknowledges that the Software may contain or be provided with copyrighted software of Company’s Suppliers as identified in associated documentation or other printed materials (“Third Party Software”) which is obtained under a license from such Suppliers. All third party licensors and Suppliers retain all right, title and interest in and to such Third Party Software and all copies thereof, including all copyright and other intellectual property rights. Distributor’s use and distribution of any Third Party Software shall be subject to and Distributor shall comply and cause all Customers to comply with the applicable restrictions and other terms and conditions set forth (i) in this Agreement or the Documentation applicable to the Software and (ii) in such Third Party Software documentation or printed materials.

 

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(e) Proprietary Notices. Distributor will ensure that all copies of the Products will incorporate copyright and other proprietary notices in the same manner that Company incorporates such notices in the Products or in any manner reasonably requested by Company. Distributor will not remove any copyright or other proprietary notices incorporated on or in the Products by Company.

 

(f) Use of Trademarks. During the term of this Agreement, Distributor may advertise the Products under the trademarks, marks, and trade names that Company may provide from time to time (the “Company Trademarks”). Distributor understands that Company has applied for applicable federal and state registration of certain of its trademarks and agrees, upon Company’s request, to so indicate on the Products and in any advertisement, promotional materials or other documents that contain the Products’ names. Nothing herein will grant to Distributor any right, title or interest in Company Trademarks. At no time during or after the term of this Agreement will Distributor challenge or assist others to challenge Company Trademarks or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to those of Company. Distributor will follow reasonable trademark usage guidelines communicated by Company, will provide examples of its usage of Company Trademarks upon request by Company, and will promptly correct any deviations from such guidelines upon notification by Company of such deviations.

 

(g) Use of Trade Names. Distributor will present and promote the sale of the Products fairly. Distributor may represent itself as an authorized Distributor of Company and use Company’s product names in Distributor’s advertising and promotional media provided (i) that Distributor conspicuously indicates in all such media that such names are trademarks of Company and (ii) that Distributor submits all such media to Company for prior approval and satisfies the requirements set forth in paragraph (c) above. Upon termination of this Agreement for any reason, Distributor will immediately cease all use of the Products’ names and Company Trademarks and, at Distributor’s election, destroy or deliver to Company all materials in Distributor’s control or possession which bear such names and trademarks, including any sales literature. Distributor will not challenge any intellectual property rights claimed by Company in such trademarks.

 

(h) Use of Marketing Materials. Company may provide Distributor with marketing materials, such as marketing literature, Company logos, and/or artwork, as Company may determine in its sole discretion (the “Marketing Materials”). Company hereby grants Distributor permission to use, reproduce, translate, and distribute the Marketing Materials solely in connection with Distributor’s distribution of Products hereunder. Distributor hereby assigns to Company all intellectual property rights in any and all translations of the Marketing Materials. Upon termination of this Agreement for any reason, Distributor will immediately cease all use of the Marketing Materials and, at Distributor’s election, destroy or deliver to Company all Marketing Materials in Distributor’s control or possession.

 

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10. Confidentiality.

 

(a) Confidential Information. During the period this Agreement is in effect and for ten (10) years thereafter, the Parties shall hold Confidential Information of the other Party in confidence and use the same degree of care, but in no event less than reasonable care, to avoid disclosure of Confidential Information as it uses with respect to its own confidential and proprietary information of similar type and importance. The receiving Party agrees to disclose Confidential Information only to its employees or other agents who have a bona fide need to know solely to perform its obligations or exercise its rights hereunder, who will each agree to comply with this section. The receiving Party shall not sell, license, sublicense, publish, display, distribute, disclose or otherwise make available the Confidential Information to any third party nor use such information except as authorized by this Agreement. The receiving Party shall immediately notify the disclosing Party of the unauthorized disclosure or use of the Products or Confidential Information and to assist Company in remedying such unauthorized use or disclosure. It is further understood and agreed that any breach of this Section 10 or Section 9(c) is a material breach of this Agreement and any such breach would cause irreparable harm to the disclosing Party, entitling the disclosing Party to injunctive relief in addition to all other remedies available at equity or law. Notwithstanding the above, non-public information contained in an RFP and the prices hereunder shall be Confidential Information of both Parties.

 

(b) Exceptions. Notwithstanding the above, receiving Party shall be under no obligation not to disclose any information that it can prove: (i) was in the public domain at the time it was disclosed or has entered the public domain through no fault of the receiving Party; (ii) was known to the receiving Party, without restriction, at the time of disclosure, as demonstrated by files in existence at the time of disclosure; (iii) is disclosed with the prior written approval of the disclosing Party; (iv) becomes known to receiving Party, without restriction, from a source other than the disclosing Party without breach of this Agreement by receiving Party; or (v) is disclosed pursuant to the order or requirement of a court, administrative agency, other governmental body, or the requirements of a public stock exchange; provided, however, that receiving Party shall provide prompt notice thereof to disclosing Party to enable disclosing Party to seek a protective order or otherwise prevent or restrict such disclosure.

 

11. Indemnification.

 

(a) Intellectual Property Indemnification.

 

(i) Company shall indemnify, defend and hold Distributor harmless against any third party action (including a Customer) alleging that the Products infringe any valid U.S. patent or copyright, and Company shall pay all settlements entered into, and all final judgments and costs (including reasonable attorneys’ fees) awarded against Distributor in connection with such action, provided Distributor (i) notifies Company promptly in writing of any such action, (ii) gives Company exclusive control and authority over the defense or settlement of such action, (iii) does not enter into any settlement or compromise of any such action without the prior written consent of Company and (iv) provides all reasonable assistance to Company at the request and expense of Company. If any Licensed Material becomes, or in the opinion of Company may become, the subject of an infringement claim, Company may, at its option, (i) procure for Distributor the right to continue using such Licensed Material, (ii) modify or replace such Licensed Material with substantially equivalent non- infringing products, or (iii) require the return of such Licensed Material and refund to Distributor a pro-rata portion of the Product Price of such Licensed Material on a depreciated basis, without depreciation for the first year after achievement of Commissioning, and thereafter on a straight line amortization of the Product Price equal to the term of the LTSA (e.g. nineteen year amortization for a twenty-year LTSA); with the provision of remedies pursuant to this Section 11(a)(i) being the sole and exclusive remedies for an infringement claim subject to this Section 11(a).

 

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(ii) Company shall have no indemnification obligations with respect to any third party action alleging that (i) the use of any Products, or any part of them, in combination with products or technology not supplied by Company, or (ii) any service or other process utilizing any Products, infringes any third party intellectual property right, and in such event Distributor will indemnify, defend and hold harmless Company, and its officers, directors and employees, against any such action, and Distributor will pay all settlements entered into, and all final judgments and costs (including reasonable attorneys’ fees) awarded against such party in connection with such action, provided Company (i) notifies Distributor promptly in writing of any such action, (ii) gives Distributor exclusive control and authority over the defense or settlement of such action, (iii) does not enter into any settlement or compromise of any such action without Distributor’s prior written consent and (iv) provides all reasonable assistance to Distributor at the request and expense of Distributor.

 

(b) Mutual Indemnification. Except as otherwise set forth in this Agreement, each Party (such Party providing indemnification, the “Indemnifying Party”) shall indemnify, defend and hold harmless the other Party and its affiliates, and each of their respective directors, officers, members, shareholders, employees and contractors (collectively, the “Indemnified Parties”), from and against all third party (not including affiliates, third party beneficiaries, or persons with an equity or security interest the Indemnified Party or its assets) claims, demands, actions, causes of action, and proceedings (“Claims”) for injury or death of any person or loss or damage to property, in each case to the extent caused by the Indemnifying Party’s gross negligence or willful misconduct; provided, that the Indemnified Party shall provide the Indemnifying Party prompt notice of any such Claim, authorize the Indemnifying Party to settle or defend such Claim, provide the Indemnifying Party control of the defense of such Claim, and assist such defense (at the Indemnifying Party’s reasonable expense) upon request of the Indemnifying Party. Notwithstanding the foregoing, an Indemnifying Party shall not be required to indemnify, defend or hold harmless for any Claim arising out of the negligence, willful misconduct or breach of this Agreement by the Indemnified Party. The provision of remedies pursuant to this Section 11(b) are the sole and exclusive remedies for an indemnification claim subject to this Section 11(b).

 

12. Limited Warranties. EXCEPT AS EXPRESSLY PROVIDED PURSUANT TO THE PRE- COMMISSIONING COMPLETION WARRANTY SET FORTH IN SECTION 4(b) AND SECTION 5 HEREIN, THE PRODUCTS ARE PROVIDED “AS IS”, AND COMPANY AND ITS SUPPLIERS MAKE NO WARRANTY, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO PRODUCTS OR ANY PART THEREOF, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR THOSE ARISING FROM COURSE OF PERFORMANCE, DEALING, USAGE OR TRADE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NEITHER COMPANY NOR ANY OF ITS SUPPLIERS WARRANT THAT THE PRODUCTS OR ANY PART THEREOF WILL MEET DISTRIBUTOR’S REQUIREMENTS OR BE UNINTERRUPTED, OR ERROR-FREE, OR THAT ANY ERRORS IN THE PRODUCTS WILL BE CORRECTED.

 

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13. Term and Termination.

 

(a) The term of this Agreement shall commence on the Effective Date and terminate on December 31, 2024 (the “Initial Term”). Thereafter, this Agreement shall be renewed automatically for three (3) year renewal terms (each a “Renewal Term”), unless not extended by either Party pursuant to the following sentence (the Initial Term and any Renewal Term, together, the “Term”). Commencing six (6) months prior to the expiration of the Initial Term or any Renewal Term, the Parties shall discuss whether to extend the Term for the immediately succeeding Renewal Term, upon mutually-agreed terms; provided, that if the annual target established pursuant to Section 2(e) for the concluding year has been satisfied, neither Party may prevent the Term for extending for the immediately succeeding Renewal Term. During each such six (6) month period, neither Party may terminate this Agreement. Subject to the foregoing, if the annual target for the concluding year has not been satisfied, then upon the conclusion of such six (6) month period, either Party may, without liability, terminate this Agreement by written notice to the other Party, with such termination to become effective upon the expiration of such calendar year (without renewal).

 

(b) Termination for Cause. Except as set forth in the last sentence of this Section 13(b), if either Party defaults in the performance of any material provision of this Agreement, then the non- defaulting Party may give written notice to the defaulting Party that if the default is not cured within thirty (30) days this Agreement will be terminated. If the non-defaulting Party gives such notice and the default is not cured during the thirty-day period, then this Agreement shall automatically terminate at the end of that period. Notwithstanding the foregoing, if Distributor breaches the provisions of Section 9 hereof, then the Company shall be entitled to terminate this Agreement effective immediately upon delivery of written notice to Distributor.

 

(c) Termination for Insolvency and Related Events. This Agreement shall terminate, without notice, (i) upon the institution by or against either Party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such Party’s debts, (ii) upon either Party’s making an assignment for the benefit of creditors, or (iii) upon either Party’s dissolution or ceasing to do business.

 

(d) Effect of Termination. Purchase orders and services contracted during the Term shall survive the expiration or earlier termination of this Agreement. Subject to the foregoing, if this Agreement is terminated, then all of Distributor’s rights and licenses with respect to the Products shall terminate, provided that each Customer license granted in accordance with this Agreement shall survive in accordance with its terms, subject to termination for default in accordance with its terms. Upon termination, Distributor must destroy any and all promotional literature, price quotations, order forms, data, information and other items received by Distributor from Company in connection with this Agreement.

 

(e) Limitation of Liability. In the event of termination by either Party in accordance with any of the provisions of this Agreement, neither Party shall be liable to the other, because of such termination, for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of either Party. Termination shall not, however, relieve either Party of any obligations incurred prior to the termination, including, without limitation, i) the obligation of Distributor to pay Company for Products purchased prior to such termination or ii) the obligation of Company to provide purchased Products to Distributor.

 

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(f) Survival of Certain Terms. The provisions of Sections 1 and Sections 9-13, and Section 17-18 of this Agreement, and all payment obligations incurred during the term of this Agreement, shall survive the expiration or termination of this Agreement for any reason. All other rights and obligations of the parties shall cease upon termination of this Agreement.

 

14. Import and Export Requirements. Distributor shall, at its own expense, pay all import and export licenses and permits, customs charges and duty fees, if any, and shall take all other actions, if any, required to accomplish the export and import of the Products purchased by Distributor. The Products are specifically subject to U.S. Export Administration Regulations. Distributor agrees to strictly comply with all export, re-export and import restrictions and regulations of the Department of Commerce or other agency or authority of the United States or the Territory or other applicable countries, and not to transfer, or authorize the transfer of, directly or indirectly, the Products or any direct product thereof to a prohibited country or otherwise in violation of any such restrictions or regulations. Distributor agrees to ensure that the Products provided hereunder are only installed in the Territory. Distributor’s failure to comply with this Section is a material breach of this Agreement.

 

15. Compliance with Laws; Business Practices.

 

(a) Each Party shall comply with, and ensure that its contractors and employees comply with, all laws and regulations of the United States and all other jurisdictions in which such Party carries out activities under or related to this Agreement, including laws prohibiting bribery and other unethical business practices. Without limitation, the Parties’ performance of this Agreement shall comply with including, but not limited to the Foreign Corrupt Practices Act of 1977 of the United States and, as applicable, the Improper Solicitation and Graft Act (Kim Young Ran Act), and, all other applicable anti-corruption legal requirements and with all applicable embargo and other economic sanctions legal requirements.

 

(b) Notwithstanding any provisions herein to the contrary, each Party shall indemnify, defend and hold harmless the other Party and its officers, directors, affiliates, employees and representatives from and against any claim, loss, damages, liability, expense or cost of whatever nature, including reasonable attorneys’ fees and costs, arising out of or related to such Party’s or its employee’s or agent’s failure to comply with applicable law as provided in this Section 15(a) or the terms and conditions of Section 15(c). The obligation of each Party under this Section 15 shall survive the termination or expiration of this Agreement. Any breach or threatened breach of Section 15(a) and Section 15(c) by a Party shall give the other Party the immediate right to terminate this Agreement.

 

(c) Anti-Bribery and Anti-Corruption.

 

(i) Representations and Warranties.

 

(1) Distributor represents, warrants and covenants to Company that it will comply with, and shall ensure that its stockholders, directors, officers, employees, agents, representatives, and contractors (including Permitted Subcontractors) comply with, the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), as amended (15 U.S.C. §§78dd-1 et seq.), and other applicable anti-corruption laws and regulations applicable to a Party in carrying out the activities or related to this Agreement (“Anti-Corruption Laws”).

 

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(2) Distributor represents, warrants and covenants to Company that neither it nor any of its stockholders, directors, officers, employees, agents, representatives, or its contractors (including Permitted Subcontractors), has made, offered, promised or authorized or will make, offer, promise or authorize, in connection with the sale of the Products or other performance contemplated in this Agreement, any payment or transfer of anything of value, directly or indirectly, to any person for the purpose of influencing any act or decision of such person or securing an improper advantage to assist Company or its affiliates in obtaining or retaining business in connection with this Agreement.

 

(ii) Annual Certification. Distributor agrees that it will, at the request of Company (but no more than once per calendar year), provide Company with a certification in the form hereto attached and incorporated by reference as Exhibit F.

 

(iii) Training. Distributor agrees that it will cause each person who is involved in carrying out the activities under this Agreement (including without limitation stockholders, directors, officers, employees, agents and representatives, if such persons are involved in carrying out activities under this Agreement) to participate in training related to compliance with Anti-Corruption Laws, such training of which shall consist of such persons taking part in the anti-corruption training program of the Company in Korea or on-line (in which case Korean subtitles shall be prepared and provided by the Company).

 

(iv) Audit Rights. For the purpose of allowing Company to monitor Distributor’s compliance with this Section 15 and/or any Anti-Corruption Laws, the Company shall have the right to conduct an investigation or audit, or have its authorized representatives conduct an investigation or audit of Distributor’s fuel cell business related books, records, and other documentation relevant to Distributor’s activities under this Agreement, to verify compliance with this Section 15 and with Anti-Corruption Laws. Distributor shall cooperate with such investigation or audit, which shall be conducted through the review of information and materials provided by Distributor at the request of the Company to which is relevant to verification of compliance with this Section 15 or with Anti- Corruption Laws, and Distributor shall grant Company the ability to conduct interviews and Q&A sessions with persons relevant to such audit. Distributor shall cooperate with information and materials requested by the person conducting the audit under this Section.

 

(v) Notice of Breach. Distributor agrees that, should it learn or have reason to know of (a) any payment or transfer of anything of value or any offer, promise or authorization of any payment or transfer of anything of value to any person for the purpose of obtaining or retaining business or securing any improper advantage for or on behalf of Company or its affiliates; or (b) any other development during the term of this Agreement that in any way makes inaccurate or incomplete any representation, warranty or covenant in this Section 15, Distributor will immediately advise Company of such knowledge and the basis known to Distributor related to such knowledge.

 

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(vi) Relationships to Officials.

 

(1) During the Term, Distributor represents, warrants, and covenants that it is not and shall not become, and that none of Distributor’s directors, officers, employees, agents and representatives are an employee or officer of a government of any country, including any federal, regional or local department , agency or enterprise owned or controlled by the government; an employee or officer of a political party (for the avoidance of doubt, excluding memberships in any political party); an employee or officer of a public international organization (for the avoidance of doubt, excluding industry related associations and foundations); or a candidate for political office.

 

(2) Distributor shall implement a program to cause its directors, officers, employees, agents and representatives who are involved in carrying out the performance of this Agreement to notify Distributor if any immediate family member of such person is an employee or officer of a government of any country, including any federal, regional or local department, agency or enterprise owned or controlled by the government; an employee or officer of a political party (for the avoidance of doubt, excluding membership is any political party); an employee or officer of a public international organization (for the avoidance of doubt, excluding industry related associations and foundations); or a candidate for political office. Distributor shall, on a quarterly basis, notify Company of the results of such program, and identify the persons who have notified Distributor of the fact that such person’s immediate family member(s) is holding such position(s), and the position(s) that is held by such family member(s).

 

(vii) Meetings with Government Officials; Reports. Each Party understands and acknowledges that Distributor may meet with government officials in connection with the performance of this Agreement. In the event that Distributor proposes to meet with any government official(s) with the title of director (kwa jang) or higher in connection with the performance of this Agreement, Distributor shall provide prior notice to the Company of such proposed meeting, including the name(s) and title of the government officials and a description of the meeting agenda and shall invite the Company to attend all such meetings. In the event the Company decides not to attend or unable to attend such meetings, Distributor shall provide promptly a summary of each such meeting, including the name and title of the attendees to the Company.

 

(d) Breach and Remedy.

 

(i) Non-Curable Breach. Distributor’s breach of Section 15(a) or Section 15(c)(i) constitutes a non-curable breach of this Agreement. In the event of Distributor’s breach of Section 15(a) or Section 15(c)(i), Company shall have the right, exercisable immediately upon written notice to Distributor, to terminate this Agreement, and Company’s obligations to Distributor shall be immediately terminated, including without limitation payment of fees (provided, that any and all fees that are accrued and not paid as of the date of termination shall become due and payable as of the date of termination).

 

(ii) Curable Breach. Distributor’s breach of Section 15(b) or any subsection of Section 15(c) other than Section 15(c)(i), if remaining uncured twenty (20) days after written notice from Supplier, shall constitute a breach of this Agreement. In the event of Distributor’s breach of Section 15(b) or any subsection of Section 15(c) other than Section 15(c)(i) remains uncured after such period, Distributor shall have the remedies set forth in Section 15(d)(iv).

 

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(iii) Other Variations. In the event that a Party violated Anti-Corruption Laws prior to the Effective Date of the Joinder and Amendment No. 3 to the PDA, dated April 17, 2020, or violates Anti-Corruption Laws and such violation is not in connection with this Agreement, then the non-violating Party shall have the remedies set forth in Section 15(d)(iv).

 

(iv) Consequences of Curable Breaches and Other Violations.

 

(1) In the event that Distributor breaches this Agreement in the manner set forth in Section 15(d)(ii), or a Party violates Anti-Corruption Laws in the manner set forth in Section 15(d)(iii), and such breach or violation has an adverse impact on the non-defaulting Party (as determined by the non-defaulting Party in its discretion), each Party shall use reasonable commercial efforts to work together to avoid exercising any of the remedies set forth in Section 15(d)(iv)(2) (including through taking actions that can address the adverse impact on the non-defaulting Party); provided, that this will not in any way limit the right of the non-breaching or non-violating Party to ultimately exercise the remedies set forth in Section 15(d)(iv)(2) if the adverse impact is not able to be addressed (as determined by the non-breaching or non-violating Party in its discretion).

 

(2) If the Parties’ efforts to address the adverse impact to the non- breaching or non-violating Party pursuant to Section 15(d)(iv)(1) have been unsuccessful (as determined by the non-breaching or non-violating Party in its discretion), then the remedies set forth in this Section 15(d)(iv)(2) shall be available to such Party. The election between Options 1-3 (as defined below in this Section 15(d)(iv)(2)) shall be mutually decided by the Parties, but if the Parties do not reach agreement, then the non-breaching or non-violating Party shall retain the right to terminate this Agreement set forth in as Option 3, below. For the avoidance of doubt, termination of this Agreement shall be the last resort of the Parties after taking efforts pursuant to Section 15(d)(iv)(1) and considering Option 1 and Option 2, below; provided, that this will not in any way limit the right of the non-breaching or non-violating Party to ultimately exercise the termination remedy set forth in Option 3 if the adverse impact is not able to be addressed (as determined by the non-breaching or non-violating Party in its discretion).

 

Option 1”: Suspend each Party’s respective ROFR until such time as such breach or violation no longer has an adverse impact on the non-breaching or non-violating Party (as determined by the non-defaulting Party in its discretion).

 

Option 2”: If Distributor is the defaulting Party, to assign this Agreement from Distributor to an affiliate of Distributor which is not involved (directly or indirectly) in such breach or violation; provided, than such assignment (a) does not pose an adverse impact to Company (as determined in Company’s discretion); and (b) is subject to Company’s prior written consent in accordance with Section 18(c); such consent not to be unreasonably withheld.

 

Option 3”: The non-breaching or non-violating Party may terminate this Agreement terminate this Agreement immediately upon written notice.

 

31

 

  

16. Export Compliance. Distributor shall not export, re-export, resell, ship or divert directly or indirectly any portion of the Products or other technical information supplied hereunder in any form, including without limitation any technical data furnished hereunder, to any country except as the laws of the United States of America expressly permit, or for which an export license or other governmental approval is required, without first obtaining such license or approval. This obligation shall survive any termination of this Agreement.

 

17. Limitation of Liability.

 

(a) NEITHER COMPANY NOR DISTRIBUTOR SHALL BE LIABLE TO THE OTHER BY REASON OF LOSS OF PROFITS, OR FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES (OR DIRECT DAMAGES IN THE CASE OF THE SUPPLIERS) ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), STRICT LIABILITY OR OTHERWISE ARISING OUT OF OR UNDER THIS AGREEMENT OR ANY USE OR INABILITY TO USE THE PRODUCTS OR EQUIPMENT, OR FOR BREACH OF THIS AGREEMENT. EACH PARTY’S TOTAL LIABILITY ARISING OUT OF OR UNDER THIS AGREEMENT, OR FOR BREACH OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL NOT EXCEED FOR ANY PURCHASE ORDER THE CONTRACT AMOUNT PURSUANT TO SUCH PURCHASE ORDER, PROVIDED, HOWEVER, THAT NOTWITHSTANDING THE FOREGOING, COMPANY’S LIABILITY FOR PAYMENT OF A REFUND AMOUNT PURSUANT TO SECTION 4(b)(ii) SHALL NOT BE SUBJECT TO SUCH LIMITATION, BUT IN NO EVENT SHALL COMPANY’S LIABILITY FOR PAYMENT OF A REFUND AMOUNT EXCEED THE APPLICABLE REFUND CAP.

 

(b) Notwithstanding the limitations of liability set forth in Section 17(a), such limitations of liability shall not apply to or limit in anyway any liability of Distributor or Company (i) arising from fraud or willful misconduct or gross negligence of such Party; or (ii) in respect of any obligation of such Party to indemnify for third party claims pursuant to Section 11 (including without limitation in respect of costs and expense incurred by the indemnified Party in respect of such third party claim).

 

(c) Liability of Bloom Corp and JV. Notwithstanding any other provision of this Agreement to the contrary, the duties and obligations of Bloom Corp and JV under this Agreement are several and not joint, and neither Bloom Corp nor JV shall be liable for the duties or obligations of the other Party arising as “Company” hereunder. Except with respect to Bloom Corp’s right to exercise the Company ROFR pursuant to Section 2(a), the rights of Bloom Corp and JV shall be several, and neither Bloom Corp nor JV shall have the authority to waive or exercise any right on behalf of the other Party acting as “Company” hereunder.

 

32

 

 

18. General.

 

(a) Governing Law. This Agreement is governed and interpreted in accordance with the laws of the State of California and the United States of America without reference to conflicts of laws principles and excluding the United Nations Convention on Contracts for the Sale of Goods.

 

(b) Dispute Resolution.

 

(i) All controversies, claims, disputes or difference in connection with this Agreement shall be finally settled by arbitration administered by the Korean Commercial Arbitration Board (“KCAB”) in accordance with the International Arbitration Rules of the KCAB. The venue of arbitration proceedings and seat of arbitration shall be Seoul, the Republic of Korea.

 

(ii) The number of arbitrators shall be three, with Company and Distributor nominating one arbitrator each and the two arbitrators shall jointly nominate the third arbitrator.

 

(c) Assignment. Distributor shall not transfer, assign or delegate this Agreement or any rights or obligations hereunder, whether voluntarily, by operation of law or otherwise, without the prior written consent of Company. Subject to the foregoing, the terms and conditions of this Agreement shall be binding upon and inure to the benefit of the parties to it and their respective heirs, successors, assigns and legal representatives.

 

(d) Publicity. No public release or announcement concerning the transactions contemplated hereby shall be issued by any Party without the prior written consent of the other Parties (which consents shall not be unreasonably withheld, conditioned or delayed), except for any such release or announcement as may be required by securities law or other applicable law or the applicable rules or regulations of any securities exchange or securities market, in which case the disclosing Party shall (to the extent permissible under applicable law) allow the other Parties, as applicable, reasonable time to comment on such release or announcement in advance of such issuance and the disclosing party shall consider the other Parties’ comments in good faith.

 

(e) Merger, Modification and Waiver. This Agreement constitutes the entire agreement between Company and Distributor with respect to the subject matter hereof, and merges all prior negotiations and drafts of the parties with regard thereto. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, by Company shall be effective unless in writing. If there is any conflict between the terms and conditions of this Agreement and the terms and conditions of any Purchase Order or other document, the terms and conditions of this Agreement shall prevail; provided, that if a specific provision of a Purchase Order expressly states that it prevails in the event of conflict with the terms and conditions of this Agreement, then such specific provision of such Purchase Order shall prevail. The waiver of one breach or default or any delay in exercising any rights shall not constitute a waiver of any subsequent breach or default.

 

(f) Severability. If any of the provisions of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable under any applicable statute or rule of law, it shall be replaced with the valid provision that most closely reflects the intent of the parties and the remaining provisions shall continue in full force and effect.

 

33

 

 

(g) Notices. All notices permitted or required under this Agreement shall be in writing and shall be delivered in person; by courier, overnight delivery, or confirmed fax; or mailed by first class, registered or certified mail, postage prepaid, to the address of the Party specified in this Agreement or such address as either Party may specify in writing. Such notice shall be deemed to have been given upon receipt.

 

  Bloom Corp
   
  Bloom Energy Corporation
   
  4353 North First Street
  San Jose, CA 95134
   
  Attn: Shawn Soderberg, General Counsel
  Email: Shawn.Soderberg@bloomenergy.com
   
  JV
   
  Bloom SK Fuel Cell, LLC
   
  1-Dong, 225,
  Suchul-Daero (Gongdan-Dong 188-8)
  Gumi-Si, Gyeongsangbuk-do, 39270, Korea
   
  Attn: Randy Ahuja
  Email: Randy.Ahuja@bloomenergy.com
   
  Distributor
   
  SK ecoplant Co., Ltd.
   
  19, Yulgok-ro 2-gil, Jongno-gu
  Seoul 03143, Korea
   
  Attn: Wang Jae Lee, Head of Hydrogen Business Center
  Email: justinwlee@sk.com

 

 

(h) Counterparts. This Agreement may be executed in any number of separate counterparts and delivered by electronic means (including in Portable Document Format (.PDF) and digital signature formats such as DocuSign), each of which shall be deemed an original and all of which together shall constitute one instrument.

 

(i) Advice of Legal Counsel. Each Party acknowledges and represents that, in executing this Agreement, it has had the opportunity to seek advice as to its legal rights from legal counsel and that the person signing on its behalf has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any Party by reason of the drafting or preparation thereof.

 

34

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

 

  BLOOM CORP
  BLOOM ENERGY CORPORATION
     
  By:   /s/ Gregory Cameron
  Name:  Gregory Cameron
  Title: Chief Financial Officer
     
  JV  
  BLOOM SK FUEL CELL, LLC
     
  By:  
  Name: Randy Ahuja
  Title: Chief Executive Officer
     
  DISTRIBUTOR
  SK ECOPLANT CO., LTD.
     
  By:    
  Name: Wang Jae Lee
  Title: Head of Hydrogen Business Center

 

35

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement co be executed by their duly authorized representatives as of the date first written above.

 

  BLOOM CORP
  BLOOM ENERGY CORPORATION
     
  By:    
  Name: Gregory Cameron
  Title: Chief Financial Officer
     
  JV
  BLOOM SK FUEL CELL, LLC
     
  By: /s/ Randy Ahuja
  Name: Randy Ahuja
  Title: Chief Executive Officer
     
  DISTRIBUTOR
  SK ECOPLANT CO., LTD.
     
  By:  
  Name:  Wang Jae Lee
  Title: Head of Hydrogen Business Center

 

36

 

  

IN WITNESS WHEREOF, the Parties have caused this Agreement co be executed by their duly authorized representatives as of the date first written above.

 

  BLOOM CORP
  BLOOM ENERGY CORPORATION
     
  By:    
  Name:  Gregory Cameron
  Title: Chief Financial Officer
     
  JV  
  BLOOM SK FUEL CELL, LLC
     
  By:    
  Name: Randy Ahuja
  Title: Chief Executive Officer
     
  DISTRIBUTOR
  SK ECOPLANT CO., LTD.
     
  By: /s/ Wang Jae Lee
  Name: Wang Jae Lee
  Title: Head of Hydrogen Business Center

 

37

 

  

EXHIBIT A

 

COMPANY-REQUIRED ANCILLARY EQUIPMENT

 

1.Mechanical installation kit
2.Electrical installation kit
3.Plumbing installation kit
4.Telemetry cabinet
5.Water Distribution Module
6.Water Distribution Module installation kit
7.Cosmetic side panels
8.Cosmetic rear panels (if systems not installed back-to-back)
9.Forklift cover panels
10.Varmint protection kit
11.Signage kit
12.Installation alignment fixture

 

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EXHIBIT B

 

PERMITTED SUBCONTRACTORS

 

Machinery/Piping:

 

-연합개발㈜ Yeonhab Development Co., Ltd.
-강우기업㈜ Kangwu Engineering & Construction Co., Ltd.
-대성기공 Daesung Co., Ltd.
-㈜동부 Dong Bu Co., Ltd.

 

Electrical/Instrument:

 

-㈜피앤케이파워시스 P&K Powersys Co., Ltd.
-㈜민성 Minsung Co., Ltd.
-금양산업개발㈜ Kumyang Electric Co., Ltd.

 

39

 

 

EXHIBIT C

 

FORM OF PURCHASE ORDER

 

[To be agreed in writing by the Parties.]

 

[Signatures Follow]

 

IN WITNESS WHEREOF, the Parties have caused this Purchase Order to be executed by their duly authorized representatives.

 

PROPOSED:

SK ECOPLANT CO., LTD.

 

ACCEPTED:

BLOOM ENERGY CORPORATION

     
Signature:   Signature:
     
     

Name:

 

Name:

     
     

Title:

 

Title:

     
     

Date:

 

Date:

     

 

40

 

 

EXHIBIT D

 

FORM OF NOTICE OF COMMISSIONING COMPLETION

 

   Installation Information and Notice of Acceptance

 

Customer: {Insert Contract Customer Name}
   
Customer Address:   {Insert Site Address}
  {Insert City, State, Zip}
     
Site Address:   {Insert Site Name (Site ID)}
  {Insert Site Address}
  {Insert City, State, Zip}

 

Bloom Energy Sales Order Number: ____________________

 

Installation Information

 

Product Serial Number Shipment Date Installation Complete Date Full Power Date
         

  

   Acceptance Details

 

By signing below, Bloom Energy represents that the Product in aggregate at the installation Site has passed the following Commissioning tests:

 

Test Name Date Status
Electrical Tie In Connection   Complete
Commissioning Complete   Complete
System Startup   Complete
Permission to Operate   Complete
Full Power Date   Complete

  

41

 

 

Bloom Energy Corporation

 

_______________________________
Signature

 

_______________________________
Name

 

_______________________________
Date

 

42

 

 

EXHIBIT E

 

BENCHMARK COST TEMPLATE

 

Systems
(100kW)

Component FP Installation Kits Water Distribution Module ("WDM") Telemetry
         

 

Benchmark Cost Data:

 

Cost
Category
Material Freight Labor Manufacturing Overhead Total
($/unit)

Component

FP

         

Installation

Kits

         
WDM          
Telemetry          
Total          

 

Cost

Category

Material Freight Labor

Manufacturing

Overhead

Total

($/quarter)

Total

($/kW)

Component

FP

           

Installation

Kits

           
WDM            
Telemetry            
Total            

 

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EXHIBIT F

 

FORM OF COMPLIANCE CERTIFICATION

 

SK ecoplant Co. Ltd (“Distributor”), Bloom Energy Corporation (“Bloom Corp”) and Bloom SK Fuel Cell, Ltd. (JV) have entered into that certain Amended and Restated Preferred Distributor Agreement, dated as of [ ], 2021 (as amended, amended and restated, supplemented or modified from time to time, the A&R PDA”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the A&R PDA.

 

The undersigned certifies, in its capacity as [TITLE] of Distributor, and on behalf of Distributor for the benefit of Company, that:

 

(a) As of the date hereof, the undersigned is an officer of Distributor with responsibility for assuring that Distributor complies with the certifications set forth herein.

 

(b) From November 14, 2018 to the date hereof, none of Distributor, its stockholders, its directors, its officers, its employees, its representatives or its agents have (a) made, offered, promised or authorized, in connection with the sale of Products or other performance contemplated in the A&R PDA, any payment or transfer anything of value, directly or indirectly, to any person for the purpose of influencing any act or decision of such person or securing an improper advantage in connection with any activity arising from the performance of the A&R PDA; or (b) otherwise violated any Anti- Corruption Laws (as defined in the A&R PDA) in connection with any activity in the performance of the A&R PDA.

 

(c) As of the date hereof, the undersigned is not aware of any activities by Distributor or any of its stockholders, its directors, its officers, its employees, its representatives, or its agents that constitutes a violation of Section 15 of the A&R PDA (or subsections thereof).

 

Distributor covenants that, should the undersigned learn of any matter that would cause the certifications set forth above to become untrue or materially misleading, the undersigned shall immediately advise the General Counsel of Bloom Corp and the Representative Director of JV.

 

  DISTRIBUTOR
   
  SK ECOPLANT CO., LTD.
     
  By:  
  Name: [_]
  Title: [_]
  Date: [_]

 

 

44

 

 

Exhibit H

 

EXECUTION VERSION

 

Commercial Collaboration Agreement

 

This Commercial Collaboration Agreement (this “Agreement”) is entered into as of October 23, 2021 (the “Effective Date”) by and between Bloom Energy Corporation (“Bloom”), a corporation established under the laws of the State of Delaware, United States of America, and SK ecoplant Co., Ltd. (f/k/a SK Engineering & Construction Co., Ltd.), a corporation established under the laws of the Republic of Korea (“SK”). Each of Bloom and SK is referred to herein as a “Party,” and together as, the “Parties.”

 

RECITALS

 

WHEREAS, Bloom develops, manufactures and supplies certain Products (as defined in the PDA) in connection with electric power facilities. SK is experienced and engaged in the business of engineering, procuring, and constructing electric power facilities on a turnkey basis, including the distribution of electric power generation components integrated into such facilities;

 

WHEREAS, Bloom and SK entered into a joint venture agreement dated September 24, 2019 (as amended by the Amendment to the Joint Venture Agreement dated as of the date hereof, the “JVA”) pursuant to which the Parties have agreed to establish and operate a joint venture company in Korea;

 

WHEREAS, the Parties desire to collaborate with each other in pursuing certain business opportunities that are beyond the scope of joint venture as set forth in the JVA; and WHEREAS, the Parties further desire to enter into this Agreement to establish a framework to govern their respective rights and obligations in relation to certain business opportunities in respect of which they wish to cooperate.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the Parties agree as follows:

 

AGREEMENT

 

1. Definitions and Rules of Interpretation.

 

(a) Definitions.

 

Award” has the meaning set forth in Section 7(b). “Bloom” has the meaning set forth in the Preamble.

 

Bloom Energy Server” has the meaning set forth in the PDA. “Definitive Agreements” has the meaning set forth in Section 6(d). “Dispute” has the meaning set forth in Section 7(b).

 

EDAs” has the meaning set forth in Section 4.

 

 

 

 

EPC” means “engineering, procurement, and construction.” “EPC Works” has the meaning set forth in Section 3(a). “ESA” has the meaning set forth in Section 3(b).

 

HIC Definitive Agreements” has the meaning set forth in Section 2(b).

 

Hydrogen Innovation Center or HIC” means a joint research & development center to be established by the Parties for the purpose of (i) seeking, procuring and co-investing into potential technology development partners; (ii) joint development of application, and improvement of balance of plant; (iii) improvement of performance and commercialization of SOFC and/or SOEC; and (iv) any other innovation that may be deemed necessary by the Parties.

 

ICC Arbitration Rules” has the meaning set forth in Section 7(b).

 

Investor Agreement” means that certain Investor Agreement attached as Exhibit B to the SPA.

 

JVA” has the meaning set forth in the Preamble. “Korea” means the Republic of Korea.

 

“LOHC” has the meaning set forth in Section 2(b)(iv).

 

PDA” means that certain Amended and Restated Preferred Distributor Agreement dated as of the date hereof by and among SK, Bloom and Bloom SK Fuel Cell, LLC. “PF” has the meaning set forth in Section 3(a).

 

Qualified Project” means a Bloom energy project in the U.S. that has been originated and contracted directly by Bloom and excludes projects either originated or contracted by other strategic or financing partners.

 

ROFO” has the meaning set forth in Section 3(a).

 

SK” has `the meaning set forth in the Preamble.

 

SOEC” has the meaning set forth in Section 2(b)(iv). “SOEC EDA” has the meaning set forth in Section 4.

 

SOFC” has the meaning set forth in Section 4.

 

SOFC EDA” has the meaning set forth in Section 4.

 

SPA” means that certain Securities Purchase Agreement dated as of the date hereof by and between Bloom and SK.

 

Term” has the meaning set forth in Section 6(a).

 

Tribunal” has the meaning set forth in Section 7(b).

 

2

 

 

United States” or “U.S.” means the United States of America, its territories, possessions and all areas subject to its jurisdiction including the Commonwealth of Puerto Rico.

 

US CFA” has the meaning set forth in Section 3(d).

 

2. Hydrogen Innovation Centers.

 

(a) Establishment. The Parties hereby agree to engage in good faith discussions to establish and operate two Hydrogen Innovation Centers: one to be located in the U.S. and one to be located in Korea.

 

(b) HIC Definitive Agreements. The Parties shall use commercially reasonable efforts to discuss and execute mutually acceptable definitive agreements (the “HIC Definitive Agreements”) by no later than December 31, 2021, which may be extended until March 31, 2022, in the event the Parties have not reached an agreement by such date, for the establishment of the Hydrogen Innovation Centers, covering, among other things, the following matters:

 

(i) Locations of the Hydrogen Innovation Centers in the U.S. and the Republic of Korea;

 

(ii) Scope of technologies to be developed at each Hydrogen Innovation Center;

 

(iii) Total investment amount; the investment structure (i.e., by way of creating a separate R&D SPC etc. in US and/or in Korea) and budget for each center;

 

(iv) Collaboration between the Parties regarding co-investment opportunities in companies engaged in the development of technologies relating to any of (but not limited to) the following, with the aim of creating an ecosystem for Solid-Oxide Electrolyzers (“SOEC”) technology:

 

  (1) Compressors;
  (2) Rectifiers;
  (3) Liquid Organic Hydrogen Carrier (“LOHC”) systems;
  (4) Ammonia as a carbon-free fuel for fuel cells;
  (5) Hydrogen sensors; and
  (6) Such other technologies as may be agreed by the Parties from time to time.

 

(c) The Parties shall exert good faith efforts to have the U.S.-based Hydrogen Innovation Center operational before the end of January 2022.

 

3

 

 

3. Right of First Offer for New Projects in the US Market.

 

(a) In general, the relevant principles contemplated by the PDA shall apply mutatis mutandis and govern the rights of SK on Bloom energy projects in the United States that have been directly originated and contracted by Bloom (“Qualified Projects”) in respect of the following; provided, that, Bloom shall grant to SK a right of first offer (“ROFO”) with respect to items (i) and (ii) set forth below:

 

(i) EPC works (the “EPC Works”); and

 

(ii) project financing (the “PF”)

 

For the avoidance of doubt, the Qualified Projects do not include Bloom energy projects in the United States either originated or contracted by other strategic or financing partners.

 

(b) Without limiting the generality of the foregoing, with respect to Qualified Projects, SK will estimate installation costs which will then be applied by Bloom to negotiate Energy Services Agreement (“ESA”) tolling rates with the customer for such Qualified Project. Bloom will consult with SK on proposed ESA tolling rates based on mutually agreed cost of capital.

 

(c) Bloom shall provide a rolling twelve-month update of its U.S. sales pipeline for Qualified Projects to SK on a monthly basis. In addition, the Parties shall agree to volume targets for Qualified Projects on an annual basis.

 

(d) The Parties shall discuss and negotiate in good faith to enter into a U.S. targeted cooperation framework agreement (the “US CFA”) before December 31, 2021 in respect of the Qualified Projects, which shall set forth certain terms and conditions regarding the EPC Works and PF, including, without limitation, the principles and ROFO set forth in Sections 3(a), 3(b) and 3(c) above, prices for the Bloom Energy Sever, cost of capital and annual volume targets.

 

4. Right of First Offer for Distributorship. Subject to the terms of this Section 4 and any subsequent agreements between the Parties, SK shall have exclusivity distributorship rights for Solid- Oxide Fuel Cells (“SOFC”) and SOEC worldwide (other than the U.S.), as agreed between the Parties on a market-by-market basis. The Parties shall negotiate in good faith an exclusivity distribution agreement in respect of (i) SOFC by March 31, 2022, and (ii) SOEC (in the event SOEC is successfully developed and can be manufactured on a commercial scale)which shall set forth the criterion that the Parties shall apply to determine whether SK shall be granted exclusive distributorship in respect of SOFC (the “SOFC EDA”) and SOEC (the “SOEC EDA,” and collectively with SOFC EDA, the “EDAs”) in a particular market.

 

5. Confidentiality. The confidentiality provisions of the Investor Agreement shall apply mutatis mutandis to this Agreement.

 

6. Term and Termination.

 

(a) The term (the “Term”) of this Agreement shall commence on the Effective Date and terminate on the later to occur of the execution of the (i) HIC Definitive Agreements, (ii) US CFA and (iii) EDAs.

 

4

 

 

(b) Termination for Cause. If either Party defaults in the performance of any material provision of this Agreement, then the non-defaulting Party may give written notice to the defaulting Party that if such default is not cured within thirty (30) days this Agreement will be terminated, and if following such notice such default is not cured during the thirty-day period, then the non-defaulting Party shall have the right to terminate this Agreement at the end of such period.

 

(c) Termination for Insolvency and Related Events. This Agreement shall terminate, without notice, (i) upon the institution by or against either Party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such Party’s debts, (ii) upon either Party’s making an assignment for the benefit of creditors, or (iii) upon either Party’s dissolution or ceasing to do business.

 

(d) Effect of Termination. The HIC Definitive Agreements, US CFA and EDAs contracted during the Term (collectively, the “Definitive Agreements”) shall survive the expiration or earlier termination of this Agreement. Upon termination, each of the Parties must destroy any and all promotional literature, notices, price quotations, order forms, data, information and other items received by the Party from the other Party in connection with this Agreement.

 

(e) Priority. In the case of any conflict or inconsistency between any provision of this Agreement and any provision of the Definitive Agreements, the provision of the Definitive Agreements shall prevail.

 

(f) Limitation of Liability. In the event of termination by either Party in accordance with any of the provisions of this Agreement, neither Party shall be liable to the other, because of such termination, for compensation, reimbursement or damages on account of the loss of prospective profits or anticipated sales or on account of expenditures, inventory, investments, leases or commitments in connection with the business or goodwill of either Party.

 

(g) Survival of Certain Terms. The provisions of Section 1 and Sections 5 through 8 of this Agreement shall survive the expiration or termination of this Agreement for any reason provided that Section 5 shall survive such expiration or termination for two (2) years. All other rights and obligations of the parties shall cease upon termination of this Agreement.

 

7. General.

 

(a) Governing Law. This Agreement is governed and interpreted in accordance with the laws of the State of New York without reference to conflicts of laws principles and excluding the United Nations Convention on Contracts for the Sale of Goods.

 

5

 

 

(b) Dispute Resolution. The Parties agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement (a “Dispute”) shall be arbitrated pursuant to the provisions of the Rules of Arbitration of the International Chamber of Commerce (the “ICC Arbitration Rules”), by three arbitrators (the “Tribunal”) appointed in accordance with the ICC Arbitration Rules (the “Arbitration”). The Arbitration will be conducted in English, and shall take place in New York, New York or such other location as the Parties and the Tribunal may agree. The arbitral award (the “Award”) shall (a) be rendered within 120 days after the Tribunal’s acceptance of its appointment; (b) be delivered in writing; (c) state the reasons for the Award; (d) be the sole and exclusive final and binding remedy with respect to the Dispute between and among the Parties without the possibility of challenge or appeal, which are hereby waived; and (e) be accompanied by a form of judgment. The Award shall be deemed an award of the United States, the relationship between the Parties shall be deemed commercial in nature, and any Dispute arbitrated pursuant to this paragraph shall be deemed commercial. The Tribunal shall have the authority to grant any equitable or legal remedies, including entering preliminary or permanent injunctive relief; provided, however, that the Tribunal shall not have the authority to award (and the Parties waive the right to seek an award of) punitive or exemplary damages.

 

(c) Assignment. None of the Parties shall transfer, assign or delegate this Agreement or any rights or obligations hereunder, whether voluntarily, by operation of law or otherwise, without the prior written consent of the other Party. Subject to the foregoing, the terms and conditions of this Agreement shall be binding upon and inure to the benefit of the parties to it and their respective heirs, successors, assigns and legal representatives.

 

(d) Merger, Modification and Waiver. This Agreement constitutes the entire agreement between Bloom and SK with respect to the subject matter hereof, and merges all prior negotiations and drafts of the parties with regard thereto. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, by a Party shall be effective unless in writing. Except as set forth in Section 6(e) of this Agreement, if there is any conflict between the terms and conditions of this Agreement and the terms and conditions of other document, the terms and conditions of this Agreement shall prevail; provided, that if a specific provision of such other document expressly states that it prevails in the event of conflict with the terms and conditions of this Agreement, then such specific provision of such document shall prevail. The waiver of one breach or default or any delay in exercising any rights shall not constitute a waiver of any subsequent breach or default.

 

(e) Severability. If any of the provisions of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable under any applicable statute or rule of law, it shall be replaced with the valid provision that most closely reflects the intent of the parties and the remaining provisions shall continue in full force and effect.

 

(f) Notices. All notices permitted or required under this Agreement shall be in writing and shall be delivered in person; by courier, overnight delivery, or confirmed fax; or mailed by first class, registered or certified mail, postage prepaid, to the address of the Party specified in this Agreement or such address as either Party may specify in writing. Such notice shall be deemed to have been given upon receipt.

 

6

 

 

Bloom

 

Bloom Energy Corporation

 

4353 North First Street
San Jose, CA 95134
Attn: Shawn Soderberg, General Counsel

Email: Shawn.Soderberg@bloomenergy.com  

 

SK

 

SK ecoplant Co., Ltd.
19, Yulgok-ro 2-gil, Jongno-gu
Seoul 03143, Korea
Attn: Wang Jae Lee, Head of Hydrogen Business Center

Email: justinwlee@sk.com

 

(g) Counterparts. This Agreement may be executed in any number of separate counterparts and delivered by electronic means (including in Portable Document Format (.PDF) and digital signature formats such as DocuSign), each of which shall be deemed an original and all of which together shall constitute one instrument.

 

(h) Advice of Legal Counsel. Each Party acknowledges and represents that, in executing this Agreement, it has had the opportunity to seek advice as to its legal rights from legal counsel and that the person signing on its behalf has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any Party by reason of the drafting or preparation thereof.

 

7

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives on the date first above written.

 

  BLOOM ENERGY CORPORATION
   
  By /s/ KR Sridhar
  Name:  KR Sridhar
  Title: Chief Executive Officer
     
  SKECOPLANT CO., LTD.
   
  By:  
  Name:  Kyung-il Park
  Title: Chief Executive Officer

 

 

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives on the date first above written.

 

  BLOOM ENERGY CORPORATION
   
  By:  
  Name:  KR Sridhar
  Title: Chief Executive Officer
     
  SK ECOPLANT CO., LTD.
   
  By: /s/ Kyung-il Park
  Name:  Kyung-il Park
  Title: Chief Executive Officer

 

 

 

 

 

[Signature Page to Commercial Collaboration Agreement]

 

 

 

Exhibit I

 

EXECUTION VERSION

 

FACILITY AGREEMENT

 

DATED 12 DECEMBER 2021

 

USD95,000,000

 

K-SURE OVERSEAS INVESTMENT INSURANCE (INVESTMENT
FINANCING) FACILITY

 

FOR

 

SK ECOPLANT CO., LTD.

 

as Borrower

 

 

 

PROVIDED BY

 

BNP PARIBAS

 

acting as Lender

 

and

 

BNP PARIBAS

 

acting as Mandated Lead Arranger and Bookrunner

 

 

 

 

 

 

 

CONTENTS

 

Clause   Page
       
1. Interpretation   1
2. Facility   14
3. Conditions Precedent   15
4. Utilisation – Loan   16
5. Repayment   17
6. Prepayment And Cancellation   17
7. Interest   20
8. Interest Periods   22
9. Changes To The Calculation Of Interest   22
10. Market Disruption   23
11. Fees   23
12. Taxes   26
13. Increased Costs   27
14. Other Indemnities   30
15. Mitigation By The Lender   31
16. Costs And Expenses   31
17. Representations And Warranties   32
18. Information Covenants   38
19. General Covenants   40
20. Financial Covenants   45
21. Subrogation And Reimbursement   47
22. Instructions Of K-Sure   49
23. Default   49
24. Evidence And Calculations   54
25. Consequential Damages   54
26. Amendments And Waivers   54
27. Transfer By The Borrower And Lender   57
28. Disclosure Of Information   59
29. Set-Off   61
30. Payment Mechanics   61
31. Severability   63
32. Counterparts   63
33. Role Of The Mandated Lead Arranger And Bookrunner   63
34. Notices   64
35. Language   66
36. Governing Law   66
37. Enforcement   66
       
Schedules      
       
1. Conditions Precedent Documents   68
2. Form of Request   70
3. Form of Compliance Certificate   72

 

i

 

 

THIS AGREEMENT is dated 12 December 2021 and is made BETWEEN:

 

(1)SK ECOPLANT CO., LTD. (the Borrower), organised under the laws of the Republic of Korea with its principal place of business at 19 Yulgok-ro 2-gil, Jongno gu, Seoul 03143, Korea and with company registration number 110111-0038805;

 

(2)BNP PARIBAS, a public limited company (société anonyme) incorporated in the Republic of France with the liability of its members being limited and having its head office at 16 boulevard des Italiens, 75009 Paris, France and having a branch at 63/F Two International Finance Centre, 8 Finance Street in Hong Kong; and

 

(3)BNP PARIBAS, a public limited company (société anonyme) incorporated in the Republic of France with the liability of its members being limited and having its head office at 16 boulevard des Italiens, 75009 Paris, France and having a branch at 63/F Two International Finance Centre, 8 Finance Street in Hong Kong in its capacity as the mandated lead arranger and bookrunner (the Mandated Lead Arranger and Bookrunner).

 

BACKGROUND

 

(A)The Borrower intends to acquire certain redeemable and convertible preferred stock of Bloom Energy Corporation, a public company listed in the New York Stock Exchange, with its principal place of business at 4353 North First Street, San Jose, CA 95134 (the Issuer), pursuant to the Securities Purchase Agreement.

 

(B)To finance a portion of the Acquisition Price, the Lender has agreed, subject to the terms and conditions of the Finance Documents, to make available to the Borrower a Facility in an aggregate amount not exceeding USD95,000,000.

 

(C)The Lender will benefit from the K-SURE Insurance Policy which will provide political and commercial risk cover for 100 per cent. of the Facility.

 

IT IS AGREED as follows:

 

1.INTERPRETATION

 

1.1Definitions

 

In this Agreement:

 

Acquisition means the issuance and sale by the Issuer, and the subscription and purchase by the Borrower (or the Acquisition SPV), of the 10,000,000 (as adjusted pursuant to the Securities Purchase Agreement) redeemable convertible preferred stock (RCPS) in the Issuer pursuant to the Securities Purchase Agreement.

 

Acquisition Closing Date means the date on which the Borrower (and, if applicable, the Acquisition SPV) consummates the Acquisition pursuant to the Securities Purchase Agreement.

 

1

 

 

Acquisition Documents means:

 

(a)the Securities Purchase Agreement;

 

(b)(if any) the Investor Agreement; and

 

(c)any other document designated as an “Acquisition Document” by the Lender and the Borrower.

 

Acquisition Price means the total purchase price for the Acquisition payable by the Borrower to the Issuer pursuant to the Securities Purchase Agreement.

 

Acquisition Shares means:

 

(a)10,000,000 (as adjusted pursuant to the Securities Purchase Agreement) redeemable convertible preferred stock (RCPS) in the Issuer subscribed and purchased by the Borrower (or the Acquisition SPV); and

 

(b)any Conversion Shares (as defined in the Securities Purchase Agreement).

 

Acquisition SPV means a special purpose vehicle to be formed by the Borrower to consummate the transactions contemplated by the Securities Purchase Agreement and the Investor Agreement.

 

Affiliate means a Subsidiary or a Holding Company of a person or any other Subsidiary of that Holding Company.

 

Anti-Corruption Laws means all laws, rules and regulations of any jurisdiction concerning or relating to bribery, money laundering or corruption including, without limitation, laws and regulations of the Sanctions Authorities.

 

Annual Financial Statements means the financial statements for a financial year delivered pursuant to paragraph (a)(i) of Clause 18.1 (Financial statements).

 

Authority means any national, supranational, regional or local government or governmental, administrative, fiscal, judicial or government-owned body, department, commission, authority, tribunal, or agency or entity or central bank (or any person, whether or not government-owned and howsoever constituted or called, that exercises the functions of a central bank) in a relevant jurisdiction.

 

Availability Period means the period from and including the date of this Agreement to and the date falling one (1) month after the date of this Agreement.

 

Borrower’s Original Financial Statements means the audited financial statements of the Borrower for the year ended 31 December 2020.

 

2

 

 

Break Costs means the aggregate amount (if any) determined by the Lender by which:

 

(a)the interest (excluding Margin) which the Lender would have received for the period from the date of receipt of any part of its share in the Loan or Unpaid Sum to the last day of the applicable Interest Period for the Loan or Unpaid Sum if the principal or Unpaid Sum received had been paid on the last day of that Interest Period;

 

exceeds

 

(b)the amount which the Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period.

 

Business Day means a day (other than a Saturday or a Sunday) on which commercial banks are open for general business in Seoul, Hong Kong and (in relation to any date for payment or purchase of US Dollar) New York and (in relation to the fixing of an interest rate) which is a US Government Securities Business Day.

 

Central Bank Rate means:

 

(a)the short-term interest rate target set by the US Federal Open Market Committee as published by the Federal Reserve Bank of New York from time to time; or

 

(b)if that target is not a single figure, the arithmetic mean of:

 

(i)the upper bound of the short-term interest rate target range set by the US Federal Open Market Committee and published by the Federal Reserve Bank of New York; and

 

(ii)the lower bound of that target range.

 

Code means the US Internal Revenue Code of 1986.

 

Commitment means USD95,000,000 to the extent not cancelled, transferred or reduced under this agreement.

 

Compliance Certificate means a certificate substantially in the form of Schedule 3 (Form of Compliance Certificate) or in form and substance satisfactory to the Lender.

 

Default means:

 

(a)an Event of Default; or

 

(b)an event or circumstance which would be (with the expiry of a grace period, lapse of time, the giving of notice or the making of any determination under the Finance Documents or any combination of them) an Event of Default.

 

Event of Default means an event or circumstance specified as such in Clause 23 (Default).

 

3

 

 

Facility means the K-SURE overseas investment insurance (investment financing) term loan facility made available to the Borrower under this Agreement.

 

Fallback Interest Payment means the aggregate amount of interest that is, or is scheduled to become, payable under paragraph (a), (b) or (c) of Clause 9.1 (Unavailability of Term SOFR).

 

FATCA means:

 

(a)sections 1471 to 1474 of the Code or any associated regulations;

 

(b)any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or

 

(c)any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

 

FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.

 

FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction.

 

FATCA FFI means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if the Lender is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

 

Final Maturity Date means the date falling 36 months from the last day of the Availability Period.

 

Finance Document means:

 

(a)this Agreement; and

 

(b)any other document designated as such by the Lender and the Borrower, and Finance Documents means all of them.

 

Financial Indebtedness means any indebtedness for or in respect of:

 

(a)moneys borrowed;

 

(b)any amount raised by acceptance credit (including any dematerialised equivalent);

 

4

 

 

(c)any amount raised pursuant to any bond, note, debenture, loan stock or other similar instrument, in each case, which are not treated as equity instruments in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the relevant entity;

 

(d)any redeemable preference share which are redeemable at the option of the holder of such redeemable preference share before the Final Maturity Date which are not treated as equity instruments in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the relevant entity;

 

(e)the amount of any liability in respect of any agreement treated as a finance or capital lease in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the relevant entity;

 

(f)receivables sold or discounted (otherwise than on a non-recourse basis or, if sold or discounted on a limited recourse basis, to the extent of such recourse only);

 

(g)the acquisition cost of any asset or service to the extent payable after its acquisition or possession by the party liable where the advance or deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset, in each case required to be accounted for as a borrowing in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the relevant entity;

 

(h)any derivative transaction protecting against or benefiting from fluctuations in any rate or price (and, when calculating the value of any derivative transaction, only the mark-to-market value shall be taken into account);

 

(i)any other transaction (including any forward sale or purchase agreement) which has the commercial effect of a borrowing and required to be accounted for as a borrowing in accordance with generally accepted accounting principles in the jurisdiction of incorporation of the relevant entity;

 

(j)any counter-indemnity obligation in respect of any guarantee, indemnity, bond, letter of credit or any other instrument issued by a bank or financial institution (excluding any performance bonds or advance payment bonds or documentary letters of credit issued in respect of the obligations of any members of the Group arising in the ordinary course of trading of that member of the Group); or

 

(k)any guarantee, indemnity or similar assurance against financial loss of any person in respect of any item referred to in the above paragraphs.

 

Funding Rate means any rate notified by the Lender to the Borrower pursuant to paragraph (a)(ii)of Clause 10.2 (Cost of funds).

 

Group means the Borrower and its Subsidiaries (including any Acquisition SPV).

 

5

 

 

Historic Term SOFR means the most recent Term SOFR for a period equal in length to the Interest Period of that Loan and which is as of a US Government Securities Business Day which is no more than three US Government Securities Business Days before the Quotation Day.

 

Holding Company of any other person, means a person in respect of which that other person is a Subsidiary.

 

Illicit Origin means any origin which is illicit or fraudulent, including without limitation, drug trafficking, corruption, organised criminal activities, terrorism, money laundering or fraud or from any Restricted Party or Sanctioned Country.

 

Increased Cost means:

 

(a)an additional or increased cost;

 

(b)a reduction in the rate of return from the Facility or on the Lender’s (or its Affiliate’s) or K- SURE’s overall capital; or

 

(c)a reduction of an amount due and payable under any Finance Document,

 

which is incurred or suffered by the Lender, any of its Affiliates or K-SURE but only to the extent it is attributable to the Lender having entered into any Finance Document or funding or performing its obligations under any Finance Document, or, in the case of K-SURE, making available the K-SURE Insurance Policy.

 

Interest Period means each period determined in accordance with Clause 8.1 (Selection) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 7.3 (Interest on overdue amounts).

 

Investor Agreement means the investor agreement (if any) by and between the Borrower, Acquisition SPV and the Issuer, dated on or around the date of the Utilisation Date, in substantially the form as prescribed in the Securities Purchase Agreement, as the same may be amended from time to time.

 

KEXIM Facility Agreement means the loan agreement dated on or around the date of this Agreement between among others, the Borrower and the Export-Import Bank of Korea in connection with the financing of the Acquisition Price.

 

K-SURE means Korea Trade Insurance Corporation.

 

K-SURE Insurance Policy means the policy of overseas investment insurance (investment financing) issued by K-SURE in respect of the Facility, together with the general terms and conditions of overseas

 

investment insurance (investment financing) (haewye tujabohoem (tujakeumyoong)) and supplemental agreement in respect of the cover over the Facility.

 

6

 

 

K-SURE Insurance Proceeds means any and all insurance moneys, recoveries and/or any other amounts payable by K-SURE under the K-SURE Insurance Policy.

 

K-SURE Premium means the premium payable to K-SURE under the K-SURE Insurance Policy in respect of the cover provided by K-SURE under the K-SURE Insurance Policy, as such premium is determined by K-SURE in accordance with Clause 2.3.

 

Lender means:

 

(a)the Original Lender; or

 

(b)any person which becomes a Party in accordance with Clause 27.2 (Assignments and transfers by the Lender).

 

Loan means, unless otherwise stated in this Agreement, the principal amount of the borrowing under this Agreement or the principal amount outstanding of such borrowing.

 

Margin means 0.65 per cent. per annum.

 

Market Disruption Rate means the percentage rate per annum which is the Reference Rate.

 

Material Adverse Effect means a material adverse effect on:

 

(a)the business, assets or financial condition of the Borrower or the Group as a whole (after taking into account all relevant circumstances);

 

(b)the ability of the Borrower to perform its payment or material obligations under any Finance Document;

 

(c)the legality, validity or enforceability of any Finance Document; or

 

(d)any right or remedy of the Lender in respect of a Finance Document.

 

Material Subsidiary means any Subsidiary of the Borrower whose Total Assets represent (or, in the case of a Subsidiary acquired after the end of the financial period to which the then latest financial statement of the Borrower and its Subsidiaries relate, are equal to (based on its latest financial statements)) not less than 10 per cent. (10%) of the Total Assets of the Borrower and its Subsidiaries taken as a whole, all as calculated respectively by reference to the latest financial statements of such Subsidiary and the consolidated accounts of the Borrower and its Subsidiaries, in each case, for the most recently ended full fiscal year. If a Material Subsidiary disposes of all or substantially all of its assets, or merged, or consolidated with, any other entity, such other entity will immediately become a Material Subsidiary if that other entity is or becomes a Subsidiary. For the purpose of this definition, Subsidiary means an entity of which a person owns directly, or indirectly through its Subsidiaries, more than 50 per cent. (50%) of the voting capital or similar right of ownership.

 

7

 

 

Measurement Period means each period of 12 months ending on the last day of the financial year of the Borrower.

 

Original Lender means BNP Paribas, acting through its Hong Kong branch.

 

Overnight SOFR means the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York (or any other person which takes over the administration of that rate)

 

published (before any correction, recalculation or republication by the administrator) by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).

 

Party means a party to this Agreement.

 

Prohibited Payment means any offer, gift, payment, promise to pay, commission, fee, loan, advantage or other consideration which would or might:

 

(a)constitute bribery or an improper gift or payment under, or a breach of, any law of the jurisdiction of incorporation of the Borrower (including any law or regulation of the Sanctions Authorities);

 

(b)constitute bribery within the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997; or

 

(c)constitute bribery under the Act on Preventing Bribery of Foreign Public Officials in International Business Transactions or any other similar act or regulations in Korea.

 

Quoted Tenor means any period for which Term SOFR is customarily displayed on the relevant page or screen of an information service.

 

Quotation Day means in relation to any period for which an interest rate is to be determined, two US Government Securities Business Days before the first day of that period (unless market practice differs in the relevant syndicated loan market, in which case the Quotation Day will be determined by the Lender in accordance with that market practice (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days)).

 

Rate Fixing Day means the second US Government Securities Business Day before the first day of an Interest Period or such other day as the Lender determines is generally treated as the rate fixing day by market practice in the relevant interbank market.

 

Reference Rate means, in relation to the Loan:

 

(a)the applicable Term SOFR as of the Quotation Date and for a period equal in length to the Interest Period of the Loan; or

 

8

 

 

(b)as otherwise determined pursuant to Clause 9.1 (Unavailability of Term SOFR),

 

and if, in either case, that rate is less than zero, the Reference Rate shall be deemed to be zero.

 

Repeating Representations means the representations and warranties set out in Clause 17.2 (Status) to Clause 17.5 (Non-conflict), paragraph(a) of Clause 17.6 (No default), Clause 17.9 (Legal and beneficial ownership), Clause 17.16 (Information), 17.19 (Immunity), 17.20 (No adverse consequence), 17.21 (Jurisdiction/governing law), 17.23 (Anti-bribery, anti-corruption and anti- money laundering), 17.24 (No Prohibited Payments), 17.25 (No funds of Illicit Origin), 17.26 (Sanctions), and 17.28 (Good title to assets) or the representations and warranties which are made or deemed to be repeated under any other Finance Document.

 

Request means a request for the Loan, substantially in the form of Schedule 2 (Form of Request).

 

Restricted Party means a person that is:

 

(a)listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on any Sanctions List;

 

(b)the government of, an agency or instrumentality of, or an entity directly or indirectly owned or controlled by a government of a country or territory that is the target of country- or territory- wide Sanctions;

 

(c)located in, incorporated under the laws of, or acting on behalf of a person located in or organised under the laws of any Sanctioned Country; or

 

(d)otherwise a target of Sanctions.

 

Sanctioned Country means, at any time, a country or territory that is, or whose government is, the subject of Sanctions broadly prohibiting dealings with such government, country, or territory.

 

Sanctions means any economic or trade sanctions or restrictive measures enacted, administered, imposed or enforced by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), the US Department of State, the United Nations Security Council, and/or the European Union and/or the French Republic, and/or Her Majesty’s Treasury and/or the Monetary Authority of Singapore, the Hong Kong Monetary Authority or other relevant sanctions authority (together, the Sanctions Authorities).

 

Sanctions List means any list maintained by, or public announcement of Sanctions designation made by, any country or governmental entity referred to in the definition of “Sanctions” or any other relevant intergovernmental entity.

 

9

 

 

Securities Purchase Agreement means the securities purchase agreement dated 23 October 2021 and entered into by and between the Issuer as the company and the Borrower as investor in respect of the Acquisition, as amended from time to time.

 

Security Interest means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest, security title, other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

 

Subsidiary means an entity of which a person has direct or indirect control or owns directly or indirectly more than 50 per cent. of the voting capital or similar right of ownership and control for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise.

 

Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

 

Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

 

Tax Payment means either the increase in a payment made by the Borrower to the Lender under Clause 12.1 (Tax gross-up) or a payment under Clause 12.2 (Tax indemnity).

 

Term SOFR means the term SOFR reference rate administered by CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period published (before any correction, recalculation or republication by the administrator) by CME Group Benchmark Administration Limited (or any other person which takes over the publication of that rate).

 

Total Assets means, at any date, the aggregate (without duplication) total current assets and total non- current assets of an entity as set out in its most recent financial statements for the most recently ended full fiscal year.

 

Unpaid Sum means any sum due and payable but unpaid by the Borrower under the Finance Documents.

 

US means the United States of America.

 

USD, US Dollars and US$ means the lawful currency of the United States of America.

 

US Government Securities Business Day means any day other than:

 

(a)a Saturday or a Sunday; and

 

10

 

 

(b)a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.

 

Utilisation Date means the date on which the Facility is utilised.

 

1.2Construction

 

(a)In this Agreement, unless the contrary intention appears, a reference to:

 

(i)an amendment includes a supplement, novation, extension (whether of maturity or otherwise), restatement, re-enactment or replacement (however fundamental and whether or not more onerous) and amended will be construed accordingly;

 

(ii)assets includes present and future properties, revenues and rights of every description;

 

(iii)an authorisation includes an authorisation, consent, approval, resolution, permit, licence, exemption, filing, registration or notarisation;

 

(iv)disposal means a sale, transfer, assignment, grant, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly;

 

(v)indebtedness includes any obligation (whether incurred as principal or as surety and whether present or future, actual or contingent) for the payment or repayment of money;

 

(vi)know your customer requirements are the identification checks that the Lender requests in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer;

 

(vii)a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, fund, joint venture or consortium), government, state, agency, organisation or other entity whether or not having separate legal personality;

 

(viii)a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

 

(ix)a currency is a reference to the lawful currency for the time being of the relevant country;

 

11

 

 

(x)the equivalent of one currency (the original currency) in another currency (the conversion currency) will (unless a contrary intention appears) be determined by the Lender or such person nominated by the Lender for that purpose by reference to its spot rate of exchange in

 

London for the purchase of the conversion currency with the original currency at or about

 

11.00 a.m. (London time) on the date of the determination or if no such spot rate of exchange exists on that date, by such other method as the Lender reasonably determines;

 

(xi)a Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been waived;

 

(xii)a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation;

 

(xiii)this Agreement is a reference to this facility agreement;

 

(xiv)a Clause, a Subclause or a Schedule is a reference to a clause or subclause of, or a schedule to, this Agreement;

 

(xv)a Party or any other person includes its successors in title, permitted assigns and permitted transferees;

 

(xvi)the Lender’s cost of funds in relation to the Loan is a reference to the average cost (determined either on an actual or a notional basis) which the Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the Loan for a period equal in length to the Interest Period;

 

(xvii)a Finance Document or other document includes (without prejudice to any prohibition on amendments) any amendment to that Finance Document or other document, including any change in the purpose of, any extension for or any increase in the amount of a facility or any additional facility;

 

(xviii)words denoting the singular number include the plural and vice versa;

 

(xix)a day means a calendar day; and

 

(xx)a time of day is a reference to Seoul time.

 

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(b)Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that:

 

(i)if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is not);

 

(ii)if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and

 

(iii)notwithstanding sub-paragraph (i) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month in which it is to end, as appropriate.

 

(c)Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document (other than K-SURE) may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 and, notwithstanding any term of any Finance Document, no consent of any third party is required for any amendment (including any release or compromise of any liability) or termination of any Finance Document. The prior written consent of K-SURE will be required in relation to any decision to amend or modify the rights of K-SURE under this paragraph (c) of Clause 1.2.

 

(d)Unless the contrary intention appears:

 

(i)a reference to a Party will not include that Party if it has ceased to be a Party under this Agreement;

 

(ii)a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement; and

 

(iii)any obligation of the Borrower under the Finance Documents which is not a payment obligation remains in force for so long as any payment obligation of the Borrower is, may be or is capable of becoming outstanding under the Finance Documents.

 

(e)The headings in this Agreement do not affect its interpretation.

 

1.3Conflict or inconsistency between Finance Documents

 

In the case of any conflict or inconsistency between:

 

(a)the terms of this Agreement and the K-SURE Insurance Policy, the terms of the K-SURE Insurance Policy will prevail; and

 

(b)the terms of this Agreement and the terms of any other Finance Document, the terms of this Agreement will prevail.

 

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2.FACILITY

 

2.1The Facility

 

Subject to the terms of this Agreement, the Lender makes available to the Borrower a term loan facility in an aggregate amount equal to the total Commitment.

 

2.2Purpose

 

The proceeds of the Loan under the Facility shall only be used to finance a portion of the Acquisition Price and in an aggregate amount not exceeding USD95,000,000.

 

2.3No obligation to monitor

 

The Lender is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

2.4K-SURE Premium

 

(a)The Borrower acknowledges that the Lender benefits from the K-SURE Insurance Policy once issued and is in effect.

 

(b)The Borrower and the Lender acknowledge and agree that:

 

(i)the amounts of the K-SURE Premium will be solely determined by K-SURE;

 

(ii)the Lender is in no way involved in the calculation or payment of any part of any K-SURE Premium;

 

(iii)the Borrower will not raise against the Lender any claim or defence of any kind whatsoever in relation to the calculation or payment of any part of any K-SURE Premium; and

 

(iv)no K-SURE Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the K-SURE Insurance Policy.

 

(c)The Borrower must pay all K-SURE Premium under the K-SURE Insurance Policy before the Loan is advanced. For the avoidance of doubt, no proceeds of the Loan may be applied towards the payment of any K-SURE Premium.

 

(d)If K-SURE at any time modifies the amount of any K-SURE Premium, and pursuant to such modification an additional amount shall be paid to K-SURE in respect of the K-SURE Premium, the Lender must notify the Borrower to that effect and of the additional amount, and the Borrower must, promptly on demand by the Lender, pay the Lender an amount equal to such additional amount.

 

(e)If the Borrower has paid all K-SURE Premium under the K-SURE Insurance Policy, the Lender shall pay to the Borrower any K-SURE Premium refunded by K-SURE and received by the Lender (if any).

 

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2.5K-SURE Override

 

(a)Nothing in this Agreement shall oblige the Lender to act (or omit to act) in a manner that is inconsistent with any requirement of K-SURE under or in connection with the K-SURE Insurance Policy.

 

(b)The Lender shall not be obliged to do anything if, in its opinion, to do so could result in a breach of any requirements of K-SURE under or in connection with the K-SURE Insurance Policy or affect the validity of the K-SURE Insurance Policy.

 

(c)The Borrower acknowledges that the Lender may take all such actions as it deems necessary to ensure that all requirements of K-SURE under or in connection with the K-SURE Insurance Policy are complied with.

 

3.CONDITIONS PRECEDENT

 

3.1Conditions precedent documents

 

(a)The Request may not be given until the Lender has notified the Borrower that it has received (or waived receipt of) all of the documents and evidence set out in Schedule 1 (Conditions Precedent Documents) in form and substance satisfactory to the Lender.

 

(b)The Lender must give such notification to the Borrower promptly upon being so satisfied.

 

3.2Further conditions precedent

 

The obligations of the Lender to provide the Loan pursuant to the terms of this Agreement are subject to (i) on the date of the Request, the satisfaction of each of the following further conditions precedent other than paragraphs (e) and (f) below and (ii) on the Utilisation Date, the satisfaction of each of the following further conditions precedent:

 

(a)the Repeating Representations are correct in all material respects;

 

(b)the Lender has not received any notice from K-SURE requesting the Lender to suspend the making of the Loan and/or the Lender are not required by the terms of the K-SURE Insurance Policy to suspend the making of the Loan;

 

(c)no occurrence, event or circumstance subsists that prohibit the Loan or the drawing of the Loan, pursuant to the terms of the K-SURE Insurance Policy;

 

(d)no Default is outstanding, continuing or would result from the Loan;

 

(e)the K-SURE Premium under the K-SURE Insurance Policy has been paid to K-SURE in full on or before the Utilisation Date; and

 

(f)the K-SURE Insurance Policy has been issued by K-SURE and has become fully effective.

 

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3.3Number of Loans

 

No more than one (1) Loan may be utilised under the Facility.

 

4.UTILISATION – LOAN

 

4.1Giving of a Request

 

(a)The Borrower may borrow the Loan by giving to the Lender a duly completed Request.

 

(b)Unless the Lender otherwise agrees, the latest time for receipt by the Lender of a duly completed Request is 10.30 a.m. (Hong Kong time) 2 Business Days before the date for the proposed borrowing.

 

(c)The Request is irrevocable.

 

4.2Completion of the Requests

 

(a)The Request for the Loan will not be regarded as having been duly completed unless:

 

(i)the Utilisation Date is a Business Day falling within the Availability Period;

 

(ii)the amount of the Loan requested is equal to the total Commitment amount available under the Facility; and

 

(iii)it is signed by the Borrower.

 

(b)Only one Loan may be requested in the Request.

 

4.3Advance of the Loan

 

If the conditions set out in this Agreement have been met, the Lender shall make the requested Loan available on the Utilisation Date to the Borrower’s bank account as specified in the Request.

 

4.4Cancellation of Commitment

 

The Commitment which, at that time, is unutilised shall be immediately cancelled at the earlier of the end of the Availability Period and the Utilisation Date (following the occurrence of the drawdown of the Loan).

 

4.5Delays in drawdown

 

(a)The Lender will not be responsible for any delay in the making of the Loan resulting from any requirement for the delivery of further information or documents required by the Lender, as the case may be, to ensure that any conditions to the K-SURE Insurance Policy will be satisfied.

 

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5.REPAYMENT

 

The Borrower must repay the Loan in full on the Final Maturity Date.

 

6.PREPAYMENT AND CANCELLATION

 

6.1Definitions relating to mandatory prepayment

 

For the purposes of this Clause 6:

 

Full Prepayment Event means:

 

(a)KEXIM has not requested or required the Borrower to apply, and the KEXIM Facility Agreement does not oblige the Borrower to so apply, the relevant Net Proceeds (or any portion thereof) towards the prepayment of the outstanding loans under the KEXIM Facility Agreement; or

 

(b)(following the Utilisation Date) there is no outstanding loans under the KEXIM Facility Agreement.

 

Issuer Insolvency Payment means any amount paid or distributed or deemed to be paid or distributed to the Borrower or the Acquisition SPV in respect of any voluntary or involuntary liquidation, dissolution or winding up or Deemed Liquidation Event of the Issuer pursuant to the Certificate of Designation (each as defined in the Securities Purchase Agreement).

 

Net Proceeds means the cash proceeds received or recovered by the Borrower (or the Acquisition SPV) from the disposal of any Acquisition Shares, redemption of any Acquisition Shares after deducting, without duplication:

 

(a)any reasonable expenses which are incurred by the Borrower (or the Acquisition SPV) with respect to such disposal of Acquisition Shares, redemption of Acquisition Shares as relevant; and

 

(b)any present and future Tax incurred and required to be paid by the Borrower (or the Acquisition SPV) in connection with such disposal of Acquisition Shares, redemption of Acquisition Shares as relevant.

 

6.2Mandatory prepayment – illegality

 

(a)The Lender must notify the Borrower promptly if it becomes aware that it is unlawful in any applicable jurisdiction for the Lender or any of its Affiliates for it to perform any of its obligations in respect of the Facility or to fund or maintain the Loan.

 

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(b)Upon receipt by the Borrower of the notification under paragraph (a) above:

 

(i)the Borrower must repay or prepay the Loan on the date specified in paragraph (c) below; and

 

(ii)the Commitment will be immediately cancelled.

 

(c)The date for repayment or prepayment of the Loan will be:

 

(i)the last day of the current Interest Period of the Loan; or

 

(ii)if earlier, the date specified by the Lender in the notification under paragraph (a) above and which must not be earlier than the last day of any applicable grace period allowed by law.

 

6.3Mandatory prepayment – K-SURE Insurance Policy

 

(a)If the terms of the K-SURE Insurance Policy require that an amount of the outstanding Loan be prepaid, the Borrower must prepay such amount of the outstanding Loan required to be prepaid under the terms of the K-SURE Insurance Policy, on demand by the Lender.

 

(b)The Borrower must promptly notify the Lender upon becoming aware that an amount is required to be prepaid under the terms of the K-SURE Insurance Policy.

 

(c)If:

 

(i)K-SURE repudiates or purports to repudiate the K-SURE Insurance Policy or evidences an intention to repudiate the K-SURE Insurance Policy;

 

(ii)the K-SURE Insurance Policy does not or ceases to constitute a legally binding, valid and enforceable obligation of K-SURE for any reason;

 

(iii)the K-SURE Insurance Policy is materially (in the opinion of the Lender) amended, terminated, repudiated, suspended, cancelled or revoked; or

 

(iv)any event or circumstance occurs which, in the opinion of the Lender, is reasonably expected to adversely affect the ability of the Lender to claim under the K-SURE Insurance Policy;

 

(v)any event or circumstance occurs which, in the opinion of the Lender, is reasonably expected to adversely affect the ability of K-SURE to perform its obligations under the K-SURE Insurance Policy; or

 

(vi)K-SURE ceases to be:

 

(A)a legal entity, established and operating under the Trade Insurance Act (Law No. 2063 of 31 December 1968, as amended); or

 

(B)directly or indirectly, owned or ultimately controlled by the Korean government, in each case, the Lender shall notify the Borrower.

 

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(d)Upon receiving the notification described in paragraph (c) above, the Borrower shall prepay all amounts of the outstanding Loan, other than where such event or circumstance is by reason of gross negligence or wilful default by the Lender alone.

 

6.4Mandatory prepayment – Disposal

 

Upon any disposal of the Acquisition Shares, the Borrower shall prepay the Loan in an amount equal to 50% or (in the case of a Full Prepayment Event) 100% of the Net Proceeds of such disposal, provided that any Net Proceeds not applied in prepayment of the Loan pursuant to this Clause 6.4 shall be used and applied towards prepayment of the outstanding loans under the KEXIM Facility Agreement.

 

6.5Mandatory prepayment – Redemption of Acquisition Shares

 

(a)The Borrower must promptly, and in any event within 30 days of receipt, provide written notice to the Lender if it or the Acquisition SPV receives a Redemption Notice (as defined in the Securities Purchase Agreement) from the Issuer of its intention to redeem any Acquisition Shares and promptly provide sufficient details and information in relation to such redemption of Acquisition Shares other than, in each case, any Redemption Notice (as defined in the Securities Purchase Agreement) not

 

delivered in accordance with the Securities Purchase Agreement and/or the Borrower or the Acquisition SPV has exercised its rights to convert the relevant Acquisition Shares as provided in section 4 of the Securities Purchase Agreement on or prior to the date that is 30 days after the date of the Redemption Notice (as defined in the Securities Purchase Agreement).

 

(b)Upon any redemption of any Acquisition Shares, the Borrower shall prepay the Loan in an amount equal to 50% or (in the case of a Full Prepayment Event) 100% of the Net Proceeds of such redemption, provided that any Net Proceeds not applied in prepayment of the Loan pursuant to this Clause 6.5 shall be used and applied towards prepayment of the outstanding loans under the KEXIM Facility Agreement.

 

6.6Mandatory prepayment – Credit rating

 

If the credit rating of any of the Borrower’s bonds or notes, or the credit rating of any new bonds or notes issued by the Borrower, published by Korea Ratings Corp., Korea Investors Service Inc. or NICE Investor Service is downgraded to, or is of, a credit rating of BBB- or below, the Borrower shall:

 

(a)promptly notify the Lender upon becoming aware of such downgrade or upon obtaining such credit rating; and

 

(b)prepay all amounts of the outstanding Loan on the date specified in Clause 6.9(c)(ii) below.

 

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6.7Mandatory prepayment – Insolvency of the Issuer

 

Upon receipt of an Issuer Insolvency Payment by the Borrower or the Acquisition SPV, the Borrower shall prepay the Loan in an amount equal to 50% or (in the case of a Full Prepayment Event) 100% of such Issuer Insolvency Payment, provided that any Issuer Insolvency Payment not applied in prepayment of the Loan pursuant to this Clause 6.7 shall be used and applied towards prepayment of the outstanding loans under the KEXIM Facility Agreement.

 

6.8Voluntary prepayment

 

The Borrower may, by giving not less than 10 Business Days’ prior written notice to the Lender, voluntarily prepay the Loan in whole or in part.

 

6.9Miscellaneous provisions

 

(a)Any notice of prepayment under this Agreement is irrevocable and must specify the relevant date(s).

 

(b)All prepayments under this Agreement must be made with accrued interest on the amount prepaid. No premium or penalty is payable in respect of any prepayment except for Break Costs. For the avoidance of doubt, no Break Cost will be payable if a prepayment is made on the last day of the applicable Interest Period.

 

(c)The Borrower must prepay the Loan at the following times:

 

(i)in the case of any prepayment under Clause 6.4 and 6.5, promptly upon receipt of the relevant Net Proceeds;

 

(ii)in the case of any prepayment under Clause 6.6, promptly upon the relevant downgrade or upon obtaining the relevant credit rating; and

 

(iii)in the case of any prepayment under Clause 6.7, promptly upon receipt by the Borrower or the Acquisition SPV of the Issuer Insolvency Payment.

 

(d)The Lender may agree to a shorter notice period for a voluntary prepayment.

 

(e)No prepayment or cancellation is allowed except in accordance with the express terms of this Agreement.

 

(f)No amount of the Commitment cancelled under this Agreement may subsequently be reinstated.

 

7.INTEREST

 

7.1Calculation of interest

 

The rate of interest on the Loan for each Interest Period is the percentage rate per annum equal to the aggregate of the applicable:

 

(a)Margin; and

 

(b)Reference Rate.

 

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7.2Payment of interest

 

Except where it is provided to the contrary in this Agreement, the Borrower must pay accrued interest on the Loan on the last day of each Interest Period.

 

7.3Interest on overdue amounts

 

(a)If the Borrower fails to pay any amount payable by it under the Finance Documents, it must immediately on demand by the Lender pay interest on the overdue amount from its due date up to the one day prior to the date of actual payment, before, on and after judgment.

 

(b)Interest on an overdue amount is payable at a rate determined by the Lender to be two per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan in the currency of the overdue amount.

 

(c)For the purpose of paragraph (b) above, the Lender may (acting reasonably):

 

(i)select successive Interest Periods of any duration of up to three months; and

 

(ii)determine the appropriate Rate Fixing Day for that Interest Period.

 

(d)Notwithstanding paragraph (b) above, if the overdue amount is a principal amount of the Loan and becomes due and payable before the last day of its current Interest Period, then:

 

(i)the first Interest Period for that overdue amount will be the unexpired portion of that Interest Period; and

 

(ii)the rate of interest on the overdue amount for that first Interest Period will be two per cent. per annum above the rate then payable on the Loan.

 

(e)After the expiry of the first Interest Period for that overdue amount, the rate on the overdue amount will be calculated in accordance with paragraph (b) above.

 

(f)Interest (if unpaid) on an overdue amount will be compounded with that overdue amount at the end of each of its Interest Periods but will remain immediately due and payable.

 

7.4Notification of rates of interest

 

(a)The Lender shall notify the Borrower of the determination of a rate of interest under this Agreement.

 

(b)In respect of any Fallback Interest Payment, the Lender shall promptly upon a Fallback Interest Payment being determinable notify:

 

(i)the Borrower of that Fallback Interest Payment;

 

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(ii)if such Fallback Interest Payment is determined pursuant to paragraph (b) of Clause 9.1 (Unavailability of Term SOFR), the Borrower of the applicable Central Bank Rate relating to the determination of that Fallback Interest Payment.

 

(c)This Clause 7.4 shall not require the Lender to make any notification to the Borrower on a day which is not a Business Day.

 

8.INTEREST PERIODS

 

8.1Selection

 

(a)The Loan has successive Interest Periods.

 

(b)Subject to the following provisions of this Clause, each Interest Period for the Loan will be three months.

 

(c)Each Interest Period of the Loan will start on its Utilisation Date or on the expiry of its preceding Interest Period of the Loan.

 

8.2No overrunning the Final Maturity Date

 

If an Interest Period would otherwise overrun the Final Maturity Date, it will be shortened so that it ends on the Final Maturity Date.

 

9.CHANGES TO THE CALCULATION OF INTEREST

 

9.1Unavailability of Term SOFR

 

(a)Historic Term SOFR: If Term SOFR is not available for the Interest Period, the Reference Rate for such Interest Period shall be Historic Term SOFR for a period equal in length to the Interest Period.

 

(b)Central Bank Rate: If paragraph (a) above applies but Historic Term SOFR is not available for the Interest Period, the Reference Rate for such Interest Period shall be the percentage rate per annum which is the arithmetic mean of the applicable Central Bank Rates for the days in the Interest Period, provided that the Central Bank Rate applicable to the day falling five days prior to the last day of the relevant Interest Period shall be deemed to be the Central Bank Rate for the final five days of such Interest Period.

 

(c)Cost of funds: If paragraph (b) above applies but the Central Bank Rate is not available for any day in the Interest Period, there shall be no Reference Rate and Clause 10.2 (Cost of funds) shall apply to that Interest Period.

 

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10.MARKET DISRUPTION

 

10.1Market disruption

 

If the Lender’s cost of funds relating to the Loan would be in excess of the Market Disruption Rate, then Clause 10.2 (Cost of funds) shall apply to the Loan for the relevant Interest Period.

 

10.2Cost of funds

 

(a)If this Clause 10.2 applies, the rate of interest on the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

(i)the applicable Margin; and

 

(ii)the rate notified to the Borrower by the Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum its cost of funds relating to the Lender of funding the Loan.

 

(b)If this Clause 10.2 applies and the Lender or the Borrower so requires, the Lender and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

 

(c)Any alternative basis agreed pursuant to paragraph (b) above shall be binding on all Parties.

 

10.3Break costs

 

(a)The Borrower must, within three (3) Business Days of demand by the Lender, pay to the Lender its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an applicable Interest Period for the Loan or Unpaid Sum.

 

(b)The Lender shall, as soon as reasonably practicable after a request by the Borrower, provide a certificate confirming the amount of any Break Costs it claims.

 

11.FEES

 

11.1Arrangement fees

 

(a)The Borrower must pay to the Lender an arrangement fee of USD285,000, being 0.3 per cent. of the Commitment as at the date of this Agreement.

 

(b)The arrangement fee shall be payable on the Utilisation Date.

 

11.2Commitment fees

 

(a)The Borrower must pay to the Lender a commitment fee computed at the rate of 0.20 per cent. per annum on the undrawn, uncancelled amount of the Commitment, from and including the date falling three weeks after the date of this Agreement until and including the last day of the Availability Period.

 

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(b)The commitment fee (if any) is payable in arrears:

 

(i)on the date of the Utilisation Date; or

 

(ii)(if the Utilisation Date does not occur during the Availability Period) on the last day of the Availability Period.

 

(c)Accrued commitment fee is also payable to the Lender on the date its commitment is cancelled in full.

 

12.TAXES

 

(a)Tax Credit means a credit against any Tax or any relief or remission for Tax (or its repayment).

 

(b)Unless a contrary indication appears, in this Clause 12, a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

 

12.1Tax gross-up

 

(a)The Borrower must make all payments to be made by it under the Finance Documents without any Tax Deduction, unless a Tax Deduction is required by law.

 

(b)The Borrower shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Lender accordingly. Similarly, the Lender shall promptly notify the Borrower on becoming so aware in respect of a payment payable to it.

 

(c)If a Tax Deduction is required by law to be made by the Borrower, the amount of the payment due from the Borrower will be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

(d)If the Borrower is required to make a Tax Deduction, the Borrower must make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

(e)Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower must deliver to the Lender evidence satisfactory to the Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

12.2Tax indemnity

 

(a)The Borrower shall (within 10 Business Days of demand by the Lender) pay to the Lender an amount equal to the loss, liability or cost which the Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by the Lender in respect of a Finance Document.

 

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(b)Paragraph (a) above does not apply:

 

(i)with respect to any Tax assessed on the Lender:

 

(A)under the law of the jurisdiction in which the Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Lender is treated as resident for tax purposes; or

 

(B)under the law of the jurisdiction in which the Lender is located in respect of amounts received or receivable in that jurisdiction,

 

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by the Lender; or

 

(ii)to the extent a loss, liability or cost:

 

(A)is compensated for by an increased payment under Clause 12.1 (Tax gross-up);

 

(B)relates to a FATCA Deduction required to be made by a Party; or

 

(C)which is not notified to the Borrower within 180 days of the Lender becoming aware of such loss, liability or cost in accordance with paragraph (c) below.

 

(c)If the Lender makes or intends to make a claim under paragraph (a) above, it shall promptly notify the Borrower of the event which will give, or has given, rise to the claim.

 

12.3Tax Credit

 

If the Borrower makes a Tax Payment and the Lender determines (in its absolute discretion) that:

 

(a)a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

 

(b)it has obtained and utilised that Tax Credit,

 

the Lender shall pay an amount to the Borrower which the Lender (in its absolute discretion) determines will leave it (after that payment) in the same after Tax position as it would have been if the Tax Payment had not been required to be made by the Borrower.

 

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12.4Stamp taxes

 

The Borrower must pay and, within 10 Business Days of demand, indemnify the Lender and K-SURE against any cost, loss or liability the Lender or K-SURE incurs in relation to all stamp duty, stamp duty land tax, registration and other similar Taxes payable in connection with the entry into, performance or enforcement of any Finance Document and the K-SURE Insurance Policy.

 

12.5Value added taxes

 

(a)Any amount payable under a Finance Document by the Borrower is exclusive of any value added tax or any other Tax of a similar nature which might be chargeable in connection with that amount. If any such Tax is chargeable, the Borrower must pay to the Lender (in addition to and at the same time as paying that amount) an amount equal to the amount of that Tax.

 

(b)Where a Finance Document or the K-SURE Insurance Policy requires any Party to reimburse the Lender or K-SURE for any costs or expenses, that Party must also at the same time pay and indemnify the Lender or K-SURE against all value added tax or any other Tax of a similar nature incurred by the Lender in respect of these costs or expenses but only to the extent that the Lender or K-SURE (acting reasonably) determines that it is not entitled to credit or repayment from the relevant tax authority in respect of the Tax.

 

12.6FATCA Information

 

(a)Subject to paragraph (c) below, each Party shall, within 5 Business Days of a reasonable request by another Party:

 

(i)confirm to that other Party whether it is:

 

(A)a FATCA Exempt Party; or

 

(B)not a FATCA Exempt Party;

 

(ii)supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and

 

(iii)supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other applicable law or regulation implementing international arrangements for the exchange of Tax or financial information between jurisdictions.

 

(b)If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

 

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(c)Paragraph (a) above shall not oblige the Lender to do anything, and paragraph (a)(iii) above shall not oblige the Borrower to do anything, which would or might in its reasonable opinion constitute a breach of any applicable:

 

(i)law or regulation;

 

(ii)fiduciary duty; or

 

(iii)duty of confidentiality.

 

(d)If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information relating to its status under FATCA requested in accordance with paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

 

12.7FATCA Deduction

 

(a)Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

 

(b)Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the other Party.

 

12.8Benefit of this Clause

 

K-SURE will have the benefit of the Lender’s rights under this Clause 12 to the extent the Lender’s rights under this Clause 12 have been fully or partly and properly assigned, transferred, subrogated or novated to K-SURE, together with any other ancillary rights under the Finance Documents required to give effect to this Clause 12.

 

13.INCREASED COSTS

 

13.1Increased Costs

 

(a)Subject to Clause 13.2 (Exceptions), the Borrower must pay to the Lender within 10 Business Days of demand by the Lender or K-SURE, the amount of any Increased Cost incurred by the Lender, any of its Affiliates or K-SURE as a result of:

 

(i)the introduction of, or any change in (or in the interpretation, administration or application of) any law or regulation; or

 

(ii)compliance with any law or regulation made after the date of this Agreement.

 

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(b)In this Agreement:

 

Basel II means the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III).

 

Basel III means:

 

(a)the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee in December 2010, each as amended, supplemented or restated;

 

(b)the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Basel committee in November 2011, as amended, supplemented or restated; and

 

(c)any further guidance or standards published by the Basel Committee relating to “Basel III”.

 

Basel Committee means the Basel Committee on Banking Supervision.

 

CRD IV means:

 

(a)(i) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and

 

(i)Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms,

 

in each case as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018; and

 

(b)(i) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and

 

(ii)Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.

 

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13.2Exceptions

 

Clause 13.1 (Increased Costs) does not apply to the extent that the Increased Cost is:

 

(a)attributable to a Tax Deduction required by law to be made by the Borrower;

 

(b)attributable to a FATCA Deduction required to be made by a Party;

 

(c)compensated for by Clause 12.2 (Tax indemnity) (or would have been compensated for under Clause 12.2 (Tax indemnity) but was not so compensated solely because of any of the exclusions in paragraph (b) of Clause 12.2 (Tax indemnity) applied);

 

(d)attributable to the wilful breach by the Lender or its Affiliate of any law or regulation;

 

(e)attributable to the implementation or application of, or compliance with, Basel III or CRD IV or any other law or regulation which implements Basel III or CRD IV (whether such implementation, application or compliance is by a government, regulator, the Lender or any of its Affiliates);

 

(f)attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the Signing Date (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, the Lender or any of its Affiliates); or

 

(g)the Lender does not notify the Borrower of its intention to make a claim within 180 days of the date on which the Lender becomes aware of such Increased Cost.

 

13.3Claims

 

(a)If the Lender intends to make a claim for an Increased Cost, it shall notify the Borrower of the circumstances giving rise to.

 

(b)The Lender shall, as soon as practicable after a demand by the Borrower, together with its demand, provide a certificate confirming the amount of its Increased Cost.

 

13.4Benefit of this Clause

 

K-SURE will have the benefit of the Lender’s rights under this Clause 13 to the extent the Lender’s rights under this Clause 13 have been fully or partly and properly assigned, transferred, subrogated or novated to K-SURE, together with any other ancillary rights under the Finance Documents required to give effect to this Clause 13.

 

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14.OTHER INDEMNITIES

 

14.1Currency indemnity

 

(a)The Borrower must indemnify the Lender against any loss or liability which the Lender incurs as a consequence of:

 

(i)the Lender receiving an amount in respect of the Borrower’s liability under the Finance Documents; or

 

(ii)that liability being converted into a claim, proof, judgment or order,

 

in a currency other than the currency in which the amount is expressed to be payable under the relevant Finance Document.

 

(b)Unless otherwise required by law, the Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.

 

14.2Other indemnities

 

(a)The Borrower must indemnify the Lender against any loss or liability which the Lender incurs as a consequence of:

 

(i)the occurrence of any Event of Default;

 

(ii)any failure by the Borrower to pay any amount due under a Finance Document on its due date;

 

(iii)(other than by reason of negligence or default by the Lender alone) the Loan not being made after a Request has been delivered; or

 

(iv)the Loan (or part of the Loan) not being prepaid in accordance with this Agreement.

 

(b)The Borrower’s liability in each case includes any loss or expense on account of funds borrowed, contracted for or utilised to fund any amount payable under any Finance Document or the Loan.

 

14.3Indemnities for other losses under the K-SURE Insurance Policy

 

Without prejudice to Clause 14.2 (Other indemnities), the Borrower must, promptly upon receipt of a written demand by the Lender, indemnify the Lender against any cost, loss or liability incurred by the Lender under the K-SURE Insurance Policy, to the extent such cost, loss or liability is not satisfied by the Borrower’s payment of interest or the repayment of the Loan and other than where such cost, loss or liability is incurred by reason of gross negligence or wilful default by the Lender alone.

 

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15.MITIGATION BY THE LENDER

 

15.1Mitigation

 

(a)The Lender shall, in consultation with the Borrower and with the prior consent of K-SURE, take all reasonable steps to mitigate any circumstances which arise and which result or would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 6.2 (Mandatory prepayment – illegality), Clause 12 (Taxes) or Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate.

 

(b)Paragraph (a) above does not in any way limit the obligations of the Borrower under the Finance Documents.

 

(c)The Borrower must indemnify the Lender for all costs and expenses reasonably incurred by the Lender as a result of any step taken by it under this Subclause.

 

(d)The Lender is not obliged to take any step under this Subclause if, in the opinion of the Lender (acting reasonably), to do so might be prejudicial to it.

 

15.2Conduct of business by the Lender

 

No term of any Finance Document will:

 

(a)interfere with the right of the Lender to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit;

 

(b)oblige the Lender to investigate or claim any credit, relief, remission or repayment available to it in respect of Tax or the extent, order and manner of any claim; or

 

(c)oblige the Lender to disclose any information relating to its affairs (Tax or otherwise) or any computation in respect of Tax.

 

16.COSTS AND EXPENSES

 

16.1Initial costs

 

The Borrower must pay to the Lender the amount of all reasonable costs and expenses (including legal fees) incurred by it and K-SURE in connection with the negotiation, preparation, printing, entry into and syndication of the Finance Documents.

 

16.2Subsequent costs

 

(a)The Borrower must pay to the Lender the amount of all reasonable costs and expenses (including legal fees) incurred by it and K-SURE in connection with:

 

(i)the negotiation, preparation, printing and entry into of any Finance Document entered into after the date of this Agreement; and

 

(ii)any amendment, waiver or consent requested by or on behalf of the Borrower or specifically allowed by a Finance Document.

 

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16.3Enforcement costs

 

The Borrower must pay to the Lender the amount of all costs and expenses (including legal fees) incurred by it and K-SURE in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

 

17.REPRESENTATIONS AND WARRANTIES

 

17.1Representations and warranties

 

The representations and warranties set out in this Clause are made by the Borrower to the Lender.

 

17.2Status

 

(a)The Borrower is a Korean joint stock company (chusik hoesa), duly incorporated and validly existing under the laws of its jurisdiction of incorporation.

 

(b)It has the power to own its assets and carry on its business as it is being conducted.

 

(c)It is acting as principal and for its own account and not as agent or trustee or in any other capacity on behalf of any third party.

 

(d)It is not a FATCA FFI.

 

17.3Powers and authority

 

It has the power to enter into and perform, and has taken all necessary action to authorise the entry into and performance of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents.

 

17.4Legal validity

 

(a)Subject to any general principles of law limiting its obligations and referred to in any legal opinion required under this Agreement, each Finance Document to which it is a party is its legally binding, valid and enforceable obligation.

 

(b)Each Finance Document to which it is a party is in the proper form for its enforcement in the jurisdiction of its incorporation.

 

17.5Non-conflict

 

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not conflict, in any material respect, with:

 

(a)any law or regulation applicable to it;

 

(b)its constitutional documents; or

 

(c)any document which is binding upon it or any of its assets.

 

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17.6No default

 

(a)No Default is continuing or will result from the entry into of, or the performance of any transaction contemplated by, any Finance Document.

 

(b)No other event or circumstance is continuing which constitutes a default under any document which is binding on it or any of its Subsidiaries or any of its or its Subsidiaries’ assets to an extent or in a manner which has or is reasonably likely to have a Material Adverse Effect.

 

17.7Authorisations

 

All authorisations required by it in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents (including without limitation, to make the Finance Documents admissible in evidence in its jurisdiction of incorporation) have been obtained or effected and are in full force and effect.

 

17.8Acquisition Documents

 

The terms of any Acquisition Document have not been amended or waived in a manner which would be materially adverse to the interests of the Lender under the Finance Documents (taken as a whole) (other than any amendment or waiver made with the prior consent of the Lender).

 

17.9Legal and beneficial ownership

 

The Borrower (or the Acquisition SPV, as applicable) will, from the Acquisition Closing Date, be the sole legal and beneficial owner of the Acquisition Shares free from any Security Interest, except such Acquisition Shares which have been disposed of, redeemed or liquidated, in each case, to the extent not in breach of the terms of this Agreement.

 

17.10Financial statements

 

Its financial statements most recently delivered to the Lender (which, at the date of this Agreement, are the Borrower’s Original Financial Statements):

 

(a)have been prepared in accordance with accounting principles and practices generally accepted in its jurisdiction of incorporation, consistently applied; and

 

(b)give a true and fair view (if audited) or fairly represent in all material respects (if unaudited) its financial condition (consolidated, if applicable) as at the date to which they were drawn up,

 

except, in each case, as disclosed to the contrary in those financial statements.

 

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17.11No material adverse change

 

There has been no material adverse change in its business, assets or financial condition since the date to which the Borrower’s Original Financial Statements were drawn up.

 

17.12Security Interest

 

No Security Interest exists over any of the assets (whether present or future) of the Borrower or any Material Subsidiary other than those Security Interest referred to in paragraphs (c) of Clause 19.5 (Negative pledge).

 

17.13Pari Passu

 

All payment obligations under the Finance Documents rank at least pari passu with all its other present unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

 

17.14Litigation

 

No litigation, arbitration or administrative proceedings against it or any Material Subsidiary are current or, to its knowledge, pending or threatened, which have or, if adversely determined, are reasonably likely to have a Material Adverse Effect.

 

17.15Insolvency

 

No:

 

(a)corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 23.8 (Insolvency proceedings);

 

(b)creditors’ process described in Clause 23.11(Creditors’ process); or

 

(c)corporate action, legal proceeds or other procedure as described in Clause 23.10 (Designation of a failing company (부실징후기업 in Korean)) has been taken or, to the knowledge of the Borrower, threatened in relation to the Borrower or any Material Subsidiary, and none of the circumstances described in Clause 23.7 (Insolvency) applies to the Borrower or any Material Subsidiary.

 

17.16Information

 

(a)Any factual information provided by the Borrower to the Lender or K-SURE is true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated to be given, provided that separate factual information provided in respect of the same matter shall be considered as a whole.

 

(b)Any financial projection provided by the Borrower to the Lender or K-SURE has been prepared on the basis of recent historical information and on the basis of reasonable assumptions, in each case, at the time of preparation.

 

(c)No information has been given or withheld that result in the information provided by the Borrower to the Lender or K-SURE being untrue or misleading in any material respect.

 

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17.17Taxes on payments

 

(a)All amounts payable by it under the Finance Documents may be made without any Tax Deduction, except that payments of any amount other than the principal amount of the Loan paid by the Borrower may be subject to withholding tax in Korea.

 

(b)It and each Material Subsidiary has filed or caused to be filed all tax returns which to its knowledge are required to be filed and has paid all Taxes which are due and payable, save for those being contested in good faith or payments lawfully withheld, in each case, for which adequate reserves have been established under generally accepted accounting principles and failure to pay or withholding payment of (as the case may be) those Taxes does not have a Material Adverse Effect.

 

17.18Stamp duties

 

No stamp or registration duty or similar Tax or charge is payable in its jurisdiction of incorporation in respect of any Finance Document.

 

17.19Immunity

 

(a)The entry into by it of each Finance Document constitutes, and the exercise by it of its rights and performance of its obligations under each Finance Document will constitute, private and commercial acts performed for private and commercial purposes; and

 

(b)subject to any general provisions of law with respect of immunity of certain assets from attachment and from execution, referred to in any legal opinion required under this Agreement, it will not be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of incorporation in relation to any Finance Document.

 

17.20No adverse consequences

 

(a)It is not necessary under the laws of its jurisdiction of incorporation:

 

(i)in order to enable the Lender to enforce its rights under any Finance Document; or

 

(ii)by reason of the entry into of any Finance Document or the performance by it of its obligations under any Finance Document,

 

that the Lender should be licensed, qualified or otherwise entitled to carry on business in its jurisdiction of incorporation; and

 

(b)the Lender is not or will not be deemed to be resident, domiciled or carrying on business in its jurisdiction of incorporation by reason only of the entry into, performance and/or enforcement of any Finance Document.

 

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17.21Jurisdiction/governing law

 

(a)In this Subclause:

 

Relevant Jurisdiction means in relation to the Borrower:

 

(i)its jurisdiction of incorporation; and

 

(ii)England and Wales.

 

(b)Its:

 

(i)irrevocable submission under the Finance Documents to the jurisdiction of the courts of England;

 

(ii)agreement that each Finance Document purported to be governed by English law to which it is a party is governed by English law; and

 

(iii)agreement not to claim any immunity to which it or its assets may be entitled, are legal, valid and binding under the laws of the Relevant Jurisdiction; and

 

(c)any judgment obtained in England will be recognised and be enforceable by the courts of its Relevant Jurisdiction.

 

17.22Compliance with laws

 

The Borrower and each member of the Group is in compliance in all material respects with all laws and regulations (including, without limitation, anti-bribery, anti-corruption, anti-money laundering and counter terrorism financing laws and regulations).

 

17.23Anti-bribery, anti-corruption and anti-money laundering

 

The Borrower (or any of its subsidiaries, directors or officers, or any affiliate, agent or employee of it), has not engaged in any activity or conduct which would violate any Anti-Corruption Laws and the Borrower has instituted and maintains policies and procedures designed to prevent violation of such laws, regulations and rules.

 

17.24No Prohibited Payments

 

No Prohibited Payment has been made or provided, directly or indirectly, by (or on behalf of) it, any of its Affiliates, its or its officers, directors or any other person acting on its behalf to, or for the benefit of, any Authority (or any official, officer, director, agent or key employee of, or other person with management responsibilities in, of any Authority) in connection with the Acquisition or any of the Finance Documents.

 

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17.25No funds of Illicit Origin

 

(a)No payments made by the Borrower in connection with the Acquisition Price have been funded out of funds of Illicit Origin, and none of the sources of funds to be used by the Borrower in connection with the Acquisition or its business are of Illicit Origin.

 

(b)The Loan will not be used to finance equipment or sectors under embargo decisions of the Sanctions Authorities.

 

17.26Sanctions

 

The Borrower, any of its subsidiaries, directors or officers, any affiliate, agent or employee of the Borrower is not an individual or entity (a Person), that is, or is owned or controlled by Persons that are:

 

(a)the target of any Sanctions (a Sanctioned Person); or

 

(b)located, organised or resident in a Sanctioned Country.

 

17.27Effectiveness of cover

 

On and after the date of the Request, the K-SURE Insurance Policy is legal, valid, binding, enforceable and in full force and effect, and K-SURE has not issued any notice of suspension or cancellation of the K-SURE Insurance Policy.

 

17.28Good title to assets

 

Each of the Borrower and its Material Subsidiaries has valid title to, or valid leases or licences of, or is otherwise entitled to use, the assets necessary to carry on its business as presently conducted.

 

17.29Times for making representations and warranties

 

(a)The representations and warranties set out in this Clause are made by the Borrower on the date of this Agreement, the Request and the Utilisation Date.

 

(b)Each Repeating Representation is deemed to be repeated by the Borrower on the first day of each Interest Period.

 

(c)The representations and warranties set out Clause 17.10(Financial statements) in respect of each set of financial statements delivered pursuant to Clause 3.1 (Conditions precedent documents) and Clause

 

18.1 (Financial Statements) shall only be made once in respect of each set of financial statements on the date such financial statements are delivered.

 

(d)The representations and warranties made or deemed to be made under the Finance Documents are made subject to the all disclosures made by the Borrower to the Lender prior to the date of this Agreement.

 

(e)When a representation and warranty is repeated, it is applied to the circumstances existing at the time of repetition.

 

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18.INFORMATION COVENANTS

 

18.1Financial statements

 

(a)Only to the extent the relevant financial statements are not publicly available (including on the website of the Borrower), the Borrower must supply to the Lender:

 

(i)its audited consolidated and non-consolidated financial statements for each of its financial years ending after the date of this Agreement; and

 

(ii)its unaudited consolidated semi-annual financial statements for the first half year of each of its financial years ending after the date of this Agreement.

 

(b)All financial statements required to be supplied pursuant to paragraph (a) above must be supplied as soon as they are available and:

 

(i)in the case of the Borrower’s audited consolidated and non-consolidated annual financial statements, within 150 days;

 

(ii)in the case of the Borrower’s unaudited consolidated semi-annual financial statements, within 120 days,

 

of the end of the relevant financial period.

 

18.2Form of financial statements

 

(a)The Borrower must ensure that each set of its financial statements supplied under this Agreement:

 

(i)gives (if audited) a true and fair view of, or (if unaudited) fairly represents, the financial condition (consolidated or otherwise) of the Borrower as at the date to which those financial statements were drawn up; and

 

(ii)is prepared in accordance with accounting principles and practices generally accepted in its jurisdiction of incorporation.

 

(b)The Borrower must notify the Lender of any material change to the manner in which its financial statements are prepared.

 

(c)If requested by the Lender, the Borrower must supply:

 

(i)a full description of any change notified under paragraph (b) above; and

 

(ii)sufficient information to enable the Lender to make a proper comparison between the financial position shown by the set of financial statements prepared on the changed basis and its most recent financial statements delivered to the Lender under this Agreement.

 

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(d)If requested by the Lender, the Borrower must enter into discussions for a period of not more than 30 days with a view to agreeing any amendments required to be made to this Agreement to place the Borrower and the Lender in the same position as they would have been in if the change had not happened. Any agreement between the Borrower and the Lender will be binding on all the Parties.

 

(e)If no agreement is reached under paragraph (d) above on the required amendments to this Agreement, the Borrower must ensure that its independent auditors certify those amendments; the certificate of the independent auditors will be, in the absence of manifest error, binding on all the Parties.

 

18.3Compliance Certificate

 

(a)The Borrower must supply to the Lender a Compliance Certificate in respect of each Measurement Period ending after the Utilisation Date no later than 150 days after the end of such Measurement Period.

 

(b)A Compliance Certificate shall be signed by a director of the Borrower.

 

18.4Credit rating downgrade

 

The Borrower must promptly, upon becoming aware of it, notify the Lender and K-SURE of any downgrades to its credit rating of its bonds and/or notes obtained from Korea Ratings Corp., Korea Investor Service Inc. or NICE Investor Service.

 

18.5Information – miscellaneous

 

(a)The Borrower must supply to the Lender (and to K-SURE under paragraph (v) below):

 

(i)if the Lender so requests, copies of all material documents despatched by the Borrower to its creditors generally (or any class of them) at the same time as they are despatched (subject, in each case, to pre-existing confidentiality arrangements);

 

(ii)promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings in connection with the Borrower which are current, threatened or pending and which have or would reasonably be expected to have, if adversely determined, a Material Adverse Effect;

 

(iii)promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against it or any Material Subsidiary, and, in each case, which would reasonably be expected to have a Material Adverse Effect;

 

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(iv)promptly upon request by the Lender, a list of the then current Material Subsidiaries; and

 

(v)promptly on request by the Lender or K-SURE, such further information including but not limited to the financial condition, business and operations of the Borrower or Material Subsidiaries as the Lender or K-SURE may reasonably request.

 

(b)The Borrower shall discuss with the Lender and with K-SURE in good faith;

 

(c)promptly, and in any event not later than 20 days prior to the date of the relevant disposal, its intention to dispose of any Acquisition Shares, together with reasonable details of the terms of the relevant disposal; and

 

(d)promptly, and in any event not later than 20 days prior to the relevant acquisition, its intention to acquire any further shares in the Issuer or any redeemable preferred share of the Issuer, together with reasonable details of the terms of the acquisition (including, but not limited to, the date of the proposed acquisition and whether it or any of its Subsidiaries will be incurring Financial Indebtedness in connection with such acquisition).

 

18.6Notification of Default

 

(a)The Borrower must notify the Lender of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

 

(b)Promptly on request by the Lender, the Borrower must supply to the Lender a certificate, signed by an authorised signatory on its behalf, certifying that no Default is continuing or, if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it.

 

18.7Year end

 

The Borrower must not change its financial year end.

 

18.8Know your customer requirements

 

The Borrower must promptly on the request of the Lender supply any documentation or other evidence (in English, if requested by the Lender) which is reasonably requested by the Lender (whether for itself or any prospective new Lender) to enable the Lender or prospective new Lender to carry out and be satisfied with the results of all applicable know your customer requirements.

 

19.GENERAL COVENANTS

 

19.1General

 

(a)The Borrower agrees to be bound by the covenants set out in this Clause.

 

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(b)The covenants set out in this Clause remain in force until the date on which all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any capacity whatsoever) of the Borrower have been unconditionally and irrevocably paid in full and all Commitment have been terminated or expired.

 

19.2Authorisations

 

The Borrower must promptly obtain, maintain and comply with the terms of any authorisation required under any law or regulation to enable it to perform its obligations under, or for the validity or enforceability or admissibility in evidence in its jurisdiction of incorporation of, any Finance Document.

 

19.3Compliance with laws

 

(a)The Borrower must (and the Borrower shall ensure that each member of the Group will) comply in all material respects with all laws and regulations (including, without limitation, anti-bribery, anti- corruption, anti-money laundering and counter terrorism financing laws and regulations).

 

(b)The Borrower must (and shall procure that each member of the Group will) comply with all Anti- Corruption Laws and Sanctions and shall implement and will maintain in effect policies and procedures designed to ensure compliance by it and its directors, officers, employees and agents with all Anti-Corruption Laws and Sanctions.

 

19.4Pari passu ranking

 

The Borrower must ensure that its payment obligations under the Finance Documents at all times rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

 

19.5Negative pledge

 

(a)(Other than any Security Interest arising from operation of law or pursuant to mandatory provisions of applicable law), the Borrower shall (and the Borrower shall ensure that the Acquisition SPV will) not create any Security Interest on the Acquisition Shares.

 

(b)Except as provided below, the Borrower shall (and the Borrower shall ensure that each Material Subsidiary will) not create or allow to exist any Security Interest on any of its assets.

 

(c)Paragraph (b) above and paragraph (d) below do not apply to any Security Interest securing indebtedness the outstanding principal amount of which (when aggregated with the outstanding principal amount of any other indebtedness which has the benefit of Security given by the Borrower or any Material Subsidiary) does not exceed an amount equal to 600% of Shareholders’ Equity, by reference to the most recent consolidated annual financial statements of the Borrower.

 

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(d)Subject to paragraphs (c) above, the Borrower may not (and the Borrower shall ensure that each of the Material Subsidiaries do not):

 

(i)sell, transfer or otherwise dispose of any of its assets on terms where it is or may be leased to or re-acquired or acquired by it or any of its related entities;

 

(ii)sell, transfer or otherwise dispose of any of its receivables on recourse terms (other than in its ordinary course of business);

 

(iii)enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

 

(iv)enter into any other preferential arrangement having a similar effect,

 

in circumstances where each such individual transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

 

19.6Financial Indebtedness

 

The Borrower must not (and the Borrower shall ensure that each of the Material Subsidiaries do not) incur any Financial Indebtedness without first obtaining a prior written consent from the Lender if such incurrence would cause the aggregate amount of all Financial Indebtedness of the Borrower and the Material Subsidiaries to exceed an amount equal to 800% of Shareholders’ Equity, by reference to the most recent consolidated annual financial statements of the Borrower.

 

19.7Disposals

 

The Borrower shall not (and the Borrower shall ensure that each Material Subsidiary do not), either in a single transaction or in a series of transactions and whether related or not, dispose of assets if such disposal would cause the aggregate value of assets disposed in any financial year of the Group to exceed 80% of the Total Assets of the Group.

 

19.8Member of the Mutual Investment Restriction Group

 

The Borrower shall ensure that it remains a member of the Mutual Investment Restriction Group (in Korean, 상호출자제한 기업집단).

 

19.9Change of business

 

The Borrower must ensure that no substantial change is made to the general nature of it’s and the Material Subsidiaries’ business from that carried on at the date of this Agreement.

 

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19.10Acquisition Documents

 

(a)The Borrower shall not assign, terminate, amend, consent to any amendment or waiver any rights under any Acquisition Document, without the prior written consent of the Lender, if such action would materially and adversely affect the interests of the Lender under the Finance Documents.

 

(b)The Borrower shall not amend or waive any terms of the Securities Purchase Agreement in a manner which would be materially adverse to the interests of the Lender under the Finance Documents (taken as a whole) (other than any amendment or waiver made with the prior consent of the Lender).

 

19.11Mergers

 

The Borrower may not enter into any amalgamation, demerger, merger or reconstruction except where:

 

(a)the Borrower is the surviving entity after the merger and the creditworthiness of the Borrower is not adversely affected in any material respect as a result of the merger;

 

(b)the Borrower continues to be bound by all of the obligations under this Agreement as borrower;

 

(c)the Finance Documents remain in full force and effect; and

 

(d)there is no Material Adverse Effect as a result of such amalgamation, demerger, merger or reconstruction.

 

19.12Insurance

 

The Borrower and each Material Subsidiary must from time to time insure its business and assets with insurance companies to such an extent and against such risks as companies engaged in a similar business normally insure.

 

19.13Taxes

 

The Borrower and each Material Subsidiary must pay all Taxes due and payable (or, where payments of Tax must be made by reference to estimated amounts, such estimated Tax (calculated in good faith) as due and payable for the relevant period) by it prior to the accrual of any fine or penalty for late payment, unless (and only to the extent that):

 

(a)payment of those Taxes is being contested in good faith or being lawfully withheld;

 

(b)adequate reserves are being maintained for those Taxes and the costs required to contest them; and

 

(c)failure to pay those Taxes does not have a Material Adverse Effect.

 

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19.14Further acts

 

(a)The Borrower must execute all such other documents and instruments and do or not do (as required) all such other acts and things as the Lender or K-SURE may reasonably require:

 

(i)in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and

 

(ii)in order for the beneficiaries under the K-SURE Insurance Policy to comply with and continue to benefit from the K-SURE Insurance Policy or to maintain the effectiveness of the K-SURE Insurance Policy,

 

in each case whether or not expressly required by K-SURE.

 

(b)The Borrower must not do or allow to be done any acts which will prejudice the interest, rights and remedies of the Lender under the K-SURE Insurance Policy.

 

19.15K-SURE Premium

 

The Borrower must pay all K-SURE Premium under the K-SURE Insurance Policy.

 

19.16Most Favoured Nation Treatment

 

If the KEXIM Facility Agreement or any agreement or document in connection with the KEXIM Facility Agreement contain terms in connection with the provisions of Security Interests, maturity date, events of default and mandatory prepayments (in each case, howsoever described) more favourable than the terms provided to the Lender pursuant to the Finance Documents, the Borrower shall (i) notify the Lender, (ii) modify or revise the terms of the Finance Documents to reflect any and all more favourable terms provided under or in connection with the KEXIM Facility Agreement and

 

(iii)take, or procure to be taken, any action, approval or any other requirement necessary to effect the terms of this Clause 19.16.

 

19.17Books and Inspection

 

The Borrower must maintain up-to-date statutory books, books of account, bank statements and other record of the Borrower in all material respects in accordance with the good business practice and all applicable laws.

 

19.18Sanctions

 

The Borrower shall not, directly or indirectly, use the proceeds of the Loan hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or any other Person:

 

(a)to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, a Sanctioned Person or Sanctioned Country; or

 

(b)in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loan hereunder, whether as an underwriter, advisor, investor, lender or otherwise).

 

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19.19Anti-Corruption Law

 

The Borrower shall not, and shall procure that none of its Subsidiaries will, directly or indirectly use the proceeds of the Facility for any purpose which would breach any Anti-Corruption Law including, without limitation, in furtherance of an offer, payment, promise to pay or authorisation of the payment or giving of money or anything else in value to any person in violation of any Anti-Corruption Law.

 

19.20Application of FATCA

 

The Borrower shall procure that it shall not become a FATCA FFI.

 

19.21Conditions subsequent

 

The Borrower shall, within 30 days of the Utilisation Date, provide:

 

(a)evidence to the satisfaction of the Lender that the proceeds of the Loan have been transferred to the Issuer as payment of the Acquisition Price and that the Acquisition Price has been paid in full at the First Closing (as defined in the Securities Purchase Agreement);

 

(b)evidence to the satisfaction of the Lender that the CFIUS Clearance (as defined in the Securities Purchase Agreement) has been obtained;

 

(c)notice to the Lender confirming the completion of the First Closing (as defined in the Securities Purchase Agreement);

 

(d)evidence to the satisfaction of the Lender that the Borrower (or the Acquisition SPV, as the case may be) is the sole record and beneficial owner of all of the Acquisition Shares; and

 

(e)a duly executed copy of the Investor Agreement (if any).

 

20.FINANCIAL COVENANTS

 

20.1Definitions

 

In this Clause:

 

EBITDA means, for any Measurement Period on a consolidated basis for the Borrower:

 

(a)the sum of the amounts for such period of:

 

(i)Net Income;

 

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(ii)depreciation and amortisation expense;

 

(iii)total interest expense;

 

(iv)charges for income taxes; and

 

(v)extraordinary losses (including restructuring charges and business acquisition and consolidation expenses) and other non-operating expenses (including fees, costs and expenses in connection with the Acquisition, this Facility, other equity offering, investment, acquisitions, and Financial Indebtedness) that have been deducted in the determination of Net Income;

 

minus

 

(b)the sum of:

 

(i)extraordinary gains not already excluded from the determination of Net Income (including, without limitation, gains in connection with the sale of property and gains based upon market valuation, valuation under generally accepted accounting principles or sale of securities); and

 

(ii)interest and other non-operating income.

 

Gearing Ratio means, in respect of the Borrower, the ratio of Total Borrowings to Shareholders’ Equity of the Borrower.

 

Interest Cover means, in respect of any Measurement Period, the ratio of EBITDA to Interest Expenses in respect of that Measurement Period.

 

Interest Expense means, for any Measurement Period, all interest expenses in respect of the Total Borrowings of that are due by it for such period (whether or not actually paid during that Relevant Period).

 

Net Income means, for any Measurement Period, the consolidated net income (or loss) after taxes for that Relevant Period taken as a single accounting period, determined in conformity with the generally accepted accounting principles in the jurisdiction of incorporation of the Borrower.

 

Shareholders’ Equity means, in respect of the Borrower, at any time the aggregate of:

 

(a)the amount paid up or credited as paid up on the issued share capital of the Borrower; and

 

(b)the amount standing to the credit of the capital and revenue reserves of the Borrower.

 

Total Borrowings means, in respect of the Borrower, at any time the aggregate of all interest-bearing Financial Indebtedness (calculated on a consolidated basis) of the Borrower.

 

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20.2Gearing Ratio

 

The Borrower must ensure that its Gearing Ratio at the end of each Measurement Period ending after the Utilisation Date, is less than 5.0 to 1.

 

20.3Shareholders’ Equity

 

The Borrower must ensure that, at the end of each Measurement Period, its Shareholders’ Equity is greater than zero.

 

20.4Interest Cover

 

The Borrower must ensure that its Interest Cover in respect at any Measurement Period ending after the Utilisation Date, is not less than 1.2 to 1.

 

20.5Financial testing

 

Subject to Clause 18.2(d) (Form of financial statements), the financial covenants set out in this Clause 20 (Financial Covenants) shall be calculated in accordance with the generally accepted accounting principles in the jurisdiction of incorporation of the Borrower and tested by reference to each of the financial statements delivered pursuant to Clause 18.1 (Financial statements) and/or each Compliance Certificate delivered pursuant to Clause 18.3(Compliance Certificate).

 

21.SUBROGATION AND REIMBURSEMENT

 

21.1Subrogation

 

(a)In addition, and without prejudice to Clause 21.2 (Reimbursement) and any right of indemnification or subrogation K-SURE may have at law, in equity or otherwise, each Party agrees that upon any payments to the Lender by K-SURE under the K-SURE Insurance Policy in respect of any amounts due under the Finance Documents (the Underlying Payment), the following shall apply:

 

(i)the obligations and liabilities of the Borrower against the Lender under this Agreement and other Finance Documents shall not be reduced, discharged nor affected in any way;

 

(ii)upon K-SURE ‘s request, the Lender shall assign to K-SURE its rights to recover the Underlying Payment from the Borrower and until the assignment referred to in this subparagraph (ii) is completed, the Lender shall hold on trust for K-SURE any payments made under this Agreement and other Finance Documents and pay or transfer them to K-SURE in accordance with the K-SURE Insurance Policy; and

 

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(iii)notwithstanding anything to the contrary, K-SURE shall be entitled to the extent of the Underlying Payment to exercise the rights of the Lender against the Borrower under this Agreement and other Finance Documents or any relevant laws and/or regulations unless and until such payment and the interest accrued thereon are fully reimbursed to K-SURE.

 

(b)The Borrower agrees to co-operate with K-SURE and the Lender, as the case may be, in giving effect to any assignment referred to in this clause, and to take all actions requested by K-SURE or the Lender, in each case to implement or give effect to such assignment.

 

(c)The Borrower shall indemnify K-SURE in respect of any costs or expenses (including legal fees) and withholdings suffered or incurred by K-SURE in connection with any assignment referred to above or

 

payments by the Lender to K-SURE under this Agreement, any other Finance Documents or the K- SURE Insurance Policy.

 

21.2Reimbursement

 

(a)Without prejudice to Clause 21.1 (Subrogation), the Borrower agrees that it will promptly pay K- SURE an amount equal to any payment made by K-SURE under the K-SURE Insurance Policy, by direct payment.

 

(b)The Lender will promptly inform the Borrower of any amounts to be reimbursed under this Agreement.

 

(c)The obligations of the Borrower to reimburse K-SURE will, subject to paragraph (a) above, be immediately due and payable in the currency of payment by K-SURE on the date that any amount is paid by K-SURE in an amount equal to:

 

(i)the amount paid by K-SURE pursuant to the K-SURE Insurance Policy on such date; and

 

(ii)all amounts previously paid by K-SURE pursuant to the K-SURE Insurance Policy which remain reimbursed,

 

in each case, together with interest on any and all amounts remaining unreimbursed from and including the date on which such amounts become due until and including the date on which such amounts are paid in full determined in accordance with Clause 7.3 (Interest on overdue amounts). For the avoidance of doubt, Clause 12.1 (Tax-gross up) will apply in respect of any reimbursement made pursuant to this Clause 21.2.

 

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22.INSTRUCTIONS OF K-SURE

 

(a)The Borrower acknowledges that the Lender is required to consult with K-SURE prior to the exercise of certain of their decisions under the Finance Documents to which they are a party (including the exercise of such voting rights in relation to any amendment to any Finance Document) and to follow any instructions given by K-SURE in relation to such decisions.

 

(b)The Lender will be deemed to have acted reasonably if it has acted on the instructions of K-SURE in the making of any decision or the taking or refraining to take any action under any Finance Document.

 

(c)The Borrower shall have no claim whatsoever in respect of any loss, damage or expense suffered or incurred by it against the Lender for acting in accordance with any instructions of K-SURE.

 

23.DEFAULT

 

23.1Events of Default

 

Each of the events or circumstances set out in this Clause (other than Clause 23.19 (Remedies following an Event of Default) is an Event of Default.

 

23.2Non-payment

 

The Borrower does not pay on the due date any amount payable by it under the Finance Documents in the manner required under the Finance Documents, unless the non-payment:

 

(a)is caused by technical or administrative error; and

 

(b)is remedied within 5 Business Days of the due date.

 

23.3Financial covenants

 

Any requirement of Clause 20 (Financial Covenants) is not satisfied.

 

23.4Breach of other obligations

 

(a)The Borrower does not comply with any term of the Finance Documents (other than any term referred to in Clause 23.2 (Non-payment) and Clause 20 (Financial Covenants), unless the non-compliance:

 

(i)is capable of remedy; and

 

(ii)either:

 

(A)in the case of Clause 18.6 (Notification of Default) or any other obligation to notify the Lender under this Agreement, is remedied within 30 days of the earlier of the Lender giving notice of the failure to comply to the Borrower and the Borrower becoming aware of the non-compliance; or

 

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(B)otherwise, is remedied within 15 Business Days of the earlier of the Lender giving notice of the failure to comply to the Borrower and the Borrower becoming aware of the non-compliance.

 

23.5Misrepresentation

 

A representation or warranty made or deemed to be repeated by the Borrower in any Finance Document or in any document delivered by or on behalf of the Borrower under any Finance Document is incorrect or misleading in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the misrepresentation or breach of warranty:

 

(a)are capable of remedy; and

 

(b)are remedied within 15 Business Days of the earlier of the Lender giving notice of the misrepresentation or breach of warranty to the Borrower becoming aware of the misrepresentation or breach of warranty.

 

23.6Cross-default

 

Any of the following occurs in respect of the Borrower or each Material Subsidiary:

 

(a)any of its Financial Indebtedness is not paid when due (after the expiry of any originally applicable grace period); or

 

(b)any of its Financial Indebtedness:

 

(i)becomes prematurely due and payable;

 

(ii)is placed on demand; or

 

(iii)is capable of being declared by or on behalf of a creditor to be prematurely due and payable or of being placed on demand,

 

in each case, as a result of an event of default or any provision having a similar effect (howsoever described),

 

unless the aggregate amount of Financial Indebtedness falling within all or any of paragraphs (a) or

 

(b) above is less than USD50,000,000 or its equivalent.

 

23.7Insolvency

 

(a)Any of the following occurs in respect of the Borrower or any Material Subsidiary:

 

(i)it is, or is deemed for the purposes of any applicable law to be, unable to pay its debts as they fall due or insolvent;

 

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(ii)it admits its inability to pay its debts as they fall due;

 

(iii)it suspends making payments on any of its debts or announces an intention to do so;

 

(iv)by reason of actual or anticipated financial difficulties, it begins negotiations with any creditor for the rescheduling or restructuring of any of its indebtedness; or

 

(v)a moratorium or restructuring is declared in respect of any of its indebtedness.

 

(b)If a moratorium or restructuring occurs in respect of the Borrower or any Material Subsidiary, the ending of the moratorium will not remedy any Event of Default caused by the moratorium.

 

23.8Insolvency proceedings

 

(a)Except as provided below, any of the following occurs in respect of the Borrower or any Material Subsidiary:

 

(i)any step is taken with a view to the suspension of payments, a moratorium or a composition, restructuring, compromise, assignment or similar arrangement with any of its creditors;

 

(ii)a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court or any registrar for, its bankruptcy, restructuring proceedings, rehabilitation proceedings, winding-up, administration or dissolution or any such resolution is passed;

 

(iii)any person presents a petition, or files documents with a court or any registrar, for its winding- up, administration, dissolution, rehabilitation, reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise), bankruptcy, composition or restructuring;

 

(iv)any Security Interest is enforced over any of its assets;

 

(v)an order for its winding-up, administration, dissolution, bankruptcy, composition, rehabilitation or restructuring;

 

(vi)any liquidator, trustee in bankruptcy, restructuring trustee, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets;

 

(vii)its shareholders, directors or other officers request the appointment of, or give notice of their intention to appoint, a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer; or

 

(viii)any other analogous step or procedure is taken in any jurisdiction.

 

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(b)Paragraph (a) above does not apply to a petition for winding-up presented by a creditor which is being contested in good faith and with due diligence and is discharged or struck out within 15 Business Days.

 

(c)Sub-paragraph (a)(iv) will not apply if the aggregate value of the assets that is subject to an enforcement of Security Interest of the Borrower and any Material Subsidiary does not exceed USD50,000,000 or more or its equivalent.

 

23.9Audit qualification

 

The auditor’s report of the Annual Financial Statements of the Borrower contains a disclaimer of opinion (의견거절 in Korean), qualified opinion (한정의견 in Korean) or adverse opinion (부적정의견 in Korean) other than due to the upcoming maturity of the Loan.

 

23.10Designation of a failing company (부실징후기업 in Korean)

 

The Borrower or any of the Material Subsidiaries is designated as a failing company (부실징후기업 in Korean) under the Corporate Restructuring Affairs Operation Code of Creditor Financial Institutions (the “Corporate Restructuring Affairs Operation Code”), the Corporate Restructuring Promotion Act (Republic of Korea Law No. 18113 of April 20, 2021) (the “CRPA”) or any successor legislation of such or any action is taken by the Borrower or any of its Affiliates for the commencement of any of the proceedings set forth the Corporate Restructuring Affairs Operation Code, the CRPA or any successor legislation of such.

 

23.11Creditors’ process

 

Any attachment, sequestration, distress, execution or analogous event affects any asset(s) of the Borrower or any Material Subsidiary, having an aggregate value of at least USD50,000,000 or its equivalent and is not discharged within 15 Business Days.

 

23.12Judgement or fines

 

One or more judgements or awards of a court or an arbitration tribunal for money damages or for a fine or penalty in an aggregate amount in excess of USD50,000,000 or its equivalent is entered against the Borrower or any Material Subsidiary, and is not paid, discharged or fully bonded within 15 Business Days after the due date of such payment.

 

23.13Cessation or change of business

 

The Borrower or any Material Subsidiary ceases, or threatens to cease, to carry on the whole of its business or a part of its business which is material in the context of the Borrower and the Material Subsidiaries (taken as a whole) except as a result of any disposal or other transaction allowed under this Agreement.

 

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23.14Financial, Political and economic risk

 

Any adverse change or deterioration of the financial, political or economic situation in Korea (including the downgrading of the Korean sovereign risk) or an act of war or hostilities, invasion, armed conflict or act of a foreign enemy, revolution, insurrection or insurgency occurs in, or involves, Korea, or any of the foregoing events threatens to occur which has a Material Adverse Effect.

 

23.15Expropriation

 

All or a substantial part of the Borrower’s or any Material Subsidiary’s business or asset is expropriated or confiscated.

 

23.16Involuntary mergers

 

The Borrower is involuntarily amalgamated, merged or consolidated, except where:

 

(a)the Finance Documents remain in full force and effect; and

 

(b)immediately following the amalgamation, merger or consolidation, the credit rating of the surviving entity published by Korea Ratings Corp., Korea Investors Service Inc. and NICE Investor Service (to the extent such credit ratings are obtained, provided that at least one credit rating shall be obtained) is BBB or higher.

 

23.17Non-effectiveness of Finance Documents

 

(a)It is or becomes unlawful for the Borrower to perform any of its material obligations under the Finance Documents.

 

(b)Any Finance Document ceases to be in full force and effect in accordance with its terms or is alleged by the Borrower to be ineffective in accordance with its terms for any reason.

 

(c)The Borrower repudiates or purports to repudiate a Finance Document or evidences an intention to repudiate a Finance Document.

 

23.18Material adverse change

 

Any event or series of events occurs which has a Material Adverse Effect.

 

23.19Remedies following an Event of Default

 

If an Event of Default is continuing, the Lender may, by notice to the Borrower:

 

(a)cancel all or any part of the Commitment;

 

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(b)declare that all or part of any amounts outstanding under the Finance Documents are:

 

(i)immediately due and payable; and/or

 

(ii)immediately due and payable on demand by the Lender.

 

Any notice given under this Subclause will take effect in accordance with its terms.

 

24.EVIDENCE AND CALCULATIONS

 

24.1Accounts

 

Accounts maintained by the Lender in connection with the Finance Documents are prima facie evidence of the matters to which they relate for the purpose of any litigation or arbitration proceedings.

 

24.2Certificates and determinations

 

Any certification or determination by the Lender of a rate or amount under the Finance Documents will be, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

24.3Calculations

 

Any interest or fee accruing under the Finance Documents accrues from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days.

 

25.CONSEQUENTIAL DAMAGES

 

Notwithstanding any provision under a Finance Document to the contrary, the Lender shall not in any event be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), whether or not foreseeable, even if the Lender has been advised of the likelihood of such loss or damage, unless the claim for loss or damage is made in respect of its own fraud, gross negligence or wilful misconduct.

 

26.AMENDMENTS AND WAIVERS

 

26.1Procedure

 

(a)Subject to the direction of K-SURE to the extent applicable under the K-SURE Insurance Policy, any term of or any right or remedy under the Finance Documents may be amended or waived only with the consent of the Lender and the Borrower.

 

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(b)The Parties acknowledge and agree that any amendment to or waiver in respect of any Finance Document affecting the liabilities, obligations or rights of the Lender requires the prior written approval of K-SURE.

 

26.2Change of currency

 

If a change in any currency of a country occurs (including where there is more than one currency or currency unit recognised at the same time as the lawful currency of a country), the Finance Documents will be amended to the extent the Lender (after consultation with the Borrower) determines is necessary to reflect the change.

 

26.3Waivers and remedies cumulative

 

The rights of the Lender under the Finance Documents:

 

(a)may be exercised as often as necessary;

 

(b)are cumulative and not exclusive of its rights under the general law; and

 

(c)may be waived only in writing and specifically.

 

Delay in exercising or non-exercise of any right is not a waiver of that right.

 

26.4Changes to reference rates

 

(a)If a Published Rate Replacement Event has occurred in relation to any Published Rate, any amendment or waiver which relates to:

 

(i)providing for the use of a Replacement Reference Rate in place of that Published Rate; and

 

(ii)(A) aligning any provision of any Finance Document to the use of that Replacement Reference Rate;

 

(B)enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);

 

(C)implement market conventions applicable to that Replacement Reference Rate;

 

(D)providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or

 

(E)adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),

 

may be made with the consent of the Lender and the Borrower.

 

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(b)In this Clause 26.4:

 

Published Rate means:

 

(a)Overnight SOFR; or

 

(b)Term SOFR for any Quoted Tenor.

 

Published Rate Replacement Event means, in relation to a Published Rate:

 

(a)the methodology, formula or other means of determining that Published Rate has , in the opinion of the Lender and the Borrower, materially changed;

 

(b)(i) (A) the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or

 

(B)information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,

 

provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;

 

(ii)the administrator of that Published Rate publicly announces that it has ceased or will cease to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;

 

(iii)the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued; or

 

(iv)the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or

 

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(c)the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:

 

(i)the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lender and the Borrower) temporary; or

 

(ii)that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than the Reference Rate Contingency Period; or

 

(d)in the opinion of the Lender and the Borrower, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.

 

Reference Rate Contingency Period means a period of 20 days.

 

Relevant Nominating Body means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.

 

Replacement Reference Rate means a reference rate which is:

 

(a)formally designated, nominated or recommended as the replacement for a Published Rate by:

 

(i)the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or

 

(ii)any Relevant Nominating Body,

 

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the “Replacement Reference Rate” will be the replacement under paragraph (ii) above;

 

(b)in the opinion of the Lender and the Borrower, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to the Published Rate; or

 

(c)in the opinion of the Lender and the Borrower, an appropriate successor to a Published Rate.

 

27.TRANSFER BY THE BORROWER AND LENDER

 

27.1Assignments and transfers by the Borrower

 

The Borrower may not assign or transfer any of its rights and obligations under the Finance Documents without the prior consent of all the Lender and K-SURE.

 

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27.2Assignments and transfers by the Lender

 

(a)Subject to this Clause 26.4, the Lender (the Existing Lender) may at any time:

 

(i)assign any of its rights; or

 

(ii)transfer by novation any of its rights and obligations,

 

under the Finance Documents to another bank or financial institution, insurer, reinsurer, trust, fund, securitisation vehicle, any of its Affiliates, branches or other entity which is regularly engaged in or

 

established for the purpose of making, purchasing or investing in loans, securities or other financial assets or for the purpose of the Lender’s refinancing or hedging in respect of the Loan (the New Lender).

 

(b)Subject to paragraphs (c) and (d) below, the consent of the Borrower shall be required for any assignment or transfer by the Existing Lender.

 

(c)The consent of the Borrower shall not be required:

 

(i)for any assignment or transfer to an Affiliate or branch of the Existing Lender; and

 

(ii)if a Default is continuing.

 

(d)The consent of the Borrower referred to in paragraph (b) above shall not be unreasonably withheld or delayed. The Borrower will be deemed to have given its consent five Business Days after the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time.

 

(e)If:

 

(i)the Lender assigns or transfers any of its rights or obligations under the Finance Documents; and

 

(ii)as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the New Lender under Clause 12 (Taxes) or Clause 13 (Increased Costs),

 

then the New Lender is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment, transfer or change had not occurred.

 

(f)The consent of K-SURE is required for any assignment or transfer by the Lender.

 

(g)A transfer of obligations will be effective only on receipt of the Borrower of written confirmation from the New Lender (in form and substance satisfactory to the Borrower) that it is bound by the terms of this Agreement as the Lender. On the transfer becoming effective in this manner, the Existing Lender will be released from its obligations under this Agreement to the extent that they are transferred to the New Lender.

 

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27.3Transfers to K-SURE

 

Notwithstanding any other provisions of the Finance Documents, the Lender may assign or transfer any of its rights and/or obligations to K-SURE to the extent and in a manner required under the K- SURE Insurance Policy, without prior notice to, or the consent of, the Borrower.

 

28.DISCLOSURE OF INFORMATION

 

(a)The Lender must keep confidential any information supplied to it by or on behalf of the Borrower in connection with the Finance Documents. However, the Lender is entitled to disclose information:

 

(i)to any of its Affiliate, head office, branches or representatives;

 

(ii)which is publicly available, other than as a result of a breach by the Lender of this Clause;

 

(iii)in connection with any legal or arbitration proceedings;

 

(iv)if required to do so under any law or regulation;

 

(v)to a governmental, banking, taxation or other regulatory authority;

 

(vi)to its professional advisers and service providers (including its auditors or its Affiliates’ auditors);

 

(vii)to any rating agency;

 

(viii)to K-SURE or to any person providing credit, political or any other form of insurance cover to the Lender or any of its affiliates (including without limitation insurers, reinsurers, brokers and any other risk mitigation provider) in respect of or in connection with the Finance Documents and their respective professional advisers;

 

(ix)to any person in connection with or in contemplation of a securitisation or other transactions having a similar effect;

 

(x)to any person appointed by the Lender or by a person to whom paragraph (c) below applies to provide administration or settlement services in respect of one or more of the Finance Documents;

 

(xi)to the extent allowed under paragraph (b) below;

 

(xii)to the extent allowed under paragraph (c) below;

 

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(xiii)any informative services which the Borrower or the Lender is interested in providing general information in relation to this Agreement; or

 

(xiv)with the agreement of the Borrower, provided that:

 

(A)in the case of paragraphs (a)(i) and (a)(vi) above, such person is made aware in writing of its confidential nature and that some or all of such confidential information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the confidential information;

 

(B)in the case of paragraphs (a)(iii), (a)(iv), (a)(v), (a)(viii) and (a)(xi) the person to whom the confidential information is to be given is informed of its confidential nature and that some or all of such confidential information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Lender, it is not practicable so to do in the circumstances;

 

(C)in the case of paragraph (a)(x), (a)(ix) and (a)(xii) above, the person has entered into a confidentiality undertaking (substantially in the form of the LMA Master Confidentiality Undertaking for Use with Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the Lender) except that there shall be no requirement for a confidentiality undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the confidential information; and

 

(D)in the case of paragraphs (a)(vii) and (a)(xiii), such disclosure is only of such confidential information as may be required to be disclosed to enable such rating agency or informative services provider to carry out its normal activities in relation to the Finance Documents and/or the Borrower if the rating agency or informative services provider to whom the confidential information is to be given is informed of its confidential nature and that some or all of such confidential information may be price-sensitive information.

 

(b)The Lender may:

 

(i)provide information about the Finance Documents to any governmental, banking, taxation or other regulatory authority of the Republic of Korea (including K-SURE), the European Union or to international institutions which are charged by any such authority with collecting statistical data; and

 

(ii)allow them to inspect and receive any records relating to the Finance Documents.

 

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(c)The Lender may disclose a copy of any Finance Document or any information which the Lender has acquired under or in connection with any Finance Document to:

 

(i)any person with (or through) whom the Lender enters into (or may enter into) any kind of transfer, participation or hedge agreement in relation to this Agreement or any other transaction under which payments are to be made by reference to this Agreement or the Borrower (a Potential Transferee);

 

(ii)any Affiliate, representative, delegate, agent or professional adviser of that Potential Transferee;

 

(iii)any person appointed by a Potential Transferee to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf; and

 

(iv)any person who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph (i) above,

 

provided that before any such person may receive any confidential information, the Lender will use its reasonable endeavours to ensure that such person agrees to keep that information confidential on the terms of paragraph (a) above as if it were the Lender.

 

(d)This Clause supersedes any previous confidentiality undertaking given by the Lender in connection with this Agreement prior to it becoming a Party.

 

29.SET-OFF

 

The Lender (or its Affiliate) may set-off any matured obligation owed to it by the Borrower under the Finance Documents (to the extent beneficially owned by the Lender (or its Affiliate)) against any obligation (whether or not matured) owed by the Lender (or its Affiliate) to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Lender (or its Affiliate) may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. The Lender (or its Affiliate) must notify the Borrower of any such set-off or conversion.

 

30.PAYMENT MECHANICS

 

30.1Payments to the Lender

 

(a)On each date on which the Borrower is required to make a payment under a Finance Document, the Borrower shall make the same available to the Lender (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Lender as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

  

(b)Payment shall be made by the Borrower to such account as the Lender specifies.

 

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30.2Partial payments

 

(a)If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable by the Borrower under the Finance Documents, the Lender shall apply that payment towards the obligations of the Borrower under the Finance Documents in the following order:

 

(i)first, in or towards payment of the Lender’s expenses and fees owing to the Lender under the Finance Documents;

 

(ii)secondly, in or towards payment of any accrued interest, fee or commission due but unpaid under this Agreement;

 

(iii)thirdly, in or towards payment of any principal due but unpaid under this Agreement; and

 

(iv)fourthly, in or towards payment of any other sum due but unpaid under the Finance Documents.

 

30.3Currency

 

(a)Unless a Finance Document specifies that payments under it are to be made in a different manner, the currency of each amount payable under the Finance Documents is determined under this Subclause.

 

(b)Amounts payable in respect of Taxes, fees, costs and expenses are payable in the currency in which they are incurred.

 

(c)Each other amount payable under the Finance Documents is payable in US Dollars.

 

30.4Change of currency

 

(a)Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

 

(i)any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Lender (after consultation with the Borrower); and

 

(ii)any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Lender (acting reasonably).

 

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(b)If a change in any currency of a country occurs, this Agreement will, to the extent the Lender (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.

 

30.5No set-off or counterclaim

 

All payments made by the Borrower under the Finance Documents must be calculated and made without (and free and clear of any deduction for) set-off or counterclaim.

 

30.6Business Days

 

(a)If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment will instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not) or whatever day the Lender determines is market practice.

 

(b)During any extension of the due date for payment of any principal under paragraph (a) above, interest is payable on that principal at the rate payable on the original due date.

 

30.7Timing of payments

 

If a Finance Document does not provide for when a particular payment is due, that payment will be due within 5 days of demand by the Lender.

 

31.SEVERABILITY

 

If, at any time, a term of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any jurisdiction, it will not affect:

 

(a)the legality, validity or enforceability in that jurisdiction of any other term of the Finance Documents; or

 

(b)the legality, validity or enforceability in other jurisdictions of that or any other term of the Finance Documents.

 

32.COUNTERPARTS

 

Each Finance Document may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

33.ROLE OF THE MANDATED LEAD ARRANGER AND BOOKRUNNER

 

Except as specifically provided in the Finance Documents, the Mandated Lead Arranger and Bookrunner has no obligations of any kind to any other Party under or in connection with any Finance Documents.

 

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34.NOTICES

 

34.1In writing

 

(a)Any communication in connection with a Finance Document must be in writing and, unless otherwise stated, may be given:

 

(i)in person, by post, fax or email; or

 

(ii)to the extent agreed by the Parties making and receiving communication, by other electronic communication.

 

(b)For the purpose of the Finance Documents, an electronic communication will be treated as being in writing.

 

(c)Unless it is agreed to the contrary, any consent or agreement required under a Finance Document must be given in writing.

 

34.2Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under of in connection with the Finance Documents is:

 

(a)in the case of the Borrower, that identified with its name below; and

 

(b)in the case of the Lender, that identified with its name below,

 

or any substitute address or fax number or department or officer as the Borrower may notify to the Lender (or the Lender may notify to the Borrower, if a change is made by the Lender) by not less that 5 Business Days.

 

34.3Effectiveness

 

(a)Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

 

(i)if by way of fax, when received in legible form; or

 

(ii)if by way of letter, when it has been left at the relevant address or 5 Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;

 

and, if a particular department or officer is specified as part of its address details provided under Clause

 

34.2 (Addresses), if addressed to that department or officer.

 

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(b)Any communication or document to be made or delivered to the Lender will be effective only when actually received by the Lender and then only if it is expressly marked for the attention of the department or officer identified with the Lender’s signature below (or any substitute department or officer as the Lender shall specify for this purpose).

 

(c)Any communication or document which becomes effective, in accordance with paragraphs (a) to (b) above, on a non-working day or after 5pm in the place of receipt shall be deemed only to become effective on the next working day in that place.

 

34.4Electronic communication

 

(a)Any communication to be made between the Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if the Parties:

 

(i)notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

 

(ii)notify each other of any change to their electronic mail address or any other such information supplied by them by not less than 5 Business Days’ notice.

 

(b)Any such electronic communication as specified in paragraph (a) above to be made between the Borrower and the Lender may only be made in that way to the extent that the Lender and the Borrower agree that, unless and until notified to the contrary, this is to be an accepted form of communication.

 

(c)Any such electronic communication as specified in paragraph (a) above made between the Parties will be effective only when actually received (or made available) in readable form and in the case of any

 

electronic communication made by the Borrower to the Lender only if it is addressed in such a manner as the Lender shall specify for this purpose.

 

(d)Any electronic communication which becomes effective, in accordance with paragraph (c) above, on a non-working day or after 5pm in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the next working day in that place.

 

(e)Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 34.4.

 

(f)An electronic communication will be treated as being in writing for the purposes of the Finance Documents.

 

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35.LANGUAGE

 

(a)Any notice given in connection with a Finance Document must be in English.

 

(b)Any other document provided in connection with a Finance Document must be:

 

(i)in English; or

 

(ii)accompanied by a certified English translation. In this case, the English translation prevails unless the document is a statutory or other official document.

 

36.GOVERNING LAW

 

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

37.ENFORCEMENT

 

37.1Jurisdiction

 

(a)The English courts have exclusive jurisdiction to settle any dispute including a dispute relating to any non-contractual obligation arising out of or in connection with any Finance Document.

 

(b)The English courts are the most appropriate and convenient courts to settle any such dispute in connection with any Finance Document. The Borrower agrees not to argue to the contrary and waives objection to those courts on the grounds of inconvenient forum or otherwise in relation to proceedings in connection with any Finance Document. For such purpose, the Borrower hereby expressly agrees to submit to the exclusive jurisdiction of the English courts, expressly waiving any other jurisdiction which may correspond to it in virtue of its present or future domicile or other.

 

(c)This Clause is for the benefit of the Lender only. To the extent allowed by law, the Lender may take:

 

(i)proceedings in any other court; and

 

(ii)concurrent proceedings in any number of jurisdictions.

 

(d)References in this Clause to a dispute in connection with a Finance Document include any dispute as to the existence, validity or termination of that Finance Document.

 

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37.2Service of process

 

(a)Without prejudice to any other mode of service allowed under any relevant law, the Borrower:

 

(i)irrevocably appoints Silvertown Investco Limited as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

 

(ii)agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.

 

(b)If any person appointed as process agent under this Clause is unable for any reason to so act, the Borrower must immediately (and in any event within 5 Business Days of the event taking place) appoint another agent.

 

(c)The Borrower agrees that failure by a process agent to notify it of any process will not invalidate the relevant proceedings.

 

(d)This Clause does not affect any other method of service allowed by law.

 

37.3Waiver of immunity

 

The Borrower irrevocably and unconditionally:

 

(a)agrees not to claim any immunity from proceedings brought by the Lender against it in relation to a Finance Document and to ensure that no such claim is made on its behalf;

 

(b)consents generally to the giving of any relief or the issue of any process in connection with those proceedings; and

 

(c)waives, to the fullest extent permitted by the applicable laws, all rights of immunity in respect of it or its assets.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

 

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SCHEDULE 1

CONDITIONS PRECEDENT DOCUMENTS

 

A.Corporate documentation of the Borrower

 

1.A copy of the constitutional documents of the Borrower, being the commercial registry extracts and the articles of incorporation.

 

2.A copy of the up-to-date internal regulations of the board of directors of the Borrower.

 

3.A copy of the up-to-date internal regulations on the delegation of authority of the Borrower.

 

4.The internal approval document of the Company with respect to the Facility Agreement.

 

5.A seal impression certificate of a director of the Borrower (법인인감증명서 in Korean).

 

6.A specimen of the signature of each person authorised on behalf of the Borrower to enter into or witness the entry into of any Finance Document or to sign or send any document or notice in connection with any Finance Document.

 

7.A certificate of an authorised signatory of the Borrower certifying that each copy document specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

8.A copy of each authorisation from the relevant foreign exchange authorities in Korea required with respect to the borrowing under the relevant Finance Documents.

 

B.Finance Documents

 

A duly executed copy of this Agreement.

 

C.Legal opinions

 

1.A legal opinion of Allen & Overy, legal advisers as to English laws to the Original Lender and K- SURE, addressed to the Original Lender and K-SURE.

 

2.A legal opinion of Kim & Chang, legal advisers as to Korean law to the Original Lender and K-SURE, addressed to the Original Lender and K-SURE.

 

3.A legal opinion of Kim & Chang, legal advisers as to Korean laws to the Original Lender and K- SURE, in relation to K-SURE and the K-SURE Insurance Policy addressed to the Original Lender.

 

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D.Other documents and evidence

 

1.A copy of a certificate of the Borrower (affixed with the Borrower’s registered corporate seal (법인인감 in Korean)):

 

(a)confirming that the obligations of the parties to the Securities Purchase Agreement to effect the Acquisition have, or will on or prior to the Acquisition Closing Date, become unconditional (other than payment of the purchase price thereunder and obligations and conditions that by their terms are to be satisfied on the Acquisition Closing Date);

 

(b)confirming that the terms of the Securities Purchase Agreement have not been amended or waived in a manner which would be materially adverse to the interests of the Lender under the Finance Documents (taken as a whole) (other than any amendment or waiver made with the prior consent of the Lender);

 

(c)confirming that it has or will have sufficient funds, together with the proceeds of the Loan, to pay the Acquisition Price in full;

 

(d)providing a list of all Material Subsidiaries of the Borrower as at the date of this Agreement;

 

(e)confirming that the KEXIM Facility Agreement or any agreement or document in connection with the KEXIM Facility Agreement do not contain terms in respect of the provisions of Security Interests, maturity date, events of default and mandatory prepayments (in each case, howsoever described) more favourable than the terms provided to the Lender pursuant to the Finance Documents; and

 

(f)certifying that each copy document provided under section D of Schedule 1 is true, correct, complete and, as relevant, in full force and effect.

 

2.A copy of the Securities Purchase Agreement.

 

3.A copy of the Borrower’s Original Financial Statements.

 

4.Evidence that all fees and expenses then due and payable from the Borrower under this Agreement have been or will be paid by the Utilisation Date.

 

5.Evidence that the agent under the Finance Documents for service of process in England and Wales has accepted its appointment.

 

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SCHEDULE 2

FORM OF REQUEST

 

From:SK Ecoplant Co., Ltd. as Borrower

 

To:[BNP Paribas] as Original Lender

 

Dated:[       ]

 

Dear Sirs

 

SK ECOPLANT CO., LTD. – USD95,000,000 Facility Agreement

 

dated 12 December 2021 (the Agreement)

 

1.We refer to the Agreement. This is a Request.

 

2.Interest Periods defined in the Agreement shall have the same meaning in this Request unless given a different meaning in this Request.

 

3.We wish to borrow the Loan on the following terms:

 

Utilisation Date:       [                      ]  
     
Amount: USD [           ]  

 

4.The proceeds of this Loan should be credited to the following account of the [Borrower]:

 

Account Name: [ ]
     
Account Number: [ ]
     
Account Bank: [ ]
     
Other required information: [ ]

 

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5.The proceeds of this Loan will be used to finance the Acquisition Price.

 

6.This Request is irrevocable.

 

7.We confirm that each condition specified in clause 3.2 (Further conditions precedent) of the Agreement is satisfied or will be satisfied on the Utilisation Date.

 

8.We undertake to supply you with such additional information and documentation in our possession, and such clarification – to our knowledge, as you advise us is reasonably necessary in connection with the K-SURE Insurance Policy and we agree we will not hold you responsible for any delay in meeting this request for the Loan occasioned by you making such request for information.

 

9.This Request is governed by and construed in accordance with English law.

 

Yours faithfully

 

……………………………………

Authorised signatory for
SK Ecoplant Co., Ltd.

 

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SCHEDULE 3

FORM OF COMPLIANCE CERTIFICATE

 

To:[LENDER] as Lender

 

From:SK Ecoplant Co., Ltd. as Borrower

 

Date:[       ]

 

SK ECOPLANT CO., LTD. – USD95,000,000 Facility Agreement
dated 12 December 2021 (the Agreement)

 

1.We refer to the Agreement. This is a Compliance Certificate.

 

2.We confirm that [no Default is continuing]/[the following Default[s] [is/are] continuing and the following steps are being taken to remedy [it/them]:

 

[       ].

 

3.We confirm that:

 

(a)Our Gearing Ratio is [●]:1;

 

(b)[Our Interest Cover Ratio is [●]:1]; and

 

(c)[Our Shareholder Equity is [●].]

 

A detailed calculation of the above mentioned ratios is attached hereto.

 

4.The current Material Subsidiaries are:

 

(a)[●];

 

(b)[●]; and

 

(c)[●].

 

SK Ecoplant Co., Ltd.

 

By:    

 

[Director]

 

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SIGNATORIES

 

Borrower  
     
SK ECOPLANT CO., LTD.  
     
By: /s/ Kyung-il Park                    
Name:  Kyung-il Park  
Function: President & CEO  

 

Signature page to the Facility Agreement

 

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Original Lender    
     
BNP PARIBAS    
     
By:    
     
/s/ Kenneth Quinn   /s/ Logan Chong
Kenneth Quinn   Logan Chong
Head of Industry Groups   Managing Director

 

Signature page to the Facility Agreement

 

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Mandated Lead Arranger and Bookrunner    
     
BNP PARIBAS    
     
By:    
     
/s/ Kenneth Quinn   /s/ Logan Chong
Kenneth Quinn   Logan Chong
Head of Industry Groups   Managing Director

 

Signature page to the Facility Agreement

 

 

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Exhibit J

 

Overseas Investment Insurance (Investment Financing) Policy

 

 

Policyholder Business Name: BNP Paribas Hong Kong Branch Policy No. 231121087068
 

Address: 62F Two International Finance Center,

8 Finance Street, Central, HK

December 21, 2021

 

This Policy is issued upon conclusion of the Overseas Investment Insurance (Investment Financing) Agreement in accordance with the provisions in the Overseas Investment Insurance (Investment Financing) Agreement and this Policy.

 

Director of Project Finance Department of Korea Trade Insurance Corporation (Seal)

 

Investment Parties Investor Investment Counterparty
Corporate SK ecoplant Co., Ltd. Bloom Energy Corporation
Address Insadong 7-gil, Jongno-gu, Seoul 4353 NORTH FIRST STREET 95134 SAN JOSE CALIFORNIA UNITED STATES OF AMERICA
CEO Park Kyung Il KR SRIDHAR
Transaction Acquisition of Stocks of Bloom Energy Corporation by SK ecoplant Co., Ltd.

Investment

Terms

Investment Method Acquisition of Shares in the US Bloom Energy

Host Country

USA
Investment Amount USD 255,000,000 Investment Period Dec 2021 – Dec 2024
Insurance Agreement Policyholder and Beneficiary
Bank Address
BNP Paribas Hong Kong Branch 62F Two International Finance Center, 8 Finance Street, Central, HK
Insured Financing Agreement Lender BNP Paribas Hong Kong Branch
Borrower SK ecoplant Co., Ltd.
Signing Date of Financing Agreement December 20, 2021
Loan Amount USD 95,000,000
Risks Covered Risks under Article 4 of the Overseas Investment Insurance (Investment Financing) Agreement
Insurable Value USD 97,034,331.27 (Expected) Period December 23, 2021 – December 23, 2024 (Expected)
Percentage of Coverage 100% Premium Rate 1.747%
Insurance Money USD 97,034,331.27 (Expected) Premium USD 1,697,650

Special Terms 1. Insurance is subject to the underwriting conditions that the following conditions be satisfied:
    (i) Financing agreements, overseas investment insurance (investment financing) agreements, etc. shall be concluded in a manner satisfactory to the Corporation.
    (ii) Financing agreements, overseas investment insurance (investment financing) agreements, etc. must be concluded within six (6) months from the date of notification of approval by the Corporation and submitted to the Corporation within ten (10) business days from the date of signing.
    (iii) The premium must be paid in full before the first withdrawal date.
  2. Where the terms of the insurance agreement conflict with the terms of the financing agreement, the insurance agreement prevails.
  3. In the event of causes under Article 24, the premiums will not be returned.
  4. Premiums will not be settled after the withdrawal period ends.
  5. If insurance liability does not commence within one (1) year after this approval, the effect of approval is lost.

 

Annex: 1. Overseas Investment Insurance (Investment Financing) Agreement
  2. Drawdown and Repayment Schedule (Expected)

 

 

 

 

Overseas Investment Insurance (Investment Financing) Agreement

 

 

Enacted on:

Amended on:

September 29, 2005

October 29, 2007

December 5, 2008

July 6, 2010

July 29, 2016

January 29, 2020

 

Chapter 1. General Provisions

 

Article 1 (Terms of Agreement) This Agreement prescribes the terms of overseas investment insurance agreements pursuant to which the Korea Trade Insurance Corporation (hereinafter referred to as the “Corporation”) indemnifies losses arising from overseas investment financing agreements (hereinafter referred to as the “Financing Agreement(s)”) stated in the insurance agreement.

 

Article 2 (Applicable Transactions) This Agreement is applied to the Financing Agreement entered into between a financial institution and a corporate or financial institution of the Republic of Korea in order to finance the following overseas investments:

 

1.Overseas investments by the corporate or financial institution of the Republic of Korea purported to acquire, directly or through a foreign subsidiary, stocks or shares (hereinafter referred to as “Stocks”) of a foreign corporation.

 

2.Overseas investments by the corporate or financial institution of the Republic of Korea purported to acquire, directly or through a foreign subsidiary, loan bonds or corporate bonds (hereinafter referred to as “Loans”) for more than two years to foreigners (including foreign corporations and governments).

 

3.Overseas investments by the corporate or financial institution of the Republic of Korea purported to acquire, directly or through a foreign subsidiary, rights to real estate or equipment for overseas business use, mining rights, industrial property rights, other rights, or any rights similar to the aforestated rights (hereinafter referred to as “Rights to Real Estate, etc.”).

 

Article 3 (Definition)

 

(1)The term “overseas investment counterparty” in this Agreement refers to the foreign corporation and government under Article 2.

 

(2)The term “borrower” in this Agreement refers to the overseas investor, which the corporate or financial institution of the Republic of Korea that enters into the Financing Agreement under Article 2 with the policyholder and is liable for repayment of Loans.

 

Chapter 2. Losses Indemnified

 

Article 4 (Risks Covered) This Agreement covers the following risks:

 

(1)Emergency risks

 

In case the following causes occur due to force majeure events not attributable to the parties to the overseas investment (the borrower and the overseas investment counterparty)

 

1.(Expropriation risks) In case a foreign government, local government, or equivalent public institution (hereinafter referred to as the “Foreign Government”) deprives the overseas investment counterparty of the following items:

 

(i)Claims to Stocks or dividends on Stocks

 

(ii)Claims to the principal or interest of Loans

 

(iii)Rights to Real Estate, etc.

 

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2.(Expropriation risks) In case the Foreign Government (by legislation or policy change) infringes upon matters particularly important to conduct business, such as the overseas investment counterparty’s Rights to Real Estate etc., thereby causing the following causes (hereinafter referred to as “Inability to Conduct Business”):

 

(i)Inability to continue business

 

(ii)Declaration of bankruptcy or equivalent

 

(iii)Suspension of business by banks or equivalent (limited to excessive insolvency)

 

(iv)Suspension of business for more than three (3) months

 

3.(War risks) In case the overseas investment counterparty is unable to conduct business or use Rights to Real Estate, etc. for business due to war, revolt, insurgent, riot, upheaval, or terrorism.

 

4.(Risks of Non-compliance with this Agreement) In case any of the following items occur:

 

(i)Where the overseas investment counterparty or the borrower entered into an agreement (limited to the agreement approved separately by the Corporation at the request of the borrower), which stipulates rights and obligations related to business conducted by the overseas investment counterparty or other overseas investments, with the Foreign Government, and is unable to conduct business due to acts not in compliance with or contrary thereto.

 

(ii)Where the overseas investment counterparty is the Foreign Government, the Foreign Government’s default on repayment

 

5.(Force majeure risks) In case the overseas investment counterparty is unable to conduct business or use Rights to Real Estate, etc. due to any of the following items:

 

(i)Force majeure events, such as typhoons, floods, earthquakes, volcano eruptions, tidal waves, strikes, nuclear accidents, etc.

 

(ii)Economic sanctions imposed by international organizations, such as the UN, or countries other than the overseas investment counterparty nation.

 

6.(Money transfer risks) In case, after depositing the proceeds (hereinafter referred to as the “Deposit”) from selling Stocks, Loans, or Rights to Real Estate, etc. or from repayment of the principal on Loans, interest on Loans, or dividends on Stocks, it becomes impossible to remit the Deposit to the Republic of Korea for more than two (2) months due to any of the following causes:

 

(i)Restriction or prohibition of foreign exchange conducted overseas

 

(ii)Inability to conduct foreign exchange due to war, revolt, insurgent, or equivalent overseas

 

(iii)Management of the Deposit by the Foreign Government

 

(iv)Revocation of approval to transfer the Deposit or refusal to approve in case the Foreign Government has previously agreed to grant approval

 

(v)Seizure of the Deposit by the Foreign Government after any of the Items (i) through (iv) occur.

 

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(2)Credit risks

 

In case any of the following causes occur:

 

1.Insolvency of the overseas investment counterparty

 

2.Insolvency or default on repayment of the borrower

 

Article 5 (Losses Indemnified) The Corporation shall indemnify the losses suffered by the policyholder as prescribed by this Agreement, in case the policyholder has provided loans pursuant to the Financing Agreement but is unable to recover (hereinafter referred to as the “Inability to recover the Principal and Interest”) the principal and interest accrued until the repayment date (hereinafter referred to as the “Principal and Interest”) due to the occurrence of risks under Article 4(1) through (2).

 

Article 6 (Amount of Losses) The amount of losses due to the Inability to recover the Principal and Interest under Article 4 shall be calculated as the sum of the following:

 

1.Of the insurable value stipulated in Article 20, the amount obtained by subtracting the amount appropriated for the outstanding Principal and Interest under Article 28(1) subparagraph (i) from the Principal and Interest that the policyholder cannot recover by the repayment date

 

2.The amount obtained by subtracting the amount of interest appropriated under Article 28(1) subparagraph (i) from the amount of interest on the outstanding Principal and Interest accrued until the date of insurance payment

 

3.Notwithstanding paragraph (2), the following interest is not included in the calculation of losses:

 

(i)In case the policyholder did not notify the occurrence of the accident within the period set in Article 12(1), the interest accrued from the day following the end of the period to the date of notification.

 

(ii)In case the policyholder failed to claim for insurance money within the period set in Article 25(1), the interest accrued from the day following the end of the period to the date of claim.

 

Article 7 (Insurance Money) The insurance money to be paid by the Corporation shall be the amount obtained by multiplying the loss calculated in accordance with Article 6 by the ratio of the insurance money to the insurable value stipulated in Article 20.

 

Chapter 3. Losses Not Indemnified

 

Article 8 (Refusal to Pay Insurance Money, etc.)

 

(1)The Corporation may not pay all or part of the insurance money stipulated in Article 7, request the policyholder to return all or part of the insurance money already paid, or cancel the insurance agreement in any of the following cases:

 

1.When losses are incurred due to a risk that occurred before the commencement date of insurance liability under Article 19

 

2.When losses are incurred or expanded due to any of the following causes by the policyholder, the assignee of the claim to insurance money, or their agent or employee

 

(i)Non-exercise or neglect of rights and authority (including pre-conditions for withdrawal) under the Financing Agreement (referring to a loan agreement, a security agreement, and all ancillary agreements related thereto)

 

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(ii)Change of the main terms of the Financing Agreement or risk guarantees (the “risk guarantees” refer to those that guarantee the repayment of Loans, such as personal security (such as a third-party payment guarantee), lien and offshore accounts, and long-term purchase agreements) without prior written approval of the Corporation.

 

(iii)Intentionally or negligently making the Financing Agreement or the risk guarantees violate the law of the country concerned or lose its legal effect

 

3.When losses are incurred or expanded because the policyholder fails to disclose the facts to be disclosed as stipulated in Articles 9 and 11 or provides false information

 

4.When the conditions specified by the policyholder in the subscription form or presented, through the insurance policy or in writing, by the Corporation as underwriting conditions are not met

 

5.When losses are incurred due to provisions (penalty provisions, non-payment provisions, etc.) that limit the policyholder’s rights stipulated in the Financing Agreement

 

6.When losses are incurred or expanded because the policyholder violates Articles 10 and 15 or fails to comply with the Corporation’s request under Article 17

 

7.When the policyholder cancels or waives all or part of the lien and personal security related to the collateral loan without the consent of the Corporation after the insurance accident under Article 12(1) has occurred (before the insurance accident occurs, limited to when the policyholder cancels the collateral requested by the Corporation to be preserved).

 

8.When losses are incurred because the policyholder violates the obligation not to execute loans under Article 13.

 

(2)The right of cancellation in paragraph (1) shall be extinguished if the Corporation does not exercise the right within three (3) months from the date when the Corporation discovered the cause of cancellation.

 

Chapter 4. Obligations of Policyholder

 

Article 9 (Obligation to Notify Before Entering into Insurance Agreement) The policyholder shall notify the Corporation of the matters requested by the Corporation in writing and other important facts that may cause loss before entering into the insurance agreement.

 

Article 10 (Obligation to Prevent and Mitigate Losses)

 

(1)The policyholder shall take reasonable measures to prevent or mitigate losses and notify the Corporation of the result. In such case, the policyholder may consult with the Corporation before taking such measures.

 

(2)In case the policyholder can recover all or part of the loss from another person, the policyholder shall not be negligent in carrying out procedures necessary to exercise or preserve the claim to indemnification.

 

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Article 11 (Obligation to Notify Occurrence of Risk) Even before the notification of the occurrence of an insurance accident under Article 12, when the policyholder is aware of the occurrence of the risk under Article 4 or became aware of causes that may impair the repayment ability of the overseas investment counterparty or the person who has provided the risk guarantee, and grounds for default in the Financing Agreement, the policyholder shall notify the Corporation in writing within one (1) month from the discovery date.

 

Article 12 (Insurance Accidents and Notification Period)

 

(1)The policyholder shall notify the Corporation, in writing and within the notification period, of insurance accidents that occurred due to the following causes: Provided, That in the event of the second cause, the policyholder shall notify first via fax, etc. and then in writing without delay.

 

Insurance Accidents and Notification Period

 

No. Insurance Accidents Notification Period
1 The Principal and Interest are not repaid by the repayment date. Within two (2) months from the date of occurrence
2 The borrower has a reason to be subject to an order by the clearing house that suspends transactions.    Within the business day following the date of occurrence  
3 The borrower is subject to the acceleration clause under the Financing Agreement. Within ten (10) business days from the date of occurrence
4 The borrower has a reason to register information subject to credit management (credit transaction information (such as late payment), information on undermining the financial order, public record information. Provided, That information on related persons is excluded) under “credit information management rules” of the Korea Federation of Banks at a bank’s branch that processes loans. Within one (1) month from the date of occurrence
5 When an application for bankruptcy, commencement of composition, commencement of company reorganization procedures is filed or commenced   Within ten (10) business days from the discovery date
6 When commencement of procedures for bankruptcy of the overseas investment counterparty is decided Within ten (10) business days from the discovery date
7 When any causes under Article 4(1) occur   Within ten (10) business days from the discovery date

 

(2)Where the insurance accident notified to the Corporation under paragraph (1) is resolved, the policyholder shall notify the Corporation in writing within ten (10) business days.

 

(3)Notwithstanding paragraph (1), in case the Principal and Interest are not repaid continuously for each settlement period due to default on repayment obligations under Article 4(2) subparagraph 1, the policyholder may notify the occurrence of insurance accidents within one (1) month from each repayment date, after the initial premium is paid pursuant to Article 26. Provided, That this shall not apply when losses are incurred due to default on the repayment obligation under Article 4(2) subparagraph 2 after the outstanding Principal and Interest are fully repaid.

 

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Article 13 (Prohibition of Execution of Loans) The policyholder shall not make a loan in any of the following cases without the written consent of the Corporation, even after the insurance policy is issued:

 

1.In case any of the insurance accidents under Article 12(1) have occurred

 

2.In case the interest (the loan interest rate under the Financing Agreement is applied) accrued during the withdrawal period on the amount notified of withdrawal is not repaid

 

Article 14 (Obligation to Preserve Rights)

 

(1)The policyholder shall make efforts to preserve the rights with respect to the claims related to the loan for which the insurance relations have been established with the same care as the claims for which the insurance relationship has not bee established.

 

 (2)

The policyholder shall preserve and exercise the claims with which the insurance relations have been established by requesting dividends and reporting claims in the process of auction of collateral against the borrower and the liquidation, settlement, bankruptcy of the borrower’s company.

 

Article 15 (Obligation to Recover Claims)

 

(1)Even after receiving insurance money, the policyholder shall take necessary measures to recover the Principal and Interest, damages, penalties, and other similar money pursuant to the Financing Agreement, and notify the Corporation of the result. In such case, the policyholder may consult with the Corporation before taking such measures.

 

(2)Notwithstanding paragraph (1), the policyholder may be released from the obligation to recover claims, if the counterparty to the exercise of the right is bankrupt or if the Corporation recognizes that it is difficult to exercise the right due to other unavoidable causes.

 

Article 16 (Obligation to Notify Other Insurance Agreements)

 

(1)If the policyholder entered into other insurance agreements with the Corporation or a person other than the Corporation to secure the same type of risk as the risk covered by this Policy, or other risk guarantees, such as establishing a security right, the policyholder must notify the Corporation in writing within one (1) month from the date of subscribing to this insurance agreement or the date when the other insurance agreement was concluded or the security right was established.
(2)In case the policyholder is paid insurance money pursuant to other insurance agreements under paragraph (1), the Corporation shall not be liable for payment of insurance money within the limit of the insurance money.

 

Article 17 (Obligation to Comply with Requests)

 

(1)The Corporation may, if necessary, request necessary materials with respect to rights and obligations related to the Financing Agreement, from the policyholder in order to prevent and mitigate losses or to recover claims. The policyholder shall comply with such requests made by the Corporation, unless there are justifiable reasons.

 

(2)The policyholder shall comply with the request made by the Corporation for submission of necessary data for matters related to insurance relations, such as the Financing Agreement, or for inspection of relevant statements, documents, or other items.

 

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Chapter 5. Insurance Relations

 

Article 18 (Appointment of Insurance Agent)

 

(1)In case the policyholder appoints the proxy bank indicated in the insurance policy issued in accordance with the insurance agreement as the policyholder’s insurance agent to participate in the lending bank group for syndicated loan, it is deemed that the policyholder has conclusively granted the agency bank the authority to act on behalf of the policyholder in each of the following matters:

 

1.Receipt of all claims, demands, notices, and any other intentions made by the Corporation to the policyholder

 

2.Receipt of insurance money and any other money that the Corporation is obliged to pay to the policyholder under the insurance agreement

 

3.Payment of premium

 

4.Transmission of all claims, demands, notices, and any other expression made by the policyholder to the Corporation under the insurance agreement

 

5.Other duties directly incidental to the above items

 

(2)The act of the proxy bank under paragraph (1) shall be deemed as the act of the policyholder. Any declaration of intention, notifications, or payment of money by the Corporation to the proxy bank shall be deemed to have been received by the policyholder.

 

Article 19 (Commencement of Insurance Liabilities) The insurance liability of the Corporation begins on the later of the date when funds are withdrawn or the date of issuance of securities pursuant to the Financing Agreement, after each of the following conditions is satisfied:

 

1.The Financing Agreement and risk guarantees take effect.

 

2.Acquisition of licenses and permits required by the relevant laws as of the signing date of the Financing Agreement between the policyholder and the borrower

 

Article 20 (Insurable Value and Insurance Amount) The insurable value shall be the Principal and Interest specified in the Financing Agreement, and the insurance amount shall be the amount obtained by multiplying the insurable amount by the rate determined by the Corporation. Provided, That the insurable value shall be the amount to be repaid for each repayment period, in case it is agreed to receive payments in two or more installments.

 

Article 21 (Notice of Withdrawal of Funds) The policyholder shall notify the Corporation in writing within ten (10) business days from the date of withdrawal when the counterparty to the Financing Agreement withdraws funds pursuant to the Financing Agreement, unless otherwise stipulated by the Corporation.

 

Article 22 (Changes in Financing Agreement, etc.)

 

(1)In case the policyholder intends to make significant changes, such as the parties to the Financing Agreement, the amount, repayment terms, or the terms and conditions of the risk guarantees, the policyholder shall obtain prior written approval from the Corporation, unless the change is not significant.

 

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(2)In case the policyholder makes any change to the Financing Agreement, the policyholder shall notify the Corporation in writing of the change within ten (10) business days from the date of the change.

 

(3)In case the policyholder violates paragraphs (1) and (2), the Corporation may terminate the insurance agreement, and the effect of termination will begin from the date of the change.

 

Article 23 (Payment and Nonpayment of Premiums)

 

(1)The policyholder shall pay the premium (including additional premiums following the approved change under Article 22) determined by the Corporation in full by the date designated by the Corporation.

 

(2)In case the policyholder does not pay the premium set in paragraph (1) by the due date, the Corporation may terminate the Insurance Agreement. Provided, That this paragraph does not apply when the Corporation recognizes that the policyholder has a good reason for the nonpayment.

 

(3)The proviso of paragraph (2) shall take effect when the policyholder pays the Corporate the premium and the default interest calculated by applying the (the rate of default interest) under the Financing Agreement to the number of days from the day following the payment due date under paragraph (1) to the payment date.

 

Article 24 (Return of Premium)

 

(1)Where the Insurance Agreement is voided, invalidated, cancelled, or terminated due to a cause attributable to the policyholder, the Corporation will return the premium received.

 

(2)Where the insurance period is shortened or the insurance amount is reduced as a result of the change of the Insurance Agreement under Article 22, the Corporation will return 75 out of 100 of the premium received for which the Corporation is no longer responsible.

 

(3)Where the Insurance Agreement is voided, invalidated, cancelled, or terminated due to a cause attributable to the Corporation, the Corporation will return the full amount of the premium received for which the Corporation is no longer responsible.

 

(4)Where the Insurance Agreement is voided, invalidated, cancelled, or terminated due to a cause not attributable to the policyholder and the Corporation, the Corporation will return 75 out of 100 of the premium received for which the Corporation is no longer responsible.

 

Chapter 6. Claim and Payment of Insurance Money

 

Article 25 (Claim of Insurance Money)

 

(1)After notifying that an insurance accident has occurred under Article 12, the policyholder shall calculate the loss at his or her expense and submit the statement of claim, along with the loss statement, supporting documents, and other necessary documents, to the Corporation.

 

(2)Notwithstanding paragraph (1), if the borrower’s repayment obligation to the policyholder is guaranteed by a third-party guarantee, the policyholder may claim insurance money after claiming the payment of guaranteed debt to the guarantor.

 

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(3)In case the policyholder has secured a lien, the policyholder shall initiate consultations with the Corporation regarding the processing of the lien when the policyholder claims the insurance money under paragraph (1).

 

(4)If the policyholder has recovered certain amount before receiving insurance money after submitting the loss statement under paragraph (1), the policyholder shall submit the revised loss statement including the recovery amount and the recovery expenses, along with supporting documents, to the Corporation.

 

(5)A person who has requested the payment of insurance money shall comply with the request made by the Corporation for submission of documents deemed necessary for determination of liability for indemnification or insurance money.

 

Article 26 (Payment of Insurance Money)

 

(1)The Corporation shall pay insurance money within two (2) months from the date when the claim is made pursuant to Article 25 (in case the claim is made for reasons other than default on the repayment obligation in Article 4(2) subparagraph 2, the later of the date when the claim is made and the respective settlement date). Provided, That this does not apply when the cause of the accident is not clearly defined or when a special date is required to calculate the loss to be indemnified.

 

(2)Even if the borrower is subject to the acceleration clause by the policyholder, the Corporation shall pay the insurance money pursuant to paragraph (1).

 

(3)Notwithstanding paragraph (1), the Corporation may pay in advance insurance money for the Principal and Interest for which the settlement date has not arrived, if any further withdrawal is impossible due to the occurrence of the risks under Article 4 during the withdrawal period or the Financing Agreement is terminated due to such reason.

 

(4)In case a dispute arises between the policyholder and the borrower and the necessary procedures to resolve the dispute are pending for a long time, the payment of insurance money may be deferred until the dispute is resolved.

 

(5)In case the policyholder delays the submission of documents required to determine the liability for indemnification or the insurance amount, the Corporation may delay payment of insurance money for the delayed period.

 

Chapter 7. Recovery of Claims

 

Article 27 (Recovered Amount) The recovered amount refers to the amount in each of the following subparagraphs and includes the default interest, if the default interest was paid.

 

1.The amount paid by the borrower, the overseas investment counterparty, or the person who has provided risk guarantees

 

2.The proceeds acquired through the execution of security rights, such as a lien

 

3.The proceeds from the disposal of assets of the borrower or the person who has provided risk guarantees.

 

4.Other property interests that the policyholder acquired, such as the amount received pursuant to other insurance agreements, etc. under Article 16

 

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Article 28 (Order of Appropriation for Repayment)

 

(1)If certain amount is recovered (including default interest) before the Corporation pays insurance money, the recovered amount shall be appropriated in the following order:

 

1.The interest on the outstanding Principal and Interest, calculated by applying the period from the day following the settlement date (or the preceding settlement date) to the recovery date and the loan interest rate under the Financing Agreement

 

2.The outstanding Principal and Interest

 

(2)If certain amount is recovered (including default interest) after the Corporation pays insurance money, the recovered amount shall be appropriated in the following order:

 

1.The amount of interest set in Article 6 subparagraph 2.

 

2.The outstanding Principal and Interest (the interest is paid in advance) when the settlement date has arrived and insurance money has been paid or rejected pursuant to Article 8

 

3.The outstanding Principal and interest (the interest is paid in advance) when the settlement date has arrived

 

4.The interest on the outstanding principal prior to the settlement date, accrued from the preceding settlement date to the recovery date

 

5.The principal prior to the settlement date (the order of appropriation is in accordance with the Financing Agreement)

 

6.Other amounts, such as bank commissions, that are not included in the losses guaranteed by the Corporation

 

(3)In case the claims for which an insurance agreement is concluded between the policyholder and the borrower conflict with other claims, if the payment does not extinguish the entire claims, it is deemed that appropriation has been made in the order of arrival of the repayment date between the Corporation and the policyholder, even if the borrower or the policyholder designates appropriation.

 

Article 29 (Recovery Expenses)

 

(1)The recovery expenses under Articles 25 and 30 are as follows:

 

1.Litigation costs, attorney fees, or collection delegation fees incurred with respect to the policyholder’s execution of obligations under Articles 10, 15, and 17.

 

2.Other expenses deemed necessary or beneficial by the Corporation

 

(2)The recovery expenses under paragraph (1) shall be borne by the Corporation up to the recovered amount. However, if deemed necessary by the Corporation, the Corporation may borne the recovery expenses in excess of the limit.

 

(3)The policyholder shall be responsible for expenses incurred in normal business activities, such as remittance fees or expenses incurred to maintain risk guarantees, and expenses incurred in disputes related to claims.

 

Article 30 (Processing of Recovered Amount by Policyholder)

 

(1)If the policyholder has recovered any amount after receiving the insurance money, the policyholder shall submit to the Corporation within one (1) month from the recovery date the statement of the amount recovered, including the details of the amount recovered and the recovery expenses, along with relevant supporting documents.

 

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(2)The policyholder shall pay the amount obtained by multiplying the amount under Article 28(2) subparagraphs 1 and 2 by the formula below (hereinafter referred to as the “Rate of Indemnification”) within fifteen (15) days from the date of submission of the statement under paragraph (1). Provided, That the amount of insurance money paid is the limit.

 

Rate of Indemnification = Insurance Money Paid / Loss under Article 6

 

(3)In case there is a remaining amount after the payment has been made in accordance with Article 28(2) of the recovered amount, the policyholder shall pay the amount obtained by multiplying the remaining amount by the rate of indemnification, to the Corporation within fifteen (15) days from the date of submission of the statement under paragraph (1).

 

(4)In case the policyholder fails to pay the amount to be paid pursuant to paragraphs (2) and (3) by the date set by the Corporation, the policyholder shall pay such amount and the arrears calculated by applying the default interest rate to the number of days from the day following the due date to the payment date.

 

(5)In case the policyholder fails to pay the amount stipulated in paragraphs (2) through (4), the Corporation may offset the amount from the insurance amount to be paid pursuant to other insurance agreements with the policyholder.

 

Article 31 (Processing of Recovered Amount by insurance subrogation, etc.) If certain amount is recovered by subrogation under Article 32 or exercise of rights by the Corporation under Article 33, the Corporation shall pay the remaining amount calculated by subtracting the amount obtained by multiplying the amount by the indemnification rate from the amount under Article 28(2) subparagraphs 1 and 2.

 

Article 32 (Insurance Subrogation)

 

(1)Where the Corporation has paid insurance money, the Corporation may acquire all or part of the claims related to the Principal and Interest from the policyholder.

 

(2)Where the Corporation requests to exercise the subrogation right under paragraph (1), the policyholder shall transfer the policy under the insurance agreement and other related documents and provide all conveniences.

 

(3)The Corporation may entrust the claims acquired in accordance with paragraph (1) to the policyholder.

 

Article 33 (Exercise of Rights by Corporation) In case the Corporation deems it necessary to exercise on its own a claim related to an insurance accident before paying the insurance money, the policyholder may entrust the exercise of the claim.

 

Chapter 8. Supplementary Provisions

 

Article 34 (Special Provisions) In case the Corporation intends to stipulate terms different from those in this Agreement, it may enter into an additional special agreement by agreement with the policyholder.

 

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Article 35 (Transfer of Claim to Insurance Money) The policyholder must obtain prior written approval from the Corporation if the policyholder intends to transfer or provide as a security the right to claim insurance money under this Agreement.

 

Article 36 (Objection)

 

(1)If the policyholder has any objection to the dispositions taken by the Corporation under this Agreement, the policyholder may file an objection to the Corporation within one (1) month from the date of discovery or within three (3) months from the date of the disposition.

 

(2)If an objection is filed pursuant to paragraph (1), the Corporation shall examine the objection within one (1) month and notify the policyholder of the result.

 

Article 37 (Exchange Rates)

 

(1)If the recovered amount and the recovery expenses under Articles 25, 27, 28, 29, 30, and 31 are in a currency other than the currency of the Financing Agreement, the following exchange rate is applied:

 

1.Recovered Amount: The exchange rate of the business day following the recovery date (referring to the first publicly announced trading standard rate of the Foreign Exchange Bank determined by the Corporation)

 

2.Recovery Expenses: The exchange rate of the business day following the date the amount was paid

 

(2)If there is no exchange rate on the date stipulated in paragraph (1), the exchange rate of the immediately preceding business day when the exchange rate is announced shall be applied.

 

(3)If the exchange rate is not announced, another currency shall be used as an intermediary for conversion.

 

(4)If it is difficult to apply the exchange rate stipulated in paragraphs (1) through (3), the exchange rate designated by the Corporation shall be used.

 

Article 38 (Headings) The headings in this Agreement are for convenience of reference and do not have any effect on the provisions of the Policy.

 

Article 39 (Procedures) In addition to those stipulated in this Agreement, the Corporation may prescribe, and the policyholder must follow, any procedures regarding this Agreement.

 

Article 40 (Governing Law)

 

(1)This Agreement shall be governed by and construed in accordance with the laws of the Republic of Korea.

 

(2)All disputes arising between the policyholder and the Corporation in connection with this Agreement shall be submitted to the Seoul Central District Court as the court of first instance, regardless of causes of action.

 

 

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Exhibit K

 

The bank must explain the important contents of this agreement to the reader and issue a copy of the basic terms and conditions for bank loan transactions and this agreement.

 

Revenue stamp

 

Park Ju-mi

 

Lee Dong-hyuk

 

Loan (Credit) Transaction Agreement

 

The Export-Import Bank of Korea (Front)

 

November __ , 2021

 

Reader: SK ecoplant Co., Ltd. (sign)

 

Address: Seoul Jongno-gu Gwanhun-dong Insa-dong 7-gil

 

I hereby agree that the “Basic Terms and Conditions for Bank Loan Transactions” apply to the loan transaction with The Export-Import Bank of Korea (henceforth “Bank”) under the conditions below, and I commit to each of the following provisions.

 

Article 1: Terms of Transaction

 

The terms of the transaction are as follows.

 

(If there are several transaction methods, listen to the explanation from the bank staff and mark “V” inside the applicable “☐”)

 

Loan Subject

(Loan Type)

Long-term Foreign Currency Loans for Oversea Investment
Transaction Classification

■ Individual Transaction

☐ Revolving Credit Line

☐ Non-Revolving Credit Line

Loan (Credit) Amount

■ USD 95,000,000

☐ Within ____ per day

 

Funding Purpose Foreign Direct Investment
Loan (credit line) Period

■ Within 3 years from the date of first withdrawal (But, within ____ )

☐ from ___ (day)___(month)____(year) to ___ (day)___(month)____(year)

Interest Rate Individual Transaction:
 

☐ Fixed

(Select Article 3, Paragraph 2, Subparagraph 1 of the Basic Terms and Conditions for Bank Loan Transactions)

Until the expiration date of the loan period:

☐ KW: __% per annum

☐ Foreign Currency: __ % per annum

 

■ Variable

(Select Article 3, Paragraph 2, Subparagraph 2 of the Basic Terms and Conditions for Bank Loan Transactions)

☐ KW: base rate + ( )%

 

■ Foreign Currency: base rate + (1.5)%

 

☐ Other: ( )

  Credit Line : as stipulated in Article 4

 

 

 

 

Late Compensation Rate

(Article 3 Paragraph 5 of the Basic Terms and Conditions for Bank Loan Transactions will be applied

__ % per annum
Commitment Fee Rate 0.5% per annum
Early Repayment Fee Rate 1.5% of the Early Repayment amount
Interest, Late Compensation, and Commission
Fee Calculation Method

A. Loans in KW: 1 year is counted as 365 days (366 days in a leap year) and calculated in units of 1 day.

B. Loans in Foreign Currency: 1 year is counted as 360 days and calculated in units of 1 day.

 

Individual Loan Amount (credit line only)

The individual loan amount, for each transaction, shall be the amount determined by the following.

 

☐ The amount required for production or manufacture within ( )% of the balance after deducting the amount already received from the export contract, export letter of credit, or goods supply contract.

 

☐ Within ( )% of the income amount or prepaid income amount

 

☐ Other:

Individual Loan Period (credit line only)

☐ Within the period of ( ) plus ( ) days from the first loan processing date for each individual loan.

 

☐ Within the period plus ( ) months from the first loan processing date for each individual loan.

 

☐ Other:

Loan Execution Method

■ Full pay on the first loan processing date.

 

☐ Based on evidence or in kind, the Bank confirms the purpose of the funds and the required amount and executes them in full or in installments.

 

☐ Executed upon request of a qualified individual

 

☐ Other:

 

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Principal Repayment Method

☐ ( ) will be repaid within the expiry date.

 

■ A lump sum payment for the entirety. However, if the bank agrees, it can be repaid in installments.

 

☐ After ( ), the first repayment will start in ( ) and repayment will be made in installments on the repayment date of the amortized repayment schedule attached separately for ( ).

 

☐ Starting from the initial loan processing date, the loan is deferred for ( ) years ( ) months, and after the deferral period expires, repayment is made in installments on the repayment date of the amortized repayment schedule attached separately.

 

☐ Each individual loan is repaid in one lump sum or in installments within the loan period.

 

☐ Other:

 

* Please note that deposits made through automated devices or electronic financial systems after the closing of banking hours may not be processed as redemption on the same day.

 

Interest Payment Date and Method

■ The first interest is paid (3) months after the loan date, and subsequent interests are paid (3) months after the day following the last day of the calculation period of the interest paid.

 

☐ Payment will be made on the repayment date of the amortized repayment schedule attached separately.

 

☐ Other:

 

* Please note that deposits made through automated devices or electronic financial systems after the closing of banking hours may not be processed as redemption on the same day.

 

Commitment Fee Payment Date and Method

n Payment is made on the interest date.

 

☐ Other:

 

* Please note that deposits made through automated devices or electronic financial systems after the closing of banking hours may not be processed as redemption on the same day.

 

 

 

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Article 2: Late Compensation

 

1. If interest, amortization of principal, or amortization of principal and interest is not paid on the due date, the late compensation for the unpaid amount must be paid starting from the next day.

 

2. In the event of non-payment of debt on the expiry date of the loan period or in the event of default pursuant to Article 7 of the Basic Terms and Conditions for Bank Loan Transactions, the payment of late compensation for the loan balance must be paid starting from the next day.

 

Article 3: Operation of Revolving and Non-Revolving Credit Lines

 

1. In the case of non-revolving credit lines, each individual loan applications shall be made in accordance with documentary evidence, such as target transaction agreements, that can confirm the purpose of funds and the required amount, within the extent that the total amount of each individual loan execution (including undrawn approved applications) up to the date of application, including the application amount for the current year, does not exceed the loan limit stipulated in Article 1. The Bank may confirm this and accept the application at its discretion.

 

2. In the case of revolving credit lines, each individual loan applications shall be made in accordance with documentary evidence, such as target transaction agreements, that can confirm the purpose of funds and the required amount, within the extent that the total amount of each individual loan’s loan balance (including undrawn approved applications) up to the date of application, including the application amount for the current year, does not exceed the loan limit stipulated in Article 1. The Bank may confirm this and accept the application at its discretion.

 

3. When the reader repays the loan under this agreement, in the case of revolving credit lines, within the credit line loan period stipulated in Article 1, the credit line shall be reinstated as much as the repaid amount. However, this is not the case in non-revolving credit lines.

 

Article 4: Individual Loan Interest Rate for Credit Lines

 

In case of credit lines, the interest rate of each individual loan amount shall be determined according to each of the following Subparagraphs.

 

1. Interest rate (including additional interest rates) for fixed-rate loans: interest rate on the date of application for individual loan approval.

 

2. Interest rate for variable-rate loans: the base rate is that of the day the interest begins, and the additional rate is that of the loan approval date.

 

Article 5: Confirmation of the Total Amount Borrowed and Notification of the Amortization Schedule

 

1. In the case of a loan to be executed in installments, the total amount of debt is confirmed after the final execution, and the method of confirmation is based on the amortization schedule, receipts, and other supporting materials.

 

2. When the total amount borrowed is confirmed under Paragraph 1, the Bank will notify the reader and joint surety of the amortization schedule, which is attached separately to the contract.

 

Article 6: Reduction and Suspension

 

1. When it is judged that a sudden change in the national economy or financial affairs or a significant deterioration in one’s credit status will cause a significant disruption to the credit agreement, the Bank may reduce the loan (credit) amount stipulated in Article 1 by notification, or temporarily suspend the loan execution despite the agreement period.

 

2. If the reasons stipulated in Paragraph 1 are resolved and normal loan (credit) transactions are possible, the Bank will relieve the reduction and suspension with haste.

 

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Article 7: Fee for Unused Credit

 

1. If there is a separate agreement for the unused credit of the loan or individual loan under Article 1, the fee set by the agreement (henceforth “agreement fee”) must be paid according to the standard articulated therein.

 

2. If the agreement fee is not paid on the due date, the late compensation rate applied to the amount to be paid shall be paid with haste.

 

Article 8: Stamp Tax Payment

 

1. The stamp tax for the preparation of this agreement is borne by the reader and the Bank at a rate of 50% each.

 

2. If the Bank pays the stamp tax to be borne by the reader pursuant to Paragraph 1, it shall be repaid with haste in accordance with Article 4 of the Basic Terms and Conditions for Bank Loan Transaction.

 

Article 9: Redemption Currency and Exchange Rate

 

The principal and interest of a foreign currency loan can be repaid in the borrowed currency or KW. When repaying in KW, the applicable exchange rate will be based on the telegraphic transfer selling rate to the customer on the day of repayment.

 

Article 10: Collateral and Insurance

 

1. The reader agrees to provide the bank with the items purchased or manufactured, facilities to be installed, the land and buildings on which they are installed, and other facilities therein with the loan under this agreement as collateral, unless the bank otherwise expresses its intention. If the Bank requests, the reader must purchase insurance of the type and price agreed to by the bank, and establish a pledge for the Bank in the right to claim the insurance money.

 

2. When the reader delivers the goods and etc. stipulated in Paragraph 1 to another party with whom the export contract or the technical assistance agreement has been entered into, and the reader obtains from the other party a promissory note or a payment guarantee or letter of credit guaranteeing the payment, it must be transferred immediately to the Bank regardless of whether the bank handles the annual payment for export funds loans as collateral in lieu of the goods and etc.as stipulated in Paragraph 1.

 

Article 11: Early Repayment

 

1. If the reader wishes to repay the loan before the due date, s/he must consult with the Bank 30 days before the expected repayment date.

 

2. When the reader repays the loan before the due date in accordance with Paragraph 1, if there is a separate agreement for the early repayment, the fee must be paid pursuant to the standard set by the agreement.

 

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Article 12: Obligation to Maintain Repayment Capacity

 

1. In order to maintain the ability to repay the debt resulting from this agreement, the reader agrees to maintain the appropriate financial ratio as follows. In the presence of other agreements (e.g. Financial structure improvement agreement), the agreements are attached following this agreement and are regarded as a part of this agreement.

 

Classification   20 .   20 .   20 .   20 .  
Debt ratio   %   %   %   %  
Equity ratio   %   %   %   %  
(  ) ratio   %   %   %   %  
(  ) ratio   %   %   %   %  

 

2. If the reader intends to engage in any of the following acts, s/he agrees to consult with the Bank in advance.

 

1. Mergers, transfers, and sale and lease of significant property

 

2. Investment in fixed assets that are not covered by this agreement

 

3. Guarantee of another’s debts

 

4. Starting a new business or investing overseas

 

5. When there is a risk of significant changes in management, such as corporate structure work out or application for privatization

 

3. The reader acknowledges the necessity for follow-up management of this agreement and agrees to comply with the following actions if the Bank requests it.

 

1. Sale of real estate and securities

 

2. Investment by controlling shareholders

 

3. Capital increase by issuing new stocks or initial public offering

 

4. The provisions of Paragraph 1 to 3 apply only when there is a separate agreement for each Paragraph between the reader and the Bank.

  

Article 13: Submissions of Materials and Etc.

 

1. In accordance with Article 17 and 19 of the Basic Terms and Conditions for Credit Transactions, the reader agrees to submit the following materials and etc. necessary for the follow-up management of the loan as requested by the Bank.

 

1. Quarterly: VAT return, compound trial balance, debt status table, sales forecast table by vendor, product, and etc.

 

2. Semi-Annually: semi-annual accounting report, VAT return, compound trial balance, debt status table, sales forecast table by vendor, product, and etc.

 

3. Annually: certified public accountant audit report (closing financial statements), consolidated financial statements, certified copy of the corporate register, business license, stockholder’s list, articles of association, wages and income tax collection table, business plan, prospective financial statements (3 years), major client status, copies of various licenses and technical certification related documents (KS, ISO, patents, etc.), labor management dispute confirmation, product manuals, industry references and etc.

 

4. Frequently: compound trial balance, debt status table, documents confirming the purpose of funds, etc.

 

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2. The reader agrees to submit the following materials upon request from the Bank in a timely manner in order to understand the current status of foreign exchange risk and management of the company when evaluating the reader’s credit.

 

1. Current status of foreign exchange risk management organization and management regulations.

 

2. Foreign currency funding and operation status.

 

3. Current status of foreign currency derivatives.

 

3. The reader will promptly submit at the Bank’s request information on the export contract, technical assistant agreement, import contract, or joint investment agreement etc. (henceforth “loan target agreement”) and counterparty’s balance sheet, loan target business status, information related to the financial and economic situation of the counterparty’s country or investment target country.

 

4. The reader will promptly submit data on the current status of overseas investment or business or major resource development projects and etc. related to this agreement every June, or at the request of the Bank.

 

5. If the imported goods related to this agreement are imported for the purpose of sale or are converted for sale, the Bank will be notified of the inventory and sales status (quantity, value amount, vendor, date of sale, payment period, and etc.) as of the end of each month by the 10th of the following month.

  

Article 14: Implementation and Altercation of Loan Target Agreement

 

1. The reader agrees to carry out the business related to this agreement without fail as stipulated in the loan target agreement.

 

2. The reader cannot arbitrarily change the terms of contracts related to this agreement (e.g. loan target agreement) without prior consent from the bank.

 

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3. When a cause for default of the loan target agreement occurs or is expected to occur by the reader or the counterparty, the reader shall promptly describe the details, cause and measures taken, and submit it to the Bank.

 

4. The reader agrees to continue to maintain the effect of the loan target agreement and various measures, such as licensing, registration, and reporting, under Article 16, Subparagraph 3.

 

5. The reader agrees to immediately notify the Bank in the event of any action, labor dispute, or lawsuit filed by the government of a relevant party that affects the validity or performance of the loan target agreement.

 

6. If the reader does not comply with the provisions of Paragraphs 1 to 5 without justifiable reasons, s/he shall comply with the Bank’s actions, such as cancellation or postponement of loan approval and execution, compensation for damages caused by loss of profit within the period.

  

Article 15: Approval of Costs of Contract Performance

 

1. The reader will make sure to implement each of the following items.

 

1. The down payment or advance payment in connection with the loan target agreement will be used only for purposes approved by the Bank.

 

2. If requested by the Bank, export proceeds, technical assistance service payment, dividends, product sales, and other equivalent funds deposited in connection with the loan target agreement shall be deposited into the bank account or a financial institution designated by the Bank.

 

3. The funds deposited under Subparagraph 2 shall not be transferred or provide as collateral to others.

 

4. When the payment for contract performance under Subparagraph 2 is received, it will be used to repay the debt to the Bank immediately, and will not be arbitrarily withdrawn or used.

 

2. In the case of a loan for funds for import, the imported goods related to this agreement shall not be used for any other purpose than when applying for the loan. However, if there is a good reason, it may be used for other purposes with the approval of the Bank.

 

Article 16: Representations and Warranties

 

The reader guarantees to the Bank that the following matters are true and correct.

 

1. The counterparty to the loan target agreement related to this agreement has been legally established in accordance with the laws of its country and has the right to act, the ability to act, and the ability to conclude and perform the loan target agreement.

 

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2. The loan target agreement has gone through the necessary internal procedures and has been legally and properly concluded in accordance with the laws of the counterparty’s country.

 

3. The reader and the counterparty to the loan target agreement have taken various measures to effectuate and maintain the loan target agreement and the various actions, including all the approvals, permits, registrations, and reports, such as import ∙ export ∙ overseas investment and permission for major resource development or remittance, etc., of the relevant parties, to fulfill their obligations.

 

4. Neither the reader nor the counterparty to the loan target agreement is in default on any debts or in arrears of taxes levied by the related governments or other public entities.

 

5. The reader and the counterparty to the target loan agreement have not been brought before any lawsuits, administrative procedures, arbitrations, etc. that may have a significant impact on their asset status, and are not in a state that is likely to receive such lawsuits.

 

6. The conclusion and performance of the loan target agreement is a commercial act between the reader and the counterparty, and the counterparty has given up the sovereign immunity he currently has or will have in the future in relation to the debts under the loan target agreement.

 

7. The loan target agreement is in accordance with the actual transaction, and the promissory note, payment guarantee, and letter of credit provided by the counterparty have been truthfully issued.

 

8. All documents, including data and information regarding the reader, and data, information, and evidence regarding the counterparty and his/her country, submitted by the reader to the Bank are accurate and authentic.

 

9. The financial statements of the reader or his/her subsidiaries and affiliates by the reader are accurate and have been prepared in accordance with general accounting principles.

 

10. The reader has not received financial support from other financial institutions in relation to the agreements supported by the Bank, and will not receive duplicate funds in the future.

  

Article 17: Other Special Terms

 

Reader:                               (sign)

 

The reader has clearly received a copy of the Basic Terms and Conditions for Bank Loan Transactions and this agreement, and has been provided sufficient explanation of the main contents of the agreement, which the reader has sufficiently understood.

 

Reader: SK ecoplant Co., Ltd.

 

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Loan Amortization Schedule

 

(Unit: )

 

Rounds Repayment Due Date Repayment Amount Balance of Principal after Repayment Notes
Principal Interest Total

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

__year __month __day

         
Total      

 

 

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