8-K
Alternus Clean Energy, Inc. (ALCE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 22, 2023
ALTERNUS CLEAN ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41306 | 87-1431377 |
|---|---|---|
| (State or other jurisdiction<br><br> of Incorporation) | (Commission<br><br> File Number) | (IRS Employer<br><br> Identification Number) |
| 360 Kingsley Park Drive, Suite 250<br><br> <br>Fort Mill, South Carolina | 29715 | |
| --- | --- | |
| (Address of registrant’s<br> principal executive office) | (Zip code) |
(800) 581-1531
(Registrant’s telephone number, including area code)
Clean Earth Acquisitions Corp.
12600 Hill Country Blvd., Building R, Suite 275
Bee Cave, Texas 78738
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant<br> to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications<br> pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications<br> pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock,<br> par value $0.0001 per share | ALCE | The Nasdaq Stock Market<br> LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
INTRODUCTORY NOTE
As previously disclosed, on October 12, 2022, Clean Earth Acquisitions Corp., a Delaware corporation (“CLIN” and “Clean Earth”), entered into a Business Combination Agreement, as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023 (the “First BCA Amendment”) (as amended by the First BCA Amendment, the “Initial Business Combination Agreement”), and as amended and restated by that certain Amended and Restated Business Combination Agreement, dated as of December 22, 2023 (the “A&R BCA”) (the Initial Business Combination Agreement, as amended and restated by the A&R BCA, the “Business Combination Agreement”), by and among CLIN, Alternus Energy Group Plc, a company incorporated under the laws of Ireland (“AEG” or “Seller”), and Clean Earth Acquisitions Sponsor LLC, a Delaware limited liability company (“Sponsor”), in its capacity as representative of CLIN and solely for the purposes of certain sections of the Business Combination Agreement.
On December 22, 2023 (the “Closing Date”), in accordance with the Business Combination Agreement, the closing of the Business Combination (as defined below) (the “Closing”) occurred, pursuant to which CLIN issued and transferred 57,500,000 shares of Class A common stock of CLIN, par value $0.0001 per share (“Class A Common Stock”) to AEG, and AEG transferred to CLIN, and CLIN received from AEG, all of the issued and outstanding equity interests in the Acquired Subsidiaries (as defined in the Business Combination Agreement) (the “Equity Exchange,” and together with the other transactions contemplated by the Business Combination Agreement, the “Business Combination”). In connection with the Closing, CLIN changed its name to “Alternus Clean Energy Inc.”
A description of the Initial Business Combination Agreement is included in the definitive proxy statement as filed by CLIN with the Securities and Exchange Commission (“SEC”) on November 13, 2023 (as supplemented by that certain supplement to the definitive proxy statement, dated as of November 16, 2023, the “Proxy Statement”), in the section titled “The BusinessCombination Proposal—The Business Combination Agreement” beginning on page 92. The foregoing description of the Business Combination Agreement is a summary only and is qualified in its entirety by the full text of the Initial Business Combination Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference, the full text of the First BCA Amendment, which is filed as Exhibit 2.2 hereto and is incorporated herein by reference, and the full text of the A&R BCA, which is filed as Exhibit 2.3 hereto and is incorporated herein by reference.
As used in this Current Report on Form 8-K, unless otherwise stated or the context clearly indicates otherwise, the terms the “Company,” “Registrant,” “we,” “us” and “our” refer to the entity formerly named Clean Earth Acquisitions Corp., after giving effect to the Business Combination, and as renamed Alternus Clean Energy Inc. All references herein to the “Board” refer to the board of directors of the Company after giving effect to the Business Combination.
On the business day following the Closing, the Company’s public units and rights automatically separated or converted into their component securities upon consummation of the Business Combination and, as a result, no longer trade as separate securities and were delisted from The Nasdaq Stock Market LLC (“Nasdaq”).
| Item 1.01. | Entry into a Material Definitive Agreement. |
|---|
Non-Redemption Agreement
On December 18, 2023, CLIN entered into a non-redemption agreement (as it may be amended, supplemented or otherwise modified from time to time, the “NRA”) by and among CLIN, the Sponsor, and the investor named therein (the “Investor”). Pursuant to the terms of the NRA, among other things, the Investor agreed to withdraw redemptions in connection with the Business Combination on any Class A Common Stock, held by the Investor and to purchase additional Class A Common Stock from redeeming stockholders of CLIN such that the Investor will be the holder of no fewer than 277,778 shares of Class A Common Stock. In exchange, CLIN and the Sponsor will cause to be delivered to the Investor at the Closing an additional 277,778 founder shares, which such founder shares will reflect the same legends and be restricted in the same manner as then-applicable to the Sponsor at the Closing.
Amended and Restated Business CombinationAgreement
On December 22, 2023, CLIN entered into that certain Amended and Restated Business Combination Agreement with AEG and Sponsor. The A&R BCA amends and restates the Initial Business Combination Agreement. The A&R BCA was approved by the board of directors of CLIN and the board of directors of AEG.
Below is a description of the material terms of the A&R BCA that are materially different from the terms of the Initial Business Combination Agreement. The description below does not purport to be complete and is qualified in its entirety by the terms and conditions of the A&R BCA, a copy of which is attached hereto as Exhibit 2.3.
Changein Valuation
The Initial Business Combination Agreement contemplated that, as consideration for the transactions contemplated thereby CLIN would issue to the Seller a number of Class A Common Stock, valued at $10.00 per share, equal to $275,000,000 plus or minus an estimated working capital adjustment (which would not be greater than or less than $10,000,000), of which 1,000,000 shares of Class A Common Stock would be deposited into a working capital escrow account to satisfy any post-closing working capital adjustments.
The A&R BCA amends the Initial Business Combination Agreement by (i) increasing the number of shares of Class A Common Stock to be issued to the Seller by 30,000,000 (10,000,000 of which is in consideration for the waiver of the Available Cash Closing Condition and the Lock-Up Provision (each as defined below)) and (ii) removing the working capital adjustment in its entirety, including any working capital escrow account related thereto.
As a result, as consideration for the transactions contemplated by the A&R BCA (the “Transactions”) CLIN will issue to the Seller 30,000,000 shares of Class A Common Stock, plus a number of shares of Class A Common Stock valued at $10 per share, equal to $275,000,000.
Removalof Earnout
The Initial Business Combination Agreement contemplated that, at the closing of the Transactions, 20,000,000 shares of Class A Common Stock (the “Earnout Shares”) would be deposited into an earnout escrow account and would be released, in whole or part, to the Seller if certain earnout milestones were met at the end of fiscal years ending December 31, 2023, December 31, 2024 and December 31, 2025. The earnout milestones were: (i) if the Adjusted EBITDA (as defined below) for the fiscal year ending on December 31, 2023 was at least $16,000,000 and the Company’s share price was at least $11.00 for a minimum number of trading days (as set forth in the Initial Business Combination Agreement), then 6,000,000 Earnout Shares would be released to the Seller, (ii) if Adjusted EBITDA for the fiscal year ending on December 31, 2024 was at least $52,000,000 and the Company’s share price was at least $13.00 for a minimum number of trading days (as set forth in the Prior Business Combination Agreement), then 6,000,000 Earnout Shares would be released to the Seller, and (iii) if Adjusted EBITDA for the fiscal year ending on December 31, 2025 was at least $156,000,000 and the Company’s share price was at least $15.00 for a minimum number of trading days (as set forth in the Initial Business Combination Agreement), then 8,000,000 Earnout Shares would be released to the Seller. If any of the earnout milestones were not met, the Earnout Shares that would have been released to the Seller would be released to the Seller if a subsequent earnout milestone was met. In addition, if any earnout milestone based on Adjusted EBITDA had been met, but the corresponding earnout milestone based on share price had not been met, Earnout Shares could be released to the Seller if share price targets or a calculated share price based on a multiple of Adjusted EBITDA reduced by net debt were met during the five-year period from the date of the applicable milestone (i.e., 5 years after 2023 for the first earnout milestone, 5 years after 2024 for the second earnout milestone and 5 years after 2025 for the third earnout milestone). Any Earnout Shares remaining in the earnout escrow account that had not been released to the Seller would be released to the Company. Adjusted EBITDA, which was defined as “Adjusted EBITDA” as set forth in the Company’s Annual Report on Form 10-K in the Management’s Discussion and Analysis, is a non-GAAP measure and should not be construed as more relevant measures of operational performance than financial information under generally accepted accounting principles (GAAP).
The A&R BCA amends the Initial Business Combination Agreement by removing the earnout concept in its entirety, including any earnout milestones and the earnout escrow account related thereto. As a result, AEG will not have the opportunity to receive additional shares of Class A Common Stock as consideration for the future performance of the Company as set forth in the prior earnout milestones, and Purchaser will not escrow or otherwise reserve any shares of Class A Common Stock for future issuance in connection therewith.
Waiver of Available Cash Closing Condition
The Initial Business Combination Agreement contemplated that, as a condition to closing of the Transactions, the Company would have Available Cash (as defined therein) equal to or greater than $25,000,000 immediately following the Transactions (the “Available Cash Closing Condition”). In the event the Available Cash Closing Condition was not satisfied and waived by Seller, each of the Locked-Up Persons (as defined therein) agreed to enter into certain transfer restrictions with respect to capital stock owned by such Locked-Up Person (the “Lock-Up Provision”), subject to terms and conditions as set forth in the Initial Business Combination Agreement.
The A&R BCA amends the Initial Business Combination Agreement by removing the Available Cash Closing Condition and the Lock-Up Provision, each of which Seller has agreed to waive. In consideration for such waiver by Seller of these provisions, CLIN has agreed to issue an additional 10,000,000 shares of Class A Common Stock to Seller.
Exclusion of Certain Subsidiaries of Seller
The Initial Business Combination Agreement contemplated that, in connection with the Transactions, CLIN would acquire, directly or indirectly, (a) one hundred percent (100%) of the issued and outstanding capital stock of Alternus Energy Americas Inc., a Delaware corporation (the “AEA Shares”), (b) sixty percent (60%) of the issued share capital of Unisun Energy Holding B.V., a private limited company incorporated under the laws of the Netherlands (the “Unisun Shares”), (c) 100% of the issued share capital of Alternus Lux (the “Alternus Lux Shares”), (d) one hundred percent (100%) of the issued share capital of Solis Bond Company Designated Activity Company, a private limited company incorporated under the laws of Ireland (the “Solis Shares”), and (e) one hundred percent (100%) of the issued share capital of AEG JD 02 Limited, a private limited company incorporated under the laws of Ireland (the “AEG JD 02 Shares”).
The A&R BCA amends the Initial Business Combination Agreement by excluding the Unisun Shares and the AEG JD 02 Shares, such that CLIN will not acquire any such shares from Seller in connection with the Transactions.
As a result, the A&R BCA contemplates that CLIN will acquire, directly or indirectly, (a) the AEA Shares and (b) the Alternus Lux Shares, which now indirectly owns the Solis Shares through an internal restructuring.
Assumption by the Company of Seller-relatedNotes and related issuance of Class A Common Stock
The A&R BCA amends the Initial Business Combination Agreement by including new assignments by the Seller of certain note instruments held by the Seller or one of its subsidiaries to the Company that will occur in connection with or following the Closing (as defined therein). First, Seller shall cause one of its subsidiaries, Alternus FundCo Limited, to assign to the Company at or immediately following the Closing, a certain convertible promissory note with a purchase price of €850,000, issued by Alternus FundCo Limited in favor of a third party. Second, the Seller shall have the right, but not the obligation, to assign to the Company a certain note instrument issued by the Seller in favor of a third party, and to cause the Company to issue up to 2,300,000 shares of Class A Common Stock to such third party in connection therewith, subject to terms to be mutually agreed upon by such third party and the Board.
Employment Agreements
Reference is made to the disclosure set forth in Item 2.01 of this Current Report on Form 8-K under the caption *“Employment Agreements,”*which is incorporated in this Item 1.01 by reference.
IndemnificationAgreements
In connection with the Closing, the Company entered into indemnification agreements (each, an “Indemnification Agreement”) with its directors and executive officers. Each Indemnification Agreement provides for indemnification and advancements by the Company of certain expenses and costs if the basis of the indemnitee’s involvement in a matter was by reason of the fact that the indemnitee is or was a director, officer, employee, or agent of the Company or any of its subsidiaries or was serving at the Company’s request in an official capacity for another entity, in each case to the fullest extent permitted by the laws of the State of Delaware.
The foregoing description of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Indemnification Agreement, a form of which is attached as Exhibit 10.22 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
|---|
The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference.
On December 4, 2023, CLIN held a special meeting of its stockholders (the “Special Meeting”) to approve, among other things, the Initial Business Combination Agreement and the transactions contemplated thereby.
On the Closing Date, the parties to the Business Combination Agreement consummated the Business Combination.
FORM 10 INFORMATION
Forward Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements with respect to trends in the cannabis industry, including changes in U.S and state laws, rules, regulations and guidance relating to the Company’s business, its growth prospects and its market size, its projected financial and operational performance, including relative to its competitors, new product and service offerings the Company may introduce in the future, the Business Combination, the outcome of any legal proceedings that may be instituted against the Company or AEG related to the Business Combination, the ability to maintain the listing of the Company’s securities on the Nasdaq Capital Market, the price of the Company’s securities, including volatility resulting from changes in the competitive and highly regulated industry in which AEG plans to operate, variations in performance across competitors, changes in laws and regulations affecting the Company’s business and changes in the combined capital structure, the ability to implement business plans, forecasts, and other expectations following the completion of the proposed Business Combination, and identify and realize additional opportunities, and other statements regarding AEG’s and the Company’s expectations, hopes, beliefs, intentions or strategies regarding the future. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
In addition to factors previously disclosed in the Company’s reports filed with the SEC, the Proxy Statement, and those identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (i) the effect of the Business Combination on AEG’s or the Company’s business relationships, performance and business generally; (ii) risks that the Business Combination disrupts current plans and operations of the Company; (iii) the outcome of any legal proceedings that may be instituted against AEG or the Company related to the Business Combination; (iv) the ability to maintain the listing of the Company’s securities on Nasdaq Capital Market; (v) the price of the Company’s securities may be volatile due to a variety of factors, including changes in the competitive and regulated industries in which the Company operates, variations in performance across competitors, changes in laws and regulations affecting the Company’s business and changes in the capital structure, and the dilutive impact of the shares issued in connection with the Business Combination, and the terms of that certain Forward Purchase Agreement dated December 3, 2023 by and among the Company and certain purchasers; (vi) the ability to implement business plans, forecasts, and other expectations after the completion of the Business Combination, and identify and realize additional opportunities; (vii) the risk of downturns and the possibility of rapid change in the highly competitive industry in which the Company operates, and the risk of changes in applicable law, rules, regulations and regulatory guidance that could adversely impact the Company’s operations; (viii) the risk that the Company may not achieve or sustain profitability; (ix) the risk that the Company will need to raise additional capital to execute its respective business plan, which may not be available on acceptable terms or at all; and (x) the risk that the Company experiences difficulties in managing its growth and expanding operations.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about the Company and the AEG or the date of such information in the case of information from persons other than the Company or the AEG, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding the Company’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected, and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results.
All subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed in this Current Report on Form 8-K and attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Current Report on Form 8-K. Except to the extent required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect the occurrence of unanticipated events.
Business
The business and properties of the Company and the AEG prior to the Business Combination are described in the “Information About Clean Earth” and “Information About Alternus” sections of the Proxy Statement beginning on pages 168 and 188 of the Proxy Statement, respectively. The foregoing sections, as supplemented, are incorporated herein by reference.
Risk Factors
The risks associated with the Company’s business and operations and the Business Combination are described in the Proxy Statement in the section titled “Risk Factors” beginning on page 18 thereof, which is incorporated herein by reference.
Financial Information
Reference is made to the disclosure contained in the Proxy Statement in the sections titled “Clean Earth’s Management’s Discussionand Analysis of Financial Condition and Results of Operations” on page 183 thereof, and “Alternus’Management’s Discussion and Analysis of Financial Condition and Results of Operations,” on page 207 thereof. The foregoing sections, as supplemented, are incorporated herein by reference.
Quarterly Resultsof Operations
Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of Company and AEG, which is incorporated herein by reference.
Management’s Discussion And AnalysisOf Financial Condition And Results Of Operations
“CleanEarth’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 183 thereof, and “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of Operations,” on page 207 thereof. The foregoing sections, as supplemented, are incorporated herein by reference.
Quantitative andQualitative Disclosures about Market Risk
As a smaller reporting company, the Company is not required to provide this disclosure pursuant to Item 305(e) of regulation S-K.
Properties
The properties of the Company are described in the Proxy Statement in the sections titled “Information About Alternus—Facilities” on page 205 thereof, which is incorporated herein by reference.
Beneficial Ownership of Securities
The following table sets forth information known to the Company regarding the beneficial ownership of the Company’s common stock, par value $0.0001 (the “Company Common Stock”) upon the Closing by:
| · | each<br> person who is the beneficial owner of more than 5% of the outstanding shares of Company Common Stock; |
|---|---|
| · | each<br> of the Company’s named executive officers and directors; and |
| --- | --- |
| · | all<br> of the Company’s named executive officers and directors as a group. |
| --- | --- |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if such person possesses sole or shared voting or investment power over that security, including options, warrants and rights that are currently exercisable or exercisable within 60 days.
The beneficial ownership of Company Common Stock is based on 71,927,855 shares of Company Common Stock issued and outstanding immediately following the Closing Date.
| Name of Beneficial Owner | Number of shares<br> of Company<br> Common Stock<br> Beneficially<br> Owned | Percentage of<br> shares of<br> outstanding<br> Company<br> Common Stock | |||
|---|---|---|---|---|---|
| Greater than 5% Stockholders: | |||||
| Alternus Energy Group Plc^(1)^ | 57,500,000 | 79.9 | % | ||
| Clean<br>Earth Acquisitions Sponsor LLC^(2)(3)^ | 8,781,667 | 12.1 | % | ||
| Named Executive Officers and Directors: ^(4)^ | |||||
| Vincent Browne | 0 | * | |||
| Joseph E. Duey | 0 | * | |||
| Taliesin Durant | 0 | * | |||
| Gary Swan | 0 | * | |||
| David Farrell | 0 | * | |||
| Larry Farrell | 0 | * | |||
| Gita Shah | 0 | * | |||
| John P. Thomas | 0 | * | |||
| Aaron T. Ratner | 0 | * | |||
| Nicholas Parker | 0 | * | |||
| Tone Bjornov | 0 | * | |||
| Mohammed Javade Chaudhri | 0 | * | |||
| Candice Beaumont | 0 | * | |||
| All directors and named executive officers as a group (13 individuals) | 0 | * | |||
| * | Less than 1%. | ||||
| --- | --- | ||||
| (1) | The business address of Alternus Energy Group Plc is c/o Alternus Clean Energy, Inc., 360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715. | ||||
| --- | --- | ||||
| (2) | The Sponsor is the record holder of the shares of Company Common Stock<br> reported herein. Share ownership for officers and directors of the Sponsor does not include<br> shares owned by the Sponsor. Martha Ross, Alex Greystoke and David Saab compose the Board<br> of Managers of the Sponsor. Any action by the Sponsor, including decisions with respect to<br> the Sponsor’s voting and dispositive power over the shares of the Company held by the<br> Sponsor, requires a majority vote of the managers of the Board of Managers. Under the so-called<br> “rule of three,” because voting and dispositive decisions are made by a<br> majority of the Sponsor’s managers, none of the Sponsor’s managers is deemed<br> to be a beneficial owner of the Sponsor’s securities, even those in which such manager<br> holds a pecuniary interest. Each of Aaron Ratner, Nicholas Parker and Candice Beaumont, directors<br> of the Company, holds membership interests in the Sponsor. None of the members of the Sponsor<br> is deemed to have or share beneficial ownership of the shares of Company Common Stock held<br> by the Sponsor. The business address of the Sponsor is 12600 Hill Country Blvd, Building<br> R, Suite 275 Bee Cave, Texas 78738. | ||||
| --- | --- | ||||
| (3) | Includes 2,555,556 shares of Class A Common Stock that are subject<br> to vesting upon the occurrence of certain stock price milestones or upon the occurrence of<br> certain events | ||||
| --- | --- | ||||
| (4) | Unless otherwise noted, the business address of each of the following<br> individuals is 360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715. | ||||
| --- | --- |
Management and Board of Directors
The following persons are the directors and executive officers of the Company immediately following the Closing:
| Name | Age | Position(s) |
|---|---|---|
| Vincent Browne | 56 | Chief Executive Officer and Chairman of the Board of Directors |
| Joseph E. Duey | 50 | Chief Financial Officer |
| Taliesin Durant | 52 | Chief Legal Officer |
| Gary Swan | 54 | Chief Technical Officer |
| David Farrell | 42 | Chief Commercial Officer |
| Larry Farrell | 53 | Chief Information Officer |
| Gita Shah | 40 | Chief Sustainability Officer |
| John P. Thomas | 70 | Director |
| Aaron T. Ratner | 48 | Director |
| Nicholas Parker | 63 | Director |
| Tone Bjornov | 61 | Director |
| Mohammed Javade Chaudhri | 71 | Director |
| Candice Beaumont | 49 | Director |
Executive Officers
The following is a brief biography of each of Company’s executive officers and key employees.
Vincent Browne, Chairman and Chief ExecutiveOfficer
Vincent Browne has served as the CFO and a Director of AEG since July 2015, and was appointed as CEO in September 2017. Prior to joining AEG, Mr. Browne is also a director of all of AEG’ subsidiaries except its Italian subsidiaries since December 2016. From December 2016 to January of 2021, and was also the owner and managing director of Power Clouds Holdings Pte. Ltd. Commencing in January 2012 and ending in December 2016, Mr. Browne served as Chief Executive Officer and Chairman of the Board of Axiologix, Inc. Prior to which, in October 2008, he served as Chief Executive Officer and Chairman of the Board of Flint Telecom Group, Inc. until December 2012. Mr. Browne was Head of Procurement with Esat Telecom Group, a telecom operator in Ireland, quoted on Nasdaq. His formative career was with Siemens Nixdorf in Ireland managing the Products Business Segment. Mr. Browne holds a Bachelor of Commerce (Accounting) degree from University College Dublin and is a regular contributor in commercialization of research and technology projects with the Technology and Enterprise Campus at Trinity College Dublin. Mr. Browne was selected to serve as a director in light of his role as Chief Executive Officer, the management perspective he brings to board deliberations and his extensive management experience.
Joseph Duey, Chief Financial Officer
Joseph Duey has served as the Chief Financial Officer of AEG since 2018. Mr. Duey has over 12 years of experience in the development, acquisition, construction and financing of renewable energy assets including key operating management, finance and audit functions and has held CFO roles with various independent power producers focused on developing, acquiring, owning, and operating clean energy generation. Prior to joining AEG, Mr. Duey served as Chief Financial Officer of Helios Energy Group from August of 2016 through September 2018, an independent power producer focused on developing, acquiring, owning, and operating clean energy generation. From January 2012 through July 2016, Mr. Duey served as Chief Financial Officer of Green States Energy, Inc., an independent power producer (IPP) focused on developing, acquiring, owning, and operating clean energy generation. From June 2008 to December 2011, Mr. Duey was the Controller for Power Partners Group, a division of MasTec (MTZ), which installed over 3.5 GWp of wind assets in the United States as the electrical contractor over a 7-year period. Mr. Duey was Vice-President of Finance and General Manager of Allumination Filmworks from September 2005 to June 2008. Mr. Duey joined the Goodrich Corporation in August 2002 to September 2005, where he was the Manager of Consolidations Planning and Analysis from January 2002 to August 2002, he was the Controller at Bran and Luebbe a division of the SPX Corporation (SPX). Mr. Duey’s early career experience was at Arthur Andersen, where he performed external, internal, and operational audits for Fortune 1000 Companies. Mr. Duey received an MBA from the University of Illinois and achieved CPA, CMA, CIA, and CFM designations.
Taliesin Durant, Chief Legal Officer
Taliesin Durant has served as the Chief Legal Officer of AEG since 2018. Prior to that, Ms. Durant spent over 20 years serving in senior operating roles in a variety of US corporate and public enterprises. Prior to December 2018 she served as President of a boutique legal services firm, DART Business Services LLC, which she founded in March 2010 to provide general and securities legal services to small public companies. Prior to founding DART, from October 2008 to February 2010, she was General Counsel and Corporate Secretary of Flint Telecom Group, Inc. Prior to this, from June 2001 to September 2008, Ms. Durant served as General Counsel and Corporate Secretary for Semotus Solutions Inc. Ms. Durant graduated with a BA in Economics from Connecticut College. Ms. Durant is a member of the California State Bar Association, having earned a Juris Doctor degree at Northwestern School of Law at Lewis and Clark College where she was associate editor of the Environmental Law Review and completed her final year of law school at Santa Clara University School of Law.
Gary Swan, Chief Technical Officer
Gary Swan has served as the Chief Technical Officer of AEG since 2021, and comes with over 30 years of construction experience working on the design, construction, operation and sale of renewable energy assets across multiple continents. Mr. Swan was previously responsible for the construction of several large-scale wind and solar projects owned by Actis Energy portfolio companies AELA Energia (Chile) and BioTherm Energy (Africa). Prior to this, Mr. Swan spent 6 years at Mainstream Renewable Power as Head of Construction and Engineering Manager from July 2012 to March 2018, where he was responsible for delivering wind and solar projects through the construction phase into operation across Europe, North America, Latin America and Africa. Mr. Swan holds a BAI in Civil, Structural and Environmental Engineering from Trinity College Dublin and an MSc in Project Management from the University College Dublin Michael Smurfit Graduate Business School.
David Farrell, Chief Commercial Officer
David Farrell has served on the executive management team at AEG since January 2022. He has over 20 years’ experience across capital markets, project finance, infrastructure and renewables, and the finance industry. Prior to joining AEG, from November 2019 to January 2022, Mr. Farrell was a Director of Corporate Finance at advisory firm Grant Thornton. Additional previous roles include Director of Mergers & Acquisitions at the investment bank, Duff & Phelps, from September of 2016 to November of 2019, Regional Head of Debt Structuring at the accountancy firm FGS, and various management roles in corporate, institutional, and commercial banking, together with several advisory board roles. In these roles, Mr. Farrell acquired extensive experience on both sides of corporate, real estate, and infrastructure and renewable financings along with numerous M&A transactions. Mr. Farrell holds a BBS degree in economics and finance from the University of Limerick, an Associateship of Chartered Institute of Management Accounting, CIMA professional qualification from the Dublin Business School, and has a diploma in Corporate Financing from the Chartered Accountant Ireland.
Larry Farrell, Chief Information Officer
Larry Farrell has served as Chief Information Officer of AEG since 2019 and has over 20 years of experience in senior leadership roles across production, operations and service delivery management, in both startups and fortune 500 companies. Prior to joining AEG, from March of 2015 to January of 2019 Mr. Farrell was Senior Director of Global Operations Application Support for Xerox, consolidating and developing support systems and infrastructure globally. From October 2012 to March of 2015, he was Director of Global Service Delivery. Larry is ITIL and Lean Six Sigma certified and studied Mechanical Engineering at Dundalk Institute of Technology and holds Diplomas in Management from Dublin Business School and Printing and Graphic Communication from Technological University Dublin.
Gita Shah, Chief Sustainability Officer
Gita Shah has served as Chief Sustainability Officer of AEG 2021, when she was promoted to the role of Chief Sustainability Officer (CSO). Prior to becoming the CSO, Gita was the Strategic Planning Manager for AEG since 2017. Prior to joining AEG, Gita was a Development Executive in Stream Bioenergy, an Irish renewable energy company. Gita holds a BSc in Spatial Planning and Environmental Management from Technological University Dublin. She has studied at the Innovation Academy in University College Dublin and recently completed a course in Business Sustainability Management from Cambridge Online University.
Non-Employee Directors
Information with respect to the Company’s directors immediately following the Closing is set forth in the Proxy Statement in the section titled “ManagementOf The Company Following The Business Combination—Non-Employee Directors” beginning on page 239 thereof, which is incorporated herein by reference.
Director Independence
Nasdaq rules will require that a majority of our Board be independent upon consummation of the business combination. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. In connection with this offering, the Board has undertaken a review of the independence of each director and considered whether each director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, the Board determined that Messrs. Nicholas Parker, Tone Bjornov, Candice Beaumont, and Mohammed Javade Chaudhri are “independent directors” as defined in Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules of Nasdaq. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Classified Boardof Directors
Information with respect to the classification of the Board is set forth in the Proxy Statement in the section titled “Management of the Company Followingthe Business Combination—Composition of the Board of Directors” on page 244 thereof, which is incorporated herein by reference.
Committees ofthe Board of Directors
Information with respect to the committees of the Board immediately following the Closing is set forth in the Proxy Statement in the sections titled “Management of the CompanyFollowing the Business Combination—Corporate Governance” and “—Committees of the Board of Directors” beginning on pages 242 and 244 thereof, respectively, which is incorporated herein by reference.
Additionally, in connection with the Closing, Nicholas Parker, an independent director of the Company, joined the audit committee of the Board, replacing Candice Beaumont in her capacity as a member of the audit committee. Candice Beaumont remains a director of the Company.
Executive Compensation
A description of the compensation of the named executive officers of AEG prior to the consummation of the Business Combination and for AEG’s fiscal years ended December 31, 2022 and December 31, 2021 is set forth in the Proxy Statement in the section titled “ExecutiveCompensation” beginning on page 245 thereof, which is incorporated herein by reference.
Employment Agreements
Each executive officer (each an “Executive”) either signed a new employment agreement with the Company or transferred their existing agreement to a subsidiary of the Company which were effective as of the Closing Date and supersede and replace the previous agreements. Each of these employment agreements are substantially identical to the respective executive’s previous employment agreement. A description of the employment agreements with the Company’s executive officers is set forth below. During the term of each employment agreement and for a period of 6 months thereafter, the Executive shall not in any manner, directly, including through entities controlled by such Executive (i) engage or participate in a business, or otherwise perform services for third parties which are competitive with those performed by the Company, or any parent, subsidiary or other affiliate of the Company (a “Company Affiliate”), with respect to a business (“Competitive Services”), or (ii) own or operate any business which engages or participates in the same or similar business or businesses conducted by the Company or Company Affiliate which performs Competitive Services. During the term of the agreement and for a period of 12 months thereafter, Executive will not influence or attempt to influence customers of the Company or a Company Affiliate to divert their business to any individual or entity then in competition with the Company. During the Non-Solicitation Period (as defined below), the Executive shall not in any manner solicit or hire any employees or consultants of the Company, or any Company Affiliate, which shall include employees or consultants: (i) with continuing contracts with the Company or a Company Affiliate; (ii) retained, employed or engaged by the Company or a Company Affiliate but without continuing contracts; or (iii) whose contracts expire or otherwise terminate for any reason preceding or following the first day of the Non-Solicitation Period. The “Non-Solicitation Period” shall mean during the period of employment by the Company or any Company Affiliate and for a period of two years following the termination of the Executive’s employment or consultant relationship with the Company, or any current or future Company Affiliate.
Vincent Browne
VestCo Corp. entered into a Professional Consulting Agreement with one of the Company’s US subsidiaries under which Alternus pays VestCo a monthly fee of $16,000. This agreement has a five-year initial term.
Additionally, Mr. Browne entered into an Employment Agreement (the “Browne Employment Agreement”) with an Irish subsidiary of the Company under which Mr. Browne receives an annual base salary of €120,000 and an annual bonus of up to 100% of his salary based on achieving certain milestones. In addition, he is eligible to receive certain equity and/or equity-based awards under the Company’s long-term incentive compensation plan(s), none of which has been issued at this time.
Alternus may terminate the Browne Employment Agreement for “Cause” which is defined as any of the following: (i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more than thirty (30) days following written notice of such failure or negligence. Alternus may terminate the Browne Employment Agreement without Cause at any time by giving 90 days’ advance written notice and shall pay a sum equal to five years of base salary. Mr. Browne may terminate his employment agreement for Good Reason (as defined in the Browne Employment Agreement) with 90 days’ notice, and Alternus shall be obligated to pay him severance pay equal to five years of base salary.
Joseph E. Duey
The Company and Mr. Duey entered into an employment agreement under which Mr. Duey receives an annual base salary of $250,000 and a cash bonus of up to 100% of his salary based on achieving certain milestones. In addition, he is eligible to receive certain equity and/or equity-based awards under the Company’s long-term incentive compensation plan(s), none of which has been issued at this time. This agreement has a five-year initial term.
The Company may terminate his employment agreement for “Cause” which is defined as any of the following: (i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more than thirty (30) days following written notice of such failure or negligence. If the executive’s employment is terminated by Alternus without Cause during the term of the employment agreement, the Alternus must give two weeks’ prior written notice and shall pay severance pay equal to one year of base salary. If Alternus closes a ‘Change in Control’ transaction, then the employment agreement will automatically terminate, and the Company shall pay severance pay equal to two years of base salary and any unvested stock shall automatically become fully vested. The executive may terminate the employment agreement for Good Reason (as defined in such employment agreement) with 90 days’ notice, and Alternus shall be obligated to pay the executive severance pay equal to one year of base salary.
Taliesin Durant
The Company and Ms. Durant entered into an employment agreement under which Ms. Durant receives an annual base salary of $190,000 and a cash bonus of up to 100% of her salary based on achieving certain milestones. In addition, she is eligible to receive certain equity and/or equity-based awards under the Company’s long-term incentive compensation plan(s), none of which has been issued at this time. This agreement has a five-year initial term.
The Company may terminate her employment agreement for “Cause” which is defined as any of the following: (i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement; or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more than thirty (30) days following written notice of such failure or negligence. If the executive’s employment is terminated by Alternus without Cause during the term of the Employment agreement, the Alternus must give two weeks’ prior written notice and shall pay severance pay equal to one year of base salary. If Alternus closes a ‘Change in Control’ transaction, then the employment agreement will automatically terminate, and the Company shall pay severance pay equal to two years of base salary and any unvested stock shall automatically become fully vested. The executive may terminate the employment agreement for Good Reason (as defined in such employment agreement) with 90 days’ notice, and Alternus shall be obligated to pay the executive severance pay equal to one year of base salary.
Gary Swan
One of the Company’s Irish subsidiaries assumed Mr. Swan’s Employment Agreement under which Mr. Swan receives an annual base salary of €180,000 and a cash bonus of up to 75% of his salary based on achieving certain milestones. In addition, he is eligible to receive certain equity and/or equity-based awards under the Company’s long-term incentive compensation plan(s), none of which has been issued at this time. The Company may terminate executive’s employment with one month’s notice.
Larry Farrell
One of the Company’s Irish subsidiaries entered into an Employment Agreement with Mr. Farrell under which Mr. Farrell receives an annual base salary of €167,000 and a cash bonus of up to €33,000 based on achieving certain milestones. In addition, he is eligible to receive certain equity and/or equity-based awards under the Company’s long-term incentive compensation plan(s), none of which has been issued at this time. The Company may terminate executive’s employment with one month’s notice.
David Farrell
One of the Company’s Irish subsidiaries assumed Mr. Farrell’s Employment Agreement under which Mr. Farrell receives an annual base salary of €200,000 and a cash bonus of up to 50% of his salary based on achieving certain milestones. In addition, he is eligible to receive certain equity and/or equity-based awards under the Company’s long-term incentive compensation plan(s), none of which has been issued at this time. The Company may terminate executive’s employment with three months notice.
Compensation Committee Interlocks and InsiderParticipation
None of the Company’s executive officers currently serve, or has served during the last year, as a member of the board of directors or compensation committee of any entity, other than AEG, that has one or more executive officers who also serve as a member of our board of directors.
Certain Relationships and Related Transactions
The certain relationships and related party transactions of CLIN, and the Company are described in the Proxy Statement in the section titled “CertainRelationships and Related Party Transactions” beginning on page 260 thereof, which is incorporated herein by reference.
Policies and Proceduresfor Related Person Transactions
Information with respect to the policies and procedures for related person transactions is set forth in the Proxy Statement in the section titled “CertainRelationships and Related Party Transactions—Policy Concerning Related Person Transactions” on page 262 thereof, which is incorporated herein by reference.
Legal Proceedings
Information about legal proceedings of CLIN and AEG is set forth in the Proxy Statement in the sections titled “Information About Clean Earth—LegalProceedings” on page 182 thereof and “Information About Alternus—Legal Proceedings” on page 206 thereof, respectively, which are incorporated herein by reference.
Market Price ofand Dividends on the Registrant’s Common Equity and Related Stockholder Matters
The information set forth in the section entitled “Market Price, Ticker Symbol and Dividend information” on page 17 of the Proxy Statement is incorporated herein by reference.
As of the Closing Date, there was one holder of record of the Class A Common Stock, excluding beneficial owners holding shares through nominee holders of record.
The Class A Common Stock, warrants to purchase Class A Common Stock (the “Warrants”), rights to purchase one-tenth of one share of Class A Common Stock (the “Rights”), and units, each comprising one share of Class A Common Stock, one Right, and one-half of one Warrant (the “Units”), began trading on Nasdaq under the symbols “CLIN”, “CLINW”, “CLINR” and “CLINU,” respectively, on February 24, 2022. In connection with the Closing, each of CLIN’s Units automatically separated into their component securities upon the Closing and, as a result, no longer trade as a separate security and were delisted from Nasdaq. CLIN’s Rights were also converted into shares of Class A Common Stock and delisted from Nasdaq.
The Company has not paid any cash dividends on the common stock to date and does not intend to pay any cash dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon the Company’s revenue and earnings, if any, capital requirements, liabilities and related reserves, and general financial condition. The payment of any cash dividends will be within the discretion of the Board from time to time and subject to applicable Delaware law. It is the present intention of the Company’s Board to retain all earnings, if any, for use in business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future. Further, the Company’s ability to declare dividends is currently limited by restrictive covenants in connection with certain credit facilities.
Recent Sales ofUnregistered Securities
Reference is made to the disclosure set forth in Item 3.02 of this Current Report on Form 8-K, which is incorporated herein by reference.
Description ofRegistrant’s Securities
The description of the Company’s securities is contained in the Proxy Statement in the section titled “Description of Securities” beginning on page 249 thereof, which is incorporated herein by reference.
Indemnificationof Directors and Officers
Reference is made to the disclosure set forth in Item 1.01 of this Current Report on Form 8-K under the caption *“Indemnification Agreements,”*which is incorporated herein by reference.
The Charter (as defined below) and the Second Amended and Restated Bylaws of the Company (the “Bylaws”) provide that the officers and directors of the Company will be indemnified by the Company to the fullest extent authorized by the General Corporation Law of the State of Delaware, as it now exists or may in the future be amended, for any threatened, pending or completed action, suit or proceeding relating to any such officer’s or director’s service to the Company. The Charter and the Bylaws also require the Company to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit the Company to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under General Corporation Law of the State of Delaware. In addition, the Charter provides that directors will not be personally liable for monetary damages to the Company or its stockholders for breaches of their fiduciary duty as directors, unless such directors violated their duty of loyalty to the Company or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.
Additionally, pursuant to the Business Combination Agreement, the Company is required to maintain all such indemnification provisions in the Charter and the Bylaws, including in the event of any change in control of the Company.
These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
Financial Statementsand Supplementary Data
Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K, which is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
|---|
On the Closing Date, pursuant to subscription agreements by and among (i) Clean Earth, (ii) Meteora Strategic Capital, LLC, (iii) Meteora Select Trading Opportunities Master, LP and (iv) Meteora Capital Partners, LP (the entities noted in (ii)-(iv), the “Subscribers”) the Company issued 1,496,234 shares of Class A Common Stock to the Subscribers.
On the Closing Date, pursuant to a Promissory Notes by and between Clean Earth and Clean Earth Acquisitions Sponsor, LLC, the Company issued 225,000 shares of Class A Common Stock to the Sponsor.
On the Closing Date, pursuant to securities purchase agreements, the Company issued to two third-party accredited investors, warrants to purchase up to (i) 100,000 shares of Company Common Stock at an exercise price of $11.50 per share and having a 5-year term, and (ii) 300,000 shares of Company Common Stock at an exercise price of $0.01 per share and having a 3-year term, and (iii) 150,000 shares of Company Common Stock at an exercise price of $11.50 per share and having a 10-year term, and (iv) 250,000 Company Common Stock at an exercise price of $0.01 per share and having a 3-year term.
The Class A Common Stock, Company Common Stock and the warrants described above were offered and sold to the Subscribers, Sponsor and investors in reliance upon exemption from the registration requirements under Section 4(a)(2) under the Securities Act of 1933.
| Item 3.03. | Material Modification to Rights of Security Holders. |
|---|
As previously disclosed, the stockholders of the Company approved the Third Amended and Restated Certificate of Incorporation of the Company (the “Charter”) at the Special Meeting, and, on December 22, 2023, the Company filed the Charter with the Secretary of State of the State of Delaware. Reference is made to the disclosure described in the Proxy Statement/Prospectus in the section titled “The Charter Proposal” on page 152 of the Proxy Statement, which is incorporated herein by reference.
The full text of the Charter is included as Exhibit 3.1 to this current report, and is thereafter incorporated herein by reference.
| Item 4.01. | Changes in Registrant’s Certifying Accountant**.** |
|---|
On December 22, 2023, the Company dismissed BDO USA P.C. (“BDO”), CLIN's independent registered public accounting firm prior to the Business Combination, as the Company's independent registered public accounting firm, effective as of December 22, 2023. The Audit Committee (the “Committee”) of the Board approved the dismissal of BDO and intends to appoint a new independent registered public accounting firm for the Company for the fiscal year ending December 31, 2023.
BDO’s reports on Company’s financial statements for the fiscal year ended December 31, 2022 and the period from May 14, 2021 (inception) through December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that such reports expressed substantial doubt regarding the Company’s ability to continue as a going concern. During the Company’s fiscal year ended December 31, 2022 and the period from May 14, 2021 (inception) through December 31, 2021, there have been no disagreements with BDO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to BDO’s satisfaction, would have caused BDO to make reference to the subject matter of the disagreement in connection with its reports on the Company’s financial statements for such periods.
For the fiscal year ended December 31, 2022 and the period from May 14, 2021 (inception) through December 31, 2021, there were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.
The Company provided BDO with a copy of the disclosure contained herein, prior to its filing with the SEC, and requested that BDO furnish the Company a letter addressed to the SEC stating whether or not it agreed with the statements herein and, if not, stating the respects in which it does not agree. BDO’s letter to the SEC is attached hereto as Exhibit 16.1.
| Item 5.01. | Changes in Control of Registrant. |
|---|
Reference is made to the disclosure in the “TheBusiness Combination Proposal” section of the Proxy Statement beginning on page 92 of the Proxy Statement, which is incorporated herein by reference.
Immediately after giving effect to the Business Combination, there were 71,927,855 shares of Company Common Stock outstanding. As of such time, AEG and our executive officers and directors and affiliates held or controlled approximately 92% of our outstanding shares of Company Common Stock.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
|---|
The information set forth in the “Management Of The Company Following The Business Combination” section of the Proxy Statement beginning on page 237 of the Proxy Statement, is incorporated by herein by reference.
At the Special Meeting, the stockholders of CLIN adopted and approved the 2023 Stock Incentive Plan, which became effective upon the Closing. The Company reserved for issuance 8,000,000 shares of Company Common Stock pursuant to the 2023 Stock Incentive Plan. The material features of the 2023 Stock Incentive Plan are described in the “The Incentive Plan Proposal” section of the Proxy Statement beginning on page 159 of the Proxy Statement, which is incorporated herein by reference.
The information contained in Item 1.01 and Item 2.01 to this Current Report on Form 8-K is also incorporated herein by reference.
| Item 5.06. | Change in Shell Company Status. |
|---|
Upon the Closing, the Company ceased to be a shell company. The material terms of the Business Combination are described beginning on page 92 of the Proxy Statement in the section titled “The Business Combination Proposal,” and are incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (a) | Financial statements of businesses acquired. |
| --- | --- |
Reference is made to (i) the consolidated financial statements of Alternus Energy Group Plc and Subsidiaries and the related notes thereto as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021, 2020 and 2019, which are included in the Proxy Statement on pages F-49 through F-219, which are incorporated herein by reference, (ii) the financial statements of Clean Earth Acquisitions Corp. and the related notes thereto as of and for the years ended December 31, 2022, and for the period from May 14, 2021 (inception) through December 31, 2021, included in the Proxy Statement on pages F-5 through F-26, which are incorporated herein by reference, (iii) the unaudited condensed consolidated financial statements of Alternus Energy Group Plc and Subsidiaries for the nine months ended September 30, 2023 and 2022, which are included herewith as Exhibit 99.1 and incorporated herein by reference, (iv) the unaudited condensed consolidated financial statements of Clean Earth Acquisitions Corp. as of and for the nine months ended September 30, 2023 and 2022, which are included herewith as Exhibit 99.2 and incorporated herein by reference, (v) the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Alternus for the nine months ended September 30, 2023 and 2022, which is included herewith as Exhibit 99.1 and incorporated herein by reference and (vi) the Management’s Discussion and Analysis of Financial Condition and Results of Operations of Clean Earth Acquisitions Corp. for the nine months ended September 30, 2023 and 2022, which is included herewith as Exhibit 99.2 and incorporated herein by reference.
| (b) | Pro forma financial information. |
|---|
Reference is made to the unaudited pro forma condensed consolidated financial information of the Company as of and for the nine months ended September 30, 2023 and the year ended December 31, 2022, which is included herewith as Exhibit 99.3 and incorporated herein by reference.
Exhibits
† Certain exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.
Indicates management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: December 22,<br>2023 | ALTERNUS CLEAN ENERGY, INC. | |
|---|---|---|
| By: | /s/ Vincent Browne | |
| Name: | Vincent Browne | |
| Title: | Chief Executive Officer<br> and Chairman of the Board of Directors |
Exhibit 2.3
Execution Version
AMENDED AND RESTATED
BUSINESS COMBINATION AGREEMENT
(originally dated October 12, 2022)
Dated December 18, 2023
by and among
CLEAN EARTH ACQUISITIONS CORP.,
ALTERNUS ENERGY GROUP PLC
and
CLEAN EARTH ACQUISITIONS SPONSOR, LLC
in its capacity as the Purchaser Representative and solely for purposes of Sections 8.06 and 9.02
TABLE OF CONTENTS
Page
| ARTICLE I DEFINITIONS | 3 | |
|---|---|---|
| Section 1.02 | Construction | 20 |
| ARTICLE II PURCHASE AND SALE TRANSACTIONS | 22 | |
| Section 2.01 | Closing | 22 |
| Section 2.02 | Purchase and Sale | 22 |
| Section 2.03 | Pre-Closing Matters | 22 |
| Section 2.04 | Closing Transactions | 23 |
| Section 2.05 | [Reserved] | 25 |
| Section 2.06 | Purchaser Board | 25 |
| Section 2.07 | Certain Adjustments | 25 |
| Section 2.08 | Fractional Shares | 25 |
| Section 2.09 | [Reserved] | 25 |
| Section 2.10 | Legends | 25 |
| Section 2.11 | Further Action | 25 |
| Section 2.12 | Withholding | 25 |
| ARTICLE III REPRESENTATIONS AND WARRANTIES<br> OF SELLER | 26 | |
| Section 3.01 | Organization and Corporate Power | 26 |
| Section 3.02 | Subsidiaries | 26 |
| Section 3.03 | Authorization; No Breach; Valid and Binding Agreement | 27 |
| Section 3.04 | Capitalization | 28 |
| Section 3.05 | Title to Shares | 28 |
| Section 3.06 | Financial Statements | 28 |
| Section 3.07 | Absence of Certain Developments | 30 |
| Section 3.08 | Orders | 30 |
| Section 3.09 | Title to Properties | 30 |
| Section 3.10 | Tax Matters | 31 |
| Section 3.11 | Contracts and Commitments | 33 |
| Section 3.12 | Intellectual Property; Information Technology; Privacy | 36 |
| Section 3.13 | Litigation | 38 |
| Section 3.14 | Employee Benefit Plans | 38 |
| Section 3.15 | Insurance | 41 |
| Section 3.16 | Compliance with Laws | 41 |
| Section 3.17 | Permits | 41 |
| Section 3.18 | Environmental Compliance | 42 |
i
| Section 3.19 | Customers and Suppliers | 42 |
|---|---|---|
| Section 3.20 | Affiliated Transactions | 42 |
| Section 3.21 | Employees | 43 |
| Section 3.22 | Seller Filings | 45 |
| Section 3.23 | Seller Information | 45 |
| Section 3.24 | Brokerage | 46 |
| Section 3.25 | Investment Representations | 46 |
| Section 3.26 | No Other Representations and Warranties | 47 |
| ARTICLE IV REPRESENTATIONS AND WARRANTIES<br> OF PURCHASER | 47 | |
| Section 4.01 | Organization and Power | 47 |
| Section 4.02 | Subsidiaries | 48 |
| Section 4.03 | Authorization; No Breach; Valid and Binding Agreement | 48 |
| Section 4.04 | Orders | 49 |
| Section 4.05 | Purchaser Trust Account | 49 |
| Section 4.06 | Investment Company Act; JOBS Act | 49 |
| Section 4.07 | Absence of Changes | 50 |
| Section 4.08 | No Undisclosed Liabilities | 50 |
| Section 4.09 | Tax Matters | 50 |
| Section 4.10 | Capitalization | 51 |
| Section 4.11 | Litigation | 52 |
| Section 4.12 | Compliance with Laws | 52 |
| Section 4.13 | Employees | 52 |
| Section 4.14 | SEC Filings and Financial Statements | 52 |
| Section 4.15 | [Reserved | 53 |
| Section 4.16 | Material Contracts | 53 |
| Section 4.17 | Purchaser Affiliated Transactions | 54 |
| Section 4.18 | Brokerage | 54 |
| Section 4.19 | Business Activities | 54 |
| Section 4.20 | NASDAQ Listing | 54 |
| Section 4.21 | Proxy Statement | 55 |
| Section 4.22 | No Other Representations and Warranties | 55 |
| ARTICLE V ACTIONS PRIOR TO THE CLOSING | 56 | |
| Section 5.01 | Operations of the Target Companies Prior to the Closing | 56 |
| Section 5.02 | Operations of Purchaser Prior to the Closing | 59 |
| Section 5.03 | Access; Notification of Certain Matters | 61 |
| Section 5.04 | Confidentiality; Public Announcements | 62 |
| Section 5.05 | Commercially Reasonable Efforts | 62 |
ii
| Section 5.06 | Regulatory Filings | 63 |
|---|---|---|
| Section 5.07 | Proxy Statement | 63 |
| Section 5.08 | Listing | 66 |
| Section 5.09 | [Reserved] | 66 |
| Section 5.10 | No Claim Against the Purchaser Trust Account | 66 |
| Section 5.11 | Section 16 Matters | 67 |
| Section 5.12 | Transaction Litigation | 67 |
| Section 5.13 | [Reserved] | 67 |
| Section 5.14 | Director and Officer Liability; Indemnification | 67 |
| Section 5.15 | Third Party Consents and Notices | 69 |
| Section 5.16 | Employment Agreements | 69 |
| Section 5.17 | No Purchaser Transactions | 69 |
| Section 5.18 | Acquisition Proposals and Alternative Transactions | 69 |
| Section 5.19 | Purchaser Public Filings | 70 |
| Section 5.20 | Financial Statements | 70 |
| Section 5.21 | Waiver of Available Cash Condition | 70 |
| ARTICLE VI CONDITIONS TO CLOSING | 71 | |
| Section 6.01 | Conditions to Obligations of Purchaser | 71 |
| Section 6.02 | Conditions to Obligations of Seller | 71 |
| Section 6.03 | Conditions to Each Party’s Obligations | 72 |
| ARTICLE VII TERMINATION | 72 | |
| Section 7.01 | Termination by Mutual Consent | 72 |
| Section 7.02 | Termination by Purchaser or Seller | 73 |
| Section 7.03 | Termination by Seller | 73 |
| Section 7.04 | Termination by Purchaser | 73 |
| Section 7.05 | Effect of Termination | 74 |
| Section 7.06 | Termination Fee | 74 |
| ARTICLE VIII TAX MATTERS | 74 | |
| Section 8.01 | Cooperation | 74 |
| Section 8.02 | Straddle Period Allocation | 74 |
| Section 8.03 | Pass-Through Tax Returns | 75 |
| Section 8.04 | Push-Out Election | 75 |
| Section 8.05 | Tax Sharing Agreements | 75 |
| Section 8.06 | Purchase Price Allocation | 75 |
| Section 8.07 | Tax Treatment | 76 |
| Section 8.08 | Transfer Taxes | 76 |
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| ARTICLE IX GENERAL PROVISIONS | 76 | |
|---|---|---|
| Section 9.01 | Survival | 76 |
| Section 9.02 | Indemnification by Seller | 77 |
| Section 9.03 | Governing Law | 77 |
| Section 9.04 | Consent to Jurisdiction, Waiver of Jury Trial | 77 |
| Section 9.05 | Notices | 78 |
| Section 9.06 | Assignment; Successors and Assigns; No Third Party<br> Rights | 79 |
| Section 9.07 | Entire Agreement; Amendments; Waiver | 79 |
| Section 9.08 | Severability | 79 |
| Section 9.09 | Execution in Counterparts | 80 |
| Section 9.10 | Post-Closing | 80 |
| Section 9.11 | Further Assurances | 80 |
| Section 9.12 | Remedies; Specific Performance | 80 |
| Section 9.13 | No Recourse | 81 |
| Section 9.14 | Fees and Expenses | 81 |
| Section 9.15 | Legal Representation | 81 |
EXHIBITS
Exhibit A – Form of Sponsor Support Agreement
Exhibit B – Form of Third Amended and Restated Certificate of Incorporation of Purchaser Exhibit C – Form of Amended and Restated Bylaws of Purchaser
Exhibit D – Form of Investor Rights Agreement
Exhibit E – Form of Purchaser Incentive Plan
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AMENDED AND RESTATED BUSINESS COMBINATION AGREEMENT
This Amended and Restated Business Combination Agreement (this “Agreement”), dated as of December 18, 2023, is made by and among Clean Earth Acquisitions Corp., a Delaware corporation (“Purchaser”), Alternus Energy Group Plc, a public limited company incorporated under the laws of Ireland (“Seller”), and Clean Earth Acquisitions Sponsor, LLC, a Delaware limited liability company, in its capacity as the representative of Purchaser and solely for purposes of Sections 8.06 and 9.02 (the “Purchaser Representative”). Purchaser and Seller are each referred to herein as a “Party” and, collectively, as the “Parties.”
RECITALS
WHEREAS, Purchaser is a blank check company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses;
WHEREAS, a business combination agreement between the parties was entered into on 12 October 2022 (the “Original Business Combination Agreement” and was subsequently amended by a First Amendment to the Business Combination Agreement, dated as of April 12, 2023 (the “First Amendment”) and by written consents dated May 25, 2023 and November 16, 2023 (the “Consents”). For the purposes of clarity, this Agreement amends and restates the Original Business Combination Agreement as amended by the First Amendment, Consents and also includes certain additional agreed amendments;
WHEREAS, prior to the date of the Original Business Combination Agreement, Seller effected a restructuring whereby Seller formed Alternus Lux 01 S.à.r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg (“Alternus Lux”), and contributed one hundred percent (100%) of the issued share capital of AEG MH 01 Limited, a private limited company incorporated under the laws of Ireland (the “AEG MH 01 Shares”), to Alternus Lux (the “Pre-Signing Luxco Contribution”);
WHEREAS, as of the date of the Original Business Combination Agreement, Seller directly owns, inter alia, (i) one hundred percent (100%) of the issued and outstanding capital stock of Alternus Energy Americas Inc., a Delaware corporation (the “AEA Shares”), (ii) sixty percent (60%) of the issued share capital of Unisun Energy Holding B.V., a private limited company incorporated under the laws of the Netherlands (the “Unisun Shares”), (iii) one hundred percent (100%) of the issued share capital of Alternus Lux (the “Alternus Lux Shares”), (iv) one hundred percent (100%) of the issued share capital of Solis Bond Company Designated Activity Company, a private limited company incorporated under the laws of Ireland (the “Solis Shares”), and (v) one hundred percent (100%) of the issued share capital of AEG JD 02 Limited, a private limited company incorporated under the laws of Ireland (the “AEG JD 02 Shares”);
WHEREAS, following the date of the Original Business Combination Agreement, Seller has effected a restructuring whereby Seller has contributed one hundred percent (100%) of the Solis Shares to Alternus Lux (the “Post-Signing Luxco Contribution” and together with the Pre- Signing Luxco Contribution and the Post-Signing LuxCo Contribution, the “Restructuring”);
WHEREAS, following the date of the Original Business Combination Agreement, Seller has incorporated a new entity and owns 100% of the issued share capital of Alternus FundCo Limited (“FundCo Shares”);
WHEREAS, upon the terms and subject to the conditions of this Agreement, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, the Purchased Shares in exchange for the consideration set forth in this Agreement (the “Share Sale”);
WHEREAS, the board of directors of Seller (the “Seller Board”) has: (a) determined that it is in the best interests of Seller and the shareholders of Seller, and declared it advisable, to enter into this Agreement and the Transactions; and (b) approved this Agreement and the Transactions, including the Share Sale, in each case on the terms and subject to the conditions of this Agreement;
WHEREAS, the board of directors of Purchaser (the “Purchaser Board”) has: (a) determined that it is in the best interests of Purchaser and the stockholders of Purchaser, and declared it advisable, to enter into this Agreement and the Transactions; and (b) approved this Agreement and the Transactions, including the Share Sale, in each case on the terms and subject to the conditions of this Agreement;
WHEREAS, in accordance with the terms hereof, Purchaser shall provide an opportunity to its stockholders to have their Public Shares redeemed on the terms and subject to the conditions set forth in the Prospectus and the Organizational Documents of Purchaser in conjunction with, inter alia, obtaining approval from its stockholders for the transactions contemplated by this Agreement and the Ancillary Agreements;
WHEREAS, concurrently with the execution and delivery of this Agreement, Clean Earth Acquisitions Sponsor, LLC (the “Sponsor”), certain other stockholders of Purchaser, Purchaser and Seller have entered into that certain Sponsor Support Agreement in the form attached hereto as Exhibit A (the “Sponsor Support Agreement”), dated as of the date hereof, pursuant to which each of the Sponsor and stockholders of Purchaser listed thereto has agreed to, among other things, vote to adopt and approve this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby, and waive, forfeit and surrender any and all anti-dilution or similar protection with respect to any shares of Purchaser Common Stock;
WHEREAS, prior to the Closing, Purchaser shall, on the terms and subject to the conditions set forth herein, adopt (i) the Third Amended and Restated Certificate of Incorporation of Purchaser in the form attached hereto as Exhibit B (the “A&R Purchaser Charter”) and (ii) the Amended and Restated Bylaws of Purchaser in the form attached hereto as Exhibit C (the “A&R Purchaser Bylaws”);
WHEREAS, concurrently with the execution and delivery of this Agreement, the Sponsor, Seller and Purchaser have entered into an Investor Rights Agreement in the form attached hereto as Exhibit D (the “Investor Rights Agreement”);
WHEREAS, after the execution and delivery of this Agreement, Purchaser may, subject to approval by Seller, obtain commitments from one or more investors (an “Investment”) pursuant to the terms of one or more agreements (each, a “Investment Agreement”); and
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WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 As used herein, the following terms shall have the following meanings:
“A&R Purchaser Bylaws” has the meaning set forth in the recitals.
“A&R Purchaser Charter” has the meaning set forth in the recitals.
“Accounting Principles” means the principles and accounting standards set out in Annex A attached hereto.
“Acquired Subsidiaries” means each of (i) Lucas EST S.R.L., (ii) Ecosfer Energy S.R.L., (iii) LJG Green Source Energy Beta S.R.L., (iv) Solarpark Samas Sp. z.o.o., (v) Elektrownia PV Komorowo Sp. z.o.o., (vi) Gardno PV Sp. z.o.o., (vii) Gardno2 PV Sp. z.o.o., (viii) PV Zachod Sp. z.o.o. and (ix) RA 01 Sp. z.o.o.
“Action” means any action, lawsuit, claim, suit, arbitration, litigation, inquiry, hearing, audit, charge, mediation, examination, judicial or legal proceeding or investigation, whether civil, criminal or administrative, at law or in equity, by or before any Governmental Authority or arbitrator.
“Adjusted EBITDA” means, with respect to any period, the “Adjusted EBITDA” of Purchaser for such period, as set forth in Purchaser’s Annual Reports (i.e., Form 10-Ks) filed with the SEC and as it is presented in the MD&A section of the Purchaser’s Annual Reports.
“AEA Shares” has the meaning set forth in the recitals.
“AEG JD 02 Shares” has the meaning set forth in the recitals.
“AEG MH 01 Shares” has the meaning set forth in the recitals.
“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. The term “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 and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning set forth in the preamble.
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“Alternus Lux” has the meaning set forth in the recitals.
“Alternus Lux Shares” has the meaning set forth in the recitals.
“Ancillary Agreements” means all agreements, other than this Agreement, entered into in connection with the consummation of the Transactions, including the Sponsor Support Agreement, the A&R Purchaser Charter, the A&R Purchaser Bylaws, the Investor Rights Agreement, the Key Employee Employment Agreements, and the documents and agreements entered into in connection therewith.
“Audited Financial Statements” has the meaning set forth in Section 3.06(a).
“Balance Sheet Date” has the meaning set forth in Section 3.06(a).
“Business Day” means any day other than a Saturday, Sunday or a day on which banks in New York, New York, Amsterdam, the Netherlands, Luxembourg, Grand Duchy of Luxembourg or Dublin, Ireland are authorized or obligated by Law to close.
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. 116-136), the Families First Coronavirus Response Act of 2020 (H.R. 6201), “Division N - Additional Coronavirus Response and Relief” of the Consolidated Appropriations Act, 2021 (H.R. 133) and the American Rescue Plan Act of 2021 (Pub. L. 117-2), as applicable (including, in each case, any changes in state or local Law that are analogous to provisions of the CARES Act or adopted to conform to the CARES Act), and any legislative or regulatory guidance issued pursuant thereto.
“Carmel Privileged Communications” has the meaning set forth in Section 9.15(a).
“CBA” means any collective bargaining agreement or other Contract with any labor union, works council, labor organization, employee representative or association.
“Certificate” has the meaning set forth in Section 2.04(d)(i).
“Change in Recommendation” has the meaning set forth in Section 5.07(d).
“Claims” has the meaning set forth in Section 5.10.
“Closing” has the meaning set forth in Section 2.01.
“Closing Date” has the meaning set forth in Section 2.01.
“Closing Statement” has the meaning set forth in Section 2.03(a).
“Code” means the Internal Revenue Code of 1986, as amended.
“Closing Consideration” means an amount equal to $275,000,000.
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“Closing Share Consideration” means a number of shares, rounded up to the nearest whole number, of Purchaser Common Stock equal to 30,000,000 shares of Purchaser Common Stock, plus the quotient of (a) the Closing Consideration divided by (b) $10.
“Company Indemnified Parties” has the meaning set forth in Section 5.14(a).
“Company IP Rights” means (a) all Intellectual Property Rights, other than Company-Owned IP Rights, for which any Target Company holds or purports to hold, or has been granted, any licenses, immunities, or other rights, or which are used or held for use in, or necessary for, the operation of the businesses of the Target Companies as presently conducted; and (b) all Company-Owned IP Rights.
“Company-Owned IP Rights” means all Intellectual Property Rights owned by any Target Company or represented by a Target Company in a Contract as owned by a Target Company.
“Company Systems” means all information technology and computer systems, electronic data processing, record keeping systems, communications systems, telecommunications systems, networking systems, account management systems, inventory management systems and other applications, Software, hardware and equipment (including all databases, firmware and related documentation) and information contained therein or transmitted thereby, including any outsourced systems and processes, in each case necessary for or otherwise used or held for use by or on behalf of the Target Companies.
“Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of April 19, 2022, by and between Seller and Purchaser.
“Contract” means any written or oral agreement, contract, indenture, lease, sublease, instrument, arrangement, license, sublicense, obligation or commitment, in each case, that is legally binding (and in each case, including any amendments and modifications thereto).
“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemic or disease outbreaks of COVID-19.
“COVID-19 Measures” means any quarantine, “shelter in place,” “stay at home,” social distancing, mask wearing, temperature taking, personal declaration, “purple badge standard,” shut down, closure, sequester or any other Law, decree, judgment, injunction or other Governmental Order, directive, guideline or recommendation by any Governmental Authority or industry group in connection with or in response to COVID-19 pandemic, including, the CARES Act.
“COVID-19 Tax Measure” means any Law enacted or issued by any Governmental Authority with respect to any Tax matter in response to COVID-19 (including the CARES Act and Payroll Tax Executive Order) and any administrative authority issued pursuant to such legislation or order or otherwise issued with respect to any Tax matter in response to COVID-19 (including IRS Notice 2020-65).
“D&O Indemnified Parties” has the meaning set forth in Section 5.14(a).
“Deferred Underwriting Commissions” has the meaning set forth in Section 4.05.
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“Disclosure Letters” means the Seller Disclosure Letter and Purchaser Disclosure Letter, collectively.
“Dispute” has the meaning set forth in Section 9.04(a).
“Entity” means a Person that is not a natural Person.
“Environmental Laws” means any applicable Law in any relevant jurisdictions relating to pollution or protection of human health or the environment, including those imposing liability or establishing requirements for the use, storage, transport, handling, treatment, Release of, exposure to, and disposal of Hazardous Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means any Person (whether or not incorporated) that is (or at the relevant time was or could be) considered a single employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA with any Target Company.
“Excepted Liens” means those Liens set forth on Section 1.01(a) of the Seller Disclosure Letter.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Companies” means (i) Altnor AS, private limited company incorporated under the laws of Norway, and its direct and indirect Subsidiaries, (iii) GHFG Limited, a private limited company incorporated under the laws of Ireland, and its direct and indirect Subsidiaries, (iii) ALTAM Inc., a Nevada corporation, and its direct and indirect Subsidiaries, (iv) Unisun Energy Holding B.V. and its direct and indirect subsidiaries, (v) AEG JD 02 Limited and its direct subsidiary, and (vi) Alternus FundCo Limited.
“Final Purchaser Trust Amount” has the meaning set forth in Section 2.03(b).
“Financial Statements” has the meaning set forth in Section 3.06(a).
“GAAP” means United States generally accepted accounting principles and practices in effect from time to time applied consistently throughout the periods involved.
“Governmental Authority” means any federal, national, supranational, foreign, state, provincial, local, county, municipal or other government, any governmental, regulatory or administrative authority, agency, department, bureau, board, commission or official or any quasi-governmental or private body, in each case whether U.S. or non-U.S., exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority, or any court, tribunal, judicial or arbitral body or arbitrator (public or private), or any Self-Regulatory Organization (in each case to the extent that the rules, regulations or orders of such body or authority have the force of Law).
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“Governmental Order” means any judgment, ruling, order, writ, injunction, award or decree of any Governmental Authority.
“Hazardous Materials” means: (a) those substances defined in or regulated as pollutants, contaminants, dangerous goods or hazardous or toxic substances, materials of concern or wastes under Laws relating to pollution or protection of human health or the environment; (b) petroleum and petroleum products, including crude oil and any fractions thereof; and (c) asbestos, polychlorinated biphenyls, radioactive materials and other chemicals or substances for which liability or standards of care are imposed by Laws relating to pollution or protection of human health or the environment.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976.
“HSR Approval” means the filing of a Notification and Report Form with the United States Federal Trade Commission and the United States Department of Justice under the HSR Act and the expiration or termination of any applicable waiting period (including any extensions) thereunder, if required.
“IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board.
“Immigration Laws” has the meaning set forth in Section 3.21(c).
“Income Tax” means any Tax based upon, measured by, or calculated with respect to (a) net income or profits or overall gross income or gross receipts (including any capital gains or alternative minimum Tax) or (b) multiple bases (including corporate franchise, doing business or occupation Tax) if one or more of the bases on which that Tax may be measured or calculated is described in clause (a) of this definition.
“Income Tax Return” means any Tax Return with respect to Income Taxes.
“Indebtedness” means, without duplication, the unsatisfied Liabilities of the Target Companies, whether contingent or otherwise (including penalties, interest and premiums): (a) in respect of borrowed money, or with respect to advances of any kind under a credit facility or other debt instrument (including under any applicable credit line); (b) evidenced by bonds, notes, debentures or similar instruments, including such obligations incurred in connection with the acquisition of property, assets or businesses; (c) any obligations for the deferred purchase price of property or services, including all earn-out or other similar contingent payment obligations; (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired (even though the rights and remedies of seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (e) all indebtedness secured by a purchase money mortgage or other Lien to secure all or part of the purchase price of the property subject to such mortgage or Lien; (f) amounts drawn on letters of credit, bankers’ acceptances or similar facilities; (g) any amounts in respect of unfunded or underfunded liabilities or obligations under pension or retirement (whether defined benefit or defined contribution), superannuation, gratuity, or similar pension-like policies, plans, programs, agreements or arrangements, severance or similar termination liabilities or obligations, deferred compensation, post-termination or retiree health and/or welfare benefit liabilities or obligations, accrued paid time off, or accrued bonuses or other incentive payments, in each case, whether pursuant to a written agreement or otherwise owed, plus the employer portion of any payroll, employment or similar Taxes associated with any of the foregoing payments; (h) payables owing to Affiliates (other than to another Target Company); (i) any change-in-control payments, transaction bonuses, retention payments, single-trigger severance or similar compensatory payments payable to any Person by any Target Company that are triggered in connection with the consummation of the Transactions (whether prior to, upon or after such consummation, and whether or not in connection with another event but excluding in all cases any “double trigger” payments that become payable as a result of any action or omission by Purchaser or its applicable Affiliate upon or following such consummation) and the employer portion of any payroll, employment or similar Taxes associated with any of the foregoing payments; and (j) guarantees of the liabilities described in clauses (a) through (i) above of any other Person; provided, however, that each of (i) trade accounts payable and other operating liabilities in the Ordinary Course of Business (for the avoidance of doubt, not including Taxes), (ii) any outstanding surety or performance bonds (to the extent undrawn) or letters of credit (to the extent undrawn), and (iii) any liabilities or obligations owed by any Target Company to another of any Target Company, shall not constitute Indebtedness.
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“Insider Letter Agreement” means that certain Insider Letter Agreement, dated February 23, 2022, by and among the Clean Earth Acquisitions Sponsor, LLC, Aaron Ratner, Martha Ross, Nicholas Parker, Candice Beaumont, Bradford Allen, Michael Vahrenkamp and Purchaser.
“Insurance Policies” has the meaning set forth in Section 3.15.
“Intellectual Property Rights” shall mean any and all common law or statutory or other rights anywhere in the world arising under or associated with: (a) patents, patent applications, statutory invention registrations, registered designs, and similar or equivalent rights in inventions and designs, and all rights therein provided by international treaties and conventions together with all reissuances, continuations, continuations-in-part, divisions, revisions, extensions, re-issues, and reexaminations thereof (collectively, “Patents”); (b) trademarks, service marks, trade dress, trade names, logos, designs, slogans, taglines, brands, product names, and other designations of origin, source or quality, registrations and applications for any of the foregoing, and all goodwill associated with any of the foregoing (collectively, “Marks”); (c) domain names, uniform resource locators, Internet Protocol addresses, social media handles, and other names, identifiers, and locators associated with Internet addresses, sites, and services; (d) copyrights, copyrightable works, and equivalent rights of author, in any published or unpublished works of authorship (including Software as a work of authorship), and registrations and applications therefor, and all renewals, extensions, restorations and reversions thereof (“Copyrights”); (e) trade secrets and industrial secret rights, and rights in know-how, data, and other confidential or proprietary information (whether business or technical or otherwise) (collectively, “Trade Secrets”); and (f) other intellectual property, industrial property and proprietary rights anywhere in the world.
“Interim Financial Statements” has the meaning set forth in Section 3.06(a).
“Interim Period” has the meaning set forth in Section 5.01.
“Intervening Event” has the meaning set forth in Section 5.07(d).
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“Intervening Event Notice Period” has the meaning set forth in Section 5.07(d).
“Investment” has the meaning set forth in the recitals.
“Investment Agreement” has the meaning set forth in the recitals.
“Investor Rights Agreement” has the meaning set forth in the recitals.
“IPO” has the meaning set forth in Section 5.10.
“IRS” means the Internal Revenue Service of the United States of America.
“Key Employees” means Vincent Browne, Joseph Duey, Taliesin Durant, Gary Swan, David Farrell, and Larry Farrell.
“Key Employee Employment Agreements” has the meaning set forth in Section 5.16.
“Law” means any law (statutory, common or otherwise), statute, ordinance, regulation, rule, code, treaty, directive, executive order, injunction, judgment, decree or other order of a Governmental Authority.
“Liability” means any liability or obligation (whether known or unknown, absolute or contingent, whether liquidated or unliquidated and whether due or to become due).
“Liens” means liens, licenses, covenants not to sue, options, transfer restrictions, mortgages, security interests, adverse ownership interests, pledges, charges or other encumbrances.
“Leased Real Property” has the meaning set forth in Section 3.09(b).
“Leases” means all leases, subleases, licenses, concessions and other binding agreements (written or oral) pursuant to which any Target Company holds any Leased Real Property, including all amendments, extensions, renewals, guaranties and other agreements with respect thereto and the right to all security deposits and other amounts and instruments deposited by or on behalf of any Target Company thereunder.
“Look-back Date” means January 1, 2019.
“Maximum Annual Premium” has the meaning set forth in Section 5.14(b).
“Most Recent Balance Sheet Date” has the meaning set forth in Section 3.06(a).
“NASDAQ” means the Nasdaq Global Market.
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“Net Working Capital” means the working capital of the Target Companies at 11:59 p.m. (Eastern Time) on the calendar day immediately prior to the Closing Date comprising all items included in the illustrative working capital calculation set out in Section 1.01(b) of the Seller Disclosure Letter calculated, on a consolidated basis, immediately prior to the Closing, in accordance with the Accounting Principles. The table in Section 1.01(b) of the Seller Disclosure Letter shows, for illustrative purposes, the calculation of the Net Working Capital of the Target Companies as of June 30, 2022. Notwithstanding anything to the contrary, Net Working Capital shall not include any current assets or current liabilities related to, based on or in respect of (i) any acquisitions consummated after the date of this Agreement and any Indebtedness incurred after the date of this Agreement related to such acquisitions, (ii) any Indebtedness and related cash, in each case not related to core operations, incurred after the date of this Agreement, or (iii) any payments or proceeds received on account of events after the date of this Agreement that are not in the Ordinary Course of Business (e.g., insurance proceeds from a natural disaster).
“Ordinary Course of Business” means, with respect to any Person, actions that are taken in the ordinary course and materially consistent with the past practices and normal day-to-day operations of such Person, including any action taken or omitted to be taken to the extent such act or omission is reasonably determined by such Person to be necessary to comply with the COVID-19 Measures.
“Organizational Documents” means, with respect to a Person that is not an individual, its articles of incorporation, constitution, certificate of incorporation, certificate of formation, bylaws, memorandum and/or articles of incorporation, operating agreement, certificate of limited partnership, partnership agreement and/or similar governing agreements or documents, instruments or certificates executed, adopted or filed in connection with the creation, formation, incorporation or organization of such Person, including any amendments thereto.
“Partnership Tax Audit Rules” means Sections 6221 through 6241 of the Code, together with any guidance issued thereunder or successor provisions and any similar provision of state, local, and non-U.S. Tax laws.
“Party” has the meaning set forth in the preamble.
“Pass-Through Tax Return” means any Income Tax Return (such as IRS Form 1065 and associated IRS Schedule K-1s and corresponding state and local Tax Returns) of the Company and its Subsidiaries with respect to which (i) such Company or Subsidiary is treated as a partnership for U.S. federal (and applicable state and local) Income Tax purposes (a “Relevant Target Company”), and (ii) the income, gain, losses, deductions, and other Tax items reflected on such Income Tax Returns are allocated to, and reflected on the Tax Returns of, the beneficial owners of the Company. By way of example and without limitation, Tax Returns primarily concerning property Taxes, sales and use Taxes, payroll Taxes, and withholding Taxes are not Pass-Through Tax Returns.
“Payroll Tax Executive Order” means the Presidential Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, as issued on August 8, 2020 and including any administrative or other guidance published with respect thereto by any Governmental Authority (including IRS Notice 2020-65).
“PCAOB” means the U.S. Public Company Accounting Oversight Board (or any successor thereto).
“PCAOB Audited Financial Statements” means the Target Companies’ audited combined balance sheet as of December 31, 2021 and December 31, 2022 and statements of income, changes in shareholder equity and cash flows for the twelve (12)-month periods then ended, each audited in accordance with GAAP and PCAOB auditing standards by a PCAOB qualified auditor.
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“Permits” means any franchise, license, permit, consent and order of any Governmental Authority necessary for any Target Company to own, lease and operate its properties or to carry on its business.
“Permitted Liens” means (a) Liens for Taxes that are not yet due and payable or for Taxes that are being contested in good faith by appropriate proceedings and in each case that are sufficiently reserved for on the Financial Statements in accordance with the Accounting Principles; (b) statutory and contractual Liens arising or incurred in the Ordinary Course of Business with respect to Leased Real Property for amounts that are not yet due and payable or are being contested in good faith by appropriate proceedings and for which sufficient reserves have been established in accordance with the Accounting Principles; (c) zoning, building, or other restrictions, variances, and other land use Laws regulating the use or occupancy of such Leased Real Property or the activities conducted thereon which are imposed by any Governmental Authority having jurisdiction over such Leased Real Property which are not violated by the current use or occupancy of such Leased Real Property or the operation of the business thereon; (d) covenants, rights of way, encumbrances, easements and other irregularities in title, none of which, individually or in the aggregate, interfere, or would interfere, in any material respect with the present use of or occupancy of the affected parcel in the operation of the business conducted thereon by the Target Companies; and (e) Liens incurred in connection with capital lease obligations of the Target Companies incurred in the Ordinary Course of Business.
“Person” means and includes an individual, a partnership (general or limited), a joint venture, a corporation, a company, a trust, an estate, a limited liability company, an association, a joint-stock company, an unincorporated organization or other entity and a Governmental Authority.
“Personal Information” means information that, alone or in combination with other information, allows the identification of an individual or can be used to contact an individual, directly or indirectly, including name; social security number; government-issued identification numbers or other identification numbers; health or medical information, including health insurance information; credit or payment card or financial account information; passport numbers; user names/email addresses in combination with a password or security code that would allow access to an online account; unique biometric identifiers (e.g., fingerprints, retinal scans, face scans, or DNA profile); employee ID numbers; date of birth; digital signature; Internet Protocol (IP) addresses or other information that is regulated by one or more Privacy Laws.
“Plan” means each “employee benefit plan” (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA, or any similar plan subject to Laws of a jurisdiction outside of the United States), and any other benefit or compensation plan, policy, program, practice, agreement, understanding or arrangement, whether written or oral, (including all cash incentive, bonus, deferred compensation, profit sharing, equity appreciation, phantom equity, equity purchase, stock or share option or other incentive equity or equity or equity-linked arrangement, and any employment, consulting, advisor, service, termination, retention, bonus, excess benefit, profit sharing, change in control, severance, retirement, supplemental retirement, pension, savings, tax gross-up, employee loan, vacation, fringe, paid time off, disability, medical, dental, vision, cafeteria, insurance, flex spending, accident, adoption/dependent/employee assistance, tuition, health and welfare, post-termination or retiree health and welfare plan, program, policy, agreement, arrangement, commitment or Contract) that is: (A) sponsored, maintained, contributed to or required to be contributed to by Seller or any of its Subsidiaries or any of their ERISA Affiliates or (B) with respect to which Seller or any of its Subsidiaries or any of their ERISA Affiliates has or could reasonably be expected to have any liability or obligation whether actual or contingent, direct or indirect, to provide compensation or benefits to or for the benefit of any current or former officer, employee, individual independent contractor, consultant or other service provider (including any such Person providing services through a personal services entity), director or manager (each, a “Service Provider”) or the spouses, beneficiaries or other dependents thereof.
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“Post-Signing Luxco Contribution” has the meaning set forth in the recitals.
“Pre-Closing Tax Period” means any taxable period ending on or prior to the Closing Date, and with respect to any Straddle Period, the portion of such period ending on (and including) the Closing Date.
“Pre-Signing Luxco Contribution” has the meaning set forth in the recitals.
“Privacy Laws” means all applicable Laws concerning the privacy, collection, receipt, storage, compilation, transfer, disposal, security (both technical and physical), disclosure, transfer, processing, protection, sharing, breach or other use of Personal Information, and all regulations promulgated thereunder, including HIPAA, the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transaction Act, the Federal Trade Commission Act, the Privacy Act of 1974, the CAN-SPAM Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Children’s Online Privacy Protection Act, the Family Educational Rights and Privacy Act, the General Data Protection Regulation (2016/679), state social security number protection Laws, state data breach notification Laws and, where applicable, state consumer protection Laws.
“Proskauer Privileged Communications” has the meaning set forth in Section 9.15(b).
“Prospectus” means that certain final prospectus of Purchaser, dated February 23, 2022, and filed on February 25, 2022, prepared, filed and made available to the public in accordance with applicable federal securities Laws.
“Proxy Statement” has the meaning set forth in Section 5.07(a).
“Public Rights” means the 23,000,000 Rights that comprise part of the Public Units, which are listed on the NASDAQ under the ticker symbol “CLINR”, with each Right entitling the holder thereof to acquire one-tenth (1/10^th^) of one share of Purchaser Common Stock upon consummation of an initial business combination.
“Public Shareholders” has the meaning set forth in Section 5.10.
“Public Shares” means the 23,000,000 shares of Purchaser Common Stock that comprise part of the Public Units, which are listed on the NASDAQ under the ticker symbol “CLIN”.
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“Public Units” means the 23,000,000 Units issued and sold in the IPO, with each Public Unit consisting of one Public Share, one Public Right and one-half of one Public Warrant, which Public Units are listed on the NASDAQ under the ticker symbol “CLINU”.
“Public Warrants” means the warrants to purchase up to 11,500,000 shares of Purchaser Common Stock at a price of $11.50 per share that comprise part of the Public Units, which is listed on the NASDAQ under the ticker symbol “CLINW”.
“Purchase Price Allocation” has the meaning set forth in Section 8.07.
“Purchased Shares” means, collectively, (i) the AEA Shares, and (ii) the Alternus Lux Shares. For the avoidance of doubt, Purchased Shares shall not include any capital stock or share capital of any of the Excluded Companies.
“Purchaser” has the meaning set forth in the preamble.
“Purchaser Acquisition Proposal” means: (a) any, direct or indirect, acquisition, merger, domestication, reorganization, business combination, “initial business combination” under Purchaser’s initial IPO prospectus or similar transaction, in one transaction or a series of transactions, involving Purchaser or involving all or a material portion of the assets, equity securities or businesses of Purchaser (whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, purchase of assets, tender offer or otherwise); or (b) any equity or similar investment in Purchaser or any of its controlled Affiliates, other than any Investments, the extent applicable.
“Purchaser Board” has the meaning set forth in the recitals.
“Purchaser Board Recommendation” has the meaning set forth in Section 5.07(d).
“Purchaser Class B Common Stock” means Class B common stock of Purchaser, par value $0.0001 per share.
“Purchaser Closing Statement” has the meaning set forth in Section 2.03(b).
“Purchaser Common Stock” means Class A common stock of Purchaser, par value $0.0001 per share.
“Purchaser Disclosure Letter” means the disclosure schedules of Purchaser delivered concurrently with the execution of this Agreement.
“Purchaser Fundamental Representations” means Section 4.01 (Organization and Power), Section 4.03(a) (Authorization;No Breach; Valid and Binding Agreement), Section 4.03(d) (Authorization; No Breach; Valid and Binding Agreement), Section 4.05 (Purchaser Trust Account), Section 4.10 (Capitalization), and Section 4.18 (Brokerage).
“Purchaser Group” has the meaning set forth in Section 9.15(a).
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“Purchaser Incentive Plan” means that certain equity incentive plan to be entered into at Closing by Purchaser, substantially in the form attached hereto as Exhibit E.
“Purchaser Indemnified Parties” has the meaning set forth in Section 5.14(a).
“Purchaser Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, (a) has had or is reasonably expected to have a materially adverse effect on the business, financial condition or results of operations of Purchaser taken as a whole or (b) has or is reasonably expected to prevent, materially impair or materially delay Purchaser from consummating the Transactions (including the Share Sale); provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Purchaser Material Adverse Effect: any change, effect, event, occurrence, state of facts or development arising from or related to (i) any downturn in general economic conditions, including changes in the credit, debt, securities, financial, capital markets, or in the industry in which Purchaser operates, or in the price of any security or any market index or any change in prevailing interest rates or currency exchange rates; (ii) the taking of any action required by this Agreement, including any redemptions of Public Shares pursuant to the Purchaser Share Redemption; (iii) any change in applicable Laws or the interpretation thereof after the date hereof; (iv) any actual or potential sequester, stoppage, shutdown, default or similar event or occurrence by or involving any Governmental Authority; (v) any change in GAAP after the date hereof; (vi) the commencement, continuation or escalation of a war, riots, material armed hostilities or other material international or national calamity or act of terrorism; (vii) effects arising from or relating to any earthquake, hurricane, tsunami, tornado, flood, mudslide or other natural disaster, weather condition, explosion or fire or other force majeure event; (viii) changes in, or effects arising from or relating to, any epidemic, pandemic or disease outbreak (including the COVID-19 pandemic), curfews or other restrictions that relate to, or arise out of, any epidemic, pandemic or disease outbreak (including the COVID-19 pandemic or any COVID-19 Measures or any change in such COVID-19 Measures or interpretations thereof) or material worsening of such conditions threatened or existing as of the date of this Agreement; (ix) the execution or public announcement of this Agreement or the pendency or consummation of the Transactions; (x) any action taken by, or at the request of, or with the express consent of Seller and (xi) the failure of Purchaser to meet or achieve the results set forth in any projection, budget, estimate, forecast or prediction (provided that this clause (xi) shall not prevent a determination that any change or effect underlying such change has resulted in a Purchaser Material Adverse Effect if not otherwise excluded from this definition); provided that, in the case of clauses (i), (iii), (iv), (v), (vi), (vii), and (viii) above, if such change, effect, event, occurrence, state of facts or development disproportionately affects Purchaser as compared to other special purpose acquisition companies and/or blank check companies, then the extent of such disproportionate effect of such change, effect, event, occurrence, state of facts or development may be taken into account in determining whether a Purchaser Material Adverse Effect has or will occur.
“Purchaser Prepared Returns” has the meaning set forth in Section 8.03.
“Purchaser SEC Documents” has the meaning set forth in Section 4.14(a).
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“Purchaser Share Redemption” means the election of an eligible holder of Purchaser Common Stock (as determined in accordance with the applicable Organizational Documents of Purchaser and the Trust Agreement) to redeem all or a portion of such holder’s shares of Purchaser Common Stock in accordance with the applicable Organizational Documents of Purchaser and the Trust Agreement.
“Purchaser Shareholder Approval” has the meaning set forth in Section 6.03(c).
“Purchaser Shareholder Proposals” means, collectively, the following proposals, or such other proposals as may be agreed upon between Purchaser and Seller, to be voted upon at the Purchaser Special Meeting: (a) the approval of the Transactions; (b) the approval, for purposes of complying with applicable listing rules of the NASDAQ, of the issuance of the shares of Purchaser Common Stock in connection with the consummation of the Transactions (including the Share Sale and any Investments, if applicable); (c) the amendment and restatement of the Organizational Documents of Purchaser as contemplated by this Agreement; (d) the adoption of the Purchaser Incentive Plan; (e) the appointment of new directors effective as of the Closing in accordance with the terms of this Agreement; and (f) the advisory charter proposals with respect to governance provisions.
“Purchaser Shareholders” means the Public Shareholders and all other holders of shares of Purchaser Common Stock and Purchaser Class B Common Stock.
“Purchaser Special Meeting” has the meaning set forth in Section 5.07(c).
“Purchaser Transaction Expenses” means, collectively, (a) the fees and expenses of Purchaser incident to the negotiation and preparation of this Agreement and the other Ancillary Agreements and the performance and compliance with all agreements and conditions contained herein to be performed or complied with, including the fees, commissions, expenses and disbursements of its counsels, accountants, placement and wall crossing agents, due diligence expenses, advisory and consulting fees, whether paid or unpaid prior to the Closing, (b) 50% of all filing fees incurred in connection with the filing required to be made under the HSR Act and for any other Regulatory Approval necessary for the consummation of the Transactions, and (c) any and all Deferred Underwriting Commissions.
“Purchaser Trust Account” means that certain trust account of Purchaser with the Trustee, established under the Purchaser Trust Agreement.
“Purchaser Trust Agreement” means that certain Investment Management Trust Agreement, dated as of February 23, 2022, by and between Purchaser and the Trustee.
“Purchaser Trust Amount” means, as the date of determination, the aggregate amount of funds held in the Purchaser Trust Account.
“Purchaser’s Knowledge” or any similar phrase, with respect to Purchaser, means the actual knowledge following a reasonable inquiry with his direct reports directly responsible for the applicable subject matter of Aaron Ratner and Martha Ross.
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“Regulatory Approvals” means any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority; provided that in no event shall the term Regulatory Approvals include the filing of, or securing effectiveness of, the Proxy Statement.
“Release” means any spilling, leaking, pumping, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping, or disposing of Hazardous Materials (including the abandonment or discarding of barrels, containers or other closed receptacles containing Hazardous Materials) into the indoor or outdoor environment.
“Released Party” has the meaning set forth in Section 9.13.
“Representatives” means the officers, directors, managers, employees, independent contractors, attorneys, accountants, advisors, representatives, consultants and agents of a Person.
“Restructuring” has the meaning set forth in the recitals.
“Sanctioned Country” means at any time, a country or territory which is itself the subject or target of any country-wide or territory-wide Sanctions Laws (at the time of this Agreement, the Crimea region, Cuba, Iran, North Korea and Syria).
“Sanctioned Person” means (i) any Person identified in any sanctions-related list of sanctioned Persons maintained by (a) the United States Department of the Treasury’s Office of Foreign Assets Control, or the United States Department of State; (b) Her Majesty’s Treasury of the United Kingdom; (c) any committee of the United Nations Security Council; or (d) the European Union or any European Union member state; (ii) any Person located, organized, or resident in, organized in, or a Governmental Authority or government instrumentality of, any Sanctioned Country; and (iii) any Person directly or indirectly owned fifty percent or more or controlled by, or acting for the benefit or on behalf of, a Person described in clause (i) or (ii), either individually or in the aggregate.
“Sanctions Laws” means those trade, economic and financial sanctions Laws and trade embargoes administered, enacted or enforced from time to time by (i) the United States (including the Department of the Treasury’s Office of Foreign Assets Control and the United States Department of State), (ii) Her Majesty’s Treasury of the United Kingdom, (iii) the United Nations, or (iv) the European Union or any European Union member state.
“SEC” means the U.S. Securities and Exchange Commission.
“SEC Guidance” means (a) any publicly available written or oral interpretations, questions and answers, guidance and forms of the SEC, (b) any oral or written comments, requirements or requests of the SEC or its staff, (c) the Securities Act and the Exchange Act, and (d) any other rules, bulletins, releases, manuals and regulations of the SEC.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
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“Self-Regulatory Organization” means any securities exchange, futures exchange, contract market, any other exchange or corporation or similar self-regulatory body or organization applicable to a Party.
“Seller” has the meaning set forth in the preamble.
“Seller Acquisition Proposal” means: (a) any, direct or indirect, acquisition, merger, domestication, reorganization, business combination or similar transaction, in one transaction or a series of transactions, involving Seller or any Target Company or involving all or a material portion of the assets, equity securities or businesses of Seller or any Target Company (whether by merger, consolidation, recapitalization, purchase or issuance of equity securities, purchase of assets, tender offer or otherwise); provided that the Restructuring and any other internal restructuring of Seller and its Subsidiaries shall be excluded from the foregoing; or (b) any equity or similar investment in Seller or any Target Company.
“Seller Board” has the meaning set forth in the recitals.
“Seller Disclosure Letter” means the disclosure schedules of Seller delivered concurrently with the execution of this Agreement.
“Seller Fundamental Representations” means the representations and warranties of Seller set forth in Section 3.01 (Organizationand Corporate Power), Section 3.03(a) (Authorization; No Breach; Valid and Binding Agreement), Section 3.03(d) (Authorization;No Breach; Valid and Binding Agreement), Section 3.04 (Capitalization), Section 3.05 (Title toShares), Section 3.10 (Tax Matters) and Section 3.24 (Brokerage).
“Seller Group” has the meaning set forth in Section 9.15(a).
“Seller Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate, (a) has had or is reasonably expected to have a materially adverse effect on the business, assets, financial condition or results of operations of Seller and the Target Companies taken as a whole or (b) has or is reasonably expected to prevent, materially impair or materially delay Seller or any Target Company from consummating the Transactions (including the Share Sale); provided, however, that none of the following shall be deemed in themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Seller Material Adverse Effect: any change, effect, event, occurrence, state of facts or development arising from or related to (i) any downturn in general economic conditions, including changes in the credit, debt, securities, financial, capital markets, or in the industry in which Seller or the Target Companies operate, or in the price of any security or any market index or any change in prevailing interest rates or currency exchange rates; (ii) the taking of any action required by this Agreement, including any redemptions of Public Shares pursuant to the Purchaser Share Redemption; (iii) any change in applicable Laws or the interpretation thereof after the date hereof; (iv) any actual or potential sequester, stoppage, shutdown, default or similar event or occurrence by or involving any Governmental Authority; (v) any change in GAAP after the date hereof; (vi) the commencement, continuation or escalation of a war, riots, material armed hostilities or other material international or national calamity or act of terrorism; (vii) effects arising from or relating to any earthquake, hurricane, tsunami, tornado, flood, mudslide or other natural disaster, weather condition, explosion or fire or other force majeure event; (viii) changes in, or effects arising from or relating to, any epidemic, pandemic or disease outbreak (including the COVID-19 pandemic), curfews or other restrictions that relate to, or arise out of, any epidemic, pandemic or disease outbreak (including the COVID-19 pandemic or any COVID-19 Measures or any change in such COVID-19 Measures or interpretations thereof) or material worsening of such conditions threatened or existing as of the date of this Agreement; (ix) the execution or public announcement of this Agreement or the pendency or consummation of the transactions contemplated by this Agreement, including the impact thereof on the relationships, contractual or otherwise, of Seller or any Target Company with employees, customers, investors, contractors, lenders, suppliers, vendors, partners, licensors, licensees, payors or other third-parties related thereto; (x) any matter disclosed in the Seller Disclosure Schedule, (xi) any action taken by, or at the request of, or with the express consent of Purchaser and (xii) the failure of Seller or the Target Companies to meet or achieve the results set forth in any projection, budget, estimate, forecast or prediction (provided that this clause (xii) shall not prevent a determination that any change or effect underlying such change has resulted in a Seller Material Adverse Effect if not otherwise excluded from this definition); provided that, in the case of clauses (i), (iii), (iv), (v), (vi), (vii), and (viii) above, if such change, effect, event, occurrence, state of facts or development disproportionately affects Seller and the Target Companies as compared to other Persons or businesses that operate in the industry in which Seller and the Target Companies operate, then the extent of such disproportionate effect of such change, effect, event, occurrence, state of facts or development may be taken into account in determining whether a Seller Material Adverse Effect has or will occur.
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“Seller Transaction Expenses” means, collectively, (a) the fees and expenses of Seller or any of its Subsidiaries incident to the negotiation and preparation of this Agreement and the other Ancillary Agreements and the performance and compliance with all agreements and conditions contained herein to be performed or complied with, including the fees, expenses and disbursements of its counsels, accountants, due diligence expenses, advisory and consulting fees, in each case, that is unpaid prior to the Closing, and (b) 50% of all filing fees incurred in connection with the filing required to be made under the HSR Act and for any other Regulatory Approval necessary for the consummation of the Transactions.
“Seller’s Knowledge” or any similar phrase, with respect to Seller or any Target Company, means the actual knowledge following a reasonable inquiry with his or her direct reports directly responsible for the applicable subject matter of Vincent Brown, Joseph Duey, Taliesin Durant, Gary Swan and David Farrell.
“Service Provider” has the meaning set forth in the definition of Plan.
“Share Price” means the closing trading price of a share of Purchaser Common Stock on the NASDAQ or any other national securities exchange on which shares of Purchaser Common Stock are then listed, as applicable
“Share Sale” has the meaning set forth in the recitals.
“Software” means any and all computer programs (whether in source code, object code, human readable form or other form), algorithms, user interfaces, firmware, development tools, templates, menus, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing, together with all intellectual property, industrial property and proprietary rights in and to any of the foregoing.
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“Solis Shares” has the meaning set forth in the recitals.
“Sponsor” has the meaning set forth in the recitals.
“Sponsor Promissory Note” means that certain Promissory Note, dated as of September 26, 2022, issued by the Purchaser to the Sponsor in the principal amount of $850,000.
“Sponsor Support Agreement” has the meaning set forth in the recitals.
“Sponsor Units” means the 890,000 private placement units held by the Sponsor, which consists of 890,000 shares of Purchaser Common Stock and warrants to purchase 445,000 shares of Purchaser Common Stock at a price of $11.50 per share (“Sponsor Warrants”).
“Straddle Period” means any taxable period that includes (but does not end on) the Closing Date.
“Subsidiary” means, with respect to any Person, any Entity of which a majority of the total voting power entitled (without regard to the occurrence of any contingency) to vote in the appointment or election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination thereof, or any partnership, limited liability company, association or other Entity of which a majority of the partnership, limited liability company or other similar ownership interest is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination thereof. For purposes of this definition, a Person is deemed to have a majority ownership interest in a partnership, limited liability company, association or other Entity if such Person is allocated a majority of the gains or losses of such partnership, limited liability company, association or other Entity or controls the managing member or general partner or similar position of such partnership, limited liability company, association or other Entity.
“Target Company” or “Target Companies” means (i) Alternus Energy Americas Inc., a Delaware corporation, and its direct and indirect Subsidiaries, and (ii) Alternus Lux and its direct and indirect Subsidiaries.
“Tax” or “Taxes” means any and all applicable federal, state, local, non-U.S. and other income, gross receipts, alternative minimum, ad valorem, premium, production, value-added, excise, real property, personal property (tangible and intangible), real property gains, lease, sales, capital stock, environmental, harmonized sales, goods and services, use, services, transfer, registration, withholding, employment, unemployment, disability, payroll, franchise, profits, capital gains, occupation, severance, windfall profits, stamp, license, social security, estimated, alternative, add-on minimum, customs, duties, or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest of such additions or penalties, whether disputed or not.
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“Tax Proceeding” has the meaning set forth in Section 8.04.
“Tax Return” means any tax return, statement, form or report (including any election, declaration, disclosure, claim for refund, estimate and information return and any other information) filed or required to be filed with or supplied to a taxing authority in connection with any Tax, including any schedule or attachment thereto and any amendment thereof and any supplement thereto.
“TCA” means the Taxes Consolidation Act 1997 of Ireland (as amended).
“Termination Date” has the meaning set forth in Section 7.03(b).
“Termination Fee” has the meaning set forth in Section 7.06.
“Threshold Amount” means $500,000.
“Top Customer” has the meaning set forth in Section 3.19.
“Top Supplier” has the meaning set forth in Section 3.19.
“Transactions” means the transactions contemplated by this Agreement and the Ancillary Agreements, including the Share Sale.
“Transfer Taxes” has the meaning set forth in Section 8.08.
“Trustee” means American Stock Transfer & Trust Company, LLC, a New York limited liability trust company.
“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988 and any similar Law.
“Working Capital Loans” means any loans incurred by Purchaser for its working capital needs, provided that the terms and conditions of such loans, including the form of consideration for repayment of such loans, shall be consistent with the terms described in the Prospectus.
Section 1.02 Construction.
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, (iv) the terms “Article”, “Section”, “Schedule”, “Exhibit” and “Annex” refer to the specified Article, Section, Schedule, Exhibit or Annex of or to this Agreement unless otherwise specified, (v) the word “including” shall mean “including without limitation”, (vi) the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”, (vii) references to a Person are also to its permitted successors and assigns and (viii) the word “or” shall be disjunctive but not exclusive.
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(b) Unless the context of this Agreement otherwise requires, references to Contracts and other documents shall be deemed to include all subsequent amendments and other modifications thereto.
(c) Unless the context of this Agreement otherwise requires, references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.
(d) The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party.
(e) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action required to be taken on or by a Business Day is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action shall be taken or given on or by the next Business Day.
(f) Unless the context of this Agreement otherwise requires, all accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
(g) The phrases “delivered,” “provided to,” “furnished to,” “made available” and phrases of similar import when used herein, unless the context otherwise requires, means that a copy of the information or material referred to has been provided no later than one calendar day prior to the date of this Agreement to the party to which such information or material is to be provided or furnished (i) in the virtual “data room” set up by Seller in connection with this Agreement or (ii) by delivery to such party or its legal counsel via electronic mail or hard copy form.
(h) References to “$”, “US$” or “dollars” refer to lawful currency of the United States.
(i) References to “director” or “board of directors” shall be deemed to be a reference to a “manager” or “board of managers” where such applies (e.g., Alternus Lux);
(j) Writing includes typewriting, printing, photography, email and other modes of representing or reproducing words in a legible and non-transitory form.
(k) Terms defined in this Agreement by reference to any other agreement, document or instrument have the meanings assigned to them in such agreement, document or instrument whether or not such agreement, document or instrument is then in effect.
(l) Titles and headings to Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
(m) The Disclosure Letters and Exhibits referred to herein shall be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein.
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ARTICLE II
PURCHASE AND SALE TRANSACTIONS
Section 2.01 Closing. Unless another date, location or time is mutually agreed upon by the Parties, the consummation of the transactions contemplated hereby (the “Closing”) shall take place at 9:00 a.m., New York City time, on the third (3rd) Business Day after satisfaction or, if permissible, waiver of the conditions to the obligations of the parties set forth in Article VI other than such conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, if permissible, waiver of those conditions. The date and time on which the Closing takes place is herein referred to as the “Closing Date.”
Section 2.02 Purchase and Sale. Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall transfer to Purchaser, and Purchaser shall acquire from Seller, free and clear of all Liens (except for (i) Liens created by Purchaser, (ii) Liens consisting of restrictions on transfer generally arising under applicable federal securities Laws or state securities Law, and (iii) Excepted Liens), all right, title and interest in and attaching to the Purchased Shares, and as consideration and in exchange therefor, Purchaser shall issue the Closing Share Consideration, to Seller in accordance with Section 2.04(c).
Section 2.03 Pre-Closing Matters.
(a) At least two (2) Business Days prior to the Closing, Seller shall deliver to Purchaser a written schedule prepared in accordance with the Accounting Principles setting forth (i) Seller’s good faith estimate, together with reasonable supporting detail of its estimated Net Working Capital and (ii) Seller’s good faith calculation, together with reasonable supporting detail, including all invoices or similar documentation accounting for such costs, and instructions that list the applicable bank accounts designated and wire instructions therefor to facilitate payment by Purchaser of the Seller Transaction Expenses, along with instructions for payment of such expenses by Purchaser as of the Closing. Purchaser shall be entitled to review such written schedule and Seller will cooperate promptly and reasonably with Purchaser to revise such written scheudle to the extent necessary to reflect any of Purchaser’s reasonable comments.
(b) At least two (2) Business Days prior to the Closing, Purchaser shall notify Seller in writing (the “Purchaser Closing Statement”) of (i) the Purchaser Trust Amount upon conclusion of the Purchaser Share Redemption (the “Final Purchaser Trust Amount”), (ii) the Closing Share Consideration, and (iii) Purchaser’s good-faith calculation, together with reasonable supporting detail, including all invoices or similar documentation accounting for such costs, and instructions that list the applicable bank accounts designated to facilitate payment by Purchaser of the Purchaser Transaction Expenses, along with details about which such expenses shall be paid out as of the Closing. Seller shall be entitled to review the Purchaser Closing Statement and Purchaser will cooperate reasonably with Seller to revise the Purchaser Closing Statement to the extent necessary to reflect any of Seller’s reasonable comments. Following such review, if the Purchaser Closing Statement is revised, such revised Purchaser Closing Statement, or if the Purchaser Closing Statement is not revised, then the initial Purchaser Closing Statement, shall be deemed to be the final “Purchaser Closing Statement”.
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Section 2.04 Closing Transactions. At the Closing:
(a) Purchaser shall pay or cause to be paid in cash, by wire transfer of immediately available funds:
(i) all amounts included in the Seller Transaction Expenses to the accounts set forth in the Closing Statement; provided that Purchaser shall pay directly to Seller any amount in respect of Seller Transaction Expenses paid by Seller or a Target Company prior to the Closing; and
(ii) all amounts included in the Purchaser Transaction Expenses to the accounts set forth in the Purchaser Closing Statement, to the extent not paid by Purchaser prior to the Closing.
(b) Purchaser shall make, or cause to be made, appropriate book entries in the name of Seller evidencing the issuance of the Closing Share Consideration, free and clear of all Liens (except for (i) Liens created by, or on behalf of, Seller, (ii) Liens consisting of restrictions on transfer generally arising under applicable federal securities Laws or state securities Law and (iii) the restrictions arising under the lock-up provisions under the Investors Rights Agreement).
(c) Seller shall deliver to Purchaser:
(i) to the extent certificated, all share certificates representing the Purchased Shares (each, a “Certificate”), or in the case of any Certificates that are lost, an indemnity for such Certificate;
(ii) a copy of the Investor Rights Agreement, duly executed by the Seller;
(iii) a copy of resolutions taken by the Seller Board in connection with the approval of this Agreement and the Transactions (including the Share Sale);
(iv) details of Seller’s Irish tax reference number;
(v) either a certificate of the kind described in section 980 of the TCA or a letter from the auditors of the Target Companies confirming that none is required;
(vi) where applicable, copies of the share transfer form instruments with respect to the Purchased Shares, duly executed by Seller;
(vii) where applicable, the updated register of members of each of the Target Companies, reflecting the transfer of the Purchased Shares to Purchaser;
(viii) the consents, approvals and waivers listed in Section 3.03(b) of the Seller Disclosure Letter;
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(ix) restrictive covenant agreements executed by each of the Key Employees;
(x) a certificate from Seller, dated as of the Closing Date in format and substance acceptable to Purchaser, certifying that (i) no withholding is required under Section 1445 of the Code, which certificate shall be in form and substance in accordance with the provisions of Treasury Regulations Section 1.1445-11T(d)(2), and (ii) no withholding is required under Section 1446(f) of the Code, which certificate shall be in form and substance in accordance with the provisions of Treasury Regulations Section 1.1446(f)-2(b)(4);
(xi) a properly completed Internal Revenue Service Form W-8 duly executed by Seller;
(xii) a copy of the minutes of a meeting of the directors validly held in accordance with the relevant Organizational Documents of each of the entities involved in the Restructuring approving the relevant aspects of the Restructuring;
(xiii) a copy of the minutes of a meeting of the directors validly held in accordance with the relevant Organizational Documents of each of Alternus Lux and AEA, in each case approving the registration of the interest of the Purchaser in the relevant Purchased Shares; and
(xiv) (A) all other documents, instruments or certificates required to be delivered by Seller at or prior to the Closing pursuant to Section 6.01; and (B) such other documents or certificates as shall reasonably be required by Purchaser and its counsel to consummate the Transactions (including the Share Sale).
(d) Purchaser shall deliver to Seller:
(i) a certified copy of the A&R Purchaser Charter;
(ii) a copy of the A&R Purchaser Bylaws;
(iii) a copy of the Investor Rights Agreement, duly executed by Purchaser;
(iv) a copy of the resolutions taken by the Purchaser Board in connection with the approval of this Agreement and the Transactions (including the Share Sale);
(v) [Reserved]; and
(vi) (A) all other documents, instruments or certificates required to be delivered by Purchaser at or prior to the Closing pursuant to Section 6.02; and (B) such other documents or certificates as shall reasonably be required by Seller and its counsel to consummate the Transactions (including the Share Sale).
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Section 2.05 [Reserved].
Section 2.06 Purchaser Board. Subject to applicable Law and approval of the stockholders of Purchaser, Purchaser shall take all action necessary to ensure that, effective as of the Closing, the Purchaser Board shall consist of seven (7) directors who shall initially be the directors named in Section 2.06 of the Purchaser Disclosure Letter.
Section 2.07 Certain Adjustments. If, between the date of this Agreement and the Closing, the outstanding shares of Purchaser Common Stock shall have been changed into a different number of shares or a different class of shares by reason of any stock dividend, subdivision, reclassification, stock split, reverse stock split, combination or exchange of shares, or any similar event shall have occurred, then the Closing Share Consideration shall be equitably adjusted, without duplication, to proportionally reflect such change.
Section 2.08 Fractional Shares. No fraction of a share of Purchaser Common Stock will be issued by virtue of the Transactions, and instead the number of shares of Purchaser Common Stock issued to Seller shall be rounded up to the nearest whole share.
Section 2.09 [Reserved].
Section 2.10 Legends. Each certificate issued to Seller in connection with the Transactions, if any, or book entry position, as applicable, shall bear the legend set forth below, or a legend substantially equivalent thereto, together with any other legends that may be required by any applicable securities Laws at the time of issuance of the shares of Purchaser Common Stock:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, MORTGAGED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL (I) SUCH OFFER, SALE, TRANSFER, MORTGAGE, PLEDGE OR HYPOTHECATION HAS BEEN REGISTERED UNDER THE ACT AND THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION COVERING SUCH SHARES OR (II) THE ISSUER OF THE SHARES HAS RECEIVED AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, MORTGAGE, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT AND SUCH OTHER APPLICABLE LAWS.
Section 2.11 Further Action. If, at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this Agreement and the Share Sale, the Parties agree to promptly take any such actions, including executing such documents or making such filings, as may be reasonably required by any of the Parties, including without limitation, making any necessary filings with or notifications to the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) and Luxembourg Register of Beneficial Owners (Registre des Bénéficiaires Effectifs, Luxembourg).
Section 2.12 Withholding. Purchaser and any other applicable withholding agent shall be entitled to deduct and withhold from any amounts paid or payable pursuant to this Agreement such amounts as such Person is required to deduct and withhold with respect to such payment under the Code or any other provision of applicable Law; provided, that Purchaser shall use commercially reasonable efforts to provide Seller with a written notice of Purchaser’s intention to withhold at least three (3) Business Days prior to any such withholding (other than any withholding attributable to the failure to provide a certificate pursuant to Section 2.04(d)(x)) and, prior to any such withholding, Purchaser shall provide Seller a reasonable opportunity to mitigate or eliminate any such requirement to deduct or withhold to the extent permitted by applicable Law. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to Seller.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in (i) the Seller Disclosure Letter (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent on the face of such disclosure) and/or (ii) the quarterly or annual reports that are available on the “Investor” section of Seller’s website (alternusenergy.com), and subject to the terms, conditions and limitations set forth in this Agreement, Seller hereby represents and warrants to Purchaser, as of the date of this Agreement and the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement) (except if the representation and warranty speaks as of a specific date prior to the Closing Date, in which case as of such earlier date), as follows:
Section 3.01 Organization and Corporate Power. Each of Seller and each of the Target Companies is an entity duly incorporated, validly existing and, to the extent such concept is applicable under the Laws of its jurisdiction of incorporation or organization, in good standing under the Laws of its jurisdiction of incorporation or organization, and each of Seller and each of the Target Companies has all requisite corporate power and authority and all authorizations, licenses and permits necessary to own, lease and operate its properties and to carry on its businesses as now conducted and is qualified to do business, and is in good standing as a foreign corporation to the extent such concept is applicable, in each jurisdiction in which its ownership, lease and operation of property or the conduct of its business requires such qualification, except where the failure to hold such authorizations, licenses and permits or to be so qualified has not had, and would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect. Complete and correct copies of the Organizational Documents of Seller and the Target Companies, in each case as in effect as of the date of this Agreement, have been made available to Purchaser. Neither Seller nor any Target Company is in breach of its Organizational Documents.
Section 3.02 Subsidiaries. Section 3.02 of the Seller Disclosure Letter sets forth the name and jurisdiction of each Subsidiary of Seller. Except as set forth on Section 3.02 of the Seller Disclosure Letter, no Subsidiary of Seller owns or holds the right to acquire any stock, partnership interest or joint venture interest or other equity ownership interest in any other partnership, corporation, organization or entity.
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Section 3.03 Authorization; No Breach; Valid and Binding Agreement.
(a) Seller has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is a party and, subject to the consents, approvals, authorizations and other requirements described in this Section 3.03, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby (including the Share Sale). The execution, delivery and performance of this Agreement and the Ancillary Agreements to which it is a party by Seller and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action, and no other corporate actions or proceedings on its part are necessary to authorize the execution, delivery or performance of this Agreement or the Ancillary Agreements and the consummation of the transactions contemplated hereby (including the Share Sale) and thereby.
(b) Except as set forth on Section 3.03(b) of the Seller Disclosure Letter, the execution, delivery and performance of this Agreement and the Ancillary Agreements to which it is a party by Seller, and the consummation of the transactions contemplated hereby and thereby do not and will not conflict with or result in any breach of, constitute a default (or an event that, with or without notice or lapse of time or both, would become a default) under, result in a violation of, result in the creation of any Lien (other than Permitted Liens and Excepted Liens) upon any assets or properties of Seller or any Target Company under, give rise to any right of payment, penalty, modification, amendment or termination, cancellation or acceleration with respect to, or require any authorization, consent, approval, exemption or other action by, notice to or filing with any court or other Governmental Authority under (i) the provisions of the Organizational Documents of Seller or any Target Company, (ii) any Contract or Permit to which Seller or any Target Company or their respective properties or assets are bound, or (iii) any Law, statute, rule or regulation or order, judgment or decree to which Seller or any Target Company is subject or their respective properties or assets are subject; except, with respect to clause (ii) and (iii) of this Section 3.03(b), where the failure to obtain such authorization, consent, approval or exemption would prevent, materially impair or materially delay the consummation of the Transactions (including the Share Sale).
(c) The execution and delivery of this Agreement or any Ancillary Agreement by Seller do not, and the performance of this Agreement or any Ancillary Agreement by Seller will not, require any Regulatory Approval, except for compliance with, filings under, and approvals of Governmental Authorities relating to, the requirements of the HSR Act, the federal securities Laws and/or any U.S. state securities or “blue sky” Laws, and the rules and regulations of NASDAQ.
(d) This Agreement has been, and each Ancillary Agreement to which Seller is a party has been or will be at Closing, as applicable, duly executed and delivered by Seller and assuming that this Agreement and each Ancillary Agreement is a valid and binding obligation of the other parties hereto and thereto, this Agreement and each Ancillary Agreement to which Seller is a party constitutes a valid and binding obligation of Seller, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies.
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Section 3.04 Capitalization. Section 3.04 of the Seller Disclosure Letter sets forth all of the authorized, issued and outstanding (as applicable) share capital of each Target Company. Except as set forth on Section 3.04 of the Seller Disclosure Letter, Seller or a Subsidiary of Seller owns all of equity interests of the Target Companies. The AEA Shares constitute one hundred percent (100%) of the issued and outstanding equity interests of Alternus Energy Americas Inc. The Alternus Lux Shares constitute one hundred percent (100%) of the issued and outstanding equity interests of Alternus Lux. The Solis Shares constitute one hundred percent (100%) of the issued and outstanding equity interests of Solis Bond Company Designated Activity Company. All of the equity interests of the Target Companies have been duly authorized and are validly issued, fully paid and nonassessable (where applicable) and issued free and clear of all Liens, other than Excepted Liens. Except as set forth on Section 3.04 of the Seller Disclosure Letter, no Target Company has any equity securities or securities containing any equity features authorized, issued, reserved for issuance or outstanding, and there are no agreements, options, warrants, convertible or exchangeable securities or other rights or arrangements relating to the interest or capital stock of, or other equity or voting interest in any Target Company existing, authorized or outstanding which provide for the sale, delivery or issuance of any of the foregoing by any Target Company. Except as set forth on Section 3.04 of the Seller Disclosure Letter, there are no authorized, issued, reserved for issuance or outstanding (i) preferred or ordinary shares or other equity interests or voting securities of any Target Company, (ii) securities convertible or exchangeable into equity interests of any Target Company or any Subsidiary of any Target Company, (iii) options, warrants, purchase rights, phantom equities, stock or share appreciation, subscription rights, preemptive rights, conversion rights, exchange rights, calls, puts, rights of first refusal or other Contracts that could require any Target Company or any Subsidiary of any Target Company to issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem equity interests of such Target Company or any Subsidiary of such Target Company, or (iv) stock or share appreciation, phantom equity, profit participation or similar rights with respect to the interest, capital stock or shares of, or other equity or voting interest in, any Target Company or any Subsidiary of any Target Company to which any Target Company is a party or is bound. None of the Target Companies has any outstanding bonds, debentures, notes or other obligations that provide the holders thereof the right to vote (or are convertible or exchangeable into or exercisable for securities having the right to vote) with the owners of any Target Company on any matter.
Section 3.05 Title to Shares. Seller has legal and valid title to all of the Purchased Shares, free and clear of all Liens, other than restrictions imposed by applicable U.S. securities Laws or the Organizational Documents of Seller or the Target Companies. Seller is the sole record and beneficial owner of the Purchased Shares. The Purchased Shares are not subject to any Contract restricting or otherwise relating to the voting, transfer or other disposition of such Purchased Shares, other than restrictions on transfer imposed by applicable U.S. securities Laws or the Organizational Documents of Seller or the Target Companies. Seller will convey legal and valid title to all of the Purchased Shares at the Closing to Purchaser free and clear of all Liens, and Purchaser will be the legal and beneficial owner of all of the Purchased Shares.
Section 3.06 Financial Statements.
(a) Section 3.06(a)(i) of the Seller Disclosure Letter contains true, correct and complete copies of certain of the Seller’s and/or its Subsidiaries’ (i) selected audited balance sheet as of December 31, 2021 (the “Balance Sheet Date”), December 31, 2022 and December 31, 2021 and statements of income, changes in shareholder equity and cash flows for the twelve (12)-month periods then ended (the “Audited Financial Statements”), and (ii) selected unaudited balance sheets as of September 30, 2023 (the “Most Recent Balance Sheet Date”) and statements of income, changes in shareholder equity and cash flows for the six-month period then ended (the “Interim Financial Statements”, and together with the Audited Financial Statements, the “Financial Statements”). The Financial Statements have been based upon, in all material respects, the information contained in Seller’s and/or its Subsidiaries’ books and records, have been prepared in accordance with IFRS or GAAP, as applicable, consistently applied throughout the periods indicated, and present fairly in all material respects the financial position, cash flows and results of operations of the Seller and its Subsidiaries (taken as a whole) as of the times and for the periods referred to therein (subject, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments and the absence of footnotes).
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(b) Section 3.06(b) of the Seller Disclosure Letter contains the projections prepared by Seller, and reflect projections for the three year period beginning on the Closing Date on a year-by-year basis. Such projections are based upon estimates and assumptions stated therein, all of which Seller believes to be reasonable and fair in light of current conditions and current facts known to Seller and, as of the Closing Date, reflect Seller’s good faith and reasonable estimates of the future financial performance of the Target Companies and of the other information projected therein for the period set forth therein.
(c) The Target Companies have no Liabilities, except (i) Liabilities specifically reserved for on the Most Recent Balance Sheet Date contained in the Financial Statements or disclosed in the notes thereto, (ii) Liabilities that were incurred after the Most Recent Balance Sheet Date in the Ordinary Course of Business, (iii) Liabilities specifically disclosed in Section 3.06(c) of the Seller Disclosure Letter, (iv) Liabilities incurred or arising under or in connection with the Transactions, including expenses related thereto; (v) Liabilities that will be discharged or paid off prior to or at the Closing or (vi) Liabilities that would not be material, individually or in the aggregate, to the Target Companies (taken as a whole). As of the date of this Agreement, there is no outstanding Indebtedness for borrowed money (or guarantee thereof) of any Target Company (excluding intercompany Indebtedness for borrowed money between any Target Companies) other than Indebtedness for borrowed money reflected on the consolidated balance sheet of the Target Companies set forth in the Financial Statements or as set forth on Section 3.06(b) of the Seller Disclosure Letter.
(d) The Target Companies maintain internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed with management’s general or specific authorizations as necessary; (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS; and (iii) to the extent applicable, material information relating to the Target Companies is promptly made known to the officers responsible for establishing and maintaining the system of internal control over financial reporting. Since the Look-back Date, no Target Company has identified or been advised by its auditors of any fraud or allegation of fraud, whether or not material, that involves management or other employees who have a role in the Target Companies’ internal controls over financial reporting.
(e) The PCAOB Audited Financial Statements when delivered by Seller in accordance with Section 5.20 will, when so delivered, be based upon, in all material respects, the information contained in the Target Companies’ books and records, be prepared in accordance with GAAP, consistently applied throughout the periods indicated (except as may be indicated in the notes thereto), and present fairly in all material respects the financial position, cash flows and results of operations of the Target Companies (taken as a whole) as of the times and for the periods referred to therein.
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(f) The Acquired Subsidiaries’ financial statements when delivered by Seller in accordance with Section 5.20 will be prepared in accordance the accounting standards required by SEC Guidance, consistently applied throughout the periods indicated (except as may be indicated in the notes thereto), and present fairly in all material respects the financial position, cash flows and results of operations of each of the Acquired Subsidiaries as of the times and for the periods referred to therein.
Section 3.07 Absence of Certain Developments. Since the Most Recent Balance Sheet Date until the date hereof, there has not been any Seller Material Adverse Effect that has arisen and is continuing. Since the Most Recent Balance Sheet Date, except as expressly contemplated by this Agreement or the Ancillary Agreements or as set forth on Section 3.07 of the Seller Disclosure Letter, or as required by applicable Law (including COVID-19 Measures) or as reasonably necessary in light of COVID-19, (a) the Target Companies have operated in the Ordinary Course of Business in all material respects, and (b) no Target Companies have taken any action that would have been prohibited by Section 5.01 if it were taken after the date hereof and prior to the Closing Date.
Section 3.08 Orders.
(a) There is no Governmental Order pending or, to the Seller’s Knowledge, threatened in writing, by or against Seller or any of its Affiliates, that seeks to delay or prevent the consummation of the Transactions.
(b) Section 3.08 of the Seller Disclosure Letter sets forth a list of all Governmental Orders pending or, to Seller’s Knowledge, threatened in writing which, if adversely determined, would be material to the business of the Target Companies (taken as a whole) or would delay or prevent the consummation of the transactions contemplated herein (including the Share Sale) or by the Ancillary Agreements.
Section 3.09 Title to Properties.
(a) Except as set forth on Section 3.09(a) of the Seller Disclosure Letter, the Target Companies own good and marketable title to, or hold pursuant to valid and enforceable leases, all of the material, tangible personal property, used or held for use by them in the conduct of their business that are material to the business of the Target Companies (taken as a whole), free and clear of all Liens, except for Permitted Liens and Excepted Liens.
(b) The real property demised by the Leases described on Section 3.09(b)(i) of the Seller Disclosure Letter (the “Leased Real Property”) constitutes all of the real property leased by the Target Companies. Except as set forth on Section 3.09(b)(ii) of the Seller Disclosure Letter and assuming that such Lease is a valid and binding obligation of the other counterparties thereto, the Leases are in full force and effect, and the applicable Target Company holds a legal, binding, valid, enforceable and existing leasehold interest in each parcel or tract of real property leased by it under each such Lease, subject to proper authorization and execution of such lease by the other party and the application of any bankruptcy or creditor’s rights Laws. Seller has delivered or made available to Purchaser complete and accurate copies of each of the Leases described on Section 3.09(b)(i) of the Seller Disclosure Letter and none of such Leases have been modified in any material respect, except to the extent that such modifications are disclosed by the copies delivered or made available to Purchaser. None of the Target Companies, and to Seller’s Knowledge no other party to any such Leases, is in default, or has delivered or received any notice of default, under any of such Leases and no event has occurred that with notice or the passage of time, or both, would constitute a default, or permit the termination, modification or acceleration of rent under any such Leases, except where such default would not reasonably be expected to be material to the Target Companies, taken as a whole. Except as set forth on Section 3.09(b)(iii) of the Seller Disclosure Letter, (a) none of the Target Companies have subleased, licensed or otherwise granted any Person the right to use or occupy such Leased Real Property or any portion thereof, and (b) none of the Target Companies have collaterally assigned or granted any other security interest in such Leases or any interest therein.
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(c) Except as set forth on Section 3.09(c) of the Seller Disclosure Letter, none of the Target Companies own any real property.
(d) Except as set forth on Section 3.09(d) of the Seller Disclosure Letter, Seller owns no personal property, real property, leased real property or any other asset other than the Purchased Shares.
(e) The Target Companies own, operate or control, or are parties to legally binding Contracts that will result in the Target Companies owning, operating or controlling, the projects set forth on Section 3.09(e) of the Seller Disclosure Letter.
Section 3.10 Tax Matters.
(a) Each Target Company has timely filed or caused to be timely filed (taking into account applicable extensions) with the appropriate taxing authorities all material Tax Returns (including all Income Tax Returns) that are required to be filed by them, and all such Tax Returns are true, correct and complete in all material respects. All material Taxes (including all Income Taxes) due and payable by the Target Companies (whether or not shown on any such Tax Return) have been duly and timely paid. Each Target Company has properly deducted, withheld and collected and timely remitted to the appropriate taxing authorities all Taxes required to be deducted, withheld or collected in respect of any amounts paid or owing to, or received or owing from, any employee, creditor or other third party and each Target Company has complied in all material respects with respect to all applicable Laws relating to payment, reporting, withholding, and collection of Taxes or remittance thereof.
(b) Except as set forth on Section 3.10(b) of the Seller Disclosure Letter, there are no audits, disputes, investigations, claims, inquiries, examinations or other proceedings (whether civil, criminal, judicial, or administrative) with respect to any Tax Return or Taxes of any Target Company pending, in progress, or threatened in writing that have not been resolved or completed.
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(c) No Target Company has received any written notice from any taxing authority of any Income Tax or other material Tax deficiency, assessment, adjustment, proposed adjustment, or other issue relating to any Income Taxes or other material Taxes, which has not been paid or otherwise resolved in full. No Target Company has commenced a voluntary disclosure proceeding in any jurisdiction that has not been resolved or settled. All material deficiencies for Taxes asserted or assessed in writing against any Target Company have been fully and timely (taking into account applicable extensions) paid, settled or withdrawn, and, no such deficiency has been threatened or proposed in writing against any Target Company.
(d) No Target Company (i) has any liability for the Taxes of any Person (other than any Target Company) under Treasury Regulations Section 1.1502-6 or any similar provision of state, local or non-U.S. Tax Law, or as a transferee or successor, by contract, or otherwise, (ii) is or has been a member of an affiliated, consolidated, combined, unitary or similar Tax group (including, for clarity, any affiliated group within the meaning of Section 1504 of the Code (or any similar provision of state, local or non-U.S. Tax Law)) for purposes of filing any Tax Return or paying Taxes, other than a group the common parent of which is the Company; or (iii) is a party to, or has any liability under, any Tax allocation, sharing, indemnification, gross-up, or similar Contract or arrangement or any other Contract or arrangement providing for payments in respect of Taxes or Tax benefits (other than customary indemnification provisions contained in commercial Contracts entered into in the Ordinary Course of Business, the principal purpose of which is not related to Taxes).
(e) No Target Company has waived or extended any statute of limitations in respect of Income Taxes or other material Taxes, or agreed to any extension of time with respect to an assessment or deficiency relating to such Taxes, for any taxable period with respect to which the statute of limitations has not expired (after giving effect to any extension or waiver) (other than any such waivers or extensions that are no longer in effect), nor is any written request for any such extension or waiver from any taxing authority outstanding. None of Seller and the Target Companies has made any election or otherwise taken any action to cause the Partnership Tax Audit Rules to apply to any Target Company at any earlier date than is required by Law.
(f) No Target Company has distributed shares or stock of another Person, or has had its shares or stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or 361 of the Code in the past two (2) years.
(g) No Target Company is a party to any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any corresponding or similar provision of state, local or non-U.S. income Tax Law).
(h) No written claim has been made by a Governmental Authority in any jurisdiction in which any Group Company does not file a Tax Return or pay Taxes that such entity is or may be subject to Tax or required to file Tax Returns in such jurisdiction, which claims have not been resolved or withdrawn.
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(i) Each Target Company is tax resident only in its jurisdiction of organization, incorporation or formation, as applicable, and is not managed or controlled outside such jurisdiction for income Tax purposes.
(j) There are no Liens for Taxes upon any of the Purchased Shares or any asset of any Target Company other than Permitted Liens.
(k) Each Target Company has the U.S. federal income tax classification that is set forth on Section 3.10(k) of the Seller Disclosure Letter, and each Target Company has been so classified for U.S. federal income tax purposes at all times since the date set forth on Section 3.10(k) of the Seller Disclosure Letter.
(l) There are no Income Tax or other material Tax rulings, requests for rulings, technical advice memoranda, closing agreements or similar agreements or rulings relating to Taxes that have been issued to or with respect to the Target Companies or into which any Target Company has entered into that would be binding on any of any Target Company in any taxable period (or portion thereof) after the Closing Date, in each case which agreement or ruling would be effective after the Closing Date.
(m) No Target Company organized or formed under the laws of a jurisdiction outside of the United States (i) is a “surrogate foreign corporation” or “expatriated entity” within the meaning of Section 7874 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) or is treated as a U.S. corporation for U.S. federal Tax purposes by reason of the application of Sections 269B or 7874(b) of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law) or (ii) was created or organized in the United States such that such entity would be taxable in the United States as a domestic entity pursuant to the dual charter provision of Treasury Regulation Section 301.7701-5(a) (or any corresponding or similar provision of state, local or non-U.S. income Tax Law).
(n) Each Target Company has complied in all material respects with respect to any “escheat,” “abandoned property,” “unclaimed property,” or other similar Laws.
The unpaid Taxes of the Target Companies (i) did not, as of the Most Recent Balance Sheet Date, materially exceed the reserves for Tax liabilities (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) included in the unaudited consolidated balance sheets and (ii) do not materially exceed such reserves as adjusted for the passage of time through the Closing Date in accordance with the past practices of the Target Companies in filing its Tax Returns.
Section 3.11 Contracts and Commitments.
(a) Except as set forth on Section 3.11(a) of the Seller Disclosure Letter, no Target Company is party to any:
(i) CBA;
(ii) Contract, agreement or indenture relating to any Indebtedness or to mortgaging, pledging or otherwise placing a Lien on any portion of their properties or assets (A) pursuant to which, any Target Company has incurred or may incur Indebtedness exceeding the Threshold Amount for which any of any Target Company will be liable following the Closing, or (B) relating to any Liens on assets of any Target Company;
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(iii) guaranty of any Indebtedness or other material guaranty;
(iv) Contract, lease or agreement under which it is lessee of, or holds, uses or operates any real or personal property or assets owned by any other party, for which the annual rental or payment commitment exceeds the Threshold Amount;
(v) Contracts or group of related Contracts with any Top Customer or any Top Supplier;
(vi) Contracts or agreements relating to the acquisition or disposition (whether by merger, sale of equity, sale of assets or otherwise) of any Person or business or the equity or substantially all of the assets of any Person by any Target Company since the Look-back Date or the future acquisition or disposition (whether by merger, sale of equity, sale of assets or otherwise) of any Person or business or the equity or substantially all of the assets of any Person by any Target Company or, pursuant to which any Target Company have any continuing “earn out” or other contingent payment obligations or any surviving material indemnification obligations;
(vii) joint venture, partnership, limited liability company or similar agreement with any third party (including any agreement providing for joint development or marketing);
(viii) (A) Contract pursuant to which any Target Company licenses, or is otherwise permitted by a third party to practice, use or register, or receive any other rights under, any material Intellectual Property Rights (other than “shrink wrap licenses,” “click through” licenses and licenses to off-the-shelf Software on standard commercial terms with fees of less than the Threshold Amount per year), (B) Contract pursuant to which a third party licenses, or is permitted to use or register, or granted any other rights under, any Company-Owned IP Rights (other than non-exclusive licenses granted by a Target Company to customers in the Ordinary Course of Business), or (C) Contract affecting any Target Company’s ability to use, enforce, or disclose any material Intellectual Property Rights, such as covenant-not-to-sue, coexistence, consent-to-use, concurrent use, or settlement agreements;
(ix) distribution, sales representative, marketing or similar Contract or agreement that required any Target Company to make commission payments under such agreement in excess of the Threshold Amount during the twelve (12)-month period ended on the Balance Sheet Date;
(x) Contract or agreement pursuant to which any Target Company would be required to make, in the aggregate, capital expenditures in excess of the Threshold Amount;
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(xi) Contract or agreement that (a) materially limits the ability of any Target Company to compete in any line of business or with any product or with any Person or in any geographic area or market or during any period of time or (b) contains covenants that restrict the business activity of any Target Company in any material respect (other than non-disclosure agreements entered into in the Ordinary Course of Business);
(xii) Contract or agreement that contains “most-favored-nation” obligations or restrictions, or rights of first refusal or offer or any similar requirement or right, in each case binding any Target Company in favor of any third party;
(xiii) Contract or agreement where any Target Company is subject to a requirement of exclusive dealing or any similar exclusivity obligation;
(xiv) any interest, currency or hedging derivatives or similar Contracts;
(xv) Contract or agreement that limits the incurrence of Indebtedness or the declaration or payment of any dividends or other distributions;
(xvi) Contract or agreement that involves payment to or by any Target Company in excess of the Threshold Amount annually;
(xvii) Contract or agreement whose termination (other than those termination by passage of time) would have a Seller Material Adverse Effect;
(xviii) management agreement or other Contract for the employment or engagement of any Service Provider on a full time, part time, consulting or other basis that: (A) provides for annual compensation (whether cash and/or otherwise) which may exceed $150,000, (B) provides for the payment of any cash or other compensation or benefits upon or in connection with the consummation of the transactions contemplated by this Agreement, (C) provides for the payment of any cash or other compensation or benefits related to a retention, severance, transaction-based or change in control bonus or other similar Contract with any Service Provider or (D) restricts any Target Company’s ability to terminate the employment or engagement of any Service Provider at any time for any lawful reason or for no reason without penalty or Liability; or
(xix) Contract or agreement that relates to the settlement of any Action (A) with any Governmental Authority since the Look-back Date; (B) that materially restricts or imposes obligations upon any Target Company; or (C) requires payment by an Target Company of more than the Threshold Amount after the date hereof.
(b) Each Contract described in clauses (i) through (xix) of Section 3.11(a) is a “Material Contract”. Seller has provided to Purchaser true and correct copies of all Material Contracts, together with all supplements, amendments, waivers or other changes thereto.
(c) Neither any Target Company nor, to Seller’s Knowledge, any other party thereto is in material breach of, violation of or default under any Material Contract. No event has occurred that with notice or lapse of time or both would constitute a material breach of, violation of or default under, any Material Contract by any Target Company, or, to Seller’s Knowledge, any counterparty. All Material Contracts are valid and in full force and effect and constitute legal, valid and binding obligations of the applicable Target Company and, to Seller’s Knowledge, each counterparty, and are enforceable against the applicable Target Company and, to Seller’s Knowledge, the counterparty thereto in accordance with their respective terms, except as enforceability may be limited by bankruptcy laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies.
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Section 3.12 Intellectual Property; Information Technology; Privacy.
(a) Section 3.12(a) of the Seller Disclosure Letter sets forth a list of all (i) Patents, registered Marks, registered Copyrights and domain name registrations, including any applications for any of the foregoing, included in the Company-Owned IP Rights (the “Company Registered IP”) and (ii) material Software included in the Company-Owned IP Rights.
(b) The Target Companies, as the case may be, exclusively own all right, title and interest in and to the Company-Owned IP Rights, free and clear of all Liens except for Permitted Liens. Except as would not be material to the Target Companies taken as a whole, (i) the Company Registered IP is subsisting, valid, and enforceable, and (ii) the Target Companies are current in the payment of all registration, maintenance and renewal fees with respect to the Company Registered IP.
(c) None of the Company-Owned IP Rights are subject to any Government Order adversely affecting the use thereof or rights thereto by the Target Companies. There is no Action pending or, to Seller’s Knowledge, threatened against any Target Company concerning the ownership, use, scope, patentability, registrability, validity or enforceability of any Company-Owned IP Rights (other than proceedings in the Ordinary Course of Business before any Governmental Authority related to the application for any item of Company Registered IP) and the Target Companies have not received any written notices regarding the foregoing.
(d) Since the Look-back Date, to Seller’s Knowledge, there has been and there is no written allegation made by any Target Company of, and there has been no and there is no infringement, misappropriation or other violation of any material Company-Owned IP Rights by any Person.
(e) Except as would not reasonably be expected to be material to the Target Companies taken as a whole, the operation of any Target Company as currently conducted as of the date hereof, and the operation of any Target Company as conducted since the Look-back Date, does not infringe, misappropriate or otherwise violate, and has not infringed, misappropriated or otherwise violated, the Intellectual Property Rights of any other Person. No Target Company has received any written notice since the Look-back Date alleging that the operation of any Target Company infringes, misappropriates, or otherwise violates the Intellectual Property Rights of any other Person (including any demand or request from any Person that any Target Company license any Intellectual Property Rights). There is no Action pending, or, to Seller’s Knowledge, threatened against any Target Company alleging that the operation of the business of any Target Company has infringed, misappropriated or otherwise violated any Intellectual Property Right of any third party.
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(f) Except as set forth on Section 3.12(f) of the Seller Disclosure Letter and as would not reasonably be expected to be material to the Target Companies taken as a whole, the Target Companies have secured from all founders, consultants, advisors, employees, freelancers, writers, and independent contractors who independently or jointly contributed to or participated in the conception, reduction to practice, creation or development of any Intellectual Property Right for or on behalf of, or under the direction or supervision of, the Target Companies (each, a “Contributor”), unencumbered and unrestricted exclusive ownership of, all of the Intellectual Property Rights developed or created in connection with the employment or engagement of any Contributor, that the Target Companies do not otherwise own by operation of law. No Contributor owns or, to Seller’s Knowledge, claims any rights, licenses, claims or interest whatsoever with respect to any Company-Owned IP Rights. Except as would not reasonably be expected to be material to the Target Companies taken as a whole, each Target Company has obtained written and enforceable Contracts with respect to invention disclosure and present assignments of such Intellectual Property Rights to such Target Company, from all current and former Contributors.
(g) The Target Companies have taken commercially reasonable steps to protect and maintain any Trade Secrets included in the Company IP Rights, and to Seller’s Knowledge, there have been no misappropriation or unauthorized uses or disclosures of any such Trade Secrets. The Target Companies have entered into reasonable confidentiality agreements with each Person having access to the Target Companies’ Trade Secrets. To Seller’s Knowledge, no such Person is in violation of any such agreement.
(h) The Target Companies exclusively own all right, title and interest in and to, or otherwise possess valid, enforceable and sufficient licenses and rights to, all Company IP Rights that are material to the Target Companies’ business (subject to Section 3.12(b) with respect to the Company-Owned IP Rights) and all such Company IP Rights shall be owned or available for use by the Target Companies immediately after the Closing on terms and conditions identical to those under which the Target Companies owned or used such Company IP Rights immediately prior to the Closing. The Target Companies may exercise, transfer, or license the Company IP Rights without material restriction or material payment to any Person. Neither this Agreement nor any of the transactions contemplated hereby will restrict or impair the right of the Target Companies to transfer, alienate, enforce, own, use or license, or affect the validity or enforceability of, any Company-Owned IP Rights.
(i) The Target Companies (i) have taken commercially reasonable steps to protect the confidentiality, integrity and security of the Company Systems and have implemented and comply with commercially reasonable written data and information security, business continuity and disaster recovery plans and procedures that are consistent with industry best practices and applicable Laws, and (ii) have taken commercially reasonable steps to assess and test such plans and procedures, and such assessments and tests have not identified any material issues that remain unremedied. Since the Look-back Date, the Company Systems have not been affected by any material failure that has not been remedied in all material respects. To Seller’s Knowledge, since the Look-back Date, there have been no security breaches that materially affected the operation of the Company Systems or have not been remedied in all material respects. The Target Companies have purchased a sufficient number of licenses (whether licensed by seats or otherwise) for all Software used in or necessary for the operation of the businesses of the Target Companies as presently conducted.
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(j) The Target Companies (and, to Seller’s Knowledge, any third Person using Personal Information on their behalf) comply in all material respects with its internal policies and privacy statements, policies and procedures related to privacy and security of Company Systems (and the data therein, including Personal Information), the Target Companies’ Contracts, and applicable Privacy Laws (including the most current version of the Payment Card Industry Data Security Standards, as applicable). Since the Look-back Date, no Target Company has received any written or, to Seller’s Knowledge, unwritten claims, notices or complaints asserting non-compliance with applicable Privacy Laws or privacy statements, policies, procedures or Contracts regarding the Target Companies’ information practices or the use, access, collection, retention, processing, disclosure, modification or destruction of any Personal Information, or alleging a violation of any individual’s privacy, publicity or confidentiality rights, including from the U.S. Federal Trade Commission, any similar foreign bodies, or any other Governmental Authority and there is no Action pending, or, to Seller’s Knowledge, threatened against any Target Company relating to any of the foregoing. The Target Companies have taken reasonable actions (including implementing reasonable technical, physical or administrative safeguards) to protect all Personal Information used by the Target Companies against any unauthorized use, access or disclosure.
Section 3.13 Litigation. Except as set forth on Section 3.13 of the Seller Disclosure Letter, since the Look-back Date there have been no, and there currently are no Actions pending or, to Seller’s Knowledge, threatened against the Target Companies that, if adversely decided or resolved, have had or would reasonably be expected be material to the Target Companies taken as a whole, at law or in equity, before or by any other Governmental Authority, and no Target Company is subject to any material outstanding judgment, order, investigation, decree, injunction, ruling, decision or award of any court or Governmental Authority.
Section 3.14 Employee Benefit Plans.
(a) Section 3.14(a) of the Seller Disclosure Letter sets forth an accurate and complete list of all Plans. None of the Target Companies has any plan or commitment to, or has represented that it will, adopt or enter into any additional Plans or to materially amend or terminate any existing Plan. Each of the Plans that is intended to be qualified under Section 401(a) of the Code is so qualified and has received a favorable determination letter from the IRS or is a prototype plan that is entitled to rely on an opinion letter issued by the IRS to the prototype plan sponsor regarding qualification of the form of the prototype plan and no such determination letter has been revoked and nothing has occurred and no fact, condition, or circumstance exists that could reasonably be expected to adversely affect the qualified status of such Plan. Each trust established in connection with any Plan which is intended to be qualified under Section 501(a) of the Code is so exempt, and nothing has occurred and no fact, condition, or circumstance exists that could reasonably be expected to adversely affect the qualified status of any such trust. Each Plan has been established, maintained, operated, funded, and administered in accordance with its terms in all material respects and in compliance in all material respects with the requirements of the Code, ERISA and all other applicable Law. No Plan, and no Target Company or any Plan fiduciary with respect to any Plan, in any case, is the subject of an audit or investigation by the Internal Revenue Service, the Department of Labor, the Pension Benefit Guaranty Corporation or any other Governmental Authority, nor is any such audit or investigation pending or, to Seller’s Knowledge, threatened.
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(b) With respect to each Plan (and each related trust or other funding vehicle), all contributions (including employer contributions and employee salary reduction contributions, premiums, distributions, payments, distributions, reimbursements, and accruals that are due have been timely made or properly accrued in accordance with the terms of such Plan and applicable Law or, if not yet due, have been properly accrued for in accordance with any applicable accounting requirements. All wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of any Service Providers have been timely paid or made in full or, to the extent not yet due, properly accrued in accordance with any applicable accounting requirements, the terms of the Plan and all applicable Law. There have been no “prohibited transactions” within the meaning of Section 4975 of the Code or Section 406 of ERISA and no breach of fiduciary duty (as determined under ERISA) or other failure to act or comply in connection with the administration or investment of assets has occurred with respect to any Plan. There is no current, pending or, to Seller’s Knowledge, threatened Actions (except for routine claims for benefits) relating to any Plan. No Target Company has made any filing in respect of any Plan under the Employee Plans Compliance Resolution System or the Department of Labor Delinquent Filer Program. Each Target Company and each of its Affiliates has complied and is in compliance in all material respects with the requirements of (i) the Patient Protection and Affordable Care Act, including the Health Care and Education Reconciliation Act of 2010, as amended, (ii) ) Section 4980B of the Code and any similar state Law and (iii) the applicable requirements of the Health Insurance Portability and Accountability Act of 1996, as amended, and the Laws (including the proposed regulations) and no Target Company has incurred (whether or not assessed), or is reasonably expected to incur or to be subject to, any material Tax or other penalty thereunder (including with respect to the reporting requirements under Sections 6055 and 6056 of the Code, as applicable). The obligations or insured contingencies under all Plans that provide health, welfare or similar insurance are fully insured by bona fide third-party insurers and all applicable premiums are paid up to date. No Plan is maintained through a human resources and benefits outsourcing entity, professional employer organization, or other similar vendor or provider.
(c) Seller has made available to Purchaser, to the extent applicable, complete, current and correct copies of: (i) all documents embodying or governing each Plan and each related trust or funding agreement and insurance policy, if any (or a written description of the material terms and conditions of each Plan that is unwritten), and any amendments thereto, (ii) the most recent summary plan description (and summary of material modifications) and any other notice or description provided to or agreed with employees, (iii) the three (3) most recently filed Form 5500 annual reports with all required schedules and attachments, (iv) the current determination letter or opinion letter, as applicable, received from the IRS, (v) the nondiscrimination, coverage and compliance testing results for the three (3) most recently completed plan years, (v) any nonroutine communications to or from any Governmental Authority, or any notices to or from a Governmental Authority relating to a Plan, (vi) the three (3) most recently prepared actuarial reports, financial statements and trustee reports, if any, relating to the Plan, and (vii) all material records, notices and filings concerning Internal Revenue Service or U.S. Department of Labor audits or investigations.
(d) No Plan is and neither any Target Company nor any ERISA Affiliate maintains, sponsors, has ever sponsored, contributes to, is required to contribute to, has ever contributed to, or could reasonably be expected to have, or has ever had, any Liability (whether fixed or contingent) with respect to a: (i) defined benefit plan (including a defined benefit plan as defined in Section 3(35) of ERISA) or any other plan, including a plan that is or was subject to Title IV of ERISA, Section 412 or 430 of the Code, or Section 302 of ERISA, (ii) “multiemployer plan” (as such term is defined under Section 3(37) of ERISA), (iii) multiple employer plan as described in Section 413(c) of the Code, (iv) “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA or (v) a “voluntary employee benefit association” (as such term is defined under Section 501(c)(9) of the Code). No Target Company nor any ERISA Affiliate has promised to any Person, has ever promised to any Person, has any Liability or obligation, or has ever had any Liability or obligation, to provide post-employment health, life, disability or other welfare benefits other than as required under Section 4980B of the Code or any similar applicable state Law for which the covered Person pays the full cost of coverage for themselves and their beneficiaries. Neither Target Company has incurred any Liability under Title I of ERISA.
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(e) Neither the execution, delivery and performance of this Agreement by Seller nor the consummation by the Company of the transactions contemplated hereby and thereby will not (alone or in combination with any other event, including a termination or restructure of employment on or following the Closing), directly or indirectly, result in (i) payment or provision of any additional, or an increase in the amount of, compensation, share incentives or other benefits, an acceleration of the amount of any compensation or benefits, or entitlement to any severance or similar benefit or change in employment status or responsibilities, payable to or in respect of any Service Provider, (ii) any acceleration in the vesting or the timing of payment of any outstanding options, compensation or benefits held by or payable to or in respect of any Service Provider, (iii) any increased, enhanced or accelerated funding obligation with respect to any Plan, (iv) any restriction on the ability of any Target Company to amend, modify or terminate any Plan, or (v) any forgiveness of indebtedness of any current or former employee, officer, director or consultant of any Target Company.
(f) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will (alone or in conjunction with any other event) result in an “excess parachute payment” to any “disqualified individual” (each, within the meaning of Section 280G of the Code).
(g) No Target Company has any obligation to pay a Tax “gross-up”, reimbursement or indemnification payment to any Person, including for the imposition of any excise Tax under Section 4999 of the Code or any Tax imposed under Section 409A of the Code or 457A of the Code.
(h) No compensation has been or would reasonably be expected to be, or has ever been, includable in the gross income of any current or former “service provider” (within the meaning of Section 409A of the Code) of any Target Company or other Person as a result of the operation of Section 409A of the Code or Section 457A of the Code.
(i) No Target Company has ever sponsored, maintained, contributed to, or has been required to sponsor, maintain, participate in or contribute to, any employee benefit plan, program, or other arrangement providing compensation or benefits to any employee or former employee (or any dependent thereof) which is subject to the Laws of any jurisdiction outside of the United States.
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Section 3.15 Insurance. All material policies of insurance maintained by or on behalf of each Target Company (the “Insurance Policies”) are set forth on Section 3.15 of the Seller Disclosure Letter and true and complete copies of such Insurance Policies have been provided to Purchaser. All Insurance Policies that are material to the business of the Target Companies (taken as a whole) are, and since the Look-back Date have been, in full force and effect and all premiums due and payable in respect thereof have been paid and no written notice of cancellation, termination, material amendment or denial of coverage has been received by any Target Company with respect to any such policy. All such Insurance Policies maintained by the Target Companies are in full force and effect, and no Target Company is in material default with respect to the provisions of any such policies or its payment obligations thereunder. There is no claim pending under such Insurance Policies as to which any Target Company has received written notice that coverage has been denied.
Section 3.16 Compliance with Laws.
(a) Seller is in compliance, in all material respects, with all Laws applicable to its business.
(b) Each Target Company is, and since the Look-back Date has been, in material compliance with all applicable Laws and regulations of any Governmental Authority. Since the Look-back Date, no Target Company has received any written notice from a Governmental Authority of any Action against any of them alleging any failure to comply with any applicable Law or regulation.
(c) Since the Look-back Date, (i) none of the Target Companies have violated any Law relating to anti-bribery or anticorruption, including the U.S. Foreign Corrupt Practices Act of 1977, as amended and as in effect at the time of such action (all such Laws, “Anticorruption Laws”), (ii) no director, officer, or employee, or, to Seller’s Knowledge, representative, consultant or other Person acting for or on behalf of any Target Company has violated any Anticorruption Law, and (iii) has been the subject of any investigation, inquiry, or enforcement proceeding by any court, governmental, administrative or regulatory body, or any customer regarding any violation or alleged violation of any Anticorruption Law, and no such investigation, inquiry or proceeding is pending or, to Seller’s Knowledge, threatened. Each Target Company has adopted and maintains reasonably adequate policies, procedures and controls to comply with all applicable Anticorruption Laws in all material respects, including policies and procedures relating to prevention of bribery, accounting for financial transactions, due diligence on third parties and training of personnel.
(d) Since the Look-back Date, neither any Target Company nor any director, officer or managing employee of any Target Company has been a Sanctioned Person.
Section 3.17 Permits. Except as set forth on Section 3.17 of the Seller Disclosure Letter, and as would not reasonably be expected to be material to the Target Companies taken as a whole, the Target Companies hold and are, and has been, since the Look-back Date, in compliance with, in all material respects, all Permits that are required by any Governmental Authority to conduct the business as now conducted and all such Permits are valid and in full force and effect. No Target Company has received any written notice from any Governmental Authority or any other Person regarding (A) any actual or alleged violation of or failure to comply with any term or requirement of any Permit, or (B) any actual or proposed revocation, withdrawal, suspension, cancellation, termination of, or modification to any Permit, except where such occurrence would not be material to the business.
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Section 3.18 Environmental Compliance. Except as set forth on Section 3.18 of the Seller Disclosure Letter:
(a) The Target Companies are, and since the Look-back Date have been, in compliance with all applicable Environmental Laws, except where the failure to comply would not be material to the Target Companies.
(b) The Target Companies have obtained and possess all material permits, licenses and other authorizations required under Environmental Laws for the operations of the Target Companies as currently conducted and are in compliance with all terms and conditions of such permits, licenses and authorizations in all material respects.
(c) No Target Company has received, since the Look-back Date, any written notice of material violation of or notice of material Liability arising under, Environmental Laws, relating to any Target Company or its facilities, the subject of which is unresolved.
(d) There are no Actions pending or, to Seller’s Knowledge, threatened against any Target Company, pursuant to Environmental Laws that would be material to the Target Companies.
(e) No Target Company is subject to any outstanding judgment, order or decree of any Governmental Authority relating to a violation of or Liability under Environmental Laws, and that would be material to the Target Companies.
Section 3.19 Customers and Suppliers. Section 3.19 of the Seller Disclosure Letter sets forth an accurate list of the top five (5) customers of the Target Companies based on calendar year 2021 sales (the “Top Customers”) and the top five (5) suppliers based on calendar year 2021 spend of the Target Companies (the “Top Suppliers”). Since January 1, 2021, no Target Company has received any notice from any Top Supplier to the effect that such supplier will stop, materially decrease the rate of, or seek to make a material change to the terms (whether related to payment, price or otherwise) with respect to, developing or supplying materials, products or services to any Target Company. Since January 1, 2021, no Target Company has received any notice from any Top Customer to the effect that such customer will stop, or materially decrease the rate of, or seek to make a material change to the terms (whether related to payment, price or otherwise) with respect to, purchasing services from the Target Companies. To Seller’s Knowledge, no supplier or customer of a Target Company is violating any Law.
Section 3.20 Affiliated Transactions. Except as set forth on Section 3.20 of the Seller Disclosure Letter, none of Seller, any equityholder, partner, member, officer, director, employee or any Affiliate or Subsidiary of Seller (other than any Target Company) or any officer, director, manager, equityholder or Affiliate of any Target Company or any individual in the immediate family of any of the foregoing, is a party to any arrangement, agreement, Contract, commitment or transaction with or owes any money to any Target Company (or any Target Company owes any money to, or guarantees any payment by, any such Person) or has any interest in any material property, asset or right, tangible or intangible, used by any Target Company, or has any material interest in a Person party to any arrangement, agreement, Contract, commitment or transaction with any Target Company.
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Section 3.21 Employees.
(a) (i) No Target Company has experienced any, nor to Seller’s Knowledge has there been any threatened, strike, work stoppage, unfair labor practice charge, labor grievance, labor arbitration, lockout, slowdown, picketing, hand billing or other material labor or industrial relations dispute, in each case since the Look-back Date, (ii) none of the employees of the Target Companies are represented by any trade union, works council, labor organization, employee association or representative with respect to their employment with any Target Company, (iii) since the Look-back Date, (a) to Seller’s Knowledge, there has been no labor organizing effort or other industrial relations dispute pending or threatened with respect to employees of any Target Company and (b) to Seller’s Knowledge, no trade union, works council, labor organization, employee association or representative or group of employees of the Target Companies has made a demand for recognition or certification, and there have been no representation or certification proceedings or petitions seeking representation pending with the National Labor Relations Board, any other labor relations tribunal or authority or any other Governmental Authority, (iv) no Target Company is, or has ever been, party to or otherwise bound by any CBA or collective bargaining relationship with any trade union, works council, labor organization, employee representative or association and no CBAs are currently being negotiated by any Target Company, and (v) since the Look-back Date, the Target Companies have been in material compliance with all, and there are no pending or threatened claims or proceedings against any Target Company under any, applicable Laws respecting labor and employment, including Laws, statutes rules and regulations respecting, if applicable, terms and conditions of employment of employees, prospective employees and former employees, employment practices, hiring practices, background checks, child labor, pay equity, wrongful or unfair discharge or dismissal, collective bargaining and labor relations, fair labor standards, reasonable accommodations, workers’ compensation, document retention, notice, employment and reemployment rights of members of the uniformed services, secondment, occupational safety and health requirements, wages and hours (including the classification of independent contractors and exempt and non-exempt employees), meal and rest breaks, withholding and remittance of Taxes, employment discrimination, harassment, retaliation, equal opportunity/employment equality, whistleblowing, disability rights or benefits, employee trainings and notices, employee leave issues, paid time off, COVID-19, affirmative action, plant closures, redundancies and layoffs (including, if applicable, the WARN Act or any collective redundancy legislation), workers’ compensation, and unemployment insurance and related matters.
(b) (i) The Target Companies have, since the Look-back Date, properly classified each of its Service Providers as “employees” or “independent contractors” and, if applicable, as “exempt” or “non-exempt” for all purposes (including with respect to eligibility for minimum wage and overtime under the Fair Labor Standards Act of 1938, as amended, or similar applicable non-U.S. Law) and have properly reported all compensation paid to such persons for all purposes, and (ii) the Target Companies have fully and timely paid all wages, salaries, wage premiums, commissions, bonuses, severance and termination payments, redundancy payments, fees, and other compensation that have come due and payable to their current or former employees and independent contractors under applicable Law, Contract or company policy.
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(c) Each Target Company is, and has at all times since the Look-back Date been, in compliance in all material respects with, and has not materially violated the terms and provisions of, any applicable immigration legislation in any jurisdiction, including the Immigration Reform and Control Act of 1986, as amended, and all related regulations promulgated thereunder (“Immigration Laws”). All current and former Service Providers are, and have at all times been, legally authorized to work in the territory in which they perform the duties of their employment, and with respect to each current Service Provider, the applicable Target Company has all times collected and has retained in their records a current Form I-9 (Employment Eligibility Verification Form) and all other records, documents, or other papers and on-boarding materials that are generally collected in connection with the completion of the Form I-9. No Target Company has, since the Look-back Date, been warned, fined, or otherwise penalized by reason of its failure to comply with the Immigration Laws, nor is any such proceeding pending or, to Seller’s Knowledge, threatened.
(d) To Seller’s Knowledge, no Service Provider is in violation of any material term of any material employment agreement, nondisclosure agreement, common law non-disclosure obligations, fiduciary duty, noncompetition agreement, nonsolicitation agreement, restrictive covenant or other obligation: (i) owed to any Target Company; or (ii) owed to any third party with respect to such person’s right to be employed or engaged by any Target Company.
(e) No current employee of any Target Company or other Service Provider with annualized compensation at or above $150,000 has informed any Target Company or any of its Affiliates (whether in writing or otherwise) of any plan to terminate employment with or services for any Target Company and, to Seller’s Knowledge, no such employee intends to terminate his or her employment prior to the Closing.
(f) No Target Company is a party to, or otherwise bound by, any consent decree with, or citation, direction, order, award or improvement notice from or issued by, any Governmental Authority relating to employees, employment practices or occupational health and safety. Since the Look-back Date, to Seller’s Knowledge, (i) no allegation involving, directly or indirectly, sexual or other unlawful harassment or discrimination has been made, asserted or threatened against (A) any officer of any Target Company or (B) any current or former Service Provider, and (ii) none of the Target Companies or current or former Service Provider is party to any agreement resolving or otherwise related to direct or indirect allegations of sexual or other unlawful harassment or discrimination. To Seller’s Knowledge, no event has occurred or circumstance exists that could reasonably be expected to serve as a basis for any such allegation of sexual or other unlawful harassment or discrimination.
(g) No employee layoff, facility closure or shutdown, reduction-in-force, furlough, temporary layoff, material work schedule change or reduction in hours, or reduction in salary or wages, or other workforce changes affecting employees of any Target Company has occurred since the Look-back Date or is currently contemplated, planned or announced, including as a result of COVID-19 or any Law directive, guideline or recommendations by any Governmental Authority in connection with or in response to COVID-19. The Target Companies have not otherwise experienced any material employment-related Liability with respect to COVID-19. Since the Look-back Date, no Target Company has effectuated any “mass layoff” or “plant closing” (each as defined in the WARN Act), “collective redundancy” or implemented any early retirement or exit incentive program, in each case, in violation of applicable Law (including, where applicable, the WARN Act).
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(h) (i) Each Target Company has paid in full (other than remuneration accrued for the current salary period or for reimbursement of business expenses) to all of its employees or adequately accrued for in accordance with applicable accounting requirements all wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of such employees; and (ii) since the Look-back Date, there is no claim with respect to payment of wages, salary or overtime pay that has been asserted or is now pending or, to the Seller’s Knowledge, threatened before any Governmental Authority with respect to any current or former employees of any Target Company. There are no material Liabilities, whether contingent or absolute, of any Target Company (or the Business) relating to workers’ compensation benefits that are not fully insured against by a bona fide third-party insurance carrier. With respect to each Plan and with respect to each state workers’ compensation arrangement that is funded wholly or partially through an insurance policy or public or private fund, all premiums required to have been paid to date under such insurance policy or fund have been paid.
(i) Schedule 3.21(i) contains a true, correct and complete list of the names and current role, annual salary rates or current hourly wages (including any overtime arrangements), as applicable, bonus opportunity, share incentives, pension arrangements, commission opportunity, other compensation and benefits (separately identifying each category of compensation and including contingent entitlements), hire date, accrued vacation and paid-time-off, principal work location, employing Person and leave status of all present employees of each Target Company and, if applicable, each such employee’s status as being exempt or nonexempt from the application of state and federal wage and hour laws applicable to employees who do not occupy an executive, administrative, or professional position.
(j) No Target Company has used the services of any agency workers, or where applicable in the United States of America, any temporary employees or “leased employees” (within the meaning of Section 414(n) of the Code).
Section 3.22 Seller Filings. Seller has filed and furnished in a timely manner all reports, schedules, forms, prospectuses and registration, proxy and other statements, in each case, required to be filed or furnished by it with or to the Companies Registration Office (collectively, and in each case including all exhibits thereto and documents incorporated by reference therein, the “Seller Filings”). As of their respective effective dates, the Seller Filings complied in all material respects with the requirements of applicable Law as in effect on the applicable date, applicable to such Seller Filings, and none of the Seller Filings as of such respective dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
Section 3.23 Seller Information. The information relating to Seller or any Target Company supplied by Seller for inclusion in the Proxy Statement will not, as of the date on which the Proxy Statement (or any amendment or supplement thereto) is first distributed to the stockholders of Purchaser or at the time of the Purchaser Special Meeting, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, Seller makes no representation, warranty or covenant with respect to: (a) statements made or incorporated by reference therein based on information supplied by Purchaser for inclusion or incorporation by reference in the Proxy Statement or any Purchaser SEC Documents; or (b) any projections or forecasts included in the Proxy Statement.
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Section 3.24 Brokerage. Other than fees or commissions for which Seller will be solely responsible, there are no claims for, and the Target Companies, Purchaser and their respective Affiliates have no liability or obligation to pay, brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement or the Ancillary Agreements based on any arrangement or agreement made by or on behalf of Seller for which any Target Company, Purchaser or any of their respective Affiliates is or may be liable.
Section 3.25 Investment Representations.
(a) Seller is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act. Seller acknowledges that Purchaser has the right to require evidence of its status as an accredited investor, if necessary.
(b) Seller acknowledges that it has prior investment experience, including investments in non-listed and non-registered securities, or has employed the services of an investment advisor, attorney or accountant to evaluate the merits and risks of such an investment on its behalf, and Seller represents that it understands the highly speculative nature of an investment in Purchaser Common Stock, which may result in the loss of the total amount of such investment.
(c) Seller has adequate means of providing for Seller’s current needs and possible contingencies, and Seller has no need, and anticipates no need in the foreseeable future, for liquidity in Seller’s investment in Purchaser Common Stock. Seller is able to bear the economic risks of this investment and, consequently, without limiting the generality of the foregoing, Seller is able to hold the Purchaser Common Stock for an indefinite period of time and has a sufficient net worth to sustain a loss of the entire investment in the event such loss should occur.
(d) Seller understands and acknowledges that the acquisition of the Purchaser Common Stock involves substantial risk. Seller has such knowledge and experience in financial or business matters that the Seller is capable of evaluating the merits and risks of its investment in the Purchaser Common Stock.
(e) Seller is acquiring the Purchaser Common Stock for its own account, for investment purposes only and not with a view toward, or for sale in connection with, any distribution thereof, or with any present intention of distributing or selling any Purchaser Common Stock in violation of the federal securities Laws, any applicable foreign or state securities Laws or any other applicable Law.
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(f) Seller understands and acknowledges that the Purchaser Common Stock has not been registered under the Securities Act, any United States state securities Laws or any other applicable foreign Law. Seller acknowledges that such securities may not be transferred, sold, offered for sale, mortgaged, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provision of applicable United States federal, United States state, or other Law or pursuant to an applicable exemption therefrom.
Section 3.26 No Other Representations and Warranties. SELLER HEREBY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE IV, NONE OF PURCHASER OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE, IS MAKING, OR SHALL BE DEEMED TO MAKE ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, TO SELLER, ANY OF ITS AFFILIATES OR REPRESENTATIVES OR ANY OTHER PERSON, WITH RESPECT TO PURCHASER OR ANY OF ITS BUSINESSES, ASSETS OR PROPERTIES OF THE FOREGOING, OR OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, FUTURE RESULTS, PROPOSED BUSINESSES OR FUTURE PLANS. WITHOUT LIMITING THE FOREGOING AND NOTWITHSTANDING ANYTHING TO THE CONTRARY, NONE OF PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES SHALL BE DEEMED TO MAKE TO SELLER OR ITS AFFILIATES OR REPRESENTATIVES ANY REPRESENTATION OR WARRANTY OTHER THAN AS EXPRESSLY MADE BY PURCHASER TO SELLER IN ARTICLE IV. SELLER HEREBY ACKNOWLEDGES THAT IT HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY THAT IS NOT EXPRESSLY SET FORTH IN ARTICLE IV OF THIS AGREEMENT.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in (i) the Purchaser Disclosure Letter (each of which qualifies (a) the correspondingly numbered representation, warranty or covenant if specified therein and (b) such other representations, warranties or covenants where its relevance as an exception to (or disclosure for purposes of) such other representation, warranty or covenant is reasonably apparent on the face of such disclosure), and/or (ii) the Purchaser SEC Documents, and subject to the terms, conditions and limitations set forth in this Agreement, Purchaser hereby represents and warrants to Seller, as of the date of this Agreement and the Closing Date (except if the representation and warranty speaks as of a specific date prior to the Closing Date, in which case as of such earlier date), as follows:
Section 4.01 Organization and Power. Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority and all authorizations, licenses and permits necessary to own, lease and operate its properties and to carry on its businesses as now conducted. Purchaser is not in breach of Purchaser’s Organizational Documents. Complete and correct copies of the Organizational Documents of Purchaser, as in effect as of the date of this Agreement, have been made available to Seller.
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Section 4.02 Subsidiaries. Purchaser has no direct or indirect Subsidiaries, and does not own or hold the right to acquire any shares or stock, partnership interest or joint venture interest or other equity ownership interest in any other partnership, company, corporation, organization or entity.
Section 4.03 Authorization; No Breach; Valid and Binding Agreement.
(a) Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is a party, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby (including the Share Sale) and thereby. The execution, delivery and performance of this Agreement and the Ancillary Agreements by Purchaser and the consummation of the transactions contemplated hereby have been duly and validly authorized by all requisite corporate action on the part of Purchaser, and no other corporate actions or proceedings on the part of Purchaser are necessary to authorize the execution, delivery or performance of this Agreement or the Ancillary Agreements or to consummate the transactions contemplated hereby and thereby, other than the Purchaser Shareholder Approval.
(b) Except for the Purchaser Shareholder Approval, the execution, delivery and performance of this Agreement and the Ancillary Agreements by Purchaser and the consummation of the transactions contemplated hereby and thereby do not and will not conflict with or result in any breach of, constitute a default (or an event that, with or without notice or lapse of time or both, would become a default) under, result in a violation of, result in the creation of any Lien upon any assets or properties of Purchaser under, give rise to any right of payment, penalty, modification, amendment or termination, cancellation or acceleration with respect to, or require any authorization, consent, approval, exemption or other action by, notice to or filing with any court or other Governmental Authority under (i) the provisions of Purchaser’s Organizational Documents, (ii) any Contract or instrument or Permit to which Purchaser or its or their respective properties or assets is bound, or (iii) any Law, statute, rule or regulation or order, judgment or decree to which Purchaser is subject or its or their respective properties or assets are subject; except, with respect to clause (ii) or (iii) of this Section 4.03(b), where the failure to obtain such authorization, consent, approval or exemption would not, individually or in the aggregate, have a Purchaser Material Adverse Effect.
(c) The execution and delivery of this Agreement or any Ancillary Agreement by Purchaser do not, and the performance of this Agreement or any Ancillary Agreement by Purchaser will not, require any Regulatory Approval, except for compliance with, filings under, and approvals of Governmental Authorities relating to, the requirements of the HSR Act, the federal securities Laws and/or any U.S. state securities or “blue sky” Laws, the rules and regulations of NASDAQ.
(d) This Agreement has been, and each Ancillary Agreement to which Purchaser is a party has been or will be at Closing, as applicable, duly executed and delivered by Purchaser, as applicable, and assuming that this Agreement and each Ancillary Agreement is a valid and binding obligation of the other parties hereto or thereto, this Agreement and each Ancillary Agreement to which Purchaser is a party constitutes a valid and binding obligation of Purchaser, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy Laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies.
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Section 4.04 Orders. Section 4.04 of the Purchaser Disclosure Letter sets forth a list of all Governmental Orders pending or, to the Purchaser’s Knowledge, threatened in writing which, if adversely determined, would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect or would delay or prevent the consummation of the transactions contemplated herein (including the Share Sale) or by the Ancillary Agreements.
Section 4.05 Purchaser Trust Account. As of September 30, 2022, the Purchaser Trust Amount is approximately $233 million (including, if applicable, an aggregate of $8,050,000 of deferred underwriting commissions and other fees being held in the Purchaser Trust Account payable to the underwriters of the IPO upon consummation of a Business Combination (the “Deferred Underwriting Commissions”)), with such funds invested in government securities or money market funds meeting certain conditions pursuant to the Purchaser Trust Agreement. The Purchaser Trust Agreement is in full force and effect and is a legal, valid and binding obligation of Purchaser and, to the Knowledge of Purchaser, the Trustee, enforceable in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or similar laws relating to or affecting creditors’ rights generally and subject, as to enforceability, to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at Law). The Purchaser Trust Agreement has not been terminated, repudiated, rescinded, amended or supplemented or modified, in any respect. Purchaser has complied in all material respects with the terms of the Purchaser Trust Agreement and is not in breach thereof or default thereunder, and there does not exist under the Purchaser Trust Agreement any event that, with the giving of notice or the lapse of time, would constitute such a breach or default by Purchaser or, to the Knowledge of Purchaser, the Trustee. Except for the Purchaser Trust Agreement, there are no Contracts, arrangements or understandings, whether written or oral, with the Trustee or any other Person that would (i) cause the description of the Purchaser Trust Agreement in the Purchaser SEC Documents to be inaccurate or (ii) entitle any Person (other than (A) the underwriters of Purchaser’s initial public offering and (B) holders of Purchaser Common Stock who have elected to redeem their Purchaser Common Stock in accordance with Purchaser’s Organization Documents) to any portion of the proceeds in the Purchaser Trust Account. Prior to the Closing, none of the funds held in the Purchaser Trust Account may be released, except in accordance with the Purchaser Trust Agreement. There is no Action pending, or to the Knowledge of Purchaser, threatened with respect to the Purchaser Trust Account.
Section 4.06 Investment Company Act; JOBS Act. Purchaser is not an “investment company” or a Person directly or indirectly “controlled” by or acting on behalf of an “investment company”, in each case within the meaning of the Investment Company Act. Purchaser constitutes an “emerging growth company” within the meaning of the JOBS Act.
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Section 4.07 Absence of Changes. Since the date of the most recent balance sheet in the Purchaser SEC Documents until the date hereof, there has not been any Purchaser Material Adverse Effect that has arisen and is continuing.
Section 4.08 No Undisclosed Liabilities. Purchaser has no Liabilities or Indebtedness, except (i) Liabilities or Indebtedness specifically reserved for in the financial statements set forth in the Purchaser SEC Documents or disclosed in the notes thereto, (ii) Liabilities or Indebtedness that were incurred after the date of the most recent balance sheet included in the Purchaser SEC Documents in the Ordinary Course of Business, (iii) Liabilities or Indebtedness specifically disclosed in Section 4.08 of the Purchaser Disclosure Letter, or (iv) Liabilities or Indebtedness incurred or arising under or in connection with the Transactions, including expenses related thereto.
Section 4.09 Tax Matters.
(a) Purchaser has timely filed or caused to be timely filed (taking into account applicable extensions) with the appropriate taxing authorities all material Tax Returns that are required to be filed by Purchaser, and all such Tax Returns are true, correct and complete in all material respects. All material Taxes due and payable by Purchaser (whether or not shown on any such Tax Return) have been duly and timely paid, other than Taxes being contested in good faith for which adequate reserves have been established in accordance with GAAP. Purchaser has properly deducted, withheld and collected and timely remitted to the appropriate taxing authorities all Taxes required to be deducted, withheld or collected in respect of any amounts paid or owing to, or received or owing from, any employee, creditor or other third party.
(b) There are no audits, disputes, investigations, claims, inquiries, examinations or other proceedings (whether civil, criminal, judicial, or administrative) with respect to any Tax Return or Taxes of Purchaser pending, in progress, or threatened in writing that have not been resolved or completed.
(c) Purchaser has not waived or extended any statute of limitations in respect of material Taxes, or agreed to any extension of time with respect to an assessment or deficiency relating to Income Taxes or other material Taxes, for any taxable period with respect to which the statute of limitations has not expired (after giving effect to any extension or waiver) (other than any such extensions or waivers that are no longer in effect), nor is any written request for any such extension or waiver from any taxing authority outstanding.
(d) Purchaser has not distributed shares or stock of another Person, or has had its shares or stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or 361 of the Code in the past two (2) years.
(e) There are no Liens for Taxes upon any of the Closing Consideration or any asset of Purchaser other than Liens for Taxes that are not yet due and payable or for Taxes that are being contested in good faith by appropriate proceedings and in each case that are sufficiently reserved for on Purchaser’s financial statements in accordance with GAAP.
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Section 4.10 Capitalization.
(a) As of the date of this Agreement, (i) the authorized capital stock of Purchaser consists of (x) 100,000,000 shares of Purchaser Common Stock (of which 23,890,000 shares are issued and outstanding, and all of which are validly issued, fully paid and non-assessable), (y) 10,000,000 shares of Purchaser Class B Common Stock (of which 7,666,667 shares are issued and outstanding, and all of which are validly issued, fully paid and non-assessable), and (z) 1,000,000 shares of preferred stock of Purchaser, par value $0.0001 per share (of which none are issued or outstanding), (ii) 14,245,000 shares of Purchaser Common Stock are issuable in respect of the Public Rights, the Public Warrants and the Sponsor Warrants, (iii) 7,666,667 shares of Purchaser Common Stock are issuable upon the automatic conversion of the Purchaser Class B Common Stock, and (iv) 127,500 shares of Purchaser Common Stock are issuable if the entire aggregate of the Sponsor Promissory Note is converted. No shares of Purchaser Common Stock are held in the treasury of Purchaser. Except for the Purchaser Share Redemption, the Transactions, the Public Rights, the Public Warrants, the Sponsor Warrants, the Sponsor Promissory Note and the Purchaser Class B Common Stock, there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of Purchaser or obligating Purchaser to issue or sell any capital stock of, or other equity interests in, Purchaser. All shares of Purchaser Common Stock subject to issuance, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. The shares of Purchaser Common Stock to be issued pursuant to this Agreement, subject to the Purchaser Shareholder Approval and the effectiveness of the A&R Purchaser Charter, will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable. To the extent applicable, the shares of Purchaser Common Stocks to be issued pursuant to any Investments, subject to the Purchaser Shareholder Approval and the effectiveness of the A&R Purchaser Charter, will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable. There are no outstanding contractual obligations of Purchaser to repurchase, redeem or otherwise acquire any shares of Purchaser Common Stock (except for the Purchaser Share Redemption). Purchaser does not own any equity securities in any other Person or have any right, option, warrant, conversion right, stock appreciation right, redemption right, repurchase right, agreement, arrangement or commitment of any character under which a Person is or may become obligated to issue or sell, or give any right to subscribe for or acquire, or in any way dispose of, any equity securities, or any securities or obligations exercisable or exchangeable for or convertible into equity securities of such Person. There are no outstanding contractual obligations of Purchaser to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Person. To Purchaser’s Knowledge, except for the Sponsor Support Agreement and the Insider Letter Agreement, there are no outstanding proxies, voting agreements or other agreements or arrangements relating to any equity securities of Purchaser. Except for the Purchaser Common Stock and the Purchaser Class B Common Stock, there are no outstanding securities of Purchaser or Indebtedness having the right to vote on any matters on which the holders of equity securities of Purchaser may vote.
(b) Except for the Public Rights, the Public Warrants, the Sponsor Warrants, the Sponsor Promissory Note and the Purchaser Class B Common Stock, there are no outstanding options, warrants, rights, convertible or exchangeable securities, “phantom” share rights, share appreciation rights, share-based performance units, commitments or Contracts of any kind to which Purchaser is a party or by which any of them is bound obligating Purchaser to issue or sell, or cause to be issued or sold, additional shares of Purchaser Common Stock or any other capital stock or other interest or participation in, or any security convertible or exercisable for or exchangeable into shares of Purchaser Common Stock or other interest or participation in Purchaser.
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Section 4.11 Litigation. Except as set forth on Section 4.11 of the Purchaser Disclosure Letter, since the date of incorporation of Purchaser there have been no, and there currently are no Actions pending or, to the Purchaser’s Knowledge, threatened against Purchaser that, if adversely decided or resolved, have had or would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect, at law or in equity, before or by any other Governmental Authority.
Section 4.12 Compliance with Laws.
(a) Purchaser is, and since its date of incorporation has been, in material compliance with all applicable Laws and regulations of any Governmental Authority. Since its date of incorporation, Purchaser has not received any written notice from a Governmental Authority of any Action against any of them alleging any failure to comply with any applicable Law or regulation.
(b) Since its inception, (i) Purchaser has not violated any Law relating to anti-bribery or anticorruption, including the U.S. Foreign Corrupt Practices Act of 1977, as amended and as in effect at the time of such action (all such Laws, “Anticorruption Laws”), (ii) no director, officer, or employee, or, to the Purchaser’s Knowledge, representative, consultant or other Person acting for on behalf of Purchaser has violated any Anticorruption Law, or (iii) has been the subject of any investigation, inquiry, or enforcement proceeding by any court, governmental, administrative or regulatory body, or any customer regarding any violation or alleged violation of any Anticorruption Law, and no such investigation, inquiry or proceeding is pending or, to the Purchaser’s Knowledge, threatened. Purchaser has adopted and maintains commercially reasonable policies, procedures and controls to comply with all applicable Anticorruption Laws in all material respects, including policies and procedures relating to prevention of bribery, accounting for financial transactions, due diligence on third parties and training of personnel.
(c) Since its date of incorporation, neither Purchaser, nor any director, officer or managing employee of Purchaser has been a Sanctioned Person.
Section 4.13 Employees. Other than the officers and directors listed in the Purchaser SEC Documents, Purchaser does not have any employees. Purchaser does not currently maintain or have any Liability under any compensation or benefit plan, program, contract, or arrangement (whether written or unwritten).
Section 4.14 SEC Filings and Financial Statements.
(a) Purchaser has filed and furnished in a timely manner all reports, schedules, forms, prospectuses and registration, proxy and other statements, in each case, required to be filed or furnished by it with or to the SEC (collectively, and in each case including all exhibits thereto and documents incorporated by reference therein, the “Purchaser SEC Documents”). As of their respective effective dates (in the case of Purchaser SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of the respective dates of the last amendment filed with the SEC (in the case of all other Purchaser SEC Documents), the Purchaser SEC Documents complied in all material respects with the requirements of the Exchange Act and the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder, each as in effect on the applicable date referred to above, applicable to such Purchaser SEC Documents, and none of the Purchaser SEC Documents as of such respective dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
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(b) The financial statements and notes of Purchaser contained or incorporated by reference in the Purchaser SEC Documents fairly present in all material respects the financial condition and the results of operations, changes in stockholders’ equity and cash flows of Purchaser as at the respective dates of, and for the periods referred to in, such financial statements, all in accordance with: (i) GAAP; and (ii) Regulation S-X or Regulation S-K, as applicable, subject, in the case of interim financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be material) and the omission of notes to the extent permitted by Regulation S-X or Regulation S-K, as applicable. Purchaser has no off-balance sheet arrangements that are not disclosed in the Purchaser SEC Documents. No financial statements other than those of Purchaser are required by GAAP to be included in the consolidated financial statements of Purchaser.
(c) Purchaser has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 under the Exchange Act) that are designed to ensure that material information relating to Purchaser is made known to Purchaser’s principal executive officer and its principal financial officer, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared. To the Knowledge of Purchaser, such disclosure controls and procedures are effective in timely alerting Purchaser’s principal executive officer and principal financial officer to material information required to be included in Purchaser’s periodic reports required under the Exchange Act. Purchaser has established and maintained a system of internal controls and, to the Knowledge of Purchaser, such internal controls are sufficient to provide reasonable assurance regarding the reliability of Purchaser’s financial reporting and the preparation of Purchaser’s financial statements for external purposes in accordance with GAAP.
(d) Since the date of the latest Form 10-Q of Purchaser filed with the SEC, there has not been any change, development, condition, occurrence, event or effect relating to Purchaser that, individually or in the aggregate, resulted in, or would reasonably be expected to result in, a Purchaser Material Adverse Effect.
Section 4.15 [Reserved.]
Section 4.16 Material Contracts. Purchaser has filed as an exhibit to the Purchaser SEC Documents every “material contract” as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (other than this Agreement and any Ancillary Agreement) to which, as of the date of this Agreement, Purchaser is a party or by which any of its assets are bound. Neither Purchaser nor, to the Purchaser’s Knowledge, any other party thereto is in material breach of, violation of or default under any such Contract. No event has occurred that with notice or lapse of time or both would constitute a material breach of, violation of or default under, any such Contract by Purchaser, or, to the Purchaser’s Knowledge, any counterparty. All such Contracts are valid and in full force and effect and constitute legal, valid and binding obligations of Purchaser and, to Purchaser’s Knowledge, each counterparty, and are enforceable against Purchaser and, to Purchaser’s Knowledge, the counterparty thereto in accordance with their respective terms, except as enforceability may be limited by bankruptcy laws, other similar Laws affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies.
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Section 4.17 Purchaser Affiliated Transactions. Except as set forth on Section 4.17 of the Purchaser Disclosure Letter, none of Purchaser, any equityholder, partner, member, officer, director, employee or any Affiliate of Purchaser or any individual in the immediate family of any of the foregoing, is a party to any arrangement, agreement, Contract, commitment or transaction with or owes any money to Purchaser or has any interest in any material property, asset or right, tangible or intangible, used by Purchaser, or has any material interest in a Person party to any arrangement, agreement, Contract, commitment or transaction with Purchaser.
Section 4.18 Brokerage. Other than fees or commissions for which Purchaser will be solely responsible, there are no claims for, and Purchaser has no liability or obligation to pay, brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement or the Ancillary Agreements based on any arrangement or agreement made by or on behalf of Purchaser for which Purchaser is or may be liable.
Section 4.19 Business Activities.
(a) Since its date of incorporation, Purchaser has not conducted any business activities other than activities related to Purchaser’s initial public offering or directed toward the accomplishment of a “business combination”, as such term is defined in Purchaser’s Organizational Documents (a “Business Combination”). Except as set forth in Purchaser’s Organizational Documents or as otherwise contemplated by this Agreement or the Ancillary Agreements and the transactions contemplated hereby and thereby, there is no agreement, commitment, or Governmental Order binding upon Purchaser or to which Purchaser is a party which has or would reasonably be expected to have the effect of prohibiting or impairing in any material respect any business practice of Purchaser or any acquisition of property by Purchaser or the conduct of business by Purchaser as currently conducted or as contemplated to be conducted as of the Closing.
(b) Except for the transactions contemplated by this Agreement and the Ancillary Agreements, Purchaser does not own or have a right to acquire, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity. Except for this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby, Purchaser has no material interests, rights, obligations or liabilities with respect to, and is not party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any Contract or transaction which is, or would reasonably be interpreted as constituting, a Business Combination.
Section 4.20 NASDAQ Listing. The Public Units, the Public Shares, the Public Warrants and the Public Rights are each listed on NASDAQ. Purchaser is in compliance in all material respects with the requirements of NASDAQ for continued listing of the Public Units, the Public Shares, the Public Warrants and the Public Rights thereon and there is no Action pending or, to the Knowledge of the Purchaser, threatened against Purchaser by NASDAQ or the Financial Industry Regulatory Authority to prohibit or terminate the listing of the Public Units, the Public Shares, the Public Warrants and the Public Rights on NASDAQ.
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Section 4.21 Proxy Statement. None of the information supplied or to be supplied by Purchaser for inclusion or incorporation by reference in the Proxy Statement will, at the date mailed to shareholders of Purchaser or at the time of the Purchaser Special Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, and the Proxy Statement and any amendment or supplement thereto shall comply in all material respects with applicable securities Laws, including the Securities Act and the Exchange Act; provided, however, no representation or warranty is made as to the accounting treatment of Purchaser’s issued and outstanding warrants, or as to any deficiencies in disclosure (including with respect to accounting and disclosure controls) arising from the treatment of such warrants as equity rather than liabilities in Purchaser’s financial statements. Notwithstanding the foregoing, Purchaser makes no representation, warranty or covenant with respect to: (a) statements made or incorporated by reference therein based on information supplied by Seller for inclusion or incorporation by reference in the Proxy Statement; or (b) any projections or forecasts included in the Proxy Statement.
Section 4.22 No Other Representations and Warranties. PURCHASER HEREBY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN ARTICLE III, NONE OF SELLER OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE REPRESENTATIVES HAS MADE, IS MAKING, OR SHALL BE DEEMED TO MAKE ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, TO PURCHASER, ANY OF ITS AFFILIATES OR REPRESENTATIVES OR ANY OTHER PERSON, WITH RESPECT TO SELLER, ANY OF THE TARGET COMPANIES OR ANY OF THE BUSINESSES, ASSETS OR PROPERTIES OF THE FOREGOING, OR OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, FUTURE RESULTS, PROPOSED BUSINESSES OR FUTURE PLANS. WITHOUT LIMITING THE FOREGOING AND NOTWITHSTANDING ANYTHING TO THE CONTRARY, NONE OF SELLER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES SHALL BE DEEMED TO MAKE TO PURCHASER OR ITS AFFILIATES OR REPRESENTATIVES ANY REPRESENTATION OR WARRANTY OTHER THAN AS EXPRESSLY MADE BY SELLER TO PURCHASER IN ARTICLE III. PURCHASER HEREBY ACKNOWLEDGES THAT IT HAS NOT RELIED ON ANY REPRESENTATION OR WARRANTY THAT IS NOT EXPRESSLY SET FORTH IN ARTICLE III OF THIS AGREEMENT.
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ARTICLE V
ACTIONS PRIOR TO THE CLOSING
The respective Parties covenant and agree to take the following actions:
Section 5.01 Operations of the Target Companies Prior to the Closing. From the date hereof until the earlier of the Closing and the date this Agreement is validly terminated in accordance with Article VII (such period, the “Interim Period”), except as set forth in Section 5.01(a) of the Seller Disclosure Letter and the Restructuring, as required by Law (including COVID-19 Measures) or expressly permitted by this Agreement or the Ancillary Agreements, or with the prior written approval of Purchaser (which approval shall not be unreasonably conditioned, withheld, delayed or denied), Seller shall, and shall cause each of the Target Companies to, (x) operate in the Ordinary Course of Business, (y) use commercially reasonable efforts to keep available the services of its current officers and employees, and (z) use commercially reasonable efforts to preserve intact its existing assets, business and operations, and to preserve the present rights, permits, franchises, goodwill and relationships with customers, suppliers, distributors, licensors, licensees, lessors and other key Persons with whom it has a significant relationship. Without limiting the generality of the foregoing, except as set forth in Section 5.01(a) of the Seller Disclosure Letter, as required by Law or expressly permitted by this Agreement or the Ancillary Agreements, or with the prior written approval of Purchaser (which approval shall not be unreasonably conditioned, withheld, delayed or denied), Seller shall not, and shall cause each of the Target Companies to not, take any of the following actions:
(a) amend the Organizational Documents of any Target Company or form any Subsidiaries that are not wholly owned Subsidiaries;
(b) split, subdivide, combine or reclassify any shares of capital stock of any Target Company or any equity or equity-linked securities of any Target Company;
(c) (i) deliver, encumber, mortgage, charge, pledge, redeem, purchase, transfer, issue, sell or otherwise dispose of any equity securities, (ii) grant or enter into any options, warrants, rights, agreements or commitments with respect to the issuance of its securities, (iii) permit the exercise of any options or (iv) amend any terms of any such equity securities or agreements;
(d) (i) merge, consolidate or combine with any Person; or (ii) acquire or agree to acquire by merging or consolidating with, purchasing any equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof;
(e) make any loans, advances, or capital contributions to, or investments in, any other Person (other than among the Target Companies), except in the Ordinary Course of Business;
(f) make a material change in any method of financial accounting or accounting practice of the Target Companies, except as required by IFRS or applicable Law;
(g) sell, lease, license or otherwise dispose of any assets (whether by merger, sale of shares, sale of assets or otherwise), except in the Ordinary Course of Business or for any assets having an aggregate value of less than the Threshold Amount;
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(h) (i) transfer, sell, assign, license, sublicense, grant other rights under, encumber, impair, abandon, fail to diligently maintain, or otherwise dispose of any right, title or interest of any Target Company in any Intellectual Property Rights, in each case, that are material to any business of the Target Companies, other than non-exclusive licenses granted by a Target Company to customers in the Ordinary Course of Business; (ii) amend, waive, cancel or modify any rights in or to any Intellectual Property Rights, in each case, that are material to any business of the Target Companies, other than as it relates to rights solely between or among the Target Companies; or (iii) divulge, furnish to or make accessible any Trade Secrets constituting Company IP Rights to any Person that is not subject to an enforceable written agreement to maintain the confidentiality of such Trade Secrets;
(i) issue or incur any additional Indebtedness except for borrowings under the Target Company’s existing credit facilities or otherwise incurred in the Ordinary Course of Business;
(j) amend or modify any agreements in respect of Indebtedness in a manner that would be adverse to the Target Companies, taken as a whole, other than as it relates to amendments or modifications solely between or among the Target Companies;
(k) except as otherwise required by any Plan as in effect on the date of this Agreement and set forth on Section 3.14(a) of the Seller Disclosure Letter or as otherwise required by applicable Law: (i) increase, decrease, make any changes in or grant any increase in the compensation of any Service Provider, except for any increases in the rate of base salary or wage made in the Ordinary Course of Business that does not exceed 10% for any such Person; (ii) grant, promise, pay, or increase any severance, incentive awards (whether or not equity or equity-based), bonus, fringe, transaction, retention, change in control, or other compensation or benefits to any Service Provider; (iii) establish, adopt, enter into, amend, modify, terminate or increase the coverage or benefits under any Plan (or any plan, program, agreement or other arrangement that would be a Plan if in effect on the date hereof); (iv) take any action to accelerate the vesting or payment of, or otherwise fund or secure the payment of, any compensation or benefits under any Plan or otherwise due to any of its current or former employees, directors, officers or other individual service providers; or (v) grant any equity or equity-linked compensation awards;
(l) hire, engage, terminate (other than for cause), furlough, or temporarily layoff any employee, consultant or other individual service provider with an annual base compensation in excess of $250,000, except as a replacement for a previous employee, consultant or other individual service provider with an annual base compensation in excess of $250,000 (at comparable compensation to the individual being replaced);
(m) waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any current or former employee or independent contractor outside of the Ordinary Course of Business;
(n) negotiate, modify, extend, or enter into any CBA or recognize or certify any labor union, labor organization, works council, employee representative or association or group of employees as the bargaining representative for any employees of any Target Company;
(o) implement or announce any employee layoffs, plant closings, reductions in force, furloughs, temporary layoffs, salary or wage reductions, work schedule changes or other such actions that would implicate the WARN Act;
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(p) (i) make, change, revoke, amend, or otherwise modify any material Tax election (including any Income Tax election), including any entity classification election pursuant to Treasury Regulations Section 301.7701-3 (or any corresponding or similar provision of state, local or non-U.S. Tax Law) or any other action to change the classification of any Target Company for U.S. federal (and applicable state and local) income Tax purposes, (ii) change any Tax accounting period or adopt, change or otherwise modify any accounting method, principles or practices with respect to Income Taxes or other material Taxes, (iii) amend, refile or otherwise modify any previously filed material Tax Returns, (iv) prepare or file any Tax Return inconsistent with applicable Laws and the past practices of the Target Company or in a manner that distorts taxable income, including by deferring income or accelerating deductions, (v) settle, consent to, or otherwise compromise (in whole or in part) any Tax audit, examination, investigation, or other proceeding or any Tax liability (including by entering into any closing agreement or other agreement with any tax authority), (vi) consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or the collection of Taxes, (vii) surrender any right to claim a Tax refund, offset, or other reduction in liability, (viii) participate in, initiate any discussions with respect to, or enter into any voluntary disclosure program (or similar program or agreement) with any Governmental Authority, or (ix) fail to pay any material Tax that becomes due and payable (including any estimated Tax payments) (other than any Taxes that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are maintained in accordance with the Accounting Principles);
(q) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation, restructuring, recapitalization (or equity split or like change in capitalization), dissolution or winding-up of any Target Company;
(r) make any capital expenditure (or series of related capital expenditures) in an amount exceeding the Threshold Amount that is not provided for in, or fail to make any capital expenditure contemplated in, the agreed upon monthly capital expenditure budgets for 2021 delivered by Seller to Purchaser;
(s) enter into, terminate (other than automatic termination in accordance with the terms thereof) or modify or amend in any material respect any Contract that, upon entry by any Target Company thereto, constitutes, or would constitute if it had been entered into prior to the date of this Agreement, a Material Contract;
(t) declare or pay any dividend or distribution on, or make any payment on account of, the purchase, redemption, defeasance, retirement or other acquisition of, any of its shares, capital stock or common shares, as applicable, or make any other distribution in respect thereof, either directly or indirectly whether in cash or property (in each case, other than among the Target Companies or Tax allocation cash payment distributions made in the Ordinary Course of Business);
(u) (i) accelerate the collection (or discount) of accounts receivables, (ii) intentionally delay or postpone the payment of trade accounts payable or enter into any agreement or negotiation with any party to extend the payment date of any trade accounts payable, or (iii) make any material changes with respect to policies and procedures relating to the establishment of reserves for uncollectable accounts, accrual of accounts receivable, prepayment of expenses, payment of trade accounts payable, accrual of other expenses and deferral of revenue, in each case outside of the Ordinary Course of Business;
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(v) amend, modify, extend, renew or terminate any Lease or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property; or
(w) agree to do any of the foregoing, or take any action or omit to take any action which action or omission, respectively, would result in any of the foregoing.
Section 5.02 Operations of Purchaser Prior to the Closing. During the Interim Period, except as set forth in Section 5.02(a) of the Purchaser Disclosure Letter, as required by Law (including COVID-19 Measures) or expressly permitted by this Agreement or the Ancillary Agreements, or with the prior written approval of Seller (which approval shall not be unreasonably conditioned, withheld, delayed or denied), Purchaser shall not, and shall cause each of its Subsidiaries to not, take any of the following actions:
(a) seek any approval from Purchaser’s shareholders to, or otherwise, make any change, amendment or modification to any of the Organizational Documents of Purchaser or form any Subsidiary, except as contemplated by the Purchaser Shareholder Proposals;
(b) seek any approval from Purchaser’s shareholders to, or otherwise, make any change, amendment or modification to the Trust Agreement, except as contemplated by the Purchaser Shareholder Proposals;
(c) (i) make, change, revoke, amend, or otherwise modify any material Tax election, including any entity classification election pursuant to Treasury Regulations Section 301.7701-3 (or any corresponding or similar provision of state, local or non-U.S. Tax Law) or any other action to change the classification of Purchaser for U.S. federal (and applicable state and local) income Tax purposes, (ii) prepare or file any Tax Return inconsistent with applicable Laws and the past practices of the Purchaser or in a manner that distorts taxable income, including by deferring income or accelerating deductions, (iii) settle, consent to, or otherwise compromise (in whole or in part) any Tax audit, examination, investigation, or other proceeding or any Tax liability (including by entering into any closing agreement or other agreement with any tax authority), (iv) consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or the collection of Taxes, (v) surrender any right to claim a Tax refund, offset, or other reduction in liability, or (vi) participate in, initiate any discussions with respect to, or enter into any voluntary disclosure program (or similar program or agreement) with any Governmental Authority;
(d) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a liquidation, dissolution, reorganization or other wind up of the business or operations of Purchaser;
(e) (i) make or declare any dividend or distribution to the shareholders of Purchaser or make any other distributions in respect of any of Purchaser’s capital stock, (ii) split, combine, reclassify or otherwise amend any terms of any shares or series of Purchaser’s capital stock or (iii) purchase, repurchase, redeem or otherwise acquire any issued and outstanding shares of capital stock, warrants or other equity interests of Purchaser, other than a redemption of Public Shares (prior to the Closing) made as part of the Purchaser Shareholder Redemption;
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(f) other than as expressly required by the Sponsor Support Agreement, enter into, renew or amend in any material respect, any transaction or Contract with an Affiliate of Purchaser (including, for the avoidance of doubt, (x) the Sponsor and (y) any Person in which the Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater);
(g) incur or assume any Indebtedness or guarantee any Indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of Purchaser or guaranty any debt securities of another Person, other than any Indebtedness for (i) the Working Capital Loan, which, however, shall be forgiven at Closing and no longer due, (ii) borrowed money or guarantees incurred in the ordinary course of business necessary to finance its ordinary course administrative costs and expenses and (iii) transaction expenses incurred in connection with the transactions contemplated by this Agreement or Ancillary Agreements;
(h) incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any material liabilities, debts or obligations, other than Indebtedness permitted to be incurred under Section 5.02(g) and other fees and expenses for professional services incurred in connection with the Transactions;
(i) (i) issue any shares of Purchaser Common Stock, or securities exercisable for or convertible into shares of Purchaser Common Stock or capital stock of Purchaser, other than the issuance of shares of Purchaser Common Stock pursuant to this Agreement and any Investment Agreements (if applicable) or the Public Rights, Public Warrants, the Sponsor Warrants or the Purchaser Class B Common Stock, (ii) grant any options, warrants or other equity-based awards with respect to Purchaser Common Stock not outstanding on the date hereof or (iii) amend, modify or waive any of the material terms or rights set forth in any Public Warrant or Sponsor Warrant, including any amendment, modification or reduction of the warrant price set forth therein;
(j) change an annual accounting period for GAAP or adopt or change any material accounting method used by it for GAAP or adopt any material accounting method unless required by GAAP;
(k) acquire any ownership interest in any real property;
(l) acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof;
(m) except as reasonably necessary to consummate the Transactions, enter into, renew, modify or revise in any material respect any material Contract;
(n) engage in any activities or business, other than activities or business (i) in connection with or incident or related to Purchaser’s incorporation or continuing corporate (or similar) existence, (ii) contemplated by, or incident or related to, this Agreement, any Ancillary Document, the performance of covenants or agreements hereunder or thereunder or the consummation of the Transactions or (iii) those that are administrative or ministerial;
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(o) waive, release, compromise, settle or satisfy any pending or threatened material claim or Action or compromise or settle any Liability that would require monetary payment or impose nonmonetary obligations on Purchaser or any of its Affiliates (or any Target Company after the Closing); or
(p) agree to do any of the foregoing, or take any action or omit to take any action, which action or omission, respectively, would result in any of the foregoing.
Section 5.03 Access; Notification of Certain Matters.
(a) During the Interim Period, the officers, employees and authorized Representatives of Purchaser (at Purchaser’s expense) shall have reasonable access during normal business hours upon providing written notice to Seller no later than two (2) Business Days prior to the date of such desired access, to the offices, properties, assets, premises, books and records of Seller or the Target Companies (including audit books) in order for Purchaser to have the opportunity to make such investigation as it may reasonably desire in connection with the consummation of the Transactions; provided, however, that in exercising such access rights, Purchaser and Purchaser’s Representatives will not be permitted to interfere unreasonably with the operations of Seller or the Target Companies. Notwithstanding anything contained herein to the contrary, no such access or examination may be permitted to the extent that it would require Seller or any Target Company to disclose information subject to attorney-client privilege or attorney work-product privilege, conflict with any third-party confidentiality obligations to which Seller or any Target Company is bound, or violate any applicable Law.
(b) During the Interim Period, the officers, employees and authorized Representatives of Seller (at Seller’s expense) shall have reasonable access during normal business hours upon providing written notice to Purchaser no later than two (2) Business Days prior to the date of such desired access, to the offices, properties, assets, premises, books and records of Purchaser (including audit books) in order for Seller to have the opportunity to make such investigation as it will reasonably desire in connection with the consummation of the Transactions; provided, however, that in exercising such access rights, Seller and Representatives of Seller will not be permitted to interfere unreasonably with the operations of Purchaser. Notwithstanding anything contained herein to the contrary, no such access or examination may be permitted to the extent that it would require Purchaser to disclose information subject to attorney-client privilege or attorney work-product privilege, conflict with any third-party confidentiality obligations to which Purchaser is bound, or violate any applicable Law.
(c) During the Interim Period, Seller shall disclose to Purchaser in writing any development, fact or circumstance arising before or after the date hereof, that would reasonably be expected to result in the failure of the conditions set forth in Section 6.01 and Section 6.03 to be satisfied.
(d) During the Interim Period, Purchaser shall disclose to Seller in writing any development, fact or circumstance arising before or after the date hereof, that would reasonably be expected to result in the failure of the conditions set forth in Section 6.02 and Section 6.03 to be satisfied.
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Section 5.04 Confidentiality; Public Announcements.
(a) Purchaser and Seller acknowledge that they are parties to the Confidentiality Agreement, the terms of which are incorporated herein by reference and which shall apply to this Section 5.04. At Closing, the Confidentiality Agreement shall be automatically terminated in its entirety; provided, however, that if for any reason this Agreement is terminated prior to the Closing, the Confidentiality Agreement shall nonetheless continue in full force and effect in accordance with its terms.
(b) Except as may be required to comply with the requirements of any applicable Law or the rules and regulations of NASDAQ or Euronext, including the filing of any Current Report on Form 8-K or other appropriate filings with the SEC, no Party will issue any press release or other public announcement relating to the subject matter of this Agreement or the Transactions without the prior written consent of the other Party. To the extent a Party is required by Law to issue a press release or other public announcement relating to the subject matter of this Agreement or the Transactions, the disclosing Party and its Representatives shall use commercially reasonable efforts to consult with the other Party to review such announcement or communication and the opportunity to comment thereon and the disclosing Party shall consider such comments in good faith.
Section 5.05 Commercially Reasonable Efforts.
(a) Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties agrees to use its commercially reasonable 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 Parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Share Sale and the other Transactions, including using commercially reasonable efforts to accomplish the following: (i) the taking of all commercially reasonable acts necessary to cause the conditions precedent set forth in Article VI to be satisfied; (ii) the obtaining of all necessary actions, waivers, consents, approvals, orders and authorizations from Governmental Authorities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Authorities, if any); (iii) the delivery of all notices to, and the obtaining of all consents, approvals or waivers from, third parties required as a result of the Transactions; and (iv) the execution or delivery of any additional instruments reasonably necessary to consummate, and to fully carry out the purposes of, the Transactions.
(b) Without limiting the generality of the foregoing, other than in connection with the Restructuring, neither Purchaser nor Seller shall, and each shall cause its Affiliates not to, acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any Person or portion thereof, or otherwise acquire or agree to acquire any assets, if the entering into of a definitive agreement relating to or the consummation of such acquisition, merger or consolidation would reasonably be expected to (i) increase the risk, in any material respect, of delaying or not obtaining any consent, approval, authorization, declaration, waiver, license, franchise, permit, certificate or order of any Governmental Authority necessary to consummate the transactions contemplated hereby or the expiration or termination of any applicable waiting period, (ii) increase the risk, in any material respect, of any Governmental Authority entering an order prohibiting the consummation of the transactions contemplated hereby or (iii) delay the consummation of the transactions contemplated hereby.
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Section 5.06 Regulatory Filings. Within ten (10) Business Days, or as promptly as reasonably practicable, after the date hereof, the Parties shall make, or cause to be made, the filings required (if any) of each of them or any of their respective Subsidiaries or Affiliates under the HSR Act with respect to the Transactions. The Parties shall make, or cause to be made, as promptly as practicable, all filings necessary to obtain all Regulatory Approvals other than the HSR Approval. The Parties shall use their commercially reasonable efforts to: (a) respond to any requests for additional information made by any Governmental Authority; (b) provide the other party with a reasonable opportunity to review and comment on any filing, submission, response to an information request or other (verbal or written) communication to be submitted or made to any Governmental Authority and such receiving party shall consider any such received comments in good faith; (c) keep each other apprised of the status of matters relating to any Regulatory Approval contemplated by this Agreement or any Ancillary Agreement; (d) advise the other Party (and, where applicable, provide a copy) of any written or verbal communications that it receives from any Governmental Authority in respect of such filings (including in respect of any supplementary filings or submissions) and otherwise in connection with satisfying the Regulatory Approvals; (e) provide the other party with a reasonable opportunity to participate in any meetings with any Governmental Authority (subject to any opposition by a Governmental Authority to a particular party’s participation in such meeting) and participate in, or review, any material communication before it is made to any Governmental Authority; and (f) consult and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of either Party in connection with judicial proceedings under or relating to Regulatory Approval. Notwithstanding the foregoing, each Party has the right to redact or otherwise exclude the other Party from receiving any confidential competitively sensitive information required to be shared under this Section 5.06; provided that such other Party’s external counsel shall be entitled to receive such confidential competitively sensitive information on an external counsel only basis. The Parties shall: (i) not agree to an extension of any waiting period or review being undertaken by a Governmental Authority without the other Party’s prior written consent; and (ii) use commercially reasonable efforts to cause any applicable waiting periods to terminate or expire at the earliest possible date.
Section 5.07 Proxy Statement.
(a) As promptly as reasonably practicable after the date of this Agreement, Purchaser will prepare and file with the SEC a proxy statement containing the information specified in Schedule 14A of the Exchange Act with respect to the Transactions (the “Proxy Statement”) in preliminary form. Purchaser shall as promptly as reasonably practicable notify Seller of the receipt of any oral or written comments from the SEC relating to the Proxy Statement and any request by the SEC for any amendment to the Proxy Statement or for additional information. Purchaser shall use commercially reasonable efforts to cooperate and provide Seller with a reasonable opportunity to review and comment on the Proxy Statement (including each amendment or supplement thereto) and all responses to requests for additional information by and replies to comments of the SEC and give due consideration to all comments reasonably proposed by Seller in respect of such documents and responses prior to filing such with or sending such to the SEC, and the Parties will provide each other with copies of all such filings made and correspondence with the SEC. Except in the case of a Change in Recommendation pursuant to Section 5.07(d), the Purchaser Board Recommendation shall be included in the Proxy Statement. Purchaser will use its commercially reasonable efforts to respond promptly to any comments made by the SEC with respect to the Proxy Statement. Purchaser will cause the Proxy Statement to be transmitted to the Purchaser Shareholders as promptly as reasonably practicable.
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(b) Seller acknowledges that a substantial portion of the Proxy Statement shall include disclosure regarding the Target Companies. Accordingly, Seller will, as promptly as reasonably practicable after the date of this Agreement, use its commercially reasonable efforts to provide Purchaser with all information concerning the operations and business of the Target Companies and their respective management and operations and financial condition, in each case, required, or reasonably requested by Purchaser, to be included in the Proxy Statement, including (i) the required financial statements of the Target Companies and the Acquired Subsidiaries prepared in accordance with SEC Guidance, including the requirements of Regulation S-X and a related consent from the Company’s independent public accountants, (ii) required selected financial data of the Target Companies and the Acquired Subsidiaries required by Item 301 of Regulation S-K, and (iii) required management’s discussion & analysis for the periods required under applicable SEC Guidance. Without limiting the generality of the foregoing, Seller shall use its commercially reasonable efforts to cooperate with Purchaser in connection with the preparation for inclusion in the Proxy Statement of pro forma financial statements that comply with SEC Guidance, including the requirements of Regulation S-X. Seller shall use commercially reasonable efforts to make the managers, directors, officers and employees of the Target Companies available to Purchaser and its counsel (and other Representatives engaged in connection with the preparation of the Proxy Statement) in connection with the drafting of the Proxy Statement, as reasonably requested by Purchaser, and responding in a timely manner to comments on the Proxy Statement and such other filings from the SEC.
(c) Purchaser will take, in accordance with applicable Law, NASDAQ rules and the Organizational Documents of Purchaser, all action necessary to call, hold and convene a meeting of the holders of Purchaser Common Stock (including any permitted adjournment) (the “Purchaser Special Meeting”) to consider and vote upon the Purchaser Shareholder Proposals as promptly as practicable after the filing of the Proxy Statement in definitive form with the SEC. Once the Purchaser Special Meeting to consider and vote upon the Purchaser Shareholder Proposals has been called and noticed, except as required by Law, Purchaser will not postpone or adjourn the Purchaser Special Meeting without the consent of Seller (which consent will not be unreasonably withheld, conditioned or delayed) other than (i) for the absence of a quorum, (ii) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure that Purchaser has determined in good faith, after consultation with its outside legal advisors, is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated to and reviewed by the Purchaser Shareholders prior to the Purchaser Special Meeting, or (iii) an adjournment or postponement to solicit additional proxies from the Purchaser Shareholders to the extent Purchaser has determined in good faith that such adjournment or postponement is reasonably necessary to obtain the approval of the Purchaser Shareholder Proposals, provided that, in the case of an postponement or adjournment in accordance with clause (i), (ii) or (iii), above, such postponement or adjournment may be no more than the earlier of (i) fifteen (15) Business Days from the original date of the Purchaser Special Meeting and (ii) four (4) Business Days prior to the Termination Date. Subject to Section 5.07(d), following delivery of the Proxy Statement to the Purchaser Shareholders, Purchaser will use commercially reasonable efforts to solicit approval of the Purchaser Shareholders Proposals by the Purchaser Shareholders.
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(d) Subject to this Section 5.07(d), the Purchaser Board will recommend that the Purchaser Shareholders approve the Purchaser Shareholder Proposals (the “Purchaser Board Recommendation”). Notwithstanding the foregoing, at any time prior to obtaining approval of the Purchaser Shareholder Proposals, the Purchaser Board may fail to make, amend, change, withdraw, modify, withhold or qualify the Purchaser Board Recommendation (any such action a “Change in Recommendation”) in response to an Intervening Event if the Purchaser Board shall have concluded in good faith, after consultation with its outside legal advisors and financial advisors, that a failure to make a Change in Recommendation would be a breach of the Purchaser Board’s fiduciary obligations to the Purchaser Shareholders under applicable Law, provided, that: (A) Seller shall have received written notice from Purchaser of Purchaser’s intention to make a Change in Recommendation at least five (5) Business Days prior to the taking of such action by Purchaser (the “Intervening Event Notice Period”), which notice shall specify the applicable Intervening Event in reasonable detail, (B) during such period and prior to making a Change in Recommendation, if requested by Seller, Purchaser and its representatives shall have negotiated in good faith with Seller and its Representatives regarding any revisions or adjustments proposed by Seller to the terms and conditions of this Agreement as would enable Purchaser to proceed with its Purchaser Board Recommendation and not make such Change in Recommendation and (C) Purchaser may make a Change in Recommendation only if the Board of Directors of Purchaser, after considering in good faith any revisions or adjustments to the terms and conditions of this Agreement that Seller shall have, prior to the expiration of the 5-Business Day period, proposed, continues to determine in good faith that failure to make a Change in Recommendation would be a breach of its fiduciary duties to the Purchaser Shareholders under applicable Law. An “Intervening Event” shall mean any fact, circumstance, occurrence, event, development, change or condition or combination thereof that (i) was not known or reasonably foreseeable to Purchaser or the Purchaser Board as of the date of this Agreement and (ii) does not relate to any alternative transaction; provided, however, that (1) any change in the price or trading volume of shares of Purchaser Common Stock shall not be taken into account for purposes of determining whether an Intervening Event has occurred (provided that the underlying factors may be taken into account); (2) in no event shall any fact, circumstance, occurrence, event, development, change or condition or combination thereof that has had or would reasonably be expected to have an adverse effect on the business or financial condition of the Target Companies constitute an Intervening Event unless such event, fact, circumstance or development constitutes a Seller Material Adverse Effect; and (3) the Target Companies meeting, failing to meet or exceeding projections shall not be taken into account for purposes of determining whether an Intervening Event has occurred (provided that the underlying factors may be taken into account). Purchaser agrees that, unless the Agreement is terminated in accordance with its terms, its obligation to establish a record date for, duly call, give notice of, convene and hold the Purchaser Special Meeting for the purpose of voting on the Purchaser Shareholder Proposals in accordance with the terms of this Agreement shall not be affected by any Change in Recommendation, and Purchaser agrees to establish a record date for, duly call, give notice of, convene and hold the Purchaser Special Meeting and submit for the approval of the Purchaser Shareholders the matters contemplated by the Proxy Statement in accordance with the terms of this Agreement, regardless of whether or not there shall be any Change in Recommendation.
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(e) If at any time prior to the Closing Date, any event, circumstance or information relating to Purchaser, Seller or any of their respective Affiliates, officers or directors or other Representatives should be discovered by Purchaser or Seller, as applicable, that in the reasonable judgment of Purchaser or Seller, as applicable, should be set forth in an amendment or supplement to the Proxy Statement, so that such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Party which discovers such information shall promptly notify the other Parties, and an appropriate amendment or supplement describing such information shall be filed as promptly as reasonably practicable with the SEC by Purchaser and, to the extent required by Law, disseminated to the holders of shares of Purchaser Common Stock.
(f) Subject to this Section 5.07, Purchaser shall use commercially reasonable efforts to complete the Purchaser Share Redemption as promptly as practicable and shall not terminate or withdraw the Purchaser Share Redemption other than in connection with the valid termination of this Agreement. Purchaser shall extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC, NASDAQ or the respective staff thereof that is applicable to the Purchaser Share Redemption. Nothing in this Section 5.07(f) shall (i) impose any obligation on Purchaser to extend the Purchaser Share Redemption beyond the Outside Date, or (ii) be deemed to impair, limit or otherwise restrict in any manner the right of Purchaser to terminate this Agreement in accordance its terms.
Section 5.08 Listing. During the Interim Period, Purchaser shall use all reasonable efforts that are necessary or desirable for Purchaser to remain listed as a public company on, and for the shares of Purchaser Common Stock to be tradable over, NASDAQ.
Section 5.09
Section 5.10 No Claim Against the Purchaser Trust Account. Seller acknowledges that it has read the Prospectus and that Purchaser has established the Purchaser Trust Account from the proceeds of Purchaser’s February 2022 initial public offering (“IPO”) and from certain private placements occurring simultaneously with the IPO for the benefit of Purchaser’s holders of Public Shares (“Public Shareholders”) and certain parties (including the underwriters of the IPO) and that, except for a portion of the interest earned on the amounts held in the Purchaser Trust Account, Purchaser may disburse monies from the Purchaser Trust Account only: (a) to the Public Shareholders in the event they elect to redeem their shares of Purchaser Common Stock in connection with the consummation of Purchaser’s Business Combination; (b) to the Public Shareholders if Purchaser fails to consummate a Business Combination within fifteen (15) months, or if a three-month extension is exercised at Purchaser’s sole discretion, eighteen (18) months, from the closing of the IPO; (c) any amounts necessary to pay any Taxes; or (d) to, or on behalf of, Purchaser after or concurrently with the consummation of a Business Combination. Seller hereby agrees that it does not now and shall not at any time hereafter have (other than their rights upon Closing) any right, title, interest or claim of any kind in or to any monies in the Purchaser Trust Account or distributions therefrom, or make any claim prior to Closing against the Purchaser Trust Account, regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (any and all such claims are collectively referred to hereafter as the “Claims”). Seller hereby irrevocably waives any Claims it may have against the Purchaser Trust Account (including any distributions therefrom) now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with Purchaser and will not, prior to the Closing, seek recourse against the Purchaser Trust Account (including any distributions therefrom) for any reason whatsoever (including for an alleged breach of this Agreement). For the avoidance of doubt, notwithstanding anything to the contrary contained herein, the waivers under this Section 5.10 will continue to apply at and after the Closing or termination of this Agreement (as applicable) to distributions made to redeeming Public Shareholders and for transaction expenses paid (including deferred IPO underwriting discount and expenses payable to Purchaser’s underwriters in connection with the IPO). Seller agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by Purchaser to induce it to enter into this Agreement. This Section 5.10 shall not limit the right of Seller to seek specific performance against Purchaser pursuant to Section 9.12, including the right to seek specific performance against Purchaser to require Purchaser to take such actions contemplated by this Agreement subject to the satisfaction of Purchaser’s conditions to the Closing in Section 6.01 and Section 6.03, and to comply with the terms of the Purchaser Trust Agreement, including distribution of funds from the Purchaser Trust Account upon the Closing in accordance with the terms of this Agreement.
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Section 5.11 Section 16 Matters. Prior to the Closing, the Purchaser Board, or an appropriate committee of non-employee directors thereof, shall adopt a resolution consistent with the interpretive guidance of the SEC so that the issuance of shares of Purchaser Common Stock by Purchaser, in each case, pursuant to this Agreement to any officer, director or shareholder (by reason of “director by deputization”) of the Target Companies who is expected to become a “covered person” of Purchaser for purposes of Section 16 of the Exchange Act and the rules and regulations thereunder shall be an exempt transaction for purposes of Rule 16b-3 promulgated under the Exchange Act.
Section 5.12 Transaction Litigation. Each of Purchaser, on the one hand, and Seller, on the other hand, shall cooperate with the other and use commercially reasonable efforts in the defense or settlement of any third-party Action relating to the Transactions which is brought or threatened in writing against (a) Purchaser and/or any of their respective directors or officers, or (b) Seller, any of the Target Companies and/or any of their respective directors or officers. Such cooperation between the Parties shall include (i) keeping the other Party reasonably and promptly informed of any developments in connection with any such Action, (ii) giving the other Party a reasonable opportunity to participate in any such Action or settlement thereof (and consider in good faith the suggestions of the other Party in connection therewith), (iii) utilizing counsel reasonably agreeable to the Parties (such agreement to counsel not to be unreasonably withheld, conditioned or delayed), and (iv) refraining from compromising, settling, consenting to any order or entering into any agreement in respect of, any such Action without the written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed).
Section 5.13 [Reserved].
Section 5.14 Director and Officer Liability; Indemnification.
(a) From and after the Closing, Purchaser agrees that it shall indemnify and hold harmless each present and former director and officer of (x) each Target Company (the “Company Indemnified Parties”) and (y) Purchaser (the “Purchaser Indemnified Parties” and together with the Company Indemnified Parties, the “D&O Indemnified Parties”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any Action, whether civil, criminal, administrative or investigative, arising out of or pertaining to matters existing or occurring at or prior to the Closing, whether asserted or claimed prior to, at or after the Closing, to the fullest extent that the Target Companies or Purchaser, as the case may be, would have been permitted under applicable Law and its respective certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other organizational documents in effect on the date of this Agreement to indemnify such D&O Indemnified Parties (including the advancing of expenses as incurred to the fullest extent permitted under applicable Law). Without limiting the foregoing, Purchaser shall, and shall cause its Subsidiaries to (i) maintain provisions in its Organizational Documents concerning the indemnification and exoneration (including provisions relating to expense advancement) of Purchaser’s and its Subsidiaries’ (including the Target Companies’) former and current officers, directors, employees, and agents that are no less favorable to those Persons than the provisions of the Organizational Documents of the Target Companies, Purchaser or their respective Subsidiaries, as applicable, in each case, as of the date of this Agreement, and (ii) not amend, repeal or otherwise modify such provisions in any respect that would adversely affect the rights of those Persons thereunder, in each case, except as required by Law.
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(b) For a period of six (6) years from the Closing, Purchaser shall maintain in effect directors’ and officers’ liability insurance covering those Persons who are currently covered by Purchaser’s, the Target Companies’ or their respective Subsidiaries’ directors’ and officers’ liability insurance policies (true, correct and complete copies of which have been heretofore made available to Purchaser or its agents or representatives) on terms not less favorable than the terms of such current insurance coverage, except that in no event shall Purchaser be required to pay an annual premium for such insurance in excess of three hundred percent (300%) of the aggregate annual premium payable by Purchaser or the Target Companies, as applicable (whichever premium being higher), for such insurance policy for the year ended December 31, 2021 (the “Maximum Annual Premium”); provided, that, if the annual premiums of such insurance coverage exceed the Maximum Annual Premium, then Purchaser shall be obligated to obtain a policy with the greatest coverage available for a cost not exceeding the Maximum Annual Premium from an insurance carrier with the same or better credit rating as Purchaser’s or the Target Companies’ current directors’ and officers’ liability insurance carrier; provided, however, that (i) Purchaser may cause coverage to be extended under the current directors’ and officers’ liability insurance by obtaining a six (6) year “tail” policy containing terms not materially less favorable than the terms of such current insurance coverage with respect to claims existing or occurring at or prior to the Closing and (ii) if any claim is asserted or made within such six (6) year period, any insurance required to be maintained under this Section 5.14 shall be continued in respect of such claim until the final disposition thereof.
(c) Notwithstanding anything contained in this Agreement to the contrary, this Section 5.14 shall survive the consummation of the Transactions indefinitely and shall be binding, jointly and severally, on Purchaser and all successors and assigns of Purchaser. In the event that Purchaser, the Target Companies or any of their respective successors or assigns consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, Purchaser shall ensure that proper provision shall be made so that the successors and assigns of Purchaser shall succeed to the obligations set forth in this Section 5.14.
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(d) On the Closing Date, Purchaser shall enter into customary indemnification agreements reasonably satisfactory to Seller and Purchaser with the post-Closing directors and officers of Purchaser, which indemnification agreements shall continue to be effective following the Closing.
Section 5.15 Third Party Consents and Notices. Prior to the Closing Date, Seller shall give any notices to third parties, and use commercially reasonable efforts to obtain any consents under any Material Contract that are required as a result of the Transactions, including Contracts set forth on Section 5.15 of the Seller Disclosure Letter; provided, however, that Seller and Purchaser shall coordinate and cooperate in determining whether any actions, notices, consents, approvals or waivers are required to be given or obtained, or should be given or obtained, from parties to any Material Contract in connection with consummation of the Transactions and in seeking any such actions, notices, consents, approvals or waivers. Assuming Seller has complied with this Section 5.15 in all material respects, obtaining any consents, approvals or waivers shall not, in and of itself, be a condition to Closing.
Section 5.16 Employment Agreements. During the Interim Period, the Parties will use commercially reasonable efforts to cause each of the Key Employees to enter into an employment agreement, to be effective as of the Closing, based on the terms and conditions as reasonably and mutually agreed upon by, Purchaser, Seller and such employees (the “Key Employee Employment Agreements”); provided that the Parties acknowledge and agree that the entry into such Key Employee Employment Agreements is not, and shall not be, a condition to Closing.
Section 5.17 No Purchaser Transactions. During the Interim Period, except as otherwise contemplated hereby, neither Seller nor any of its Affiliates, directly or indirectly, shall engage in any transactions involving the securities of Purchaser without the prior written consent of Purchaser.
Section 5.18 Acquisition Proposals and Alternative Transactions.
(a) During the Interim Period, Purchaser will not, and it will cause its Affiliates and its and their respective Representatives not to, directly or indirectly: (a) solicit, initiate, submit, facilitate (including by means of furnishing or disclosing information), discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to a Purchaser Acquisition Proposal; (b) furnish or disclose any non-public information to any Person in connection with or that could reasonably be expected to lead to a Purchaser Acquisition Proposal; (c) enter into any agreement, arrangement or understanding regarding a Purchaser Acquisition Proposal or (d) otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing.
(b) During the Interim Period, Seller will not, and each will cause their Affiliates and their respective Representatives not to, directly or indirectly: (a) solicit, initiate, submit, facilitate (including by means of furnishing or disclosing information), discuss or negotiate, directly or indirectly, any inquiry, proposal or offer (written or oral) with respect to a Seller Acquisition Proposal; (b) furnish or disclose any non-public information to any Person in connection with or that could reasonably be expected to lead to a Seller Acquisition Proposal; (c) enter into any agreement, arrangement or understanding regarding a Seller Acquisition Proposal or (d) otherwise cooperate with, assist or participate in, or knowingly facilitate or encourage any effort or attempt by any Person to do or seek to do any of the foregoing.
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Section 5.19 Purchaser Public Filings. During the Interim Period, Purchaser will use reasonable efforts to keep current, accurate and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable Laws.
Section 5.20 Financial Statements. As promptly as reasonably practicable after the date of this Agreement, Seller shall deliver to Purchaser the PCAOB Audited Financial Statements, the audited and unaudited financial statements of the Acquired Subsidiaries in the form and to the extent that are required to be included in the Proxy Statement, and any other audited and unaudited consolidated balance sheets and the related audited or unaudited consolidated accounts of Seller that are required to be included in the Proxy Statement. Each Party shall each use its commercially reasonable efforts (a) to assist the other, upon advance written notice, during normal business hours and in a manner such as to not unreasonably interfere with the normal operation of Seller or Purchaser, in preparing in a timely manner any other financial information or statements (including customary pro forma financial statements) that are required to be included in the Proxy Statement and any other filings to be made by Purchaser with the SEC in connection with the Transactions and (b) to obtain the consents of its auditors with respect thereto as may be required by applicable Law or requested by the SEC in connection therewith.
Section 5.21 Waiver of Available Cash Condition. The condition in Section 6.02(e) of the Original Business Combination Agreement has been waived by Seller and as such, is not included in this Agreement. The Parties agree that in consideration for Seller’s waiver of such closing condition, Purchaser shall issue as part of the Closing Share Consideration an additional 10,000,000 shares of Purchaser Common Stock to Seller (which, for the avoidance of doubt, constitutes a portion of the 30,000,000 shares of Purchaser Common Stock issued thereby). In addition, in connection with the Transactions contemplated hereby, (a) Seller shall cause Alternus FundCo Limited to assign to Purchaser at or immediately following the Closing, that certain Amended and Restated Convertible Promissory Note, dated March 8, 2023, issued by Alternus FundCo Limited to Wissam Anastas and (b) following the Closing, Seller shall have the right to assign to Purchaser that certain Convertible Loan Instrument dated 22 March 2021 as amended from time to time, issued by the Seller to AVG Group S.a.r.l. and to cause Purchaser to issue up to 2,300,000 shares of Purchaser Common Stock to AVG, subject to terms to be mutually agreed upon by AVG and the post-Closing board of directors of Purchaser.
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ARTICLE VI
CONDITIONS TO CLOSING
Section 6.01 Conditions to Obligations of Purchaser. The obligations of Purchaser to consummate the Transactions are subject to the satisfaction of the following conditions on or before the Closing, any and all of which may be waived in whole or in part by Purchaser, to the extent permitted by applicable Law:
(a) Accuracy of Representations of Seller. (i) The representations and warranties of Seller set forth in Article III (other than the Seller Fundamental Representations) shall be true and correct in all respects (without giving effect to materiality, Seller Material Adverse Effect or similar phrases in such representations and warranties), on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties of Seller to be so true and correct, individually or in the aggregate, has not had and is not reasonably likely to have a Seller Material Adverse Effect, and (ii) the Seller Fundamental Representations will be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date).
(b) Compliance with Covenants. Seller shall have performed or complied with all agreements and covenants required by this Agreement and the Ancillary Agreements to be performed or complied with by it at or prior to the Closing Date, in each case in all material respects.
(c) No Seller Material Adverse Effect. There shall not have occurred a Seller Material Adverse Effect since the date hereof that is continuing.
(d) Closing Certificate. Seller shall have delivered to Purchaser a certificate, signed by an executive officer of Seller and dated as of the Closing Date, certifying as to the matters set forth in Section 6.01(a), Section 6.01(b) and Section 6.01(c).
Section 6.02 Conditions to Obligations of Seller. The obligations of the Seller to consummate the Transactions are subject to the satisfaction of the following conditions, any and all of which may be waived in whole or in part by Seller to the extent permitted by applicable Law:
(a) Accuracy of Representations of Purchaser. (i) The representations and warranties of Purchaser set forth in Article IV (other than the Purchaser Fundamental Representations) shall be true and correct in all respects (without giving effect to materiality, Purchaser Material Adverse Effect or similar phrases in such representations and warranties), on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where the failure of such representations and warranties of Purchaser to be so true and correct, individually or in the aggregate, has not had and is not reasonably likely to have a Purchaser Material Adverse Effect, and (ii) the Purchaser Fundamental Representations will be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date).
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(b) Compliance with Covenants. Purchaser shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing Date, in each case in all material respects.
(c) No Purchaser Material Adverse Effect. There shall not have occurred a Purchaser Material Adverse Effect since the date hereof that is continuing.
(d) Closing Certificate. Purchaser shall have delivered to Seller a certificate, signed by an executive officer of Purchaser and dated as of the Closing Date, certifying as to the matters set forth in Section 6.02(a), Section 6.02(b) and Section 6.02(c).
(e) [Reserved].
Section 6.03 Conditions to Each Party’s Obligations. The obligations of each Party to consummate the Transactions are subject to the satisfaction of the following conditions:
(a) Receipt of HSR Approval. The HSR Approval, if required, shall have been obtained.
(b) No Restraint. No provision of any applicable Law or Governmental Order shall be in effect prohibiting the consummation of the Transactions (including the Share Sale), and there shall not be any pending Action by any Governmental Authority which would reasonably be expected to result in the issuance of any such Governmental Order.
(c) Purchaser Shareholder Approval. The approval of the Purchaser Shareholder Proposals other than the advisory charter proposal; (the “Purchaser Shareholder Approval”) shall have been duly obtained in accordance with the Laws of the State of Delaware, the Organizational Documents of Purchaser and the rules and regulations of NASDAQ.
(d) Listing. The shares of Purchaser Common Stock to be issued pursuant to the Transactions and any Investment Agreements, if applicable, shall have been conditionally approved for listing on NASDAQ, subject to official notice of the issuance thereof and any requirement to have a sufficient number of round lot holders of shares of Purchaser Common Stock.
(e) Net Tangible Assets. Purchaser shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the closing of the Purchaser Share Redemption.
ARTICLE VII
TERMINATION
Section 7.01 Termination by Mutual Consent. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing by the mutual written consent of Purchaser and Seller.
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Section 7.02 Termination by Purchaser or Seller. This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Closing by either Purchaser or Seller if any injunction or other Governmental Order of any Governmental Authority preventing the consummation of the Transactions (including the Share Sale) shall have become final and non-appealable.
Section 7.03 Termination by Seller. Seller may terminate this Agreement at any time prior to the Closing by written notice to Purchaser:
(a) upon a material breach of any representation, warranty, covenant or agreement on the part of Purchaser set forth in this Agreement or the Ancillary Agreements, or if any representation or warranty of Purchaser shall have become untrue or incorrect, in either case which has rendered the satisfaction of the conditions set forth in Section 6.02(a) or Section 6.02(b) incapable of fulfillment, and such violation or breach has neither been waived by Seller nor (if capable of being cured) cured by Purchaser within thirty (30) days of Purchaser’s receipt of written notice of such violation or breach from Seller; provided, however, that the right to terminate this Agreement under this Section 7.03(a) shall not be available to Seller if Seller is then in material breach of any representation, warranty, covenant or agreement set forth in this Agreement or the Ancillary Agreements that has not been cured; or
(b) if (i) the Closing shall not have occurred by November 28, 2023 (the “Termination Date”), provided, that the Termination Date may be extended to a later date by mutual written consent of Purchaser and Seller, in which case such later date shall be deemed the Termination Date for purposes of this Agreement; and (ii) the failure of the Closing to occur on or before the Termination Date is not caused by a failure of Seller to perform and comply in all material respects with its covenants and agreements contained in this Agreement or any of the Ancillary Agreements that are required to be performed or complied with at or prior to Closing.
Section 7.04 Termination by Purchaser. Purchaser may terminate this Agreement at any time prior to the Closing by written notice to Seller:
(a) upon a material breach of any representation, warranty, covenant or agreement on the part of Seller set forth in this Agreement or the Ancillary Agreements, or if any representation or warranty of Seller shall have become untrue or incorrect, in either case which has rendered the satisfaction of the conditions set forth in Section 6.01(a), Section 6.01(b) or Section 6.01(c) incapable of fulfillment, and such violation or breach has neither been waived by Purchaser nor (if capable of being cured) cured by Seller within 30 days of Seller’s receipt of written notice of such violation or breach from Purchaser; provided, however, that the right to terminate this Agreement under this Section 7.04(a) shall not be available to Purchaser if Purchaser is then in material breach of any representation, warranty, covenant or agreement set forth in this Agreement or the Ancillary Agreements that has not been cured;
(b) if (i) the Closing shall not have occurred by the Termination Date and (ii) the failure of the Closing to occur on or before the Termination Date is not caused by a failure of Purchaser to perform and comply in all material respects with its covenants and agreements contained in this Agreement or any of the Ancillary Agreements that are required to be performed or complied with at or prior to Closing; or
(c) if Seller fails to consummate the Transactions on the fifth (5^th^) Business Day following the later of (A) the day on which the last of the conditions set forth in Sections 6.02 and 6.03 (excluding conditions that, by their nature are to be satisfied at the Closing) are satisfied and (B) the date on which Purchaser delivers written notice to Seller that the condition in the foregoing clause (A) is satisfied and Purchaser has irrevocably confirmed that it is ready, willing and able to consummate the Transactions and is prepared to satisfy the conditions set forth in Sections 6.02 and 6.03 that cannot be satisfied until Closing on such date.
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Section 7.05 Effect of Termination. Subject to Section 7.06, if this Agreement is terminated pursuant to this Article VII, all further obligations of the Parties under this Agreement (other than those contained in Section 5.10, this Section 7.05, Article IX and the Confidentiality Agreement, which shall continue in effect) shall be terminated and shall be of no further force and effect, and no Party or its respective Representatives or Affiliates will have any further liability to any other Party; provided that nothing herein shall relieve any Party from liability for such Party’s breach of this Agreement prior to the date of termination or for fraud under applicable Law.
Section 7.06 Termination Fee. If Purchaser terminates this Agreement pursuant to Section 7.04(c), then Seller shall promptly pay Purchaser a termination fee of $2,000,000 (the “Termination Fee”). Seller acknowledges and agrees that (i) the Termination Fee is a fair and reasonable estimate of the actual damages suffered by Purchaser, which amount would otherwise be impossible to calculate with precision, (ii) the Termination Fee constitutes liquidated damages hereunder and is not intended to be a penalty, and (iii) the Termination Fee shall be the sole and exclusive remedy available to Purchaser against Seller; provided, however, that the limitations set forth in this Section 7.06 shall not apply to the Liabilities arising from a finding of fraud committed by Seller, as determined by a final, non-appealable order in a court of competent jurisdiction.
ARTICLE VIII
TAX MATTERS
Section 8.01 Cooperation. After the Closing Date, Purchaser and Seller shall provide each other with reasonable cooperation in connection with the preparation and filing of Tax Returns of the Target Companies, any other Tax Returns or Tax filings contemplated by this Agreement and any Tax audit, contest, claim or other proceeding in respect of any Tax Returns or Taxes of the Target Companies in each case with respect to Pre-Closing Tax Periods, and shall make available to the other and to any taxing authority as reasonably requested, all information, records or documents relating to Tax liabilities or potential Tax liabilities of the Target Companies for all periods that end prior to or on, or that include, the Closing Date and shall preserve all such information, records and documents until the expiration of any statute of limitations or extensions thereof.
Section 8.02 Straddle Period Allocation. For purposes of the Agreement, in the case of a Straddle Period, the amount of Taxes allocable to the Pre-Closing Tax Period portion of such Straddle Period shall be (a) in the case of property Taxes and other Taxes imposed on a periodic basis without regard to income, gross receipts, payroll or sales, deemed to be the amount of such Taxes for the entire Straddle Period multiplied by a fraction, the numerator of which is the number of calendar days in the portion of such Straddle Period ending at the end of the Closing Date and the denominator of which is the number of calendar days in the entire Straddle Period and (b) in the case of all other Taxes, determined based on an interim closing of the books as of the close of business on the Closing Date (and for such purpose, the taxable period of any “controlled foreign corporation” (within the meaning of Section 957(a) of the Code), partnership, or other pass-through entity in which any Target Company holds a beneficial interest shall be deemed to terminate at such time), as if the taxable period of that entity ended as of the close of business on the Closing Date); provided that exemptions, allowances or deductions that are calculated on an annual (or monthly) basis (including depreciation and amortization deductions), other than with respect to property placed in service after the Closing, shall be allocated on a daily basis.
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Section 8.03 Pass-Through Tax Returns. Any Pass-Through Tax Returns of the Relevant Target Companies that Purchaser prepares and files, or causes to be prepared and filed, for any Pre-Closing Tax Period that are to be filed after the Closing Date (the “Purchaser Prepared Returns”) shall be prepared in a manner consistent with the Relevant Target Company’s past practices (to the extent supportable at a “more likely than not” or higher level of comfort), except as otherwise required by applicable Law. Each Purchaser Prepared Return filed after the Closing Date (taking into account applicable extensions) shall be submitted to Seller for review no later than thirty (30) days prior to the due date for filing such Purchaser Prepared Return (taking into account applicable extensions). Purchaser shall consider in good faith all reasonable comments timely received from Seller in writing no later than fifteen (15) days prior to the due date for filing any such Purchaser Prepared Return (taking into account applicable extensions). Notwithstanding the foregoing, each Purchaser Prepared Return for the Company for any Straddle Period for which the “interim closing method” under Section 706 of the Code (or any similar provision of state, local or non-U.S. Tax Law) is available shall be prepared in accordance with such method (with such interim closing occurring as of end of business on the Closing Date), except as otherwise required by applicable law. Purchaser shall prepare, or cause to be prepared, all other Tax Returns of the Target Companies that are filed after the Closing Date for which are not Purchaser Prepared Returns.
Section 8.04 Push-Out Election. Notwithstanding anything else to the contrary, with respect to any Tax audit, examination, or other proceeding by any Governmental Authority relating to any Pass-Through Tax Returns of a Relevant Target Company for any Pre-Closing Tax Period (each, a “Tax Proceeding”), a valid “push out” election under Section 6226 of the Code and the Treasury Regulations promulgated thereunder (and applicable state or local income Tax law) shall be made to the extent such election is available for any Pre-Closing Tax Period (or portion thereof).
Section 8.05 Tax Sharing Agreements. All Tax allocation, indemnification, sharing, gross-up, or similar Contracts or arrangements with respect to or involving a Target Company, on the one hand, and Seller and its Affiliates (other than the Target Companies), on the other hand, shall be terminated as of the Closing Date, thereby extinguishing any obligations or liabilities of the Target Companies thereunder.
Section 8.06 Purchase Price Allocation. Within thirty (30) days of the Closing Date, Seller shall provide the Purchaser Representative with a statement that allocates (the “Purchase Price Allocation”) the Closing Consideration (any other amounts required to be taken into account for U.S. federal income tax purposes) among the appropriate assets of Seller in accordance with the applicable Law. The Purchaser Representative shall have the right to raise reasonable objections to any portion of the initial Purchase Price Allocation within thirty (30) days after its receipt thereof from Seller by delivering written notice to Seller setting forth in reasonable detail its objections to the initial Purchase Price Allocation and the reasons therefor. Unless the Purchaser Representative raises objections in accordance with the preceding sentence, the Purchaser Representative shall be deemed to have agreed to the initial Purchase Price Allocation as prepared by Seller. The Purchaser Representative and Seller shall attempt to resolve any objections raised by the Purchaser Representative within such thirty (30)-day period. To the extent the Parties agree on the Purchase Price Allocation, the Parties shall prepare and file all Tax Returns in a manner consistent with the Purchase Price Allocation and shall not take any position on any Tax Return or in the course of any Tax audit, review, litigation, or other proceeding inconsistent with the Purchase Price Allocation, unless otherwise required by a final “determination” within the meaning of Section 1313 of the Code (or any similar or corresponding provision of state, local, or non-U.S. Law) or a revised Purchase Price Allocation as mutually agreed by the Parties.
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Section 8.07 Tax Treatment. The Parties acknowledge and agree that the Transactions are intended to be treated for U.S. federal (and applicable state and local) income Tax purposes as a contribution described in Section 351(a) of the Code. The Parties shall prepare and file all Tax Returns in a manner consistent with such intended tax treatment and shall not take any position on any Tax Return or in the course of any Tax audit, review, litigation, or other proceeding inconsistent with such intended tax treatment, unless otherwise required by applicable Law.
Section 8.08 Transfer Taxes. All transfer Taxes, stamp Taxes and other sales, use, documentary, excise, and similar Taxes, if any, that are imposed on the Transactions (collectively, “Transfer Taxes”), shall be borne by Seller. The Person responsible under Law for filing the Tax Returns with respect to such Transfer Taxes shall prepare and timely file such Tax Returns and promptly provide a copy of such Tax Return to Seller or Purchaser, as applicable. The Parties shall reasonably cooperate to timely prepare and file any Tax Returns or other filings relating to any Transfer Taxes, including any claim for exemption or exclusion from the application or imposition of any Transfer Taxes. If Seller is not responsible for filing such Tax Return, Seller shall pay to the Person responsible for filing such Tax Return all Transfer Taxes that it owes pursuant to this Section 8.08 within five (5) Business Days of written demand from the Person responsible for filing such Tax Return, provided that no payment shall be required more than three (3) days before the Transfer Tax is required to be paid.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01 Survival. None of the representations, warranties, covenants or agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Closing and all rights, claims and causes of action (whether in contract or in tort or otherwise, or whether at law or in equity) with respect thereto shall terminate at the Closing. Notwithstanding the foregoing, neither this Section 9.01 nor anything else in this Agreement to the contrary shall limit: (a) the survival of any covenant or agreement of the Parties which by its terms is required to be performed or complied with in whole or in part after the Closing, which covenants and agreements shall survive the Closing in accordance with their respective terms; (b) any claim against Seller in connection with the Restructuring if timely made pursuant to the applicable statute of limitations for such claim or (c) any claim against any Person with respect to fraud or willful breach of this Agreement if timely made pursuant to the applicable statute of limitations for such claim.
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Section 9.02 Indemnification by Seller. From and after the Closing, Seller shall be liable for, and shall indemnify and hold harmless Purchaser from and against any and all losses, Liabilities, actions, claims, demands, judgments, obligations, damages, Taxes, interest, awards, fines, penalties, costs and expenses (including out-of-pocket legal fees, costs and expenses incurred in investigating, preparing or defending the foregoing), asserted against, incurred, sustained or suffered by Purchaser as a result of, arising out of or otherwise relating to the Restructuring. If Purchaser has a claim for indemnification pursuant to this Section 9.02, then the Purchaser Representative shall give Seller written notice of such claim, and such claims, to the extent not mutually resolved between Seller and the Purchaser Representative, shall be resolved in accordance with the dispute resolution provisions set forth in Section 9.04.
Section 9.03 Governing Law. This Agreement shall be governed by and construed in accordance with the internal Laws of the State of Delaware (without reference to its choice of Law rules).
Section 9.04 Consent to Jurisdiction, Waiver of Jury Trial.
(a) Any Action that is based upon, arises out of, in connection with or relates to this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby (a “Dispute “) must be brought in the Court of Chancery of the State of Delaware (or, to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware), or, if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and each of the Parties irrevocably and unconditionally (i) consents and submits to the exclusive jurisdiction of each such court in any such Dispute, (ii) waives any objection it may now or hereafter have to personal jurisdiction, venue or to convenience of forum, (iii) agrees that all claims in respect of the Dispute shall be heard and determined only in any such court, and (iv) agrees not to bring any Dispute based upon, arising out of or relating to this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby in any other court. Nothing herein contained shall be deemed to affect the right of any Party to serve process in any Action permitted by Law or to commence an Action or otherwise proceed against any other Party in any other jurisdiction, in each case, to enforce judgments obtained in any Action brought pursuant to this Section 9.04.
(b) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY DISPUTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY, UNCONDITIONALLY AND VOLUNTARILY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE.
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Section 9.05 Notices. All notices or other communications, including service of process, required or permitted hereunder shall be in writing and shall be deemed given or delivered and received on the earliest of (a) the day when delivered, if delivered personally, (b) two (2) Business Days after deposit for next-day delivery with a nationally or internationally recognized courier or overnight service such as Federal Express or DHL (or upon any earlier receipt confirmed in writing by such service), (c) seven (7) Business Days after mailing via U.S. certified or registered mail, return receipt requested, or (d) the date sent, with no mail undeliverable or other rejection notice, if sent by email, in each case addressed as follows:
If to Purchaser, to:
Clean Earth Acquisitions Corp.
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
Attn: Aaron Ratner
E-mail: aaron@carbonfoundry.com
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attention: Steven R. Burwell
Email: sburwell@proskauer.com
If to Purchaser Representative, to:
Clean Earth Acquisitions Sponsor, LLC
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
Attn: Alexander Greystoke
E-mail: AlexHSC2@gmail.com
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
Eleven Times Square
New York, NY 10036
Attention: Steven R. Burwell
Email: sburwell@proskauer.com
If to Seller, to:
Alternus Energy Group Plc
Suite 9 & 10
Plaza 212
Blanchardstown Corporate Park 2
Dublin D15 R504
Ireland
Attn: Tali Durant
E-mail: td@alternusenergy.com
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with a copy (which shall not constitute notice) to:
Carmel, Milazzo & Feil LLP
55 West 39^th^ Street, 18^th^ Floor
New York, NY 10018
Attn: Ross D. Carmel, Esq.
E-mail: rcarmel@cmfllp.com
and to such other address or addressee as any such Party has specified by prior written notice to the other Party in accordance with this Section 9.05.
Section 9.06 Assignment; Successors and Assigns; No Third Party Rights. Except as otherwise provided herein, this Agreement may not, without the prior written consent of the other Party, be assigned by operation of Law or otherwise, and any attempted assignment shall be null and void ab initio. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, successors, permitted assigns and legal representatives, and nothing herein, express or implied, it intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; provided, that the D&O Indemnified Parties shall be third party beneficiaries and entitled to enforce Section 5.14, the Released Parties shall be third party beneficiaries and entitled to enforce Section 9.13, Carmel, Milazzo & Feil LLP shall be a third party beneficiary and entitled to enforce Section 9.15(a), and Proskauer Rose LLP shall be a third party beneficiary and entitled to enforce Section 9.15(b).
Section 9.07 Entire Agreement; Amendments; Waiver.
(a) This Agreement and the Exhibits and Disclosure Letters referred to herein, the Ancillary Agreements and the Confidentiality Agreement contain the entire understanding of the Parties with regard to the subject matter contained herein or therein, and supersede all prior and contemporaneous agreements, understandings and intents, whether express or implied (whether oral or written), between or among any of the Parties with respect to such subject matter.
(b) No amendment or modification of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by all of the Parties. No waiver of this Agreement shall be binding or effective for any purpose unless it is made in a writing signed by the Party against whom enforcement of such waiver is sought. No course of dealing between the Parties shall be deemed to modify, amend or discharge any provision or term of this Agreement. No delay or failure by any Party in the exercise of any of its rights or remedies shall operate as a waiver thereof, and no single or partial exercise by any Party of any such right or remedy shall preclude any other or further exercise thereof. A waiver of any right or remedy on any one occasion shall not be construed as a bar to or waiver of any such right or remedy on any other occasion.
Section 9.08 Severability. If any term or other provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination by a court of competent jurisdiction that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible.
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Section 9.09 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been signed by each of the Parties and delivered to the other Party. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Section 9.10 Post-Closing.
(a) Post-Closing Payments Related to the Business. If any payment on accounts receivable of any Target Company or other assets of a Target Company is received by Seller or its Affiliate after the Closing Date, Seller will hold such amounts received as trustee for, and remit such amounts to, Purchaser by wire transfer of immediately available funds as soon as practicable (and in any event within five (5) Business Days following receipt thereof). Purchaser may endorse and cash any checks or instruments payable or endorsed to Seller or any Affiliate thereof or its order which are received by Purchaser and which relate to any Target Company.
(b) Business Relationships. After the Closing, Seller will cooperate with Purchaser in its efforts to continue and maintain for the benefit of Purchaser those business relationships of Seller existing prior to the Closing and relating to the Business. Seller will refer to Purchaser all inquiries relating to any Target Company. None of Seller, its Affiliates or any Representative of either Seller or its Affiliates shall take any action that would reasonably be expected to diminish the value of the Target Companies after the Closing or that would interfere with the Target Companies.
(c) Name Change. Within five Business Days following the Closing, Seller shall change its name and the name of any of its Affiliates such that the names of Seller and its Affiliates shall not contain the name “Alternus” or any name that may be similar thereto.
Section 9.11 Further Assurances. The Parties shall cooperate reasonably with each other and with their respective Representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement, and shall (a) furnish upon request to each other such further information; (b) execute and deliver to each other such other documents; and (c) do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the Transactions. Furthermore, the Parties agree to comply with all Laws in connection with the Transactions.
Section 9.12 Remedies; Specific Performance. The Parties acknowledge that money damages may not be an adequate remedy at law if any Party fails to perform any of its obligations hereunder, and accordingly agree that each Party, in addition to any other remedy to which it may be entitled at Law or in equity, shall be entitled to seek an injunction or similar equitable relief restraining such Party from committing or continuing any such breach (or threatened breach) and to compel specific performance of the obligations of any other Party under this Agreement, without the posting of any bond. No remedy under this Agreement shall be exclusive of any other remedy, and all available remedies shall be cumulative.
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Section 9.13 No Recourse. All Actions that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to: (a) this Agreement, (b) the negotiation, execution or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), (c) any breach of this Agreement, and (d) any failure of the Transactions to be consummated, may be made only against (and, without prejudice to the rights of any express third-party beneficiary to whom rights under this Agreement inure pursuant to Section 9.06), Persons that are expressly identified as parties to this Agreement and not against any Released Party. No other Person, including any director, officer, employee, incorporator, member, partner, manager, shareholder, optionholder, Affiliate, agent, attorney or representative of, or any financial advisor or lender to, any Party, or any director, officer, employee, incorporator, member, partner, manager, shareholder, Affiliate, agent, attorney or representative of, or any financial advisor or lender (each of the foregoing, a “Released Party”) to any of the foregoing shall have any Liabilities (whether in contract or in tort, in Law or in equity, or granted by statute whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil) for any claims, causes of action, obligations or Liabilities arising under, out of, in connection with or related in any manner to the items in the immediately preceding clauses (a) through (d) and each Party, on behalf of itself and its Affiliates, hereby irrevocably releases and forever discharges each of the Released Parties from any such Liability or obligation.
Section 9.14 Fees and Expenses. Except as expressly set forth in this Agreement, including the treatment of Purchaser Transaction Expenses and Seller Transaction Expenses, all fees and expenses incurred in connection with this Agreement, the Transactions or otherwise shall be paid by the Party incurring such fees or expenses.
Section 9.15 Legal Representation.
(a) The Parties, on behalf of their respective successors and assigns, hereby agree that, in the event a dispute with respect to this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby arises after the Closing between or among (x) Seller and any of its directors, members, partners, officers, employees or Affiliates (collectively, the “Seller Group”), on the one hand, and (y) Purchaser, the Purchaser Representative, the Sponsor, the shareholders or holders of other equity interests of Purchaser, the Purchaser Representative or the Sponsor and/or any of their respective directors, members, partners, officers, employees or Affiliates (collectively, the “Purchaser Group”), on the other hand, any legal counsel, including Carmel, Milazzo & Feil LLP, that represented Seller prior to the Closing may represent any member of the Seller Group in such dispute even though the interests of such Persons may be directly adverse to Purchaser, and even though such counsel may have represented Seller in a matter substantially related to such dispute, or may be handling ongoing matters for Seller, and further agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute or Action arising out of or relating to, this Agreement, any Ancillary Agreements or the transactions contemplated hereby or thereby) between or among Seller and/or any member of the Seller Group, on the one hand, and Carmel, Milazzo & Feil LLP, on the other hand (the “Carmel Privileged Communications”), the attorney/client privilege and the expectation of client confidence shall survive the Transactions and belong to the Seller Group after the Closing. Notwithstanding the foregoing, any privileged communications or information shared by Seller prior to the Closing with Purchaser under a common interest agreement shall remain the privileged communications or information of Seller. The Parties, together with any of their respective Affiliates, Subsidiaries, successors or assigns, agree that no Person may use or rely on any of the Carmel Privileged Communications, whether located in the records or email server of Purchaser, Seller or their respective Subsidiaries, in any Action against or involving any of the Parties after the Closing, and the Parties agree not to assert that any privilege has been waived as to the Carmel Privileged Communications, by virtue of the Transactions.
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(b) The Parties, on behalf of their respective successors and assigns, hereby agree that, in the event a dispute with respect to this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby arises after the Closing between or among (x) any member of the Seller Group, on the one hand, and (y) any member of the Purchaser Group, on the other hand, any legal counsel, including Proskauer Rose LLP, that represented Purchaser and the Sponsor prior to the Closing may represent any member of the Purchaser Group in such dispute even though the interests of such Persons may be directly adverse to Seller, and even though such counsel may have represented Purchaser in a matter substantially related to such dispute, or may be handling ongoing matters for Purchaser, and further agree that, as to all legally privileged communications prior to the Closing (made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute or Action arising out of or relating to, this Agreement, any Ancillary Agreements or the transactions contemplated hereby or thereby) between or among Purchaser and/or any member of the Purchaser Group, on the one hand, and Proskauer Rose LLP, on the other hand (the “Proskauer Privileged Communications”), the attorney/client privilege and the expectation of client confidence shall survive the Transactions and belong to the Purchaser Group after the Closing. Notwithstanding the foregoing, any privileged communications or information shared by Purchaser prior to the Closing with Seller under a common interest agreement shall remain the privileged communications or information of Purchaser. The Parties, together with any of their respective Affiliates, Subsidiaries, successors or assigns, agree that no Person may use or rely on any of the Proskauer Privileged Communications, whether located in the records or email server of Purchaser, Seller or their respective Subsidiaries, in any Action against or involving any of the parties after the Closing, and the Parties agree not to assert that any privilege has been waived as to the Proskauer Privileged Communications, by virtue of the Transactions.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have duly executed this Business Combination Agreement as of the date first above written.
| CLEAN EARTH ACQUISITIONS CORP. | |
|---|---|
| By: | /s/ Aaron Ratner |
| Name: Aaron Ratner | |
| Title: CEO | |
| ALTERNUS ENERGY GROUP PLC | |
| By: | /s/ Vincent Browne |
| Name: Vincent Browne | |
| Title: Director | |
| CLEAN EARTH ACQUISITIONS SPONSOR, LLC, in its capacity as the Purchaser Representative and solely for purposes of Sections 8.06 and 9.02 | |
| By: | /s/ Martha Ross |
| Name: Martha Ross | |
| Title: Manager, Director |
[Signature Page toBusiness Combination Agreement]
Exhibit 3.1
THIRD AMENDED AND RESTATEDCERTIFICATE OF INCORPORATIONOF
CLEAN EARTH ACQUISITIONS CORP.
Clean Earth Acquisitions Corp., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFYAS FOLLOWS:
| 1. | The name of the Corporation is “Clean Earth Acquisitions Corp.” The original certificate of incorporation was filed with<br>the Secretary of State of the State of Delaware on May 14, 2021 (the “Certificate of Incorporation”), and was<br>subsequently amended and restated by the first amended and restated certificate of incorporation filed with the Secretary of State of<br>the State of Delaware on November 17, 2021 (the “First A&R Certificates of Incorporation”), and by the second<br>amended and restated certificate of incorporation filed with the Secretary of State of the State of Delaware on February 23, 2022<br>(the “Second A&R Certificate of Incorporation”, and together with the “Certificate of Incorporation”<br>and the “First A&R Certificate of Incorporation” hereinafter referred to as the “Original Certificatesof Incorporation”). |
|---|---|
| 2. | This Third Amended and Restated Certificate of Incorporation (this “Amended and Restated Certificate of Incorporation”),<br>restates and amends the provisions of both the First A&R Certificate of Incorporation and the Second A&R Certificate of Incorporation,<br>and was duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended<br>from time to time (the “DGCL”). |
| --- | --- |
| 3. | This Amended and Restated Certificate of Incorporation shall become effective on the date of filing with the Secretary of State of<br>Delaware. |
| --- | --- |
| 4. | The Original Certificates of Incorporation are being amended and restated in connection with the transactions contemplated by that<br>certain Business Combination Agreement, dated as of October 12, 2022, by and among the Corporation, Alternus Energy Group Plc, a<br>public limited company incorporated under the laws of Ireland, and Clean Earth Acquisitions Sponsor, LLC, a Delaware limited liability<br>company, in its capacity as the representative of the Corporation, (as amended, modified, amended and restated, supplemented or waived<br>from time to time, the “Initial Business Combination”). |
| --- | --- |
| 5. | This Amended and Restated Certificate of Incorporation hereby amends and restates the provisions of the Original Certificates of Incorporation<br>in their entirety as follows: |
| --- | --- |
ARTICLE I NAME
Section 1.Name. The name of this corporation is Alternus Clean Energy Inc.
ARTICLE II REGISTERED AGENT
Section 2.Address. The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle, Zip Code 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.
ARTICLE III PURPOSE
Section 3.Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the DGCL.
| Certificate of Incorporation | 1 |
| --- | --- |
ARTICLE IV CAPITALIZATION
Section 4.1.Authorized Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 151,000,000 shares, consisting of (a) 150,000,000 shares of common stock (the “Common Stock”), and (b) 1,000,000 shares of preferred stock (the “Preferred Stock”). The number of authorized shares of any of the Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares of such class or series then outstanding) by the affirmative vote of the holders of a majority of the voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Common Stock or Preferred Stock voting separately as a class shall be required therefor, unless a vote of any such holder is required pursuant to this Amended and Restated Certificate of Incorporation or any certificate of designations relating to any series of Preferred Stock.
Section 4.2.Preferred Stock. Subject to Article IX of this Amended and Restated Certificate of Incorporation, the board of directors of the Corporation (the “Board”) is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred Stock Designation”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or hereafter, to adopt any such resolution or resolutions.
Section 4.3.Common Stock.
| (a) | Voting Rights. |
|---|---|
| i. | Except as otherwise required by law or this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation,<br>the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation. |
| --- | --- |
| ii. | Except as otherwise required by law or this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation,<br>the holders of shares of Common Stock shall each be entitled to one vote for each such share on each matter properly submitted to the<br>stockholders of the Corporation on which the holders of the Common Stock are entitled to vote. |
| --- | --- |
| iii. | Except as otherwise required by law or this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation,<br>holders of Common Stock, shall have the exclusive right to vote on all matters properly submitted to a vote of the stockholders. Notwithstanding<br>the foregoing, except as otherwise required by law or this Amended and Restated Certificate of Incorporation (including any Preferred<br>Stock Designation), holders of shares of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate<br>of Incorporation (including any amendment to any Preferred Stock Designation) that relates solely to the terms of one or more outstanding<br>series of Preferred Stock or other series of Common Stock if the holders of such affected series of Preferred Stock or Common Stock, as<br>applicable, are entitled exclusively, either separately or together with the holders of one or more other such series, to vote thereon<br>pursuant to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) or the DGCL. |
| --- | --- |
| (b) | Dividends. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and<br>the provisions of Article IX hereof, the holders of shares of Common Stock shall be entitled to receive such dividends and<br>other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board from<br>time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in<br>such dividends and distributions. |
| --- | --- |
| Certificate of Incorporation | 2 |
| --- | --- | | (c) | Liquidation, Dissolution or Winding Up of the Corporation. Subject to applicable law, the rights, if any, of the holders of<br>any outstanding series of the Preferred Stock and the provisions of Article IX hereof, in the event of any voluntary or involuntary<br>liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of<br>the Corporation, the holders of shares of Common Stock shall be entitled to receive all the remaining assets of the Corporation available<br>for distribution to its stockholders, ratably in proportion to the number of shares of Common Stock held by them. | | --- | --- |
Section 4.4.Rights and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board. The Board is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof.
ARTICLE V BY-LAWS
Section 5.1.By-Laws. In furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized to make, amend, alter, change, add to or repeal the by-laws of the Corporation (as the same may be amended from time to time, the “By-Laws”) without the consent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Amended and Restated Certificate of Incorporation and without limiting the rights or obligations of any party pursuant to the Investor Rights Agreement. Without limiting the rights or obligations of any party to the Investor Rights Agreement, the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any such provision of the By-Laws, or to adopt any provision inconsistent therewith.
ARTICLE VI BOARD OF DIRECTORS
Section 6.1.Board of Directors.
| (a) | Board Powers. Except as otherwise provided in this Amended and Restated Certificate of Incorporation or the DGCL, the business<br>and affairs of the Corporation shall be managed by or under the direction of the Board. |
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| (b) | Number, Election and Term. |
| --- | --- |
| i. | The number of directors of the Corporation, other than those who may be elected by the holders of one or more series of the Preferred<br>Stock voting separately by class or series, shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted<br>by a majority of the Board. |
| --- | --- |
| ii. | Without limiting the rights or obligations of any party pursuant to the Investor Rights Agreement, the directors (other than those<br>directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such<br>series, as the case may be) shall be divided into three classes designated Class I, Class II and Class III. Each class<br>shall consist, as nearly as possible, of one-third of the total number of such directors. Class I directors shall initially serve<br>for a term expiring at the first annual meeting of stockholders for the calendar year ended December 31, 2024, Class II directors<br>shall initially serve for a term expiring at the second annual meeting of stockholders for the calendar year ended December 31, 2025<br>and Class III directors shall initially serve for a term expiring at the third annual meeting of stockholders for the calendar year<br>ended December 31, 2026. At each annual meeting including and following the annual meeting of the stockholders for the calendar year<br>ended December 31, 2023, successors to the class of directors whose term expires at that annual meeting shall be elected for a term<br>expiring at the third succeeding annual meeting of stockholders. If the<br>number of such directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors<br>in each class as nearly equal as possible, and any such additional director of any class elected to fill a newly created directorship<br>resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in<br>no case shall a decrease in the number of directors remove, or shorten the term of, any incumbent director. Subject to the rights granted<br>to the holders of any one or more series of Preferred Stock then outstanding and without limiting the rights or obligations of any party<br>pursuant to the Investor Rights Agreement, the election of directors shall be determined by a plurality of the votes cast by the stockholders<br>present in person or represented by proxy at the meeting and entitled to vote thereon. The Board is authorized to assign members of the<br>Board already in office to their respective class in accordance with the Investor Rights Agreement. |
| --- | --- |
| Certificate of Incorporation | 3 |
| --- | --- | | iii. | Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot. The holders<br>of shares of Common Stock shall not have cumulative voting rights. | | --- | --- |
Section 6.2.Newly-Created Directorships and Vacancies. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding and without limiting the rights or obligations of any party granted pursuant to the Investor Rights Agreement, any newly-created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled (a) by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director (and not by the stockholders) or (b) upon the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.
Section 6.3.Newly-Created Directorships and Vacancies. Any director may resign at any time upon notice to the Corporation given in writing or by any electronic transmission permitted by the By-Laws. Without limiting the rights or obligations of any party pursuant to the Investor Rights Agreement, any or all of the directors (other than the directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such series, as the case may be) may be removed only for cause and only upon the affirmative vote of the holders of a majority of the voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Without limiting the rights or obligations of any party pursuant to the Investor Rights Agreement, in case the Board or any one or more directors should be so removed, new directors may be elected pursuant to Section 6.2.
Section 6.4.Preferred Stock Directors. Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of this Amended and Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) applicable thereto. Notwithstanding Section 6.1(b), the number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 6.1(b) hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly
Section 6.5.Quorum. A quorum for the transaction of business by the directors shall be set forth in the By-Laws.
ARTICLE VII
SPECIAL MEETINGS OF STOCKHOLDERS; ACTION BYWRITTEN CONSENT
Section 7.1.Special Meetings. Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer of the Corporation, or the Board pursuant to a resolution adopted by a majority of the Board, and the ability of the stockholders of the Corporation to call a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders of the Corporation may not be called by another person or persons.
| Certificate of Incorporation | 4 |
| --- | --- |
Section 7.2.Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.
Section 7.3.Action by Written Consent. Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock, subsequent to the consummation of the Offering, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.
ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION
Section 8.1.Limited Liability of Directors and Officers. To the fullest extent permitted by law, no director or officer of the Corporation will have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director or officer, except to the extent such an exemption from liability or limitation thereof is not permitted under the DGCL as presently in effect or as the same may hereafter be amended. If the DGCL is amended to authorize action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Neither the amendment nor the repeal of this Article VIII shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the Corporation existing prior to such amendment or repeal.
Section 8.2. Indemnification and Advancementof Expenses.
| (a) | To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify<br>and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened,<br>pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (for purposes of this Section 8.2,<br>a “Proceeding”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a<br>director or officer of the Corporation, is or was serving at the request of the Corporation as a director, manager, officer, employee<br>or agent of another corporation or of a partnership, limited liability company, joint venture, trust, other enterprise or nonprofit entity,<br>including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding<br>is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director,<br>officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees,<br>judgments, fines, Employee Retirement Income Security Act of 1974 (as amended from time to time, “ERISA”) excise taxes<br>and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such Proceeding. The Corporation<br>shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an Indemnitee<br>in defending or otherwise participating in any Proceeding in advance of its final disposition; provided, however, that,<br>to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made<br>only upon receipt of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be determined<br>that the Indemnitee is not entitled to be indemnified under this Section 8.2 or otherwise. The rights to indemnification and<br>advancement of expenses conferred by this Section 8.2 shall be contract rights and such rights shall continue as to an Indemnitee<br>who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators.<br>Notwithstanding the foregoing provisions of this Section 8.2(a), except for Proceedings to enforce rights to indemnification<br>and advancement of expenses, the Corporation shall indemnify and advance expenses to an Indemnitee in connection with a Proceeding (or<br>part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board. |
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| (b) | The rights to indemnification and advancement of expenses conferred on any Indemnitee by this Section 8.2 shall not be<br>exclusive of any other rights that any Indemnitee may have or hereafter acquire under law, this Amended and Restated Certificate of Incorporation, the By-Laws,<br>the Investor Rights Agreement, an agreement, vote of stockholders or disinterested directors, or otherwise. |
| --- | --- |
| Certificate of Incorporation | 5 |
| --- | --- | | (c) | Any repeal or amendment of this Section 8.2 by the stockholders of the Corporation or by changes in law, or the adoption<br>of any other provision of this Amended and Restated Certificate of Incorporation inconsistent with this Section 8.2, shall,<br>unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to<br>provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely<br>affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect<br>of any Proceeding (regardless of when such Proceeding is first threatened, commenced or completed) arising out of, or related to, any<br>act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. | | --- | --- | | (d) | This Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted<br>by law, to indemnify and to advance expenses to persons other than Indemnitees. | | --- | --- | | (e) | To the extent an indemnitee has rights to indemnification, advancement of expenses and/or insurance provided by a third party, (i) the<br>Corporation shall be the indemnitor of first resort (i.e., that its obligations to an indemnitee are primary and any obligation of such<br>third party to advance expenses or to provide indemnification for the same expenses or liabilities incurred by an indemnitee are secondary),<br>(ii) the Corporation shall be required to advance the full amount of expenses incurred by an indemnitee and shall be liable for the<br>full amount of all claims, liabilities, damages, losses, costs and expenses (including amounts paid in satisfaction of judgments, in compromises<br>and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim<br>or alleged claim) to the extent legally permitted and as required by the terms of this Amended and Restated Certificate of Incorporation,<br>the Amended and Restated Bylaws and the agreements to which the Corporation is a party, without regard to any rights an indemnitee may<br>have against such third party and (iii) the Corporation irrevocably waives, relinquishes and releases such third party from any and<br>all claims against them for contribution, subrogation or any other recovery of any kind in respect thereof. No advancement or payment<br>by such third party on behalf of an indemnitee with respect to any claim for which an indemnitee has sought indemnification from the Corporation<br>shall affect the foregoing, and such third party shall have a right of contribution and be subrogated to the extent of such advancement<br>or payment to all of the rights of recovery of an indemnitee against the Corporation. | | --- | --- |
ARTICLE IX RESERVED
ARTICLE X DGCL SECTION 203
Section 10.1.DGCL. The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.
ARTICLE X CORPORATE OPPORTUNITY
Section 11.1.Corporate Opportunity. To the extent allowed by law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its officers or directors, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may have as of the date of this Amended and Restated Certificate of Incorporation or in the future, and the Corporation renounces any expectancy that any of the directors or officers of the Corporation will offer any such corporate opportunity of which he or she may become aware to the Corporation, except, the doctrine of corporate opportunity shall apply with respect to any of the directors or officers of the Corporation with respect to a corporate opportunity that was offered to such person solely in his or her capacity as a director or officer of the Corporation and (i) such opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation to pursue and (ii) the director or officer is permitted to refer that opportunity to the Corporation without violating any legal obligation.
| Certificate of Incorporation | 6 |
| --- | --- |
ARTICLE XII
AMENDMENT OF AMENDED AND RESTATED CERTIFICATEOF INCORPORATION
Section 12.1.Amendment. The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation (including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that may be added or inserted, in the manner now or hereafter prescribed by this Amended and Restated Certificate of Incorporation and the DGCL; and, except as set forth in Article VIII, all rights, preferences and privileges of whatever nature herein conferred upon stockholders, directors or any other persons by and pursuant to this Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article XII.
ARTICLE XIII
EXCLUSIVE FORUM FOR CERTAIN LAWSUITS
Section 13.1.Forum. Subject to the last sentence in this Section 13.1, and unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by the applicable law, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring
(i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Amended and Restated Certificate of Incorporation or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. Notwithstanding the foregoing, (i) the provisions of this Section 13.1 will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Section 13.2.Consent to Jurisdiction. If any action the subject matter of which is within the scope of Section 13.1 immediately above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 13.1 immediately above (an “FSC Enforcement Action”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XIII.
| Certificate of Incorporation | 7 |
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ARTICLE XIV SEVERABILITY
Section 14.1.Severability. If any provision or provisions (or any part thereof) of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby, and (ii) the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their faith service or for the benefit of the Corporation to the fullest extent permitted by law.
[Signature page follows]
| Certificate of Incorporation | 8 |
| --- | --- |
INWITNESS WHEREOF, Clean Earth Acquisitions Corp. has caused this Amended and Restated Certificate of Incorporation to be duly executed and acknowledged in its name and on its behalf by an authorized officer as of the date first set forth above.
| CLEAN EARTH ACQUISITIONS CORP. | |
|---|---|
| By: | /s/ Aaron Ratner |
| Name: Aaron Ratner | |
| Title: CEO |
[Signature Page to Amended and Restated Certificateof Incorporation]
| Certificate of Incorporation | 9 |
| --- | --- |
Exhibit 3.2
AMENDED AND RESTATED BYLAWS
OF
Alternus Clean Energy Inc.
(THE “CORPORATION”)
ARTICLE I
OFFICES
Section 1.1.Registered Office. The registered office of the Corporation within the State of Delaware shall be located at either (a) the principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the Corporation’s registered agent in Delaware..
Section 1.2.Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”) may from time to time determine or as the business and affairs of the Corporation may require.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 2.1.Annual Meetings. The annual meeting of stockholders shall be held at such place, either within or without the State of Delaware, and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a). At each annual meeting, the stockholders entitled to vote on such matters shall elect those directors of the Corporation to fill any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought before the meeting.
Section 2.2.Special Meetings. Subject to the rights of the holders of any outstanding series of the preferred stock of the Corporation (“Preferred Stock”), and to the requirements of applicable law, special meetings of stockholders, for any purpose or purposes, may be called only by the Chairman of the Board, the Chief Executive Officer, or by the Board pursuant to a resolution adopted by a majority of the Board, and may not be called by any other person. Special meetings of stockholders shall be held at such place, either within or without the State of Delaware, and at such time and on such date as shall be determined by the Board and stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a).
Section 2.3.Notices. Written notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting and the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by Section 9.3 to each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting, by the Corporation not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the General Corporation Law of the State of Delaware (the “DGCL”). If said notice is for a stockholders meeting other than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of stockholders as to which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given before the date previously scheduled for such meeting.
Section 2.4. Quorum. Except as otherwise provided by applicable law, the Corporation’s third amended and restated certificate of incorporation (as the same may be further amended or restated from time to time, the “Certificate of Incorporation”) or these amended and restated bylaws (these “Bylaws”), the presence, in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any such other corporation to vote shares held by it in a fiduciary capacity.
Section 2.5. Voting of Shares.
| (a) | Voting Lists. The Secretary of the Corporation (the “Secretary”) shall prepare, or shall cause the officer<br>or agent who has charge of the stock ledger of the Corporation to prepare and make, at least 10 days before every meeting of stockholders,<br>a complete list of the stockholders of record entitled to vote at such meeting; provided, however, that if the record date<br>for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders<br>entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the address and the number and<br>class of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a) shall require the<br>Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the<br>examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least 10 days<br>prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to<br>such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business<br>of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation<br>may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be<br>held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may<br>be inspected by any stockholder who is present. If a meeting of stockholders is to be held solely by means of remote communication as<br>permitted by Section 9.5(a), the list shall be open to the examination of any stockholder during the whole time of the meeting<br>on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of meeting.<br>The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.5(a) or<br>to vote in person or by proxy at any meeting of stockholders. |
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| (b) | Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized<br>by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot<br>submitted by electronic transmission (as defined in Section 9.3), provided that any such electronic transmission must either<br>set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by<br>the stockholder or proxy holder. The Board, in its discretion, or the chairman of the meeting of stockholders, in such person’s<br>discretion, may require that any votes cast at such meeting shall be cast by written ballot. |
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| (c) | Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action<br>in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be<br>voted or acted upon after three years from its date, unless the proxy provides for a longer period. Proxies need not be filed with the<br>Secretary until the meeting is called to order, but shall be filed with the Secretary before being voted. Without limiting the manner<br>in which a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute<br>a valid means by which a stockholder may grant such authority. No stockholder shall have cumulative voting rights. |
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| i. | A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished<br>by the stockholder or such stockholder’s authorized officer, director, employee<br>or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including,<br>but not limited to, by facsimile signature. |
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| ii. | A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission<br>of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service<br>organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that<br>any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic<br>transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing or<br>transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original<br>writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy,<br>facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. |
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| (d) | Required Vote. Subject to the rights of the holders of one or more series of Preferred Stock, voting separately by class or<br>series, to elect directors pursuant to the terms of one or more series of Preferred Stock, at all meetings of stockholders at which a<br>quorum is present, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person<br>or represented by proxy at the meeting and entitled to vote thereon. All other matters presented to the stockholders at a meeting at which<br>a quorum is present shall be determined by the vote of a majority of the votes cast by the stockholders present in person or represented<br>by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law, the Certificate of Incorporation,<br>these Bylaws or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the<br>decision of such matter. |
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| (e) | Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint one<br>or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities,<br>to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may appoint one or more<br>persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed by<br>the Board, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging<br>his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to<br>the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each;<br>determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count<br>all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges<br>made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their<br>count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election.<br>Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector<br>acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. |
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Section 2.6.Adjournments. Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting, from time to time, whether or not there is a quorum, to reconvene at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting in accordance with Section 9.2, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
Section 2.7. Advance Notice for Business.
| (a) | Annual Meetings of Stockholders. No business may be transacted at an annual meeting of stockholders, other than business that<br>is either (i) specified in the Corporation’s notice of meeting (or any supplement thereto) given by or at the direction of<br>the Board, (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or (iii) otherwise<br>properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record entitled to vote<br>at such annual meeting on the date of the giving of the notice provided for in this Section 2.7(a) and on the record<br>date for the determination of stockholders entitled to vote at such annual meeting and (y) who complies with the notice procedures<br>set forth in this Section 2.7(a). Notwithstanding anything in this Section 2.7(a) to the contrary, only persons<br>nominated for election as a director to fill any term of a directorship that expires on the date of the annual meeting pursuant to Section 3.2<br>will be considered for election at such meeting. |
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| i. | In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual meeting<br>by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary and such business must<br>otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s notice to the Secretary<br>with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not<br>later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of<br>the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is<br>more than 30 days before or more than 60 days after such anniversary date (or if there has been no prior annual meeting), notice by the<br>stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not later<br>than the later of (x) the close of business on the<br>90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement of the date<br>of the annual meeting is first made by the Corporation. The public announcement of an adjournment or postponement of an annual meeting<br>shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in this Section 2.7(a). |
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| ii. | To be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations)<br>must set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the<br>business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions<br>proposed for consideration and in the event such business includes a proposal to amend these Bylaws, the language of the proposed amendment)<br>and the reasons for conducting such business at the annual meeting, (B) the name and record address of such stockholder and the name<br>and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series and number of shares of<br>capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on<br>whose behalf the proposal is made, (D) a description of all arrangements or understandings between such stockholder and the beneficial<br>owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal<br>of such business by such stockholder, (E) any material interest of such stockholder and the beneficial owner, if any, on whose behalf<br>the proposal is made in such business and (F) a representation that such stockholder (or a qualified representative of such stockholder)<br>intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. |
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| iii. | The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal<br>(other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal<br>at an annual meeting in compliance with Rule 14a- 8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended<br>(the “Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such<br>proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at<br>the annual meeting of stockholders except business brought before the annual meeting in accordance with<br>the procedures set forth in this Section 2.7(a), provided, however, that once business has been properly brought<br>before the annual meeting in accordance with such procedures, nothing in this Section 2.7(a) shall be deemed to preclude<br>discussion by any stockholder of any such business. If the Board or the chairman of the annual meeting determines that any stockholder<br>proposal was not made in accordance with the provisions of this Section 2.7(a) or that the information provided in a<br>stockholder’s notice does not satisfy the information requirements of this Section 2.7(a), such proposal shall not be<br>presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.7(a), if the stockholder<br>(or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present<br>the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such matter may have<br>been received by the Corporation. |
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| iv. | In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements<br>of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a) shall<br>be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to<br>Rule 14a-8 under the Exchange Act. |
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| (b) | Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have<br>been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board<br>may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting<br>only pursuant to Section 3.2. |
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| (c) | Public Announcement. For purposes of these Bylaws, “public announcement” shall mean disclosure in a press<br>release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed or<br>furnished by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act<br>(or any successor thereto). |
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Section 2.8.Conduct of Meetings. The chairman of each annual and special meeting of stockholders shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President is not a director, such other person as shall be appointed by the Board. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these Bylaws or such rules and regulations as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairman of the meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.
ARTICLE III
DIRECTORS
Section 3.1.Powers; Number. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. Directors need not be stockholders or residents of the State of Delaware. Subject to the Certificate of Incorporation, the number of directors shall be fixed exclusively by resolution of the Board.
Section 3.2. Advance Notice for Nominationof Directors.
| (a) | Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation,<br>except as may be otherwise provided by the terms of one or more series of Preferred Stock with respect to the rights of holders of one<br>or more series of Preferred Stock to elect directors. Nominations of persons for election to the Board at any annual meeting of stockholders,<br>or at any special meeting of stockholders called for the purpose of electing directors as set forth in the Corporation’s notice<br>of such special meeting, may be made (i) by or at the direction of the Board or (ii) by any stockholder of the Corporation (x) who<br>is a stockholder of record entitled to vote in the election of directors on the date of the giving of the notice provided for in this<br>Section 3.2 and on the record date for the determination of stockholders entitled to vote at such meeting and (y) who<br>complies with the notice procedures set forth in this Section 3.2. |
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| (b) | In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely<br>notice thereof in proper written form to the Secretary. To be timely, a stockholder’s notice to the Secretary must be received by<br>the Secretary at the principal executive offices of the Corporation (i) in the case of an annual meeting, not later than the close<br>of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding<br>annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before<br>or more than 60 days after such anniversary date (or if there has been no prior annual meeting), notice by the stockholder to be timely<br>must be so received not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the<br>close of business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public<br>announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special meeting of stockholders<br>called for the purpose of electing directors, not later than the close of business on the 10th day following the day on which public announcement<br>of the date of the special meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement<br>of an annual meeting or special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s<br>notice as described in this Section 3.2. |
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| (c) | Notwithstanding anything in paragraph (b) to the contrary, in the event that the number of directors to be elected to the Board<br>at an annual meeting is greater than the number of directors whose terms expire on the date of the annual meeting and there is no public<br>announcement by the Corporation naming all of the nominees for the additional directors to be elected or specifying the size of the increased<br>Board before the close of business on the 90th day prior to the anniversary date of the immediately preceding annual meeting of stockholders,<br>a stockholder’s notice required by this Section 3.2 shall also be considered timely, but only with respect to nominees<br>for the additional directorships created by such increase that are to be filled by election at such annual meeting, if it shall be received<br>by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following<br>the date on which such public announcement was first made by the Corporation. |
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| (d) | To be in proper written form, a stockholder’s notice to the Secretary must set forth (i) as to each person whom the stockholder<br>proposes to nominate for election as a director (A) the name, age, business address and residence address of the person, (B) the<br>principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation<br>that are owned beneficially or of record by the person and (D) any other information relating to the person that would be required<br>to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of<br>directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder; and (ii) as<br>to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s<br>books and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the<br>class or series and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder<br>and the beneficial owner, if any, on whose behalf the nomination is made, (C) a description of all arrangements or understandings<br>relating to the nomination to be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination<br>is made, each proposed nominee and any other person or persons (including their names), (D) a representation that such stockholder<br>(or a qualified representative of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named<br>in its notice and (E) any other information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination<br>is made that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations<br>of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.<br>Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if<br>elected. |
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| (e) | If the Board or the chairman of the meeting of stockholders determines that any nomination was not made in accordance with the provisions<br>of this Section 3.2, or that the information provided in a stockholder’s notice does not satisfy the information requirements<br>of this Section 3.2, then such nomination shall not be considered at the meeting in question. Notwithstanding the foregoing<br>provisions of this Section 3.2, if the stockholder (or a qualified representative of the stockholder) does not appear at the<br>meeting of stockholders of the Corporation to present the nomination, such nomination shall be disregarded, notwithstanding that proxies<br>in respect of such nomination may have been received by the Corporation. |
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| (f) | In addition to the provisions of this Section 3.2, a stockholder shall also comply with all of the applicable requirements<br>of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 3.2<br>shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation. |
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Section 3.3.Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have the authority to fix the compensation of directors, including for service on a committee of the Board, and may be paid either a fixed sum for attendance at each meeting of the Board or other compensation as director. The directors may be reimbursed their expenses, if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on the committee.
ARTICLE IV
BOARD MEETINGS
Section 4.1.Annual Meetings. The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided in this Section 4.1.
Section 4.2.Regular Meetings. Regularly scheduled, periodic meetings of the Board may be held without notice at such times, dates and places (within or without the State of Delaware) as shall from time to time be determined by the Board.
Section 4.3. SpecialMeetings. Special meetings of the Board (a) may be called by the Chairman of the Board, Chief Executive Officer or President and (b) shall be called by the Chairman of the Board, Chief Executive Officer, President or Secretary on the written request of at least a majority of directors then in office, or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Delaware) as may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director (i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation, or these Bylaws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or waiver of notice of such meeting. A special meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 9.4.
Section 4.4.Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these Bylaws. If a quorum shall not be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 4.5.Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 4.6.Organization. The chairman of each meeting of the Board shall be the Chairman of the Board or, in the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director, a chairman elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence (or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.
ARTICLE V
COMMITTEES OF DIRECTORS
Section 5.1.Establishment. The Board may by resolution of the Board designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board when required by the resolution designating such committee. The Board shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve any such committee.
Section 5.2.Available Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.
Section 5.3.Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.
Section 5.4. Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of Incorporation, these Bylaws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise provides and except as provided in these Bylaws, each committee designated by the Board may make, alter, amend and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized to conduct its business pursuant to Article III and Article IV of these Bylaws.
ARTICLE VI
OFFICERS
Section 6.1.Officers. The officers of the Corporation elected by the Board shall be a Chief Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including without limitation, a Chairman of the Board, Presidents, Vice Presidents, Assistant Secretaries and a Treasurer) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices for such terms as may be provided in these Bylaws or as may be prescribed by the Board or, if such officer has been appointed by the Chief Executive Officer or President, as may be prescribed by the appointing officer.
| (a) | Chairman of the Board. The Chairman of the Board shall preside when present at all meetings of the stockholders and the Board.<br>In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director)<br>shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the Chairman of the Board shall<br>not include supervision or control of the preparation of the financial statements of the Corporation (other than through participation<br>as a member of the Board). The position of Chairman of the Board and Chief Executive Officer may be held by the same person. |
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| (b) | Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have general<br>supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of the Board,<br>and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent any such powers<br>and duties have been prescribed to the Chairman of the Board pursuant to Section 6.1(a) above. In the absence (or inability<br>or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside when present<br>at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the same person. |
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| (c) | President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would normally<br>be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to act) of<br>the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present at<br>all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated<br>by the Board. The position of President and Chief Executive Officer may be held by the same person. |
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| (d) | Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there<br>be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers<br>of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function. |
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| (e) | Secretary. |
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| i. | The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record<br>the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be<br>given, notice of all meetings of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed<br>by the Board, the Chairman of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal<br>of the Corporation and the Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it,<br>and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general<br>authority to any other officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature. |
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| ii. | The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s<br>transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders<br>and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates<br>issued for the same and the number and date of certificates cancelled. |
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| (f) | Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined<br>by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary. |
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| (g) | Chief Financial Officer. The Chief Financial Officer shall perform all duties commonly incident to that office, including,<br>without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Chief<br>Financial Officer’s hands and the deposit of the funds of the Corporation in such banks or trust companies as the Board, the Chief<br>Executive Officer or the President may authorize. |
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| (h) | Treasurer. The Treasurer shall, in the absence (or inability or refusal to act) of the Chief Financial Officer, perform the<br>duties and exercise the powers of the Chief Financial Officer. |
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Section 6.2.Term of Office; Removal; Vacancies. The elected officers of the Corporation shall be appointed by the Board and shall hold office until their successors are duly elected and qualified by the Board or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides. Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.
Section 6.3.Other Officers. The Board may delegate the power to appoint such other officers and agents, and may also remove such officers and agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.
Section 6.4.Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the Certificate of Incorporation or these Bylaws otherwise provide. Officers need not be stockholders or residents of the State of Delaware.
ARTICLE VII
SHARES
Section 7.1.Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.
Section 7.2. MultipleClasses of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements, there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights.
Section 7.3.Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by (a) the Chairman of the Board, Chief Executive Officer, the President or a Vice President and (b) the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.
Section 7.4. Consideration and Paymentfor Shares.
| (a) | Subject to applicable law and the Certificate of Incorporation, shares of stock may be issued for such consideration, having in the<br>case of shares with par value a value not less than the par value thereof, and to such persons, as determined from time to time by the<br>Board. The consideration may consist of any tangible or intangible property or any benefit to the Corporation including cash, promissory<br>notes, services performed, contracts for services to be performed or other securities, or any combination thereof. |
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| (b) | Subject to applicable law and the Certificate of Incorporation, shares may not be issued until the full amount of the consideration<br>has been paid, unless upon the face or back of each certificate issued to represent any partly paid shares of capital stock or upon the<br>books and records of the Corporation in the case of partly paid uncertificated shares, there shall have been set forth the total amount<br>of the consideration to be paid therefor and the amount paid thereon up to and including the time said certificate representing certificated<br>shares or said uncertificated shares are issued. |
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Section 7.5. Lost, Destroyed or Wrongfully Taken Certificates.
| (a) | If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation<br>shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new<br>certificate before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser;<br>(ii) if requested by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim<br>that may be made against the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance<br>of such new certificate or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation. |
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| (b) | If a certificate representing shares has been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation<br>of that fact within a reasonable time after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation<br>registers a transfer of such shares before receiving notification, the owner shall be precluded from asserting against the Corporation<br>any claim for registering such transfer or a claim to a new certificate representing such shares or such shares in uncertificated form. |
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Section 7.6. Transfer of Stock.
| (a) | If a certificate representing shares of the Corporation is presented to the Corporation with an endorsement requesting the registration<br>of transfer of such shares or an instruction is presented to the Corporation requesting the registration of transfer of uncertificated<br>shares, the Corporation shall register the transfer as requested if: |
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| i. | in the case of certificated shares, the certificate representing such shares has been surrendered; |
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| ii. | (A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as entitled to such<br>shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares;<br>or (C) with respect to certificated shares or uncertificated shares, the endorsement or instruction is made by any other appropriate<br>person or by an agent who has actual authority to act on behalf of the appropriate person; |
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| iii. | the Corporation has received a guarantee of signature of the person signing such endorsement or instruction or such other reasonable<br>assurance that the endorsement or instruction is genuine and authorized as the Corporation may request; |
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| iv. | the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable in accordance with Section 7.8(a);<br>and |
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| v. | such other conditions for such transfer as shall be provided for under applicable law have been satisfied. |
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| (b) | Whenever any transfer of shares shall be made for collateral security and not absolutely, the Corporation shall so record such fact<br>in the entry of transfer if, when the certificate for such shares is presented to the Corporation for transfer or, if such shares are<br>uncertificated, when the instruction for registration of transfer thereof is presented to the Corporation, both the transferor and transferee<br>request the Corporation to do so. |
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Section 7.7.Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.
Section 7.8. Effect of the Corporation’sRestriction on Transfer.
| (a) | A written restriction on the transfer or registration of transfer of shares of the Corporation or on the amount of shares of the Corporation<br>that may be owned by any person or group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing<br>such shares or, in the case of uncertificated shares, contained in a notice, offering circular or prospectus sent by the Corporation to<br>the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares, may be enforced<br>against the holder of such shares or any successor or transferee of the holder including an executor, administrator, trustee, guardian<br>or other fiduciary entrusted with like responsibility for the person or estate of the holder. |
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| (b) | A restriction imposed by the Corporation on the transfer or the registration of shares of the Corporation or on the amount of shares<br>of the Corporation that may be owned by any person or group of persons, even if otherwise lawful, is ineffective against a person without<br>actual knowledge of such restriction unless: (i) the shares are certificated and such restriction is noted conspicuously on the certificate;<br>or (ii) the shares are uncertificated and such restriction was contained in a notice, offering circular or prospectus sent by the<br>Corporation to the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares. |
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Section 7.9.Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.
ARTICLE VIII
INDEMNIFICATION
Section 8.1.The Right to Indemnification. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (hereinafter an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding; provided, however, that, except as provided in Section 8.3 with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify an Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if such proceeding (or part thereof) was authorized by the Board.
Section 8.2.Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.1, an Indemnitee shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including, without limitation, attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon the Corporation’s receipt of an undertaking (hereinafter an “undertaking”), by or on behalf of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified under this Article VIII or otherwise.
Section 8.3.Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or Section 8.2 is not paid in full by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII or otherwise shall be on the Corporation.
Section 8.4. Non-Exclusivityof Rights. The rights provided to any Indemnitee pursuant to this Article VIII shall not be exclusive of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these Bylaws, an agreement, a vote of stockholders or disinterested directors, or otherwise.
Section 8.5.Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Section 8.6.Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation to the extent and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Indemnitees. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VIII with respect to the indemnification and advancement of expenses of Indemnitees under this Article VIII.
Section 8.7.Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these Bylaws inconsistent with this Article VIII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision; provided, however, that amendments or repeals of this Article VIII shall require the affirmative vote of the stockholders holding at least 66.7% of the voting power of all then-outstanding shares of capital stock of the Corporation.
Section 8.8.Certain Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” for purposes of Section 145 of the DGCL.
Section 8.9.Contract Rights. The rights provided to Indemnitees pursuant to this Article VIII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators.
Section 8.10.Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII (including, without limitation, each such portion of this Article VIII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
ARTICLE IX
MISCELLANEOUS
Section 9.1.Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required under these Bylaws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the Corporation; provided, however, if the Board has, in its sole discretion, determined that a meeting shall not be held at any place, but instead shall be held by means of remote communication pursuant to Section 9.5 hereof, then such meeting shall not be held at any place.
Section 9.2. Fixing Record Dates.
| (a) | In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment<br>thereof, the Board may fix a record date, which shall not precede the date upon which the resolution fixing the record date is adopted<br>by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes<br>a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines,<br>at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.<br>If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of<br>stockholders shall be at the close of business on the business day next preceding the day on which notice is given, or, if notice is waived,<br>at the close of business on the business day next preceding the day on which the meeting is held. A determination of stockholders of record<br>entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however,<br>that the Board may fix a new record date for the adjourned meeting, and in such case shall also fix as the record date for stockholders<br>entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote<br>in accordance with the foregoing provisions of this Section 9.2(a) at the adjourned meeting. |
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| (b) | In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or<br>allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock,<br>or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which<br>the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record<br>date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which<br>the Board adopts the resolution relating thereto. |
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Section 9.3. Means of Giving Notice.
| (a) | Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required to<br>be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery<br>service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given<br>personally or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by<br>telephone, when actually received by the director, (ii) if sent through the United States mail, when deposited in the United States<br>mail, with postage and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the<br>Corporation, (iii) if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such<br>service, with fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation,<br>(iv) if sent by facsimile telecommunication, when sent to the facsimile transmission number for such director appearing on the records<br>of the Corporation, (v) if sent by electronic mail, when sent to the electronic mail address for such director appearing on the records<br>of the Corporation, or (vi) if sent by any other form of electronic transmission, when sent to the address, location or number (as<br>applicable) for such director appearing on the records of the Corporation. |
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| (b) | Notice to Stockholders. Whenever under applicable law, the Certificate of Incorporation or these Bylaws notice is required<br>to be given to any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States<br>mail, or by a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission<br>consented to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL.<br>A notice to a stockholder shall be deemed given as follows: (i) if given by hand delivery, when actually received by the stockholder,<br>(ii) if sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed<br>to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, (iii) if sent for next day<br>delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon prepaid, addressed<br>to the stockholder at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form<br>of electronic transmission consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth<br>above, (A) if by facsimile transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if<br>by electronic mail, when directed to an electronic mail address at which the stockholder has<br>consented to receive notice, (C) if by a posting on an electronic network together with separate notice to the stockholder of such<br>specified posting, upon the later of (1) such posting and (2) the giving of such separate notice, and (D) if by any other<br>form of electronic transmission, when directed to the stockholder. A stockholder may revoke such stockholder’s consent to receiving<br>notice by means of electronic communication by giving written notice of such revocation to the Corporation. Any such consent shall be<br>deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation<br>in accordance with such consent and (2) such inability becomes known to the Secretary or an Assistant Secretary or to the Corporation’s<br>transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat<br>such inability as a revocation shall not invalidate any meeting or other action. |
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| (c) | Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving<br>the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that<br>may be directly reproduced in paper form by such a recipient through an automated process, including but not limited to transmission by<br>telex, facsimile telecommunication, electronic mail, telegram and cablegram. |
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| (d) | Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively<br>by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate<br>of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented<br>to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering<br>written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days<br>of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented<br>to receiving such single written notice. |
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| (e) | Exceptions to Notice Requirements. Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation<br>or these Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and<br>there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any<br>action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same<br>force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the<br>filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required,<br>that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful. |
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Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these Bylaws, to any stockholder to whom (1) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to Section 230(b) of the DGCL. The exception in subsection (1) of the first sentence of this paragraph to the requirement that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
Section 9.4. Waiverof Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these Bylaws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice. All such waivers shall be kept with the books of the Corporation. Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section 9.5. Meeting Attendance viaRemote Communication Equipment.
| (a) | Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the<br>Board may adopt, stockholders entitled to vote at such meeting and proxy holders not physically present at a meeting of stockholders may,<br>by means of remote communication: |
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| i. | participate in a meeting of stockholders; and |
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| ii. | be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely<br>by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person<br>deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the Corporation<br>shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting<br>and, if entitled to vote, to vote on matters submitted to the applicable stockholders, including an opportunity to read or hear the proceedings<br>of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or takes other<br>action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation. |
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| (b) | Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these Bylaws, members of<br>the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone<br>or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in<br>a meeting shall constitute presence in person at the meeting, except where a person participates in the meeting for the express purpose<br>of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened. |
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Section 9.6.Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and the Certificate of Incorporation.
Section 9.7.Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve.
Section 9.8.Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these Bylaws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize. Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the Chairman of the Board Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Vice President may delegate powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.
Section 9.9.Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.
Section 9.10.Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 9.11.Books and Records. The books and records of the Corporation may be kept within or outside the State of Delaware at such place or places as may from time to time be designated by the Board.
Section 9.12.Resignation. Any director, committee member or officer may resign by giving notice thereof in writing or by electronic transmission to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time it is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 9.13.Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairman of the Board, Chief Executive Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books, papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in such amounts and by such surety companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine. The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.
Section 9.14.Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman of the Board, Chief Executive Officer, President, any Vice President or any officers authorized by the Board. Any such officer, may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.
Section 9.15.Amendments. The Board shall have the power to adopt, amend, alter or repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting power (except as otherwise provided in Section 8.7) of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the Bylaws.
Exhibit 4.1
SPECIMEN COMMON STOCK CERTIFICATE
| NUMBER<br><br> <br>C- | SHARES |
|---|
SEE REVERSE FOR CERTAIN
DEFINITIONS
CUSIP[●]
ALTERNUS CLEAN ENERGY, INC.
COMMON STOCK
THIS CERTIFIES THAT is the owner of fully paid and non-assessable shares of common stock, par value $0.0001 per share (the “Common Stock”), of Alternus Clean Energy, Inc., a Delaware corporation (the “Company”), transferable on the books of the Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar of the Company.
Witness the facsimile signature of a duly authorized signatory of the Company.
| Authorized Signatory | Transfer Agent |
|---|
ALTERNUS CLEAN ENERGY, INC.
The Company will furnish without charge to each stockholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional or other special rights of each class of equity or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the Company’s Third Amended and Restated Certificate of Incorporation and all amendments thereto and resolutions of the Board of Directors providing for the issue of securities (copies of which may be obtained from the secretary of the Company), to all of which the holder of this certificate by acceptance hereof assents.
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
| TEN COM | — | as tenants in common | UNIF GIFT MIN ACT | — | Custodian | |
|---|---|---|---|---|---|---|
| TEN ENT | — | as tenants by the entireties | (Cust) | (Minor) | ||
| JT TEN | — | as joint tenants with right of survivorship and not as tenants in common | under Uniform Gifts to Minors<br><br>Act | |||
| (State) |
Additional abbreviations may also be used though not in the above list.
For value received, hereby sells, assigns and transfers unto
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER(S) OF ASSIGNEE(S))
(PLEASE PRINT OR TYPEWRITE NAME(S) AND ADDRESS(ES), INCLUDING ZIP CODE, OF ASSIGNEE(S))
shares of Common Stock represented by the withinCertificate, and hereby irrevocably constitutes and appoints
Attorney to transfer the said shares of Common Stock on the books of the within named Company with full power of substitution in the premises.
| Dated | |
|---|---|
| Notice: The signature(s) to this assignment must correspond with the name as written upon<br> the face of the certificate in every particular, without alteration or enlargement or any change whatever. | |
| Signature(s) Guaranteed: | |
| --- |
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO SEC RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (OR ANY SUCCESSOR RULE).
THE SECURITIES OF ALTERNUS CLEAN ENERGY, INC. REPRESENTED BY THIS CERTIFICATE, NOTICE OR DOCUMENT ARE SUBJECT TO VOTING RESTRICTIONS WITH RESPECT TO CERTAIN SECURITIES HELD, OWNED OR CONTROLLED BY PERSONS OR ENTITIES THAT FAIL TO QUALIFY AS “CITIZENS OF THE UNITED STATES” AS THE TERM IS DEFINED USED IN SECTION 40102(A)(15) OF TITLE 49 OF THE UNITED STATES CODE, AS AMENDED, IN ANY SIMILAR LEGISLATION OF THE UNITED STATES ENACTED IN SUBSTITUTION OR REPLACEMENT THEREFOR, AND AS INTERPRETED BY THE DEPARTMENT OF TRANSPORTATION, ITS PREDECESSORS AND SUCCESSORS, FROM TIME TO TIME. SUCH VOTING RESTRICTIONS ARE CONTAINED IN THE CERTIFICATE OF INCORPORATION AND THE BYLAWS OF ALTERNUS CLEAN ENERGY, INC., AS THE SAME MAY BE AMENDED OR RESTATED FROM TIME TO TIME. A COMPLETE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION AND THE BYLAWS SHALL BE FURNISHED FREE OF CHARGE TO THE HOLDER OF THE SECURITIES REPRESENTED HEREBY UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.
Exhibit 10.1
Execution version
BOND TERMS
FOR
Solis Bond CompanyDesignated Activity Company FRN senior secured EUR 200,000,000 green bonds 2021/2024
ISIN NO0010914914
Contents
| Clause | Page | |
|---|---|---|
| 1. | INTERPRETATION | 3 |
| 2. | THE<br> BONDS | 22 |
| 3. | THE<br> BONDHOLDERS | 24 |
| 4. | ADMISSION<br> TO LISTING | 25 |
| 5. | REGISTRATION<br> OF THE BONDS | 25 |
| 6. | CONDITIONS<br> FOR DISBURSEMENT | 26 |
| 7. | REPRESENTATIONS<br> AND WARRANTIES | 30 |
| 8. | PAYMENTS<br> IN RESPECT OF THE BONDS | 32 |
| 9. | INTEREST | 35 |
| 10. | REDEMPTION<br> AND REPURCHASE OF BONDS | 35 |
| 11. | PURCHASE<br> AND TRANSFER OF BONDS | 37 |
| 12. | INFORMATION<br> UNDERTAKINGS | 38 |
| 13. | GENERAL<br> AND FINANCIAL UNDERTAKINGS | 39 |
| 14. | EVENTS<br> OF DEFAULT AND ACCELERATION OF THE BONDS | 44 |
| 15. | BONDHOLDERS'<br> DECISIONS | 47 |
| 16. | THE<br> BOND TRUSTEE | 51 |
| 17. | AMENDMENTS<br> AND WAIVERS | 55 |
| 18. | MISCELLANEOUS | 56 |
| 19. | GOVERNING<br> LAW AND JURISDICTION | 59 |
SCHEDULE 1 RESTRICTED GROUP
SCHEDULE 2 EXISTING FACILITIES
SCHEDULE 3 EXISTING PARENT GROUP COMPANIES AND INITIAL ACQUISITIONS
SCHEDULE 4 COMPLIANCE CERTIFICATE
SCHEDULE 5 RELEASE NOTICE – ESCROW ACCOUNT
| 2 |
| --- | | BOND TERMS between | | | --- | --- | | ISSUER: | Solis Bond Company Designated Activity Company, a designated activity company incorporated under the laws of Ireland with its registered office at O'Sullivan & Associates, 69 Main Street, Blackrock, Co. Dublin, having company number 679734 and LEI-code 254900Z8QM2AR51H5I26; and | | BOND TRUSTEE: | Nordic Trustee AS, a company existing under the laws of Norway with registration number 963 342 624 and LEI-code 549300XAKTM2BMKIPT85. | | DATED: | 5 January 2021 | | These Bond Terms shall remain in effect for so long as any Bonds remain outstanding. | | | 1. | INTERPRETATION | | --- | --- | | 1.1 | Definitions | | --- | --- |
The following terms will have the following meanings:
"Acceptable Bank" means:
| (a) | a bank or financial institution which has a rating for its long-term unsecured and non- credit-enhanced debt obligations of BBB- or<br>higher by S&P Global Ratings, BBB- or higher by Fitch Ratings Ltd or Baa3 or higher by Moody's Investors Service Limited or a comparable<br>rating from another internationally recognized credit rating agency; or |
|---|---|
| (b) | such other bank or<br>financial institution reasonably acceptable to the Bond Trustee. |
| --- | --- |
"Account Bank" means:
| (a) | an Acceptable Bank in Norway; or |
|---|---|
| (b) | NT Services AS (an Affiliate of the Bond Trustee). |
| --- | --- |
"Additional Bonds" means the debt instruments issued under a Tap Issue, including any Temporary Bonds.
"Additional Security" means, collectively, the New Share Pledges, the New Intercompany Loan Assignments and the New Guarantees.
"Affiliate" means, in relation to any person:
| (a) | any person which is a Subsidiary of that person; |
|---|
| 3 |
| --- | | (b) | any person who has Decisive Influence over that person (directly or indirectly); and | | --- | --- | | (c) | any person which is a Subsidiary of an entity who has Decisive Influence (directly or indirectly) over that person. | | --- | --- |
"Annual Financial Statements" means the audited consolidated annual financial statements of the Issuer for any financial year, prepared in accordance with GAAP, such financial statements to include a profit and loss account, balance sheet, cash flow statement and management commentary or report from the board of directors.
"Approved Valuer" means Grant Thornton, Mazars, KPMG and E&Y or such other independent and reputable valuer appointed by the Issuer with the approval of the Bond Trustee (acting reasonably).
"Attachment" means any schedule, appendix or other attachment to these Bond Terms.
"BondTerms" means these terms and conditions, including all Attachments which shall form an integrated part of these Bond Terms, in each case as amended and/or supplemented from time to time.
"Bond Trustee" means the company designated as such in the preamble to these Bond Terms, or any successor, acting for and on behalf of the Bondholders in accordance with these Bond Terms.
"Bond Trustee Fee Agreement" means the agreement entered into between the Issuer and the Bond Trustee relating among other things to the fees to be paid by the Issuer to the Bond Trustee for its obligations relating to the Bonds.
"Bondholder" means a person who is registered in the CSD as directly registered owner or nominee holder of a Bond, subject however to Clause 3.3 (Bondholders'rights).
"Bondholders' Meeting" means a meeting of Bondholders as set out in Clause 15 (Bondholders' Decisions).
"Bonds" means (i) the debt instruments issued by the Issuer pursuant to these Bond Terms, including any Additional Bonds, and (ii) any overdue and unpaid principal which has been issued under a separate ISIN in accordance with the regulations of the CSD from time to time.
"Business Day" means a day on which both the relevant CSD settlement system is open and which is a TARGET Day.
"Business Day Convention" means that if the last day of any Interest Period originally falls on a day that is not a Business Day, the Interest Period will be extended to include the first following Business Day unless that day falls in the next calendar month, in which case the Interest Period will be shortened to the first preceding Business Day (Modified Following).
"Call Option" has the meaning given to it in Clause 10.2 (Voluntary early redemption – Call Option).
| 4 |
| --- |
"Call Option Repayment Date" means the settlement date for the Call Option determined by the Issuer pursuant to Clause 10.2 (Voluntary early redemption –Call Option), Clause 10.3(d) or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds.
"Cash" means, at any time, cash in hand or at bank and (in the latter case) credited to an account in the name of a Restricted Group Company with an Acceptable Bank(s) and to which a Restricted Group Company is alone (or together with other Restricted Group Companies) beneficially entitled and for so long as the cash is not restricted or subject to any Security.
"Cash Equivalents" means at any time:
| (a) | certificates of deposit maturing within one year after the relevant date of calculation or maturing after more than one year after<br>the relevant date of calculation so long as the relevant Restricted Group Company is able to access the cash within fifteen (15) Business<br>Days of giving notice, and issued by an Acceptable Bank; |
|---|---|
| (b) | any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom,<br>Norway or any member state of the European Economic Area which has a rating for its long-term unsecured and non- credit-enhanced debt<br>obligations of A- or higher by S&P Global Ratings or Fitch Ratings Ltd or Baa1 or higher by Moody's Investors Service Limited or a<br>comparable rating from another internationally recognized credit rating agency or by an instrumentality of any the states listed above<br>or agency of any of them having an equivalent credit rating by the same rating agencies, maturing within one year after the relevant date<br>of calculation and not convertible or exchangeable to any other security; |
| --- | --- |
| (c) | tradable commercial paper not convertible or exchangeable to any other security with a maturity no greater than one year after the<br>relevant calculation date and which has a credit rating of either A-1 or higher by S&P Global Ratings or F1 or higher by Fitch Ratings<br>Ltd or P-1 or higher by Moody's Investors Service Limited, or, if no rating is available in respect of the commercial paper, the issuer<br>of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; or |
| --- | --- |
| (d) | any investment in money market funds: |
| --- | --- |
| (i) | which have a credit rating of either A-1 or higher by S&P Global Ratings or F1 or higher by Fitch Ratings Ltd or P1 or higher<br>by Moody's Investors Service Limited; |
| --- | --- |
| (ii) | which invest substantially all their assets in securities of the types described in paragraphs (a) to (c) above; and |
| --- | --- |
| (iii) | can be turned into cash on not more than thirty (30) Business Days' notice, |
| --- | --- |
in each case, to which the Issuer any Restricted Group Company is alone (or together with other Restricted Group Companies) beneficially entitled at that time and which is not issued or guaranteed by any Obligor subject to any Security.
| 5 |
| --- |
"Change of Control Event" means:
| (a) | if the Parent ceases to own and control 100 per cent. of the issued capital and votes of the Issuer; or |
|---|---|
| (b) | if any person, or a group of persons under the same Decisive Influence, or two or more persons acting in concert, other than the Major<br>Shareholder, obtain Decisive Influence over the Parent. |
| --- | --- |
"Companies Act" means the Companies Act 2014 of Ireland.
"Compliance Certificate" means a statement substantially in the form as set out in Schedule 4 hereto.
"CSD" means the central securities depository in which the Bonds are registered, being Verdipapirsentralen ASA (VPS).
"Decisive Influence" means a person having, as a result of an agreement or through the ownership of shares or interests in another person (directly or indirectly):
| (a) | a majority of the voting rights in that other person; or |
|---|---|
| (b) | a right to elect or remove a majority of the members of the board of directors of that other person. |
| --- | --- |
"Default Notice" means a written notice to the Issuer as described in Clause 14.2 (Acceleration of the Bonds).
"Default Repayment Date" means the settlement date set out by the Bond Trustee in a Default Notice requesting early redemption of the Bonds.
"Distribution" means:
| (a) | any payment of dividend on shares, including preferred shares; |
|---|---|
| (b) | any repurchase of own shares; |
| --- | --- |
| (c) | any redemption of share capital or other restricted equity with repayment to shareholders; or |
| --- | --- |
| (d) | any other similar distribution or transfers of value (including repayment or servicing of any Subordinated Loans). |
| --- | --- |
"DSRAccount" means an account in the name of the Issuer with an Account Bank, blocked and pledged on first priority as security for the Issuer's obligations under the Finance Documents.
"DSR Account Pledge" means a first priority pledge over the DSR Account under applicable law, where the bank operating the account has waived any set-off rights.
| 6 |
| --- |
"EBITDA" means, for any Relevant Period (on a consolidated basis for the Restricted Group) operating profit before deducting any amount attributable to interest, corporate taxes, depreciation, amortisation, impairment and non-cash expenses, and excluding any items of a one-off, non-recurring, extraordinary or exceptional nature but so that any cost, expense and/or loss in respect of such items in excess of 10 per cent. EBITDA (calculated without any cap on adjustments for any such items) shall be taken into account and reduce EBITDA in any Relevant Period.
"Equity Contribution" means an amount of minimum EUR 37,500,000 to be funded by the Parent and contributed to the Issuer in the form of paid-in share capital and/or Subordinated Loans.
"Equity Ratio" means the ratio of Total Equity to Total Assets.
"Escrow Account" means an account denominated in EUR in the name of the Issuer with an Account Bank, blocked and pledged on first priority as security for the Issuer's obligations under the Finance Documents.
"Escrow Account Pledge" means the first priority Norwegian law pledge over the Escrow Account, where the bank operating the account has waived any set-off rights.
"Event of Default" means any of the events or circumstances specified in Clause 14.1 (Events of Default).
"Examiner" has the meaning given to it in section 2 of the Companies Act.
"Exchange" means any regulated market or multilateral trading facility as such terms are understood in accordance with the Markets in Financial Instruments Directive 2014/65/EU (MiFID II), as applicable.
"Existing Facilities" means the existing credit facilities set out in Schedule 2 hereto.
"ExistingParent Group Companies" means the entities listed as "SPV" in Part I of Schedule 3, as of the Issue Date being directly or indirectly owned by the Parent and which will become direct or indirect Subsidiaries of the Issuer (and "ExistingParent Group Company" shall mean any of them).
"Finance Documents" means these Bond Terms, the Bond Trustee Fee Agreement, any Transaction Security Document, the Standstill Agreement, the Management Undertaking, any Subordination Agreement and any other document designated by the Issuer and the Bond Trustee as a Finance Document.
"Financial Indebtedness" means any indebtedness for or in respect of:
| (a) | moneys borrowed (and debit balances at banks or other financial institutions); |
|---|---|
| (b) | any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent; |
| --- | --- |
| 7 |
| --- | | (c) | any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument,<br>including the Bonds; | | --- | --- | | (d) | the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be capitalized<br>as an asset and booked as a corresponding liability in the balance sheet; | | --- | --- | | (e) | receivables sold or discounted (other than any receivables to the extent they are sold or discounted on a non-recourse basis); | | --- | --- | | (f) | any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a<br>borrowing or otherwise being classified as a borrowing under GAAP; | | --- | --- | | (g) | any derivative transaction entered into and, when calculating the value of any derivative transaction, only the marked to market value<br>(or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount shall be taken<br>into account); | | --- | --- | | (h) | any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument<br>issued by a bank or financial institution in respect of an underlying liability of a person which is not a Restricted Group Company which<br>liability would fall within one of the other paragraphs of this definition; | | --- | --- | | (i) | any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the Issuer) before the Maturity<br>Date or are otherwise classified as borrowings under GAAP; | | --- | --- | | (j) | any amount of any liability under an advance or deferred purchase agreement, if (a) the primary reason behind entering into the<br>agreement is to raise finance or (b) the agreement is in respect of the supply of assets or services and payment is due more than<br>180 calendar days after the date of supply; and | | --- | --- | | (k) | without double counting, the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in<br>paragraphs (a) to (j) above. | | --- | --- |
"Financial Reports" means the Annual Financial Statements and the Interim Results Announcements.
"Financial Support" means any loans, guarantees, Security or other financial assistance (whether actual or contingent).
"GAAP" means generally accepted accounting practices and principles in the country in which the Issuer is incorporated including, if applicable, IFRS.
"Green Bond Framework" means the Issuer's framework on processes and procedures for defining, selecting, verifying, monitoring and reporting on green asset management, as publicly available on the Issuer's website https://alternusenergy.com/.
| 8 |
| --- |
"Guarantee" means the irrevocable and unconditional Norwegian law (or such other relevant law as the Bond Trustee may request) guarantee and indemnity (Norwegian: "selvskyldnerkausjon") issued by each of the Guarantors on a joint and several basis in respect of the Secured Obligations, which shall rank as senior obligations and shall at all times rank at least pari passu with all other obligations of each of the Guarantors, except for those obligations which are mandatorily preferred by law.
"Guarantor" means the Parent and each of the Restricted Group Companies.
"IFRS" means the International Financial Reporting Standards and guidelines and interpretations issued by the International Accounting Standards Board (or any predecessor and successor thereof) in force from time to time and to the extent applicable to the relevant financial statement.
"Incurrence Test" shall have the meaning ascribed to such term in Clause 13.3 (Financial Covenants).
"Initial Acquisition AmountRelease" means a release for the purpose of part funding an Initial Acquisition.
"InitialAcquisitions" means the acquisition of PV Assets set out in Part II of Schedule 3 hereto.
"Initial Bond Issue" means the aggregate Nominal Amount of all Bonds issued on the Issue Date.
"Initial Nominal Amount" means the nominal amount of each Bond as set out in Clause 2.1 (Amount, denomination and ISIN of the Bonds).
"Initial Targets" means the entities owning the assets subject to the Initial Acquisitions (and an "Initial Target" means any of them).
"Insolvent" means that a person:
| (a) | is unable or admits inability to pay its debts as they fall due; |
|---|---|
| (b) | suspends making payments on any of its debts generally; or |
| --- | --- |
| (c) | is otherwise considered insolvent, bankrupt, in examinership or in receivership within the meaning of the relevant bankruptcy legislation<br>of the jurisdiction which can be regarded as its centre of main interest as such term is understood pursuant to Regulation (EU) 2015/848<br>on insolvency proceedings (as amended from time to time). |
| --- | --- |
"Interest Payment Date" means the last day of each Interest Period, the first Interest Payment Date being 6 April 2021 and the last Interest Payment Date being the Maturity Date.
| 9 |
| --- |
"Interest Period" means, subject to adjustment in accordance with the Business Day Convention, the period between 6 January, 6 April, 6 July and 6 October each year, provided however that an Interest Period shall not extend beyond the Maturity Date.
"Interest Quotation Day" means, in relation to any period for which Interest Rate is to be determined, 2 Quotation Business Days before the first day of the relevant Interest Period.
"Interest Rate" means the percentage rate per annum which is the aggregate of the Reference Rate for the relevant Interest Period plus the Margin.
"Interim Results Announcements" means the unaudited consolidated condensed interim quarterly management accounts or preliminary results announcement of the Issuer for the quarterly period ending on each 31 March, 30 June, 30 September and 31 December in each year, prepared in accordance with GAAP.
"Intra-Group Loan Assignments" means a first priority assignment over any intra-group loans between the Issuer and any Restricted Group Company or between any Restricted Group Companies.
"Investment Grade Status" means:
| (a) | a credit rating of BBB- or higher by S&P Global Ratings, BBB- or higher by Fitch Ratings Ltd or Baa3 or higher by Moody's Investors<br>Service Limited or a comparable rating from another internationally recognized credit rating agency; and/or |
|---|---|
| (b) | direct or indirect majority ownership or control by the government of an EU member state, the government of a member state of the<br>European Economic Area, the UK Government (or any devolved administration of the foregoing including the devolved Scottish, Welsh and<br>Northern Ireland administrations). |
| --- | --- |
"ISIN" means International Securities Identification Number. "Issue Date" means 6 January 2021.
"Issuer" means the company designated as such in the preamble to these Bond Terms.
"Issuer's Bonds" means any Bonds which are owned by the Issuer or any Affiliate of the Issuer.
"Issuer Share Pledge" means a first priority Irish law charge given by the Parent in respect of the shares it owns in the Issuer.
"Leverage Ratio" means, in respect of any Relevant Period, the ratio of Net Interest Bearing Debt to EBITDA.
"Liquidity" means the aggregate book value of the Restricted Group's Cash and Cash Equivalents.
| 10 |
| --- |
"Listing Failure Event" means:
| (a) | that the Bonds (save for any Temporary Bonds) have not been admitted to listing on Oslo Børs (the Oslo Stock Exchange) within<br>twelve (12) months following the Issue Date; |
|---|---|
| (b) | in the case of a successful admission to listing of the Bonds, that a period of six (6) months has elapsed since the Bonds ceased<br>to be admitted to listing on Oslo Børs without being listed on another Exchange; |
| --- | --- |
| (c) | that the Temporary Bonds have not been admitted to listing on Oslo Børs or the Exchange which the other Bonds are listed within<br>three (3) months following the issue date for such Temporary Bonds; |
| --- | --- |
| (d) | that the Parent have not been admitted to listing on Euronext Growth in Oslo within 30 June 2021; or |
| --- | --- |
| (e) | in the case of a successful admission to listing of the Parent, that a period of one (1) month has elapsed since the Parent ceased<br>to be admitted to listing on Euronext Growth without being listed on another Exchange. |
| --- | --- |
"Longstop Date" means 5 July 2021.
"Longstop Listing Failure Event" means if:
| (a) | the Parent have not been admitted to listing on Euronext Growth in Oslo within twelve (12) months from Issue Date; or |
|---|---|
| (b) | in the case of a successful admission to listing of the Parent, a period of one (1) month has elapsed since the Parent ceased<br>to be listed on Euronext Growth without being listed on another Exchange. |
| --- | --- |
"Longstop Repayment Date" means two (2) Business Days after the Longstop Date or a date agreed upon between the Bond Trustee and the Issuer in connection with such redemption of Bonds.
"Major Shareholder" means Mr. Vincent Browne and/or any Person wholly owned and controlled by him and/or any of his direct lineal descendants and/or any companies or trusts of which such individuals, respectively, are principal beneficiaries.
"Make Whole Amount" means an amount equal to the sum of:
| (a) | the present value on the Repayment Date of the Nominal Amount of the redeemed Bonds, as if such payment originally had taken place<br>on the Maturity Date; and |
|---|---|
| (b) | the present value on the Repayment Date of the remaining interest payments of the redeemed Bonds, less any accrued and unpaid interest<br>on the redeemed Bonds as at the Repayment Date, to the Maturity Date, |
| --- | --- |
where the present value for (a) and (b) shall be calculated by using a discount rate of 0.50 per cent. per annum, and where the Interest Rate applied for the remaining interest payments until the Maturity Date shall equal the applicable Interest Rate at the Repayment Date.
| 11 |
| --- |
"Management Agreement" means any agreement entered into from time to time between the Issuer and the Parent for technical and operational management of the PV Assets, to be provided at market terms which is agreed to be in an amount equal to EUR 1,000 each month for each MW of solar parks under operation in the Restricted Group at the last day of that month, payable quarterly in advance.
"Management Undertaking" means a subordination undertaking from the Parent (or any other relevant manager under any management agreement replacing the Management Agreement) in respect of payments to be made by any Restricted Group Company under the Management Agreement following an Event of Default.
"Manager" means Arctic Securities AS.
"Margin" means 6.50 per cent.
"Material Adverse Effect" means a material adverse effect on:
| (a) | the ability of any Obligor to perform and comply with its obligations under any of the Finance Documents; or |
|---|---|
| (b) | the validity or enforceability of any of the Finance Documents. |
| --- | --- |
"Maturity Date" means 6 January 2024, adjusted according to the Business Day Convention.
"Maximum Issue Amount" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination and ISIN of the Bonds).
"Monthly Transfer Date" means the fourth day of each month, the first day being 4 February 2021.
"Net Cash Flow After Debt Service" means, for any Relevant Period, EBITDA after:
| (a) | adding the amount of any decrease (and deducting the amount of any increase) in net working capital for that Relevant Period; |
|---|---|
| (b) | deducting the amount of any capital expenditures actually made in cash during that Relevant Period by any Restricted Group Company; |
| --- | --- |
| (c) | deducting (to the extent not already deducted in determining EBITDA) any amount attributable to lease liabilities actually paid in<br>cash during that Relevant Period by any Restricted Group Company; |
| --- | --- |
| (d) | adding the amount of any cash receipts during that Relevant Period in respect of any tax rebates or credits and deducting the amount<br>actually paid or due and payable in respect of taxes during that Relevant Period by any Restricted Group Company; |
| --- | --- |
| (e) | deducting any amount attributable to service of borrowings by any Restricted Group Company in that Relevant Period; |
| --- | --- |
| 12 |
| --- | | (f) | deducting any amount attributable to interest paid by any Restricted Group Company (calculated on a consolidated basis) in cash in<br>respect of that Relevant Period; | | --- | --- | | (g) | adding any amount of interest payable in that Relevant Period to any Restricted Group Company (other than by another Restricted Group<br>Company) on any Cash or Cash Equivalents; | | --- | --- | | (h) | deducting the amount of any Permitted Distribution paid during such Relevant Period; and | | --- | --- | | (i) | adding the proceeds of any claim in respect of business interruption insurance received in cash during that Relevant Period, to the<br>extent not taken into account in establishing EBITDA, | | --- | --- |
and so that no amount shall be or deducted more than once.
"Net Interest Bearing Debt" means, at any time, the aggregate amount of interest bearing Financial Indebtedness of the Restricted Group (excluding any interest bearing Financial Indebtedness borrowed from the Issuer or any Restricted Group Company) less Cash and Cash Equivalents of the Restricted Group and funds held on the Escrow Account and the DSR Account.
"New Guarantees" means a Guarantee from each relevant Existing Parent Group Company or (as the case may be) Initial Target.
"New Intercompany Loan Assignments" means a first priority assignment over any new loans from the Parent or any Restricted Group Company to each relevant Existing Parent Group Company or (as the case may be) Initial Target.
"New Share Pledges" means a first priority pledge, under the relevant jurisdiction, over the shares in each relevant Existing Parent Group Company or (as the case may be) Initial Target.
"NominalAmount" means the Initial Nominal Amount (less the aggregate amount by which each Bond has been partially redeemed, if any, pursuant to Clause 10 (Redemption and repurchase of Bonds)), or any other amount following a split of Bonds pursuant to Clause 16.2, paragraph (j).
"Obligor" means the Issuer and any Guarantor.
"Operational PV Assets" means PV Assets on which:
| (a) | all commissioning tests have been passed successfully and written acknowledgement received from the seller/EPC that the PV park conforms<br>to all authorisations, design and specifications; |
|---|---|
| (b) | complete grid connection has been achieved and that electricity is being generated and passed to the grid in line with expected volumes;<br>and |
| --- | --- |
| (c) | each of points (a) and (b) above is confirmed by a third party expert appointed by the Issuer. |
| --- | --- |
| 13 |
| --- |
"Outstanding Bonds" means any Bonds outstanding from time to time not redeemed or otherwise discharged.
"Overdue Amount" means any amount required to be paid by an Obligor under any of the Finance Documents but not made available to the Bondholders on the relevant Payment Date or otherwise not paid on its applicable due date.
"Parent" means Alternus Energy Group PLC, a public limited company incorporated under the laws of Ireland having its registered office at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin, with company number 642708 and LEI number 254900ZKB8Y5Z906E28.
"Partial Payment" means a payment that is insufficient to discharge all amounts then due and payable under the Finance Documents.
"Paying Agent" means the legal entity appointed by the Issuer to act as its paying agent with respect to the Bonds in the CSD.
"Payment Date" means any Interest Payment Date or any Repayment Date.
"Permitted Acquisition" means:
| (a) | the Initial Acquisitions; |
|---|---|
| (b) | any acquisition by the Issuer of (through a wholly owned SPV) Utility-scale Operational PV Assets or SPVs owning Utility-scale Operational<br>PV Assets, in each case with a fixed price PPAs and/or FiTs of a minimum remaining term of five years with counterparties with Investment<br>Grade Status in respect of minimum 70 per cent. of the total capacity of such PV Assets, and provided that: |
| --- | --- |
| (i) | the Issuer is in compliance with the Incurrence Test, if tested pro forma immediately after the completion of such acquisition; |
| --- | --- |
| (ii) | (to the extent relevant) any cash consideration of assets or special purpose vehicles acquired from the Parent or any of its Subsidiaries<br>shall be the lower of the construction cost of such PV Asset and FMV as evidenced by an independent valuation report from an Approved<br>Valuer less 15 per cent.; |
| --- | --- |
| (iii) | the acquisition qualifies under the Green Bond Framework; |
| --- | --- |
| (iv) | no Event of Default is outstanding or arising as a result of such acquisition; and |
| --- | --- |
| (v) | the Bond Trustee (on behalf of the Bondholder) having been provided with Security over the shares of any new Restricted Group Company<br>and that such new Restricted Group Company provides a Guarantee (subject to such clean- up period allowed for pursuant to paragraph (k) of<br>Permitted Financial Indebtedness and closing mechanism to be agreed with the Bond Trustee). |
| --- | --- |
"Permitted Distribution" means at any time after 1 January 2022, a Distribution made from the Issuer or any Restricted Group Company to any direct or indirect shareholders the Issuer (or any of their Affiliates not being a Restricted Group Company) of up to 15 per cent. of Net Cash Flow After Debt Service during the Relevant Period ending on the last day of the period covered by the most recent Annual Financial Statements (with no carry forward and no carry back), subject to no Event of Default outstanding or arising as a result of such Distribution.
| 14 |
| --- |
"Permitted Financial Indebtedness" means any Financial Indebtedness:
| (a) | incurred under the Finance Documents in respect of the initial Bond Issue; |
|---|---|
| (b) | arising under any intercompany loans from the Issuer or a Restricted Group Company to another Restricted Group, subject to any receivables<br>thereunder being made subject to Transaction Security; |
| --- | --- |
| (c) | in the form of any Subordinated Loans; |
| --- | --- |
| (d) | up until the relevant Repayment Amount Release, debt outstanding under the Existing Facilities; |
| --- | --- |
| (e) | incurred by the Issuer after the Issue Date, provided that: |
| --- | --- |
| (i) | it complies with the Incurrence Test if tested pro forma immediately after the incurrence of such new Financial Indebtedness; and |
| --- | --- |
| (ii) | such Financial Indebtedness is incurred as a result of a Tap Issue, and provided further that no Event of Default is continuing or<br>would result from the incurrence of such Financial Indebtedness; |
| --- | --- |
| (f) | in the form of any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit<br>or any other instrument issued by a bank or financial institution in respect of an underlying liability in the ordinary course of business<br>of a Restricted Group Company; |
| --- | --- |
| (g) | incurred under any advance or deferred purchase agreement on normal commercial terms by any Restricted Group Company from any of its<br>trading partners in the ordinary course of its trading activities; |
| --- | --- |
| (h) | under any pension and tax liabilities incurred in the ordinary course of business; |
| --- | --- |
| (i) | related to any hedging or derivative arrangements entered into to manage or hedge, directly or indirectly, actual or anticipated exposures<br>arising in the ordinary course of business and on a non-speculative basis; |
| --- | --- |
| (j) | under any lease or hire purchase contract which would, in accordance with GAAP, be treated as finance or capital lease (meaning that<br>the lease is capitalized as an asset and booked as a corresponding liability in the balance sheet) of land, office buildings, vehicles,<br>equipment, computers, production, storage and export facilities or other relevant assets incurred in the ordinary course of business; |
| --- | --- |
| (k) | arising as a result of a contemplated refinancing of the Bonds in full provided that such debt is held in escrow until full repayment<br>of the Bonds; |
| --- | --- |
| 15 |
| --- | | (l) | incurred as a result of any Restricted Group Company acquiring another entity and which is due to such acquired entity holding Financial<br>Indebtedness, provided that such acquisition is a Permitted Acquisition and that the Financial Indebtedness is repaid within 90 days from<br>the date of such acquisition; and | | --- | --- | | (m) | any other Financial Indebtedness not permitted by the preceding paragraphs and the aggregate outstanding principal amount of which<br>does not exceed an aggregate amount of EUR 2,000,000 (or the equivalent in other currencies) at any time. | | --- | --- |
"Permitted Financial Support" means any guarantee, loan or other financial support:
| (a) | granted under the Finance Documents; |
|---|---|
| (b) | permitted under paragraphs (b) and (d) of the definition of Permitted Financial Indebtedness; |
| --- | --- |
| (c) | which constitutes a trade credit or guarantee issued in respect of a liability incurred by another Restricted Group Company in the<br>ordinary course of business; |
| --- | --- |
| (d) | up until the Repayment Amount Release, any guarantee or indemnity granted in respect of any Existing Facilities; |
| --- | --- |
| (e) | any trade credit extended by any Restricted Group Company to its customers on normal commercial terms and in the ordinary course of<br>its trading activities; |
| --- | --- |
| (f) | arising in the ordinary course of banking arrangements for the purposes of netting debt and credit balances within the Restricted<br>Group; |
| --- | --- |
| (g) | for any rental obligations in respect of any real property leased by a Restricted Group Company in the ordinary course of business<br>and on normal commercial terms; |
| --- | --- |
| (h) | from the Issuer or a Restricted Group Company to or for the benefit of another Restricted Group Company; and |
| --- | --- |
| (i) | not otherwise permitted above which in aggregate shall not exceed EUR 2,000,000 (or its equivalent in other currencies). |
| --- | --- |
"Permitted Security" means any Security:
| (a) | created under the Finance Documents; |
|---|---|
| (b) | up until the Repayment Amount Release, created in respect of any Existing Facilities; |
| --- | --- |
| (c) | arising by operation of law or in the ordinary course of trading, provided that if such Security has arisen as a result of any default<br>or omission by any Restricted Group Company it shall not subsist for more than 30 days; |
| --- | --- |
| (d) | any cash pooling, netting or set-off arrangement arising in the ordinary course of banking arrangements for the purposes of netting<br>debt and credit balances between Restricted Group Companies; |
| --- | --- |
| 16 |
| --- | | (e) | any right of set-off arising under contracts entered into by a Restricted Group Company in the ordinary course of business; | | --- | --- | | (f) | in the form of rental deposits or other guarantees in respect of any lease agreement including in relation to real property entered<br>into by a Restricted Group Company in the ordinary course of business and on normal commercial terms; | | --- | --- | | (g) | provided for any guarantees issued by a Restricted Group Company in the ordinary course of business or any instrument permitted pursuant<br>to paragraph (f) of Permitted Financial Indebtedness; | | --- | --- | | (h) | provided in the form of a second ranking silent pledge over any shares acquired by the Restricted Group in the Romanian Target securing<br>the Seller Credit; | | --- | --- | | (i) | any Security created in the form of a pledge over an escrow account (with no other amount on such account than proceeds from the refinancing<br>notes issue) to which the proceeds incurred in relation to a refinancing of the Bonds in full (a "Refinancing") are intended<br>to be received; | | --- | --- | | (j) | any Security created for the benefit of the financing providers in relation to a Refinancing, however provided always that any perfection<br>requirements in relation thereto are satisfied after repayment of the Bonds in full; | | --- | --- | | (k) | provided for debt permitted pursuant to paragraph (l) of Permitted Financial Indebtedness in the form of pre-existing Security<br>for such Permitted Financial Indebtedness over assets in the acquired group; and | | --- | --- | | (l) | not otherwise permitted above which in aggregate shall not secure indebtedness exceeding EUR 2,000,000 (or its equivalent in other<br>currencies). | | --- | --- |
"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, unincorporated organization, government, or any agency or political subdivision thereof or any other entity, whether or not having a separate legal personality.
"Put Option" shall have the meaning ascribed to such term in Clause 10.3 (Mandatory repurchase due to a Put Option Event).
"Put Option Event" means a Longstop Listing Failure Event or a Change of Control Event.
"Put Option Repayment Date" means the settlement date for the Put Option pursuant to Clause 10.3 (Mandatory repurchase due to a Put Option Event).
"PV Assets" means all material assets necessary for the development and production of renewable energy from a photovoltaic process including, but not limited to, any relevant intellectual property rights, and associated Power Purchase Agreement(s) ("PPAs"), Feed-in- Tariff(s) ("FiTs"), Green Certificates ("GCs") and land leases.
"Quotation Business Day" means a day which is a Target Day.
| 17 |
| --- |
"Reference Rate" shall mean EURIBOR (European Interbank Offered Rate) being;
| (a) | the interest rate displayed on Reuters screen EURIBOR01 (or through another system or website replacing it) as of or around 11.00<br>a.m. (Brussels time) on the Interest Quotation Day for the offering of deposits in Euro and for a period comparable to the relevant<br>Interest Period; or |
|---|---|
| (b) | if no screen rate is available for the relevant Interest Period: |
| --- | --- |
| (i) | the linear interpolation between the two closest relevant interest periods, and with the same number of decimals, quoted under paragraph<br>(a) above; or |
| --- | --- |
| (ii) | a rate for deposits in the currency of the Bonds for the relevant Interest Period as supplied to the Bond Trustee at its request quoted<br>by a sufficient number of commercial banks reasonably selected by the Bond Trustee; or |
| --- | --- |
| (c) | if the interest rate under paragraph (a) is no longer available, the interest rate will be set by the Bond Trustee in consultation<br>with the Issuer to: |
| --- | --- |
| (i) | any relevant replacement reference rate generally accepted in the market; or |
| --- | --- |
| (ii) | such interest rate that best reflects the interest rate for deposits in the currency of the Bonds offered for the relevant Interest<br>Period. |
| --- | --- |
In each case, if any such rate is below zero, the Reference Rate will be deemed to be zero.
"Release Notice" means a release notice from the Issuer substantially in the form as set out in Schedule 5 hereto.
"Relevant Jurisdiction" means the country in which the Bonds are issued, being Norway.
"Relevant Period" means each period of twelve (12) months ending on the last days of a financial quarter.
"Relevant Record Date" means the date on which a Bondholder's ownership of Bonds shall be recorded in the CSD as follows:
| (a) | in relation to payments pursuant to these Bond Terms, the date designated as the Relevant Record Date in accordance with the rules of<br>the CSD from time to time; or |
|---|---|
| (b) | for the purpose of casting a vote with regard to Clause 15 (Bondholders' Decisions), the date falling on the immediate preceding<br>Business Day to the date of that Bondholders' decision being made, or another date as accepted by the Bond Trustee. |
| --- | --- |
"Reorganisation" means the reorganisation whereby the existing direct or indirect owners of the Existing Parent Group Companies are transferred to and become wholly direct or indirect Subsidiaries of the Issuer.
"**Repayment Amount Release"**means a release for the purpose of refinancing the Existing Facilities in respect of an Existing Parent Group Company.
| 18 |
| --- |
"Repayment Date" means any Call Option Repayment Date, the Default Repayment Date, the Put Option Repayment Date, the Tax Event Repayment Date, the Maturity Date or the Longstop Repayment Date.
"Restricted Group" means the Issuer and its Subsidiaries from time to time. The Restricted Group immediately following the completion of the Reorganisation is set out in Schedule 1 hereto.
"Restricted Group Company" means any person which is a member of the Restricted Group.
"Romanian Target" means LPJ Green Source Energy Beta Srl, a Romanian company owning a 20MWp solar PV plant located in Izvoarele in Prahova county in Romania.
"Second Opinion Green Bonds" means a second opinion issued by Cicero Shades of Green AS, confirming that the Green Bond Framework is in accordance with the ICMA Green Bond Principles 2018 (however so that the Issuer and the Green Bond Framework will not be assessed under the forthcoming EU classification system for sustainable economic activities cf. Regulation (EU) 2020/852 nor under the forthcoming EU Green Bond Standard).
"Secured Obligations" means all present and future obligations and liabilities of the Obligors under the Finance Documents.
"SecuredParties" means the Security Agent and the Bond Trustee on behalf of itself and the Bondholders.
"Securities Trading Act" means the Securities Trading Act of 2007 no.75 of the Relevant Jurisdiction.
"Security" means a mortgage, charge, pledge, lien, security assignment or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
"Security Agent" means the Bond Trustee or any successor Security Agent, acting for and on behalf of the Secured Parties in accordance with any Security Agent Agreement or any other Finance Document.
"Seller Credit" means a seller credit from the seller of the Romanian Target to the Parent in the amount of up to EUR 13,000,000.
"Shareholder Loan Assignments" means a first priority assignment over any loans from the Parent to any Restricted Group Company.
"Stamdata" means the Bond Trustee's website for Nordic bond market information, https://www.stamdata.com or any on another relevant information platform replacing this website.
"Standstill Agreement" means a standstill and subordination agreement between the seller of the Romanian Target, the Parent, the Issuer and the Bond Trustee, in respect of, amongst other things, any second ranking share pledge granted over the shares in the Romanian Target securing the Seller Credit.
| 19 |
| --- |
"Subordinated Loan" means debt financing that:
| (a) | is provided to the Issuer by any person(s) or entities (the "Subordinated Lenders") which are not a Restricted<br>Group Company; |
|---|---|
| (b) | falls due after the Maturity Date and contains no scheduled amortisation prior to all amounts outstanding under the Finance Documents<br>having been repaid in full; and |
| --- | --- |
| (c) | is subject to the terms of a subordination agreement between the Issuer, the Bond Trustee (as agent for and on behalf of the Bondholders)<br>and the Subordinated Lenders (a "Subordination Agreement") whereby the Subordinated Loan is fully subordinated to the<br>Bonds and where: |
| --- | --- |
| (i) | no interest on such loan shall be payable in cash other than by way of a Permitted Distribution; |
| --- | --- |
| (ii) | no principal may be paid, repaid, re-purchased, netted, set off, reduced through the payment of other amounts or settled in kind other<br>than by way of a Permitted Distribution; and |
| --- | --- |
| (iii) | no acceleration or declaration of default may occur, in each case prior to all amounts outstanding under the Finance Documents have<br>been repaid in full. |
| --- | --- |
"Subsidiary" means a company over which another company has Decisive Influence.
"Subsidiary Pledge" means a first priority pledge, under the relevant jurisdiction, over the shares in any Restricted Group Company.
"Summons" means the call for a Bondholders' Meeting or a Written Resolution as the case may be.
"Tap Issue" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination and ISIN of the Bonds).
"Tap Issue Addendum" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination and ISIN of the Bonds).
"TARGET Day" means any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer payment system is open for the settlement of payments in euro.
"Tax Event Repayment Date" means the date set out in a notice from the Issuer to the Bondholders pursuant to Clause 10.4 (Early redemption option due to a tax event).
"Temporary Bonds" shall have the meaning ascribed to such term in Clause 2.1 (Amount, denomination and ISIN of the Bonds).
"Total Assets" means the aggregate book value of the Restricted Group's total assets treated as assets in accordance with GAAP.
| 20 |
| --- |
"TotalEquity" means the aggregate book value of the Restricted Group's total equity treated as equity in accordance with GAAP.
"TransactionSecurity" means the Security created or expressed to be created in favour of the Security Agent (on behalf of the Secured Parties) pursuant to the Transaction Security Documents.
"Transaction Security Documents" means, collectively, the Escrow Account Pledge and all of the documents evidencing the terms of any security created or to be created by any Obligor pursuant to the terms hereof (which, unless the context otherwise requires, shall include any Guarantees).
"Utility-scale" means a solar facility (normally 1MW or larger) that generates solar power and feeds it into local power grids, either under government FiTs, GCs or via PPAs with utilities or corporate off-takers guaranteeing a market for all energy produced.
"Voting Bonds" means the Outstanding Bonds less the Issuer's Bonds.
"Written Resolution" means a written (or electronic) solution for a decision making among the Bondholders, as set out in Clause 15.5 (Written Resolutions).
| 1.2 | Construction |
|---|
In these Bond Terms, unless the context otherwise requires:
| (a) | headings are for ease of reference only; |
|---|---|
| (b) | words denoting the singular number will include the plural and vice versa; |
| --- | --- |
| (c) | references to Clauses are references to the Clauses of these Bond Terms; |
| --- | --- |
| (d) | references to a time are references to Central European time unless otherwise stated; |
| --- | --- |
| (e) | references to a provision of "law" is a reference to that provision as amended or re- enacted, and to any regulations<br>made by the appropriate authority pursuant to such law; |
| --- | --- |
| (f) | references to a "regulation" includes any regulation, rule, official directive, request or guideline by any official<br>body; |
| --- | --- |
| (g) | references to a "person" means any individual, corporation, partnership, limited liability company, joint venture,<br>association, joint-stock company, unincorporated organization, government, or any agency or political subdivision thereof or any other<br>entity, whether or not having a separate legal personality; |
| --- | --- |
| (h) | references to Bonds being "redeemed" means that such Bonds are cancelled and discharged in the CSD in a corresponding<br>amount, and that any amounts so redeemed may not be subsequently re-issued under these Bond Terms; |
| --- | --- |
| (i) | references to Bonds being "purchased" or "repurchased" by the Issuer means that such Bonds may be<br>dealt with by the Issuer as set out in Clause 11.1 (Issuer's purchase of Bonds), |
| --- | --- |
| 21 |
| --- | | (j) | references to persons "acting in concert" shall be interpreted pursuant to the relevant provisions of the Securities<br>Trading Act; | | --- | --- | | (k) | an Event of Default is "continuing" if it has not been remedied or waived; and | | --- | --- | | (l) | "examinership" means an examinership for the purposes of section 509 or 517 of the Companies Act. | | --- | --- | | 2. | THE BONDS | | --- | --- | | 2.1 | Amount, denomination and ISIN of the Bonds | | --- | --- | | (a) | The Issuer has resolved to issue a series of Bonds in the maximum amount of EUR 200,000,000 (the "Maximum Issue Amount").<br>The Bonds may be issued on different issue dates and the Initial Bond Issue will be in the amount of EUR 110,000,000. The Issuer may,<br>provided that the conditions set out in Clause 6.5 (Tap Issues) are met, at one or more occasions issue Additional Bonds in minimum<br>amounts of EUR 10,000,000 (each a "Tap Issue") until the Nominal Amount of all Additional Bonds equals in aggregate the<br>Maximum Issue Amount less the Initial Bond Issue. Each Tap Issue will be subject to identical terms as the Bonds issued pursuant to the<br>Initial Bond Issue in all respects as set out in these Bond Terms, except that Additional Bonds may be issued at a different price than<br>for the Initial Bond Issue and which may be below or above the Nominal Amount. The Bond Trustee shall prepare an addendum to these Bond<br>Terms evidencing the terms of each Tap Issue (a "Tap Issue Addendum"). | | --- | --- |
If the Bonds are listed on an Exchange and there is a requirement for a new prospectus in order for the Additional Bonds to be listed together with the Bonds, the Additional Bonds may be issued under a separate ISIN (such Bonds referred to as the "Temporary Bonds"). Upon the approval of the prospectus, the Issuer shall (i) notify the Bond Trustee, the Exchange and the Paying Agent and (ii) ensure that the Temporary Bonds are converted into the ISIN for the Bonds.
| (b) | The Bonds are denominated in Euro (EUR), being the single currency of the participating member states in accordance with the legislation<br>of the European Community relating to Economic and Monetary Union. |
|---|---|
| (c) | The Initial Nominal Amount of each Bond is EUR 1,000. |
| --- | --- |
| (d) | The ISIN of the Bonds is set out on the front page. These Bond Terms apply with identical terms and conditions to (i) all Bonds<br>issued under this ISIN, (ii) any Temporary Bonds and (iii) any Overdue Amounts issued under one or more separate ISIN in accordance<br>with the regulations of the CSD from time to time. |
| --- | --- |
| (e) | Holders of Overdue Amounts related to interest claims will not have any other rights under these Bond Terms than their claim for payment<br>of such interest claim which claim shall be subject to paragraph (b) of Clause 15.1. |
| --- | --- |
| 2.2 | Tenor of the Bonds |
| --- | --- |
The tenor of the Bonds is from and including the Issue Date to but excluding the Maturity Date.
| 22 |
| --- | | 2.3 | Use of proceeds | | --- | --- | | (a) | The Issuer will use the net proceeds from the Initial Bond Issue for: | | --- | --- | | (i) | refinancing the Existing Facilities of approximately EUR 33,000,000; and | | --- | --- | | (ii) | funding the Initial Acquisitions of approximately EUR 72,000,000, provided always that the use of proceeds qualifies under the Green<br>Bond Framework, | | --- | --- |
including by re-imbursement of any payments previously made in connection with paragraphs (i) and (ii).
| (b) | The Issuer will use the net proceeds from the issuance of any Additional Bonds for future Permitted Acquisitions, provided always<br>that the use of proceeds qualifies under the Green Bond Framework. |
|---|---|
| 2.4 | Status of the Bonds |
| --- | --- |
The Bonds will constitute senior debt obligations of the Issuer. The Bonds will rank pari passu between themselves and will rank at least pari passu with all other obligations of the Issuer (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application) and shall rank ahead of subordinated debt. The Bonds and all other payment obligations under or in relation to the Finance Documents shall be secured by the Transaction Security on a first priority basis.
| 2.5 | Transaction Security |
|---|---|
| (a) | As Security for the due and punctual fulfilment of the Secured Obligations, the Issuer shall procure that the following Transaction<br>Security is granted in favour of the Security Agent with first priority within the times agreed in Clause 6 (Conditions for disbursement)<br>and as set out below: |
| --- | --- |
Pre-SettlementSecurity:
| (i) | the Escrow Account Pledge; |
|---|
Pre-DisbursementSecurity:
| (ii) | the Issuer Share Pledge; |
|---|---|
| (iii) | the Subsidiary Pledge; |
| --- | --- |
| (iv) | the Shareholder Loan Assignments; |
| --- | --- |
| (v) | the Intra-Group Loan Assignments; |
| --- | --- |
| (vi) | the DSR Account Pledge; |
| --- | --- |
| (vii) | the Guarantees; |
| --- | --- |
| 23 |
| --- |
Additional Security to be provided in connection with eachRepayment Amount Release and Initial Acquisition Amount Release:
| (viii) | the New Share Pledges; |
|---|---|
| (ix) | the New Intercompany Loan Assignments (to the extent relevant); and |
| --- | --- |
| (x) | the New Guarantees. |
| --- | --- |
| (b) | The Transaction Security shall be entered into on such terms and conditions as the Bond Trustee in its discretion deems appropriate<br>in order to create the intended benefit for the Secured Parties under the relevant document. |
| --- | --- |
| (c) | The Security Agent shall be irrevocably authorised to (i) release any Guarantees and Transaction Security over assets which are<br>sold or otherwise disposed of (directly or indirectly) (A) in any merger, de-merger or disposal permitted in compliance with Clauses<br>13.1.2 (Mergers and de-mergers) or 13.2.3 (Disposals) and (B) following an enforcement. |
| --- | --- |
| 3. | THE BONDHOLDERS |
| --- | --- |
| 3.1 | Bond Terms binding on all Bondholders |
| --- | --- |
| (a) | By virtue of being registered as a Bondholder (directly or indirectly) with the CSD, the Bondholders are bound by these Bond Terms<br>and any other Finance Document, without any further action required to be taken or formalities to be complied with by the Bond Trustee,<br>the Bondholders, the Issuer or any other party. |
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| (b) | The Bond Trustee is always acting with binding effect on behalf of all the Bondholders. |
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| 3.2 | Limitation of rights of action |
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| (a) | No Bondholder is entitled to take any enforcement action, instigate any insolvency procedures, or take other legal action against<br>the Issuer or any other party in relation to any of the liabilities of the Issuer or any other party under or in connection with the Finance<br>Documents, other than through the Bond Trustee and in accordance with these Bond Terms, provided, however, that the Bondholders shall<br>not be restricted from exercising any of their individual rights derived from these Bond Terms, including the right to exercise the Put<br>Option. |
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| (b) | Each Bondholder shall immediately upon request by the Bond Trustee provide the Bond Trustee with any such documents, including a written<br>power of attorney (in form and substance satisfactory to the Bond Trustee), as the Bond Trustee deems necessary for the purpose of exercising<br>its rights and/or carrying out its duties under the Finance Documents. The Bond Trustee is under no obligation to represent a Bondholder<br>which does not comply with such request. |
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| 3.3 | Bondholders' rights |
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| (a) | If a beneficial owner of a Bond not being registered as a Bondholder wishes to exercise any rights under the Finance Documents, it<br>must obtain proof of ownership of the Bonds, acceptable to the Bond Trustee. |
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| --- | | (b) | A Bondholder (whether registered as such or proven to the Bond Trustee's satisfaction to be the beneficial owner of the Bond as set<br>out in paragraph (a) above) may issue one or more powers of attorney to third parties to represent it in relation to some or all<br>of the Bonds held or beneficially owned by such Bondholder. The Bond Trustee shall only have to examine the face of a power of attorney<br>or similar evidence of authorisation that has been provided to it pursuant to this Clause 3.3 (Bondholders' rights) and may assume<br>that it is in full force and effect, unless otherwise is apparent from its face or the Bond Trustee has actual knowledge to the contrary. | | --- | --- | | 4. | ADMISSION TO LISTING | | --- | --- |
The Issuer shall use its reasonable endeavours to ensure that:
| (a) | the Bonds are listed on Frankfurt Open Market on or about the Issue Date (and in case of any Additional Bonds, the date of the relevant<br>Tap Issue); |
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| (b) | the Bonds are listed on Oslo Børs (Oslo Stock Exchange) within twelve (12) months of the Issue Date (and in case of any Additional<br>Bonds, the date of the relevant Tap Issue); |
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| (c) | any Temporary Bonds are listed on Oslo Børs (Oslo Stock Exchange) within three (3) months of the issue date for such Temporary<br>Bonds; and |
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| (d) | the<br>Parent is listed on Euronext Growth in Oslo within 30 June 2021, |
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and thereafter remain listed until the Bonds have been redeemed in full.
| 5. | REGISTRATION OF THE BONDS |
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| 5.1 | Registration in the CSD |
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The Bonds shall be registered in dematerialised form in the CSD according to the relevant securities registration legislation and the requirements of the CSD.
| 5.2 | Obligation to ensure correct registration |
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The Issuer will at all times ensure that the registration of the Bonds in the CSD is correct and shall immediately upon any amendment or variation of these Bond Terms give notice to the CSD of any such amendment or variation.
| 5.3 | Country of issuance |
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The Bonds have not been issued under any other country's legislation than that of the Relevant Jurisdiction. Save for the registration of the Bonds in the CSD, the Issuer is under no obligation to register, or cause the registration of, the Bonds in any other registry or under any other legislation than that of the Relevant Jurisdiction.
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| --- | | 6. | CONDITIONS FOR DISBURSEMENT | | --- | --- | | 6.1 | Conditions precedent for disbursement to the Issuer | | --- | --- | | (a) | Payment of the net proceeds from the Initial Bond Issue to the Escrow Account shall be conditional on the Bond Trustee having received<br>no later than two (2) Business Days prior to the Issue Date (or such later date as the Bond Trustee may agree) prior to the Issue Date each of the following documents, in form and substance<br>satisfactory to the Bond Trustee: | | --- | --- | | (i) | these Bond Terms duly executed by all parties hereto; | | --- | --- | | (ii) | the Bond Trustee Fee Agreement duly executed by the parties thereto; | | --- | --- | | (iii) | the Escrow Account Pledge duly executed by all parties thereto and perfected in accordance with applicable law; | | --- | --- | | (iv) | copies of the Issuer's constitutional documents and a letter of status from the companies registration office of Ireland in respect<br>of the Issuer evidencing that the Issuer is validly existing; | | --- | --- | | (v) | copies of all necessary corporate resolutions (including<br>authorisations) of the Issuer to issue the Bonds and execute the Finance Documents to which it is a party; | | --- | --- | | (vi) | a copy of a shareholder resolution of the Parent amending the constitutional documents of the Issuer to remove the directors right<br>to refuse to register a transfer of the shares of the Issuer and removing any lien which exists in respect of such shares; | | --- | --- | | (vii) | a copy of a power of attorney (unless included in the corporate resolutions) from the Issuer to relevant individuals for their execution<br>of the Finance Documents to which it is a party, or extracts from the relevant register or similar documentation evidencing such individuals'<br>authorisation to execute such Finance Documents on behalf of the Issuer; | | --- | --- | | (viii) | a certificate from a director certifying that: | | --- | --- | | (A) | the issuance of the Bonds: | | --- | --- | | (1) | would not cause any borrowing, guaranteeing, security or similar limit binding on the Issuer to be exceeded; | | --- | --- | | (2) | does not constitute financial assistance for the purposes of section 82 of the Companies Act; | | --- | --- | | (B) | each copy document relating to it set out in this clause 6.1 is correct, complete and in full force and effect; | | --- | --- | | (C) | the Issuer is not insolvent within the meaning of section 509(3) or section 570 of the Companies Act, | | --- | --- |
and including specimen signature of each person authorised by the resolutions referred to in paragraph (v) above.
| (ix) | evidence that the Equity Contribution has been fully committed (subject only to customary conditions precedent); |
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| --- | | (x) | copies of any necessary governmental or other third party approval, consent or waiver (as the case may be) required at such time to<br>issue the Bonds; | | --- | --- | | (xi) | confirmation that the applicable prospectus requirements (ref. the EU prospectus regulation ((EU) 2017/1129)) concerning the issuance<br>of the Bonds have been fulfilled; | | --- | --- | | (xii) | confirmation that the Bonds are registered in the CSD (by obtaining an ISIN for the Bonds); | | --- | --- | | (xiii) | copy of the Second Opinion Green Bonds; | | --- | --- | | (xiv) | copies of any written documentation used in marketing the Bonds or made public by the Issuer or any Manager in connection with the<br>issuance of the Bonds; | | --- | --- | | (xv) | confirmation of acceptance from any process agent; | | --- | --- | | (xvi) | legal opinions or other statements customary for transactions of this nature and as may be required by the Bond Trustee (including<br>in respect of corporate matters relating to the Issuer and the legality, validity and enforceability of these Bond Terms and the Finance<br>Documents); and | | --- | --- | | (xvii) | any other document, evidence or action reasonably requested by the Bond Trustee. | | --- | --- | | (b) | The net proceeds from the Initial Bond Issue on the Escrow Account (whether in the form of a Repayment Amount Release or Initial Acquisition<br>Amount Release) will not be disbursed to the Issuer unless the Bond Trustee has received or is satisfied that it will receive in due time<br>(as determined by the Bond Trustee) each of the following documents, in form and substance satisfactory to the Bond Trustee: | | --- | --- | | (i) | evidence that the Equity Contribution has been contributed to the Issuer; | | --- | --- | | (ii) | copy of the agreement in respect of any Subordinated Loans, duly signed by the parties thereto, together with the Subordination Agreement<br>related thereto; | | --- | --- | | (iii) | copies of the Parent's and each Existing Parent Group Company's articles of association and of a full extract from the relevant company<br>register or a letter of status in respect of the Parent and each Existing Parent Group Company evidencing that it is validly existing; | | --- | --- | | (iv) | copies of all necessary corporate resolutions (including authorisations) of the Parent and each Existing Parent Group Company required<br>to execute the Finance Documents to which it is a party; | | --- | --- | | (v) | a copy of a power of attorney (unless included in the relevant corporate resolutions) from the Parent and each Existing Parent Group<br>Company to relevant individuals for their execution of the Finance Documents to which it is a party, or extracts from the relevant register<br>or similar documentation evidencing such individuals' authorisation to execute such Finance Documents on behalf of each such party; | | --- | --- |
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| --- | | (vi) | confirmation from the Issuer that the Restricted Group and Existing Parent Group Companies has no Financial Indebtedness, Security<br>or Financial Support (other than that expressly permitted under the Finance Documents); | | --- | --- | | (vii) | copy of the Management Agreement(s); | | --- | --- | | (viii) | the Management Undertaking duly executed; | | --- | --- | | (ix) | legal opinions or other statements customary for transactions of this nature and as may be required by the Bond Trustee (including<br>in respect of corporate matters relating to the Obligors and the legality, validity and enforceability of the Finance Documents); and | | --- | --- | | (x) | any other document, evidence or action reasonably requested by the Bond Trustee. | | --- | --- | | (c) | The Bond Trustee, acting in its sole discretion, may, regarding this Clause 6.1 (Conditions precedent for disbursement to the Issuer),<br>waive the requirements for documentation or decide that delivery of certain documents shall be made subject to an agreed closing procedure<br>between the Bond Trustee and the Issuer. | | --- | --- | | 6.2 | Additional conditions precedent for any Repayment Amount Release | | --- | --- | | (a) | The disbursement of proceeds from the Escrow Account in the form of a Repayment Amount Release will (in addition to the conditions<br>in Clause 6.1 (Conditions precedent for disbursement to the Issuer)) be subject to the receipt by the Bond Trustee of the following<br>documents and evidence (in form and substance satisfactory to the Bond Trustee): | | --- | --- | | (i) | a duly executed Release Notice for the release of an amount not exceeding the amount(s) allocated to any relevant Existing Parent<br>Group Company as set out in Part I, column "Bond Amount" of Schedule 3 hereto; | | --- | --- | | (ii) | a release undertaking from the agent or (as relevant) lender(s) under the relevant Existing Facilities to the Issuer and the<br>Bond Trustee confirming the relevant Repayment Amount Release and that the Existing Facilities has been or will be repaid in full and<br>any guarantee and Security related thereto are or will be released upon payment of such amount, together with copy of relevant release<br>documentation; | | --- | --- | | (iii) | a closing procedure in agreed form between the Issuer, or (as relevant) lender(s) under the relevant Existing Facilities, and<br>the Bond Trustee; | | --- | --- | | (iv) | evidence that the conditions have been satisfied for the repayment of the relevant Existing Facilities; | | --- | --- | | (v) | evidence that the Issuer has or will, in connection with the relevant Repayment Amount Release and subject to a closing procedure<br>agreed between the Issuer and Bond Trustee, become the direct or indirect owner of 100 per cent. of the outstanding share capital of the<br>relevant Existing Parent Group Company; | | --- | --- |
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| --- | | (vi) | evidence that the Pre-Disbursement Security in respect of the relevant Existing Parent Group Company will, subject to a closing procedure<br>agreed between the Issuer and Bond Trustee, be executed and perfected in connection with the relevant Repayment Amount Release; | | --- | --- | | (vii) | the Guarantees from the relevant Existing Parent Group Company duly executed (being subject to release, if relevant, pursuant to a<br>closing procedure agreed between the Issuer and Bond Trustee); | | --- | --- | | (viii) | legal opinions or other statements customary for transactions of this nature and as may be reasonably required by the Bond Trustee<br>(including in respect of corporate matters relating to the Obligors and the legality, validity and enforceability of any Finance Documents);<br>and | | --- | --- | | (ix) | any other document, evidence or action reasonably requested by the Bond Trustee. | | --- | --- | | (b) | The Bond Trustee may (at its sole discretion and in each case) waive or postpone the delivery of one or more of such conditions precedent,<br>and the Bond Trustee may on behalf of the Bondholders agree on a closing procedure with the Issuer and (as relevant) the agent or (as<br>relevant) the lender(s) under the Existing Facilities as referred to below. The closing procedure may include the use of an additional<br>escrow or settlement agent and a up to three (3) days (or such longer period as the Bond Trustee may agree on a case by case basis)<br>clean-up period to have the relevant Transaction Security established. | | --- | --- | | 6.3 | Additional conditions precedent for any Initial Acquisition Amount Release | | --- | --- | | (a) | The disbursement of proceeds from the Escrow Account in the form of an Initial Acquisition Amount Release will (in addition to the<br>conditions in Clause 6.1 (Conditions precedent for disbursement to the Issuer)) be subject to the receipt by the Bond Trustee of<br>the following documents and evidence (in form and substance satisfactory to the Bond Trustee): | | --- | --- | | (i) | a duly executed Release Notice for the release of an amount not exceeding the amount(s) allocated to the relevant Initial Acquisition<br>as set out in Part II, column "Bond Amount" of Schedule 3 hereto; | | --- | --- | | (ii) | a release undertaking from the agent or (as relevant) lender(s) under any existing financing arrangement to which the Initial<br>Target is subject, if any, confirming that any debt is or will be repaid in full and any guarantee and security related thereto and to<br>the Initial Target will be released prior to or upon completion of the relevant Initial Acquisition, together with (as relevant) copies<br>of relevant release documentation; | | --- | --- | | (iii) | copy of the share purchase agreement in respect of the relevant Initial Acquisition, together with a certificate from the Issuer confirming<br>that any closing conditions have been fulfilled (save for those to be fulfilled at the relevant closing date); | | --- | --- | | (iv) | evidence of purchase price of the Initial Target; | | --- | --- |
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| --- | | (v) | evidence that the Additional Security to be provided for release of an amount from the Escrow Account in respect of the relevant Initial<br>Target being executed and perfected (or, subject to a closing procedure agreed between the Issuer and Bond Trustee, will be executed and<br>perfected in connection with the relevant Initial Acquisition Amount Release); | | --- | --- | | (vi) | for an Initial Acquisition Amount Release in connection with the acquisition of the Romanian Target, the Standstill Agreement, on<br>such terms as acceptable to the Bond Trustee; and | | --- | --- | | (vii) | a closing procedure in agreed form between the Issuer and the Bond Trustee and (to the extent applicable) any relevant third parties<br>involved in the Initial Acquisition. | | --- | --- | | (b) | The Bond Trustee may (at its sole discretion and in each case) waive or postpone the delivery of one or more of the above conditions<br>precedent. | | --- | --- | | 6.4 | Disbursement of the proceeds | | --- | --- | | (a) | Disbursement of the proceeds from the issuance of the Bonds is conditional on the Bond Trustee's confirmation to the Paying Agent<br>that the relevant conditions in this Clause 6 (Conditions for Disbursement) have been either satisfied in the Bond Trustee's discretion<br>or waived by the Bond Trustee pursuant to the terms of this Clause 6 (Conditions for Disbursement). | | --- | --- | | (b) | Any release of proceeds from the Escrow Account shall be made on multiple occasions by delivery to the Account Bank and the Bond Trustee<br>of a Release Notice. | | --- | --- | | 6.5 | Tap Issues | | --- | --- |
The Issuer may issue Additional Bonds if:
| (a) | the Bond Trustee has executed a Tap Issue Addendum; |
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| (b) | the representations and warranties contained in Clause 7 (Representations and Warranties) of these Bond Terms are true and<br>correct in all material respects and repeated by the Issuer as at the date of issuance of such Additional Bonds; and |
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| (c) | the Issuer meets the Incurrence Test tested pro forma including the new Financial Indebtedness incurred as a result of issuing such<br>Additional Bonds. |
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| 7. | REPRESENTATIONS AND WARRANTIES |
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The Issuer makes the representations and warranties set out in this Clause 7 (Representations and warranties), in respect of itself and in respect of each Obligor to the Bond Trustee (on behalf of the Bondholders) at the following times and with reference to the facts and circumstances then existing:
| (a) | at the date of these Bond Terms; |
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| (b) | at the Issue Date; |
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| --- | | (c) | on each date of disbursement of proceeds from the Escrow Account; and | | --- | --- | | (d) | at the date of issuance of any Additional Bonds. | | --- | --- | | 7.1 | Status | | --- | --- |
It is a designated activity company, duly incorporated and validly existing and registered under the laws of its jurisdiction of incorporation, and has the power to own its assets and carry on its business as it is being conducted.
| 7.2 | Power and authority |
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It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, these Bond Terms and any other Finance Document to which it is a party and the transactions contemplated by those Finance Documents.
| 7.3 | Valid, binding and enforceable obligations |
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These Bond Terms and each other Finance Document to which it is a party constitutes (or will constitute, when executed by the respective parties thereto) its legal, valid and binding obligations, enforceable in accordance with their respective terms, and (save as provided for therein) no further registration, filing, payment of tax or fees or other formalities are necessary or desirable to render the said documents enforceable against it.
| 7.4 | Non-conflict with other obligations |
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The entry into and performance by it of these Bond Terms and any other Finance Document to which it is a party and the transactions contemplated thereby do not and will not conflict with (i) any law or regulation or judicial or official order; (ii) its constitutional documents; or (iii) any agreement or instrument which is binding upon it or any of its assets.
| 7.5 | No Event of Default |
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| (a) | No Event of Default exists or is likely to result from the making of any drawdown under these Bond Terms or the entry into, the performance<br>of, or any transaction contemplated by, any Finance Document. |
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| (b) | No other event or circumstance has occurred which constitutes (or with the expiry of any grace period, the giving of notice, the making<br>of any determination or any combination of any of the foregoing, would constitute) a default or termination event (howsoever described)<br>under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries')<br>assets are subject which has or is likely to have a Material Adverse Effect. |
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| 7.6 | Authorizations and consents |
| --- | --- |
All authorisations, consents, approvals, resolutions, licenses, exemptions, filings, notarizations or registrations required:
| (a) | to enable it to enter into, exercise its rights and comply with its obligations under these Bond Terms or any other Finance Document<br>to which it is a party; and |
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| (b) | to carry on its business as presently conducted and as contemplated by these Bond Terms, |
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have been obtained or effected and are in full force and effect.
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| --- | | 7.7 | Litigation | | --- | --- |
No litigation, arbitration or administrative proceedings or investigations of or before any court, arbitral body or agency which, if adversely determined, is likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
| 7.8 | Financial Reports |
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Its most recent Financial Reports fairly and accurately represent the assets and liabilities and financial condition as at their respective dates, and have been prepared in accordance with GAAP, consistently applied.
| 7.9 | No Material Adverse Effect |
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Since the date of the most recent Financial Reports, there has been no change in its business, assets or financial condition that is likely to have a Material Adverse Effect.
| 7.10 | No misleading information |
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Any factual information provided by it to the Bondholders or the Bond Trustee for the purposes of the issuance of the Bonds was 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.
| 7.11 | No withholdings |
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The Issuer is not required to make any deduction or withholding from any payment which it may become obliged to make to the Bond Trustee or the Bondholders under these Bond Terms.
| 7.12 | Pari passu ranking |
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Its payment obligations under these Bond Terms or any other Finance Document to which it is a party ranks as set out in Clause 2.4 (Status of the Bonds).
| 7.13 | Security |
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No Security exists over any of the present assets of any Restricted Group Company in conflict with these Bond Terms.
| 8. | PAYMENTS IN RESPECT OF THE BONDS |
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| 8.1 | Covenant to pay |
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| (a) | The Issuer will unconditionally make available to or to the order of the Bond Trustee and/or the Paying Agent all amounts due on each<br>Payment Date pursuant to the terms of these Bond Terms at such times and to such accounts as specified by the Bond Trustee and/or the<br>Paying Agent in advance of each Payment Date or when other payments are due and payable pursuant to these Bond Terms. |
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| (b) | All payments to the Bondholders in relation to the Bonds shall be made to each Bondholder registered as such in the CSD at the Relevant<br>Record Date, by, if no specific order is made by the Bond Trustee, crediting the relevant amount to the bank account nominated by such<br>Bondholder in connection with its securities account in the CSD. |
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| --- | | (c) | Payment constituting good discharge of the Issuer's payment obligations to the Bondholders under these Bond Terms will be deemed to<br>have been made to each Bondholder once the amount has been credited to the bank holding the bank account nominated by the Bondholder in<br>connection with its securities account in the CSD. If the paying bank and the receiving bank are the same, payment shall be deemed to<br>have been made once the amount has been credited to the bank account nominated by the Bondholder in question. | | --- | --- | | (d) | If a Payment Date or a date for other payments to the Bondholders pursuant to the Finance Documents falls on a day on which either<br>of the relevant CSD settlement system or the relevant currency settlement system for the Bonds are not open, the payment shall be made<br>on the first following possible day on which both of the said systems are open, unless any provision to the contrary have been set out<br>for such payment in the relevant Finance Document. | | --- | --- | | 8.2 | Default interest | | --- | --- | | (a) | Default interest will accrue on any Overdue Amount from and including the Payment Date on which it was first due to and excluding<br>the date on which the payment is made at the Interest Rate plus 3 percentage points per annum. | | --- | --- | | (b) | Default interest accrued on any Overdue Amount pursuant to this Clause 8.2 (Default interest) will be added to the Overdue<br>Amount on each Interest Payment Date until the Overdue Amount and default interest accrued thereon have been repaid in full. | | --- | --- | | (c) | Upon the occurrence of a Listing Failure Event and for as long as such Listing Failure Event is continuing, the interest on any principal<br>amount outstanding under these Bonds Terms will accrue at the Interest Rate plus 1.00 percentage point per annum. In the event the Listing<br>Failure Event relates to Temporary Bonds, the Interest Rate will only be increased in respect of such Temporary Bonds. | | --- | --- | | 8.3 | Partial Payments | | --- | --- | | (a) | If the Paying Agent or the Bond Trustee receives a Partial Payment, such Partial Payment shall, in respect of the Issuer's debt under<br>the Finance Documents be considered made for discharge of the debt of the Issuer in the following order of priority: | | --- | --- | | (i) | firstly, towards any outstanding fees, liabilities and expenses of the Bond Trustee (and any Security Agent); | | --- | --- | | (ii) | secondly, towards accrued interest due but unpaid; and | | --- | --- | | (iii) | thirdly, towards any other outstanding amounts due but unpaid under the Finance Documents. | | --- | --- | | (b) | Notwithstanding paragraph (a) above, any Partial Payment which is distributed to the Bondholders, shall, after the above mentioned<br>deduction of outstanding fees, liabilities and expenses, be applied (i) firstly towards any principal amount due but unpaid and (ii) secondly,<br>towards accrued interest due but unpaid, in the following situations; | | --- | --- | | (i) | the Bond Trustee has served a Default Notice in accordance with Clause 14.2 (Acceleration of the Bonds), or | | --- | --- | | (ii) | as a result of a resolution according to Clause 15 (Bondholders' decisions). | | --- | --- |
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| --- | | 8.4 | Taxation | | --- | --- | | (a) | Each Obligor is responsible for withholding any withholding tax imposed by applicable law on any payments to be made by it in relation<br>to the Finance Documents. | | --- | --- | | (b) | The Issuer shall, if any tax is withheld in respect of the Bonds under the Finance Documents: | | --- | --- | | (i) | gross up the amount of the payment due from it up to such amount which is necessary to ensure that the Bondholders or the Bond Trustee,<br>as the case may be, receive a net amount which is (after making the required withholding) equal to the payment which would have been received<br>if no withholding had been required; and | | --- | --- | | (ii) | at the request of the Bond Trustee, deliver to the Bond Trustee evidence that the required tax deduction or withholding has been made. | | --- | --- | | (c) | Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by<br>law or regulation, and the Issuer shall not be responsible for reimbursing any such fees. | | --- | --- | | 8.5 | Currency | | --- | --- | | (a) | All amounts payable under the Finance Documents shall be payable in the denomination of the Bonds set out in Clause 2.1 (Amount,denomination and ISIN of the Bonds). If, however, the denomination differs from the currency of the bank account connected to the<br>Bondholder's account in the CSD, any cash settlement may be exchanged and credited to this bank account. | | --- | --- | | (b) | Any specific payment instructions, including foreign exchange bank account details, to be connected to the Bondholder's account in<br>the CSD must be provided by the relevant Bondholder to the Paying Agent (either directly or through its account manager in the CSD) within<br>five (5) Business Days prior to a Payment Date. Depending on any currency exchange settlement agreements between each Bondholder's<br>bank and the Paying Agent, and opening hours of the receiving bank, cash settlement may be delayed, and payment shall be deemed to have<br>been made once the cash settlement has taken place, provided, however, that no default interest or other penalty shall accrue for the<br>account of the Issuer for such delay. | | --- | --- | | 8.6 | Set-off and counterclaims | | --- | --- |
No Obligor may apply or perform any counterclaims or set-off against any payment obligations pursuant to these Bond Terms or any other Finance Document.
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| --- | | 9. | INTEREST | | --- | --- | | 9.1 | Calculation of interest | | --- | --- | | (a) | Each Outstanding Bond will accrue interest at the Interest Rate on the Nominal Amount for each Interest Period, commencing on and<br>including the first date of the Interest Period, and ending on but excluding the last date of the Interest Period. | | --- | --- | | (b) | Any Additional Bond will accrue interest at the Interest Rate on the Nominal Amount commencing on the first date of the Interest Period<br>in which the Additional Bonds are issued and thereafter in accordance with Clause 9.1 (a) above. | | --- | --- | | (c) | Interest shall be calculated on the basis of the actual number of days in the Interest Period in respect of which payment is being<br>made divided by 360 (actual/360-days basis). The Interest Rate will be reset at each Interest Quotation Day by the Bond Trustee, who will<br>notify the Issuer and the Paying Agent and, if the Bonds are listed, the Exchange, of the new Interest Rate and the actual number of calendar<br>days for the next Interest Period. | | --- | --- | | 9.2 | Payment of interest | | --- | --- | | (a) | Interest shall fall due on each Interest Payment Date for the corresponding preceding Interest Period and, with respect to accrued<br>interest on the principal amount then due and payable, on each Repayment Date. | | --- | --- | | 9.3 | DSR Account | | --- | --- | | (a) | The Issuer shall on the Monthly Transfer Date transfer to the DSR Account a minimum amount corresponding to 1/3 of the quarterly interest<br>on the Outstanding Bonds from time to time, until the total deposited amount on the DSR Account corresponds to the amount due on the next<br>Interest Payment Date. | | --- | --- | | (b) | The Issuer shall have the right to use funds deposited on the DSR Account for the purpose of paying Interest Payments on each Interest<br>Payment Date, following which the Issuer shall again transfer funds to the account as described paragraph (a) above until the total<br>deposited amount on such account corresponds to the amount due on the next Interest Payment Date. | | --- | --- | | (c) | The Issuer shall, subject to the DSR Account Pledge, be entitled to all interest receivable (if any) derived from the amount in the<br>DSR Account. To the extent the interest is negative, the Issuer shall transfer such additional funds necessary to ensure that the total<br>deposited amount on the DSR Account on each Interest Payment Date corresponds to the amount due on the next Interest Payment Date. | | --- | --- | | 10. | REDEMPTION AND REPURCHASE OF BONDS | | --- | --- | | 10.1 | Redemption of Bonds | | --- | --- |
The Outstanding Bonds will mature in full on the Maturity Date and shall be redeemed by the Issuer on the Maturity Date at a price equal to 100 per cent. of the Nominal Amount.
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| --- | | 10.2 | Voluntary early redemption - Call Option | | --- | --- | | (a) | The Issuer may redeem all but not only some of the Outstanding Bonds (the "Call Option") on any Business Day from<br>and including the Issue Date to, but not including, the Maturity Date at a price equal to the Make Whole Amount. | | --- | --- | | (b) | The Call Option may be exercised by the Issuer by written notice to the Bond Trustee at least ten (10) Business Days prior to<br>the proposed Call Option Repayment Date. Such notice sent by the Issuer shall specify the Call Option Repayment Date, but may be withdrawn<br>at the discretion of the Issuer with no less than least three (3) Business Days written notice to the Bondholders prior to the Call<br>Option Repayment Date. Unless the Make Whole Amount is set out in the written notice where the Issuer exercises the Call Option, the Issuer<br>shall calculate the Make Whole Amount and provide such calculation by written notice to the Bond Trustee as soon as possible and at the<br>latest within three (3) Business Days from the date of<br>the notice. | | --- | --- | | 10.3 | Mandatory repurchase due to a Put Option Event | | --- | --- | | (a) | Upon the occurrence of a Put Option Event, each Bondholder will have the right (the "Put Option") to require that<br>the Issuer purchases all or some of the Bonds held by that Bondholder at a price equal to 101 per cent. of the Nominal Amount. | | --- | --- | | (b) | The Put Option must be exercised within fifteen (15) Business Days after the Issuer has given notice to the Bond Trustee and the Bondholders<br>that a Put Option Event has occurred pursuant to Clause 12.3 (Put Option Event). Once notified, the Bondholders' right to exercise<br>the Put Option is irrevocable. | | --- | --- | | (c) | Each Bondholder may exercise its Put Option by written notice to its account manager for the CSD, who will notify the Paying Agent<br>of the exercise of the Put Option. The Put Option Repayment Date will be the 5th Business Day after the end of fifteen (15) Business Days<br>exercise period referred to in paragraph (b) above. However, the settlement of the Put Option will be based on each Bondholders holding<br>of Bonds at the Put Option Repayment Date. | | --- | --- | | (d) | If Bonds representing more than 90 per cent. of the Outstanding Bonds have been repurchased pursuant to this Clause 10.3 (Mandatoryrepurchase due to a Put Option Event), the Issuer is entitled to repurchase all the remaining Outstanding Bonds at the price stated<br>in paragraph (a) above by notifying the remaining Bondholders of its intention to do so no later than ten (10) Business Days<br>after the Put Option Repayment Date. Such notice sent by the Issuer is irrevocable and shall specify the Call Option Repayment Date. Such<br>prepayment may occur at the earliest on the 15th calendar day following the date of such notice. | | --- | --- | | 10.4 | Early redemption option due to a tax event | | --- | --- |
If the Issuer is or will be required to gross up any withheld tax imposed by law from any payment in respect of the Bonds under the Finance Documents pursuant to Clause 8.4 (Taxation) as a result of a change in applicable law implemented after the date of these Bond Terms, the Issuer will have the right to redeem all, but not only some, of the Outstanding Bonds at a price equal to 100 per cent. of the Nominal Amount. The Issuer shall give written notice of such redemption to the Bond Trustee and the Bondholders at least twenty (20) Business Days prior to the Tax Event Repayment Date, provided that no such notice shall be given earlier than forty (40) Business Days prior to the earliest date on which the Issuer would be obliged to withhold such tax were a payment in respect of the Bonds then due.
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| --- | | 10.5 | Mandatory early redemption at the Longstop Date | | --- | --- |
In the event that the conditions precedent set out in Clause 6.1 (Conditions precedent for disbursement to the Issuer) have not been fulfilled within the Longstop Date, any remaining amount standing to the credit of the Escrow Account shall:
| (a) | in case such remaining amount is less than EUR 3,000,000, at the request of the Issuer be released to the Issuer for general corporate<br>purposes; or |
|---|---|
| (b) | in case such remaining amount is EUR 3,000,000 or higher, no later than on the Longstop Repayment Date, be used to redeem all of the<br>Outstanding Bonds at a price equal to 100 per cent. of the Nominal Amount (plus accrued and unpaid interest thereon), |
| --- | --- |
and the Bond Trustee shall be authorised to either (i) release amounts pursuant to (a) above or (as applicable) (ii) take all necessary measures to effectuate redemption pursuant to (b) above and return such remaining proceeds to the Bondholders applying the funds deposited on the Escrow Account for such redemption (on a pro rata basis to the Bondholders in accordance with the applicable regulations of the CSD).
| 11. | PURCHASE AND TRANSFER OF BONDS |
|---|---|
| 11.1 | Issuer's purchase of Bonds |
| --- | --- |
The Issuer and the other Obligors each may purchase and hold Bonds and such Bonds may be retained, sold or cancelled in the Issuer's sole discretion, including with respect to Bonds purchased pursuant to Clause 10.3 (Mandatory repurchase due to a Put Option Event).
| 11.2 | Restrictions |
|---|---|
| (a) | Certain purchase or selling restrictions may apply to Bondholders under applicable local laws and regulations from time to time. Neither<br>the Issuer nor the Bond Trustee shall be responsible to ensure compliance with such laws and regulations and each Bondholder is responsible<br>for ensuring compliance with the relevant laws and regulations at its own cost and expense. |
| --- | --- |
| (b) | A Bondholder who has purchased Bonds in breach of applicable restrictions may, notwithstanding such breach, benefit from the rights<br>attached to the Bonds pursuant to these Bond Terms (including, but not limited to, voting rights), provided that the Issuer shall not<br>incur any additional liability by complying with its obligations to such Bondholder. |
| --- | --- |
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| --- | | 12. | INFORMATION UNDERTAKINGS | | --- | --- | | 12.1 | Financial Reports | | --- | --- | | (a) | The Issuer shall prepare Annual Financial Statements together with consolidated financial statements of the Parent in the English<br>language and make them available on its website (alternatively by arranging for publication on<br>Stamdata) as soon as they become available, and not later than four (4) months after the end of the financial year. | | --- | --- | | (b) | The Issuer shall prepare Interim Results Announcement together with those of the Parent in the English language and make them available<br>on its website (alternatively by arranging for publication on Stamdata) as soon as they become available, and not later than two (2) months<br>after the end of the relevant interim period. | | --- | --- | | (c) | The Issuer shall conduct investor calls in connection with the publication of Financial Reports in order to discuss such Financial<br>Reports and provide operational updates with Q&A sessions. | | --- | --- | | 12.2 | Requirements as to Financial Reports | | --- | --- | | (a) | The Issuer shall supply to the Bond Trustee, in connection with the publication of its Financial Reports pursuant to Clause 12.1 (FinancialReports) and in connection with the application of the Incurrence Test and as otherwise required, a Compliance Certificate with a<br>copy of the Financial Reports attached thereto. The Compliance Certificate shall be duly signed by the chief executive officer of the<br>Issuer, certifying inter alia that the Financial Reports are fairly representing its financial condition as at the date of those financial<br>statements and setting out (in reasonable detail) computations evidencing compliance with Clause 13.3 (Financial Covenants) as<br>at such date. | | --- | --- | | (b) | The Issuer shall procure that the Financial Reports delivered pursuant to Clause 12.1 (Financial Reports) are prepared using<br>GAAP consistently applied. | | --- | --- | | 12.3 | Put Option Event | | --- | --- |
The Issuer shall inform the Bond Trustee in writing as soon as possible after becoming aware that a Put Option Event has occurred.
| 12.4 | Listing Failure Event |
|---|
The Issuer shall promptly inform the Bond Trustee in writing if a Listing Failure Event has occurred. However, no Event of Default shall occur if the Issuer fails (i) to list the Bonds in accordance with Clause 4 (Listing) or (ii) to inform of such Listing Failure Event, only default interest in accordance with Clause 8.2 paragraph (c) will accrue as long as such Listing Failure Event is continuing.
| 12.5 | Information: Miscellaneous |
|---|
The Issuer shall:
| (a) | promptly inform the Bond Trustee in writing of any Event of Default or any event or circumstance which the Issuer understands or could<br>reasonably be expected to understand may lead to an Event of Default and the steps, if any, being taken to remedy it; |
|---|---|
| (b) | at the request of the Bond Trustee, report the balance of the Issuer's Bonds (to the best of its knowledge, having made due and appropriate<br>enquiries); |
| --- | --- |
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| --- | | (c) | send the Bond Trustee copies of any statutory notifications of the Issuer, including but not limited to in connection with mergers,<br>de-mergers and reduction of the Issuer's share capital or equity; | | --- | --- | | (d) | if the Bonds are listed on an Exchange, send a copy to the Bond Trustee of its notices to the Exchange; | | --- | --- | | (e) | if the Issuer and/or the Bonds are rated, inform the Bond Trustee of its and/or the rating of the Bonds, and any changes to such rating; | | --- | --- | | (f) | inform the Bond Trustee of changes in the registration of the Bonds in the CSD; and | | --- | --- | | (g) | within a reasonable time, provide such information about the Issuer's and the Restricted Group's business, assets and financial condition<br>as the Bond Trustee may reasonably request. | | --- | --- | | 13. | GENERAL AND FINANCIAL UNDERTAKINGS | | --- | --- | | 13.1 | General undertakings | | --- | --- |
The Issuer undertakes to (and shall, where applicable, procure that the other Restricted Group Companies will) comply with the undertakings set forth in this Clause 13.1 (GeneralUndertakings).
| 13.1.1 | Pari passu ranking |
|---|
The Issuer shall ensure that its obligations under these Bond Terms shall at all times rank at least pari passu as set out in Clause 2.4 (Status of the Bonds) above.
| 13.1.2 | Mergers and de-mergers |
|---|
The Issuer shall not, and shall ensure that no other Restricted Group Company will, carry out:
| (a) | any merger or other business combination or corporate reorganisation involving the consolidation of assets and obligations of the<br>Issuer or such other Restricted Group Company with any other company or entity not being a Restricted Group Company; or |
|---|---|
| (b) | any demerger or other corporate reorganisation having the same or equivalent effect as a demerger involving a split of the Issuer<br>or such other Restricted Group Company into two or more separate companies or entities other than within the Restricted Group. |
| --- | --- |
| 13.1.3 | Continuation of business |
| --- | --- |
The Issuer shall, and shall ensure that each Restricted Group Company will, procure that no material change is made to the general nature of the business of the Restricted Group from that carried on by the Restricted Group at the Issue Date.
| 13.1.4 | Corporate status |
|---|
The Issuer shall not, and shall procure that no other Restricted Group Company shall, change its type of organisation if such change would have a Material Adverse Effect or its jurisdiction of incorporation or its "centre of main interest" (as defined in the recast Insolvency Regulation (Regulation (EU) No. 2015/848)) from its jurisdiction of incorporation.
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| --- | | 13.1.5 | Operations | | --- | --- |
The Issuer shall ensure that the operations of any Restricted Group Company are conducted in accordance with acknowledged practices related to the renewable energy business in all material respects.
| 13.1.6 | Compliance with laws |
|---|
The Issuer shall, and shall ensure that each other Restricted Group Company shall, comply in all material respects with all laws and regulations it may be subject to from time to time (including any environmental laws and regulations and laws and regulations concerning sanctions and anti-bribery and anti-corruption).
| 13.1.7 | Transaction Security Documents |
|---|
The Issuer shall take all such steps necessary to ensure that the Transaction Security Documents remain valid, enforceable and perfected for as long as any amount is outstanding under the Bonds.
| 13.1.8 | Insurances |
|---|
The Issuer shall ensure that each Restricted Group Company will maintain, with financially sound and reputable insurance companies, funds or underwriters, adequate insurance with respect to its assets, equipment and business against such liabilities, casualties and contingencies and of such types and in such amounts as would be reasonable with respect to similar assets to those owned by the relevant Restricted Group Company pursuant to good industry practice in both the relevant jurisdiction of incorporation and the relevant jurisdiction of the location of any PV Assets.
| 13.1.9 | Arm's length transactions |
|---|
The Issuer shall not engage in, or permit any other Restricted Group Company to engage in, directly or indirectly, any transaction (other than with the Issuer or any other Restricted Group Company) not less favourable to such Restricted Group Company than would have prevailed in an arm's length transaction with a third party.
| 13.1.10 | Authorisations |
|---|
The Issuer shall, and shall procure that each other Restricted Group Company will, in all material respects obtain, maintain and comply with the terms of any authorisation, approval, license and consent required for the conduct of its business as carried out from time to time.
| 13.2 | Special undertakings |
|---|
The Issuer undertakes to (and shall, where applicable, procure that the other Restricted Group Companies will) comply with the undertakings set forth in this Clause 13.2 (SpecialUndertakings).
| 13.2.1 | Distributions |
|---|---|
| (a) | Except as permitted under paragraph (b) below, the Issuer shall not be permitted to (and shall procure that no other Restricted<br>Group Company) make any Distribution, repurchase of shares or make other Distributions or payments to the Issuer's direct or indirect<br>shareholders (or any of their Affiliates not being a Restricted Group Company), whether in cash or in kind, including without limitation any<br>total return swap(s) or instruments with similar effect. |
| --- | --- |
| (b) | Paragraph (a) above does not apply to any Permitted Distribution. |
| --- | --- |
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| --- | | 13.2.2 | Subsidiaries' Distributions | | --- | --- | | (a) | Except as permitted under paragraph (b) below, the Issuer shall not permit any Restricted Group Company to create or permit to<br>exist any contractual obligation (or encumbrance) restricting the right of any such Restricted Group Company to: | | --- | --- | | (i) | make Distributions to its shareholders; | | --- | --- | | (ii) | service any Financial Indebtedness to the Issuer; | | --- | --- | | (iii) | make any loans to the Issuer; or | | --- | --- | | (iv) | transfer any of its assets and properties to the Issuer, | | --- | --- |
if the creation of such contractual obligation is reasonably likely to prevent the Issuer from complying with its payment obligations under these Bond Terms.
| (b) | Paragraph (a) above does not apply to any Permitted Financial Indebtedness or Permitted Security. |
|---|---|
| 13.2.3 | Disposals |
| --- | --- |
The Issuer shall not, and shall ensure that no other Restricted Group Company shall, sell, or otherwise dispose of, all or a substantial part of such Restricted Group Company's assets or operations, (save for intra-group reorganisations within the Restricted Group) unless:
| (a) | the transaction is carried out at a fair market value, on terms and conditions customary for such transactions; and |
|---|---|
| (b) | such transaction would not have a Material Adverse Effect. |
| --- | --- |
| 13.2.4 | Acquisitions |
| --- | --- |
| (a) | Except as permitted under paragraph (b) below, the Issuer shall not, and shall ensure that no Restricted Group Company shall,<br>acquire any company, shares, securities or business undertaking. |
| --- | --- |
| (b) | Paragraph (a) above does not apply to any Permitted Acquisition. |
| --- | --- |
| 13.2.5 | Financial Indebtedness |
| --- | --- |
| (a) | Except as permitted under paragraph (b) below, the Issuer shall not, and shall ensure that no other Restricted Group Company<br>shall, incur, create or permit to subsist any Financial Indebtedness. |
| --- | --- |
| (b) | Paragraph (a) above shall not prohibit any Restricted Group Company to incur, create or permit to subsist any Permitted Financial<br>Indebtedness. |
| --- | --- |
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| --- | | 13.2.6 | Negative pledge | | --- | --- | | (a) | Except as permitted under paragraph (b) below, the Issuer shall not, and shall ensure that no Restricted Group Company shall,<br>create, permit to subsist or allow to exist any Security over any of its present or future assets, its revenues or its shares. | | --- | --- | | (b) | Paragraph (a) above does not apply to any Permitted Security. | | --- | --- | | 13.2.7 | Financial Support | | --- | --- | | (a) | Except as permitted under paragraph (b) below, the Issuer shall not, and shall ensure that no other Restricted Group Company<br>shall, grant any Financial Support. | | --- | --- | | (b) | Paragraph (a) above does not apply to any Permitted Financial Support. | | --- | --- | | 13.2.8 | Hedging | | --- | --- |
The Issuer shall not, and shall procure that no other Restricted Group Company will, enter into hedging arrangements for speculative purposes.
| 13.2.9 | Green Bonds |
|---|
The Issuer shall at all times maintain a Green Bond Framework.
| 13.2.10 | FMV report |
|---|
The Issuer shall procure that a valuation shall be carried out by an Approved Valuer once per Financial Year (at the cost of the Issuer) to estimate the aggregated fair market value of the assets of the Restricted Group, and provide to the Bond Trustee a copy of such valuation in connection with the Compliance Certificate for submission of the Annual Financial Statements.
| 13.2.11 | Notification |
|---|
The Issuer shall promptly inform the Bond Trustee of the occurrence of any event which could reasonably be expected to result in the revocation, withdrawal, cancellation, termination, suspension or forfeiture of any PV Asset, if such event might have a Material Adverse Effect. Upon receiving such notification, the Bond Trustee shall automatically be authorized by the Issuer to publish the information on Stamdata.
| 13.3 | Financial covenants |
|---|
The Issuer shall procure that the Restricted Group complies with the following financial covenants:
| 13.3.1 | Liquidity |
|---|
The Restricted Group shall at all times following the Issue Date maintain a Liquidity of no less than the higher of:
(a) EUR 5,500,000; and
(b) an amount equivalent to 5 per cent. the aggregate Nominal Amount of all Outstanding Bonds.
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| --- | | 13.3.2 | Equity Ratio | | --- | --- |
The Restricted Group shall at all times following the Issue Date maintain an Equity Ratio of minimum 25 per cent.
| 13.3.3 | Leverage Ratio |
|---|
The Restricted Group shall maintain a Leverage Ratio of less than:
| (a) | 6.50:1 for the Relevant Periods expiring on 31 March 2021, 30 June 2021, 30 September 2021 and 31 December 2021; |
|---|---|
| (b) | 6.00:1 for the Relevant Periods expiring on 31 March 2022, 30 June 2022, 30 September 2022 and 31 December 2022;<br>and |
| --- | --- |
| (c) | 5.50:1 for the Relevant Periods thereafter until the Maturity Date. |
| --- | --- |
| 13.3.4 | Testing |
| --- | --- |
The Leverage Ratio shall be tested on a quarterly basis, calculated and measured on a consolidated basis for the Restricted Group by reference to the relevant Financial Reports and each Compliance Certificate delivered to the Bond Trustee pursuant to Clause 12 (Information Undertakings) above, adjusting the EBITDA and Net Interest Bearing Debt pro-forma as set out for the Incurrence Test in Clause 13.3.5 (Incurrence Test) below.
| 13.3.5 | Incurrence Test |
|---|---|
| (a) | The Incurrence Test is met if the Restricted Group complies with the Financial Covenants tested pro forma as set out herein. |
| --- | --- |
| (b) | The calculation of the Leverage Ratio shall be made as at a testing date determined by the Issuer, falling no earlier than one month<br>prior to the event relevant for the application of the Incurrence Test. |
| --- | --- |
| (c) | The calculation shall be made by taking into account the figures for EBITDA for the Relevant Period ending on the last day of the<br>period covered by the most recent Financial Report which shall be used for the Incurrence Test, but adjusted so that (without double-<br>counting): |
| --- | --- |
| (i) | entities, assets or operations acquired, disposed or discontinued of by the Restricted Group in accordance with these Bond Terms during<br>the Relevant Period, or after the end of the Relevant Period but before the relevant testing date, shall be included or excluded (as applicable),<br>pro forma, for the entire Relevant Period; |
| --- | --- |
| (ii) | (to the extent relevant) any entity to be acquired though the Permitted Acquisition in respect of which the Incurrence Test is made,<br>shall be included, pro forma, for the entire Relevant Period; and |
| --- | --- |
| (iii) | for each Relevant Period that includes any of the four quarterly periods first following the commencement of operation of any PV Assets,<br>the full year contributions from such PV Assets to EBITDA projected by the Issuer (acting reasonably and as confirmed in writing by the CEO or the<br>CFO) shall be included in EBITDA. |
| --- | --- |
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| --- | | (d) | The Net Interest Bearing Debt shall be measured on the relevant testing date so determined, but (to the extent relevant) take into<br>account the full commitment of the new Financial Indebtedness in respect of which the Incurrence Test is applied after deducting any Financial<br>Indebtedness being refinanced at the time of incurrence of such new Financial Indebtedness (however, any cash balance resulting from the<br>incurrence of such new Financial Indebtedness shall not reduce the Net Interest Bearing Debt). | | --- | --- | | 14. | EVENTS OF DEFAULT AND ACCELERATION OF THE BONDS | | --- | --- | | 14.1 | Events of Default | | --- | --- |
Each of the events or circumstances set out in this Clause 14.1 shall constitute an Event of Default:
| (a) | Non-payment |
|---|
An Obligor fails to pay any amount payable by it under the Finance Documents when such amount is due for payment, unless:
| (i) | its failure to pay is caused by administrative or technical error in payment systems or the CSD and payment is made within five (5) Business<br>Days following the original due date; or |
|---|---|
| (ii) | in the discretion of the Bond Trustee, the Issuer has substantiated that it is likely that such payment will be made in full within<br>five (5) Business Days following the original due date. |
| --- | --- |
| (b) | Breach of other obligations |
| --- | --- |
An Obligor does not comply with any provision of the Finance Documents other than set out under paragraph (a) (Non-payment) above, unless such failure is capable of being remedied and is remedied within twenty (20) Business Days after the earlier of the Issuer's actual knowledge thereof, or notice thereof is given to the Issuer by the Bond Trustee.
| (c) | Misrepresentation |
|---|
Any representation, warranty or statement (including statements in Compliance Certificates) made under or in connection with any Finance Documents is or proves to have been incorrect, inaccurate or misleading in any material respect when made.
| (d) | Cross default |
|---|
If for any Obligor:
| (i) | any Financial Indebtedness is not paid when due nor within any applicable grace period; or |
|---|
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| --- | | (ii) | any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an<br>event of default (however described); or | | --- | --- | | (iii) | any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however<br>described), or | | --- | --- | | (iv) | any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of<br>an event of default (however described), | | --- | --- |
provided however that the aggregate amount of such Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (i) to (iv) above exceeds a total of EUR 1,000,000 (or the equivalent thereof in any other currency).
| (e) | Insolvency and insolvency proceedings |
|---|
Any Obligor:
| (i) | is Insolvent; or |
|---|---|
| (ii) | is object of any corporate action or any legal proceedings is taken in relation to: |
| --- | --- |
| (A) | the suspension of payments, a moratorium of any indebtedness, winding- up, dissolution, examinership, administration or reorganisation<br>(by way of voluntary arrangement, scheme of arrangement or otherwise) other than a solvent liquidation or reorganization; or |
| --- | --- |
| (B) | a composition, compromise, assignment or arrangement with any creditor which may materially impair its ability to perform its obligations<br>under these Bond Terms; or |
| --- | --- |
| (C) | the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, Examiner, administrative receiver, administrator,<br>compulsory manager or other similar officer of any of its assets; or |
| --- | --- |
| (D) | enforcement of any Security over any of its or their assets having an aggregate value exceeding the threshold amount set out in paragraph<br>14.1 (d) (Cross default) above; or |
| --- | --- |
| (E) | for (A) - (D) above, any analogous procedure or step is taken in any jurisdiction in respect of any such company, |
| --- | --- |
however this shall not apply to any petition which is frivolous or vexatious and is discharged, stayed or dismissed within twenty (20) Business Days of commencement.
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| --- | | (f) | Creditor's process | | --- | --- |
Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of any Obligor having an aggregate value exceeding the threshold amount set out in paragraph (d) (Cross default) above and is not discharged within 20 Business Days.
| (g) | Unlawfulness |
|---|
It is or becomes unlawful for an Obligor to perform or comply with any of its obligations under the Finance Documents to the extent this may materially impair:
| (i) | the ability of such Obligor to perform its obligations under these Bond Terms; or |
|---|---|
| (ii) | the ability of the Bond Trustee or any Security Agent to exercise any material right or power vested to it under the Finance Documents. |
| --- | --- |
| 14.2 | Acceleration of the Bonds |
| --- | --- |
If an Event of Default has occurred and is continuing, the Bond Trustee may, in its discretion in order to protect the interests of the Bondholders, or upon instruction received from the Bondholders pursuant to Clause 14.3 (Bondholders' instructions) below, by serving a Default Notice:
| (a) | declare that the Outstanding Bonds, together with accrued interest and all other amounts accrued or outstanding under the Finance<br>Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or |
|---|---|
| (b) | exercise (or direct the Security Agent to exercise) any or all of its rights, remedies, powers or discretions under the Finance Documents<br>or take such further measures as are necessary to recover the amounts outstanding under the Finance Documents. |
| --- | --- |
| 14.3 | Bondholders' instructions |
| --- | --- |
The Bond Trustee shall serve a Default Notice pursuant to Clause 14.2 (Acceleration of the Bonds) if:
| (a) | the Bond Trustee receives a demand in writing from Bondholders representing a simple majority of the Voting Bonds, that an Event of<br>Default shall be declared, and a Bondholders' Meeting has not made a resolution to the contrary; or |
|---|---|
| (b) | the Bondholders' Meeting, by a simple majority decision, has approved the declaration of an Event of Default. |
| --- | --- |
| 14.4 | Calculation of claim |
| --- | --- |
The claim derived from the Outstanding Bonds due for payment as a result of the serving of a Default Notice will be equal to the price set out in Clause 10.2 (Voluntary earlyredemption – Call Option).
| 46 |
| --- | | 15. | BONDHOLDERS' DECISIONS | | --- | --- | | 15.1 | Authority of the Bondholders' Meeting | | --- | --- | | (a) | A Bondholders' Meeting may, on behalf of the Bondholders, resolve to alter any of these Bond Terms, including, but not limited to,<br>any reduction of principal or interest and any conversion of the Bonds into other capital classes. | | --- | --- | | (b) | The Bondholders' Meeting cannot resolve that any overdue payment of any instalment shall be reduced unless there is a pro rata reduction<br>of the principal that has not fallen due, but may resolve that accrued interest (whether overdue or not) shall be reduced without a corresponding<br>reduction of principal. | | --- | --- | | (c) | The Bondholders' Meeting may not adopt resolutions which will give certain Bondholders an unreasonable advantage at the expense of<br>other Bondholders. | | --- | --- | | (d) | Subject to the power of the Bond Trustee to take certain action as set out in Clause 16.1 (Power to represent the Bondholders),<br>if a resolution by, or an approval of, the Bondholders is required, such resolution may be passed at a Bondholders' Meeting. Resolutions<br>passed at any Bondholders' Meeting will be binding upon all Bondholders. | | --- | --- | | (e) | At least 50 per cent. of the Voting Bonds must be represented at a Bondholders' Meeting for a quorum to be present. | | --- | --- | | (f) | Resolutions will be passed by simple majority of the Voting Bonds represented at the Bondholders' Meeting, unless otherwise set out<br>in paragraph (g) below. | | --- | --- | | (g) | Save for any amendments or waivers which can be made without resolution pursuant to Clause 17.1 (Procedure for amendments and waivers)<br>paragraph (a), section (i) and (ii), a majority of at least 2/3 of the Voting Bonds represented at the Bondholders' Meeting is required<br>for approval of any waiver or amendment of these Bond Terms. | | --- | --- | | 15.2 | Procedure for arranging a Bondholders' Meeting | | --- | --- | | (a) | A Bondholders' Meeting shall be convened by the Bond Trustee upon the request in writing of: | | --- | --- | | (i) | the Issuer; | | --- | --- | | (ii) | Bondholders representing at least 1/10 of the Voting Bonds; | | --- | --- | | (iii) | the Exchange, if the Bonds are listed and the Exchange is entitled to do so pursuant to the general rules and regulations of<br>the Exchange; or | | --- | --- | | (iv) | the Bond Trustee. | | --- | --- |
The request shall clearly state the matters to be discussed and resolved.
| (b) | If the Bond Trustee has not convened a Bondholders' Meeting within ten (10) Business Days after having received a valid request<br>for calling a Bondholders' Meeting pursuant to paragraph (a) above, then the requesting party may call the Bondholders' Meeting itself. |
|---|
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| --- | | (c) | Summons to a Bondholders' Meeting must be sent no later than ten (10) Business Days prior to the proposed date of the Bondholders'<br>Meeting. The Summons shall be sent to all Bondholders registered in the CSD at the time the Summons is sent from the CSD. If the Bonds<br>are listed, the Issuer shall ensure that the Summons is published in accordance with the applicable regulations of the Exchange. The Summons<br>shall also be published on the website of the Bond Trustee (alternatively by press release or other relevant information platform). | | --- | --- | | (d) | Any Summons for a Bondholders' Meeting must clearly state the agenda for the Bondholders' Meeting and the matters to be resolved.<br>The Bond Trustee may include additional agenda items to those requested by the person calling for the Bondholders' Meeting in the Summons.<br>If the Summons contains proposed amendments to these Bond Terms, a description of the proposed amendments must be set out in the Summons. | | --- | --- | | (e) | Items which have not been included in the Summons may not be put to a vote at the Bondholders' Meeting. | | --- | --- | | (f) | By written notice to the Issuer, the Bond Trustee may prohibit the Issuer from acquiring or dispose of Bonds during the period from<br>the date of the Summons until the date of the Bondholders' Meeting, unless the acquisition of Bonds is made by the Issuer pursuant to<br>Clause 10 (Redemption and Repurchase of Bonds). | | --- | --- | | (g) | A Bondholders' Meeting may be held on premises selected by the Bond Trustee, or if paragraph (b) above applies, by the person<br>convening the Bondholders' Meeting (however to be held in the capital of the Relevant Jurisdiction). The Bondholders' Meeting will be<br>opened and, unless otherwise decided by the Bondholders' Meeting, chaired by the Bond Trustee. If the Bond Trustee is not present, the<br>Bondholders' Meeting will be opened by a Bondholder and be chaired by a representative elected by the Bondholders' Meeting (the Bond Trustee<br>or such other representative, the "Chairperson"). | | --- | --- | | (h) | Each Bondholder, the Bond Trustee and, if the Bonds are listed, representatives of the Exchange, or any person or persons acting under<br>a power of attorney for a Bondholder, shall have the right to attend the Bondholders' Meeting (each a "Representative").<br>The Chairperson may grant access to the meeting to other persons not being Representatives, unless the Bondholders' Meeting decides otherwise.<br>In addition, each Representative has the right to be accompanied by an advisor. In case of dispute or doubt with regard to whether a person<br>is a Representative or entitled to vote, the Chairperson will decide who may attend the Bondholders' Meeting and exercise voting rights. | | --- | --- | | (i) | Representatives of the Issuer have the right to attend the Bondholders' Meeting. The Bondholders Meeting may resolve to exclude the<br>Issuer's representatives and/or any person holding only Issuer's Bonds (or any representative of such person) from participating in the<br>meeting at certain times, however, the Issuer's representative and any such other person shall have the right to be present during the<br>voting. | | --- | --- | | (j) | Minutes of the Bondholders' Meeting must be recorded by, or by someone acting at the instruction of, the Chairperson. The minutes<br>must state the number of Voting Bonds represented at the Bondholders' Meeting, the resolutions passed at the meeting, and the results of the vote on the matters to<br>be decided at the Bondholders' Meeting. The minutes shall be signed by the Chairperson and at least one other person. The minutes will<br>be deposited with the Bond Trustee who shall make available a copy to the Bondholders and the Issuer upon request. | | --- | --- |
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| --- | | (k) | The Bond Trustee will ensure that the Issuer, the Bondholders and the Exchange are notified of resolutions passed at the Bondholders'<br>Meeting and that the resolutions are published on the website of the Bond Trustee (or other relevant electronically platform or press<br>release). | | --- | --- | | (l) | The Issuer shall bear the costs and expenses incurred in connection with convening a Bondholders' Meeting regardless of who has convened<br>the Bondholders' Meeting, including any reasonable costs and fees incurred by the Bond Trustee. | | --- | --- | | 15.3 | Voting rules | | --- | --- | | (a) | Each Bondholder (or person acting for a Bondholder under a power of attorney) may cast one vote for each Voting Bond owned on the<br>Relevant Record Date, ref. Clause 3.3 (Bondholders' rights). The Chairperson may, in its sole discretion, decide on accepted evidence<br>of ownership of Voting Bonds. | | --- | --- | | (b) | Issuer's Bonds shall not carry any voting rights. The Chairperson shall determine any question concerning whether any Bonds will be<br>considered Issuer's Bonds. | | --- | --- | | (c) | For the purposes of this Clause 15 (Bondholders' decisions), a Bondholder that has a Bond registered in the name of a nominee<br>will, in accordance with Clause 3.3 (Bondholders' rights), be deemed to be the owner of the Bond rather than the nominee. No vote<br>may be cast by any nominee if the Bondholder has presented relevant evidence to the Bond Trustee pursuant to Clause 3.3 (Bondholders'rights) stating that it is the owner of the Bonds voted for. If the Bondholder has voted directly for any of its nominee registered<br>Bonds, the Bondholder's votes shall take precedence over votes submitted by the nominee for the same Bonds. | | --- | --- | | (d) | Any of the Issuer, the Bond Trustee and any Bondholder has the right to demand a vote by ballot. In case of parity of votes, the Chairperson<br>will have the deciding vote. | | --- | --- | | 15.4 | Repeated Bondholders' Meeting | | --- | --- | | (a) | Even if the necessary quorum set out in paragraph (e) of Clause 15.1 (Authority of the Bondholders' Meeting) is not achieved,<br>the Bondholders' Meeting shall be held and voting completed for the purpose of recording the voting results in the minutes of the Bondholders'<br>Meeting. The Bond Trustee or the person who convened the initial Bondholders' Meeting may, within ten (10) Business Days of that<br>Bondholders' Meeting, convene a repeated meeting with the same agenda as the first meeting. | | --- | --- | | (b) | The provisions and procedures regarding Bondholders' Meetings as set out in Clause 15.1 (Authority of the Bondholders'Meeting), Clause 15.2 (Procedure for arranging a Bondholders' Meeting) and Clause 15.3 (Voting rules) shall apply mutatismutandis to a repeated Bondholders' Meeting, with the exception that the quorum requirements set out in paragraph (d) of Clause<br>15.1 (Authority of the Bondholders' Meeting) shall not apply to a repeated Bondholders' Meeting. A Summons for a repeated<br>Bondholders' Meeting shall also contain the voting results obtained in the initial Bondholders' Meeting. | | --- | --- |
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| --- | | (c) | A repeated Bondholders' Meeting may only be convened once for each original Bondholders' Meeting. A repeated Bondholders' Meeting<br>may be convened pursuant to the procedures of a Written Resolution in accordance with Clause 15.5 (Written Resolutions), even if<br>the initial meeting was held pursuant to the procedures of a Bondholders' Meeting in accordance with Clause 15.2 (Procedure for arranginga Bondholders' Meeting) and vice versa. | | --- | --- | | 15.5 | Written Resolutions | | --- | --- | | (a) | Subject to these Bond Terms, anything which may be resolved by the Bondholders in a Bondholders' Meeting pursuant to Clause 15.1 (Authorityof the Bondholders' Meeting) may also be resolved by way of a Written Resolution. A Written Resolution passed with the relevant majority<br>is as valid as if it had been passed by the Bondholders in a Bondholders' Meeting, and any reference in any Finance Document to a Bondholders'<br>Meeting shall be construed accordingly. | | --- | --- | | (b) | The person requesting a Bondholders' Meeting may instead request that the relevant matters are to be resolved by Written Resolution<br>only, unless the Bond Trustee decides otherwise. | | --- | --- | | (c) | The Summons for the Written Resolution shall be sent to the Bondholders registered in the CSD at the time the Summons is sent from<br>the CSD and published at the Bond Trustee's web site, or other relevant electronic platform or via press release. | | --- | --- | | (d) | The provisions set out in Clause 15.1 (Authority of the Bondholders' Meeting), 15.2 (Procedure for arranging a Bondholder'sMeeting), Clause 15.3 (Voting Rules) and Clause 15.4 (Repeated Bondholders' Meeting) shall apply mutatis mutandisto a Written Resolution, except that: | | --- | --- | | (i) | the provisions set out in paragraphs (g), (h) and (i) of Clause 15.2 (Procedure for arranging Bondholders Meetings);<br>or | | --- | --- | | (ii) | provisions which are otherwise in conflict with the requirements of this Clause 15.5 (Written Resolution), | | --- | --- |
shall not apply to a Written Resolution.
| (e) | The Summons for a Written Resolution shall include: |
|---|---|
| (i) | instructions as to how to vote to each separate item in the Summons (including instructions as to how voting can be done electronically<br>if relevant); and |
| --- | --- |
| (ii) | the time limit within which the Bond Trustee must have received all votes necessary in order for the Written Resolution to be passed<br>with the requisite majority (the "Voting Period"), which shall be at least ten (10) Business Days but not more than<br>15 Business Days from the date of the Summons. |
| --- | --- |
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| --- | | (f) | Only Bondholders of Voting Bonds registered with the CSD on the Relevant Record Date, or the beneficial owner thereof having presented<br>relevant evidence to the Bond Trustee pursuant to Clause 3.3 (Bondholders' rights), will be counted in the Written Resolution. | | --- | --- | | (g) | A Written Resolution is passed when the requisite majority set out in paragraph (e) or paragraph (f) of Clause 15.1 (Authorityof Bondholders' Meeting) has been obtained, based on a quorum of the total number of Voting Bonds, even if the Voting Period has not<br>yet expired. A Written Resolution will also be resolved if the sufficient numbers of negative votes are received prior to the expiry of<br>the Voting Period. | | --- | --- | | (h) | The effective date of a Written Resolution passed prior to the expiry of the Voting Period is the date when the resolution is approved<br>by the last Bondholder that results in the necessary voting majority being obtained. | | --- | --- | | (i) | If no resolution is passed prior to the expiry of the Voting Period, the number of votes shall be calculated at the close of business<br>on the last day of the Voting Period, and a decision will be made based on the quorum and majority requirements set out in paragraphs<br>(e) to (g) of Clause 15.1(Authority of Bondholders' Meeting). | | --- | --- | | 16. | THE BOND TRUSTEE | | --- | --- | | 16.1 | Power to represent the Bondholders | | --- | --- | | (a) | The Bond Trustee has power and authority to act on behalf of, and/or represent, the Bondholders in all matters, including but not<br>limited to taking any legal or other action, including enforcement of these Bond Terms, and the commencement of bankruptcy or other insolvency<br>proceedings against the Issuer, or others. | | --- | --- | | (b) | The Issuer shall promptly upon request provide the Bond Trustee with any such documents, information and other assistance (in form<br>and substance satisfactory to the Bond Trustee), that the Bond Trustee deems necessary for the purpose of exercising its and the Bondholders'<br>rights and/or carrying out its duties under the Finance Documents. | | --- | --- | | 16.2 | The duties and authority of the Bond Trustee | | --- | --- | | (a) | The Bond Trustee shall represent the Bondholders in accordance with the Finance Documents, including, inter alia, by following up<br>on the delivery of any Compliance Certificates and such other documents which the Issuer is obliged to disclose or deliver to the Bond<br>Trustee pursuant to the Finance Documents and, when relevant, in relation to accelerating and enforcing the Bonds on behalf of the Bondholders. | | --- | --- | | (b) | The Bond Trustee is not obligated to assess or monitor the financial condition of the Issuer or any other Obligor unless to the extent<br>expressly set out in these Bond Terms, or to take any steps to ascertain whether any Event of Default has occurred. Until it has actual<br>knowledge to the contrary, the Bond Trustee is entitled to assume that no Event of Default has occurred. The Bond Trustee is not responsible<br>for the valid execution or enforceability of the Finance Documents, or for any discrepancy between the indicative terms and conditions<br>described in any marketing material presented to the Bondholders prior to issuance of the Bonds and the provisions of these Bond Terms. | | --- | --- |
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| --- | | (c) | The Bond Trustee is entitled to take such steps that it, in its sole discretion, considers necessary or advisable to protect the rights<br>of the Bondholders in all matters pursuant to the terms of the Finance Documents. The Bond Trustee may submit any instructions received<br>by it from the Bondholders to a Bondholders' Meeting before the Bond Trustee takes any action pursuant to the instruction. | | --- | --- | | (d) | The Bond Trustee is entitled to engage external experts when carrying out its duties under the Finance Documents. | | --- | --- | | (e) | The Bond Trustee shall hold all amounts recovered on behalf of the Bondholders on separated accounts. | | --- | --- | | (f) | The Bond Trustee will ensure that resolutions passed at the Bondholders' Meeting are properly implemented, provided, however, that<br>the Bond Trustee may refuse to implement resolutions that may be in conflict with these Bond Terms, any other Finance Document, or any<br>applicable law. | | --- | --- | | (g) | Notwithstanding any other provision of the Finance Documents to the contrary, the Bond Trustee is not obliged to do or omit to do<br>anything if it would or might in its reasonable opinion constitute a breach of any law or regulation. | | --- | --- | | (h) | If the cost, loss or liability which the Bond Trustee may incur (including reasonable fees payable to the Bond Trustee itself) in: | | --- | --- | | (i) | complying with instructions of the Bondholders; or | | --- | --- | | (ii) | taking<br>any action at its own initiative, | | --- | --- |
will not, in the reasonable opinion of the Bond Trustee, be covered by the Issuer or the relevant Bondholders pursuant to paragraphs (e) and (g) of Clause 16.4 (Expenses,liability and indemnity), the Bond Trustee may refrain from acting in accordance with such instructions, or refrain from taking such action, until it has received such funding or indemnities (or adequate security has been provided therefore) as it may reasonably require.
| (i) | The Bond Trustee shall give a notice to the Bondholders before it ceases to perform its obligations under the Finance Documents by<br>reason of the non-payment by the Issuer of any fee or indemnity due to the Bond Trustee under the Finance Documents. |
|---|---|
| (j) | The Bond Trustee may instruct the CSD to split the Bonds to a lower nominal amount in order to facilitate partial redemptions, restructuring<br>of the Bonds or other situations. |
| --- | --- |
| 16.3 | Equality and conflicts of interest |
| --- | --- |
| (a) | The Bond Trustee shall not make decisions which will give certain Bondholders an unreasonable advantage at the expense of other Bondholders.<br>The Bond Trustee shall, when acting pursuant to the Finance Documents, act with regard only to the interests of the Bondholders and shall<br>not be required to have regard to the interests or to act upon or comply with any direction or request of any other person, other than<br>as explicitly stated in the Finance Documents. |
| --- | --- |
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| --- | | (b) | The Bond Trustee may act as agent, trustee, representative and/or security agent for several bond issues relating to the Issuer notwithstanding<br>potential conflicts of interest. The Bond Trustee is entitled to delegate its duties to other professional parties. | | --- | --- | | 16.4 | Expenses, liability and indemnity | | --- | --- | | (a) | The Bond Trustee will not be liable to the Bondholders for damage or loss caused by any action taken or omitted by it under or in<br>connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct. The Bond Trustee shall not<br>be responsible for any indirect or consequential loss. Irrespective of the foregoing, the Bond Trustee shall have no liability to the<br>Bondholders for damage caused by the Bond Trustee acting in accordance with instructions given by the Bondholders in accordance with these<br>Bond Terms. | | --- | --- | | (b) | The Bond Trustee will not be liable to the Issuer for damage or loss caused by any action taken or omitted by it under or in connection<br>with any Finance Document, unless caused by its gross negligence or wilful misconduct. The Bond Trustee shall not be responsible for any<br>indirect or consequential loss. | | --- | --- | | (c) | Any liability for the Bond Trustee for damage or loss is limited to the amount of the Outstanding Bonds. The Bond Trustee is not liable<br>for the content of information provided to the Bondholders by or on behalf of the Issuer or any other person. | | --- | --- | | (d) | The Bond Trustee shall not be considered to have acted negligently in: | | --- | --- | | (i) | acting in accordance with advice from or opinions of reputable external experts; or | | --- | --- | | (ii) | taking, delaying or omitting any action if acting with reasonable care and provided the Bond Trustee considers that such action is<br>in the interests of the Bondholders. | | --- | --- | | (e) | The Issuer is liable for, and will indemnify the Bond Trustee fully in respect of, all losses, expenses and liabilities incurred by<br>the Bond Trustee as a result of negligence by the Issuer (including its directors, management, officers, employees and agents) in connection<br>with the performance of the Bond Trustee's obligations under the Finance Documents, including losses incurred by the Bond Trustee as a<br>result of the Bond Trustee's actions based on misrepresentations made by the Issuer in connection with the issuance of the Bonds, the<br>entering into or performance under the Finance Documents, and for as long as any amounts are outstanding under or pursuant to the Finance<br>Documents. | | --- | --- | | (f) | The Issuer shall cover all costs and expenses incurred by the Bond Trustee in connection with it fulfilling its obligations under<br>the Finance Documents. The Bond Trustee is entitled to fees for its work and to be indemnified for costs, losses and liabilities on the<br>terms set out in the Finance Documents. The Bond Trustee's obligations under the Finance Documents are conditioned upon the due payment<br>of such fees and indemnifications. The fees of the Bond Trustee will be further set out in the Bond Trustee Fee Agreement. | | --- | --- |
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| --- | | (g) | The Issuer shall on demand by the Bond Trustee pay all costs incurred for external experts engaged after the occurrence of an Event<br>of Default, or for the purpose of investigating or considering (i) an event or circumstance which the Bond Trustee reasonably believes<br>is or may lead to an Event of Default or (ii) a matter relating to the Issuer or any of the Finance Documents which the Bond Trustee<br>reasonably believes may constitute or lead to a breach of any of the Finance Documents or otherwise be detrimental to the interests of<br>the Bondholders under the Finance Documents. | | --- | --- | | (h) | Fees, costs and expenses payable to the Bond Trustee which are not reimbursed in any other way due to an Event of Default, the Issuer<br>being Insolvent or similar circumstances pertaining to any Obligors, may be covered by making an equal reduction in the proceeds to the<br>Bondholders hereunder of any costs and expenses incurred by the Bond Trustee or the Security Agent in connection therewith. The Bond Trustee<br>may withhold funds from any escrow account (or similar arrangement) or from other funds received from the Issuer or any other person,<br>irrespective of such funds being subject to Transaction Security, and to set-off and cover any such costs and expenses from those funds. | | --- | --- | | (i) | As a condition to effecting any instruction from the Bondholders (including, but not limited to, instructions set out in Clause 14.3<br>(Bondholders' instructions) or Clause 15.2 (Procedure for arranging a Bondholders' Meeting)), the Bond Trustee may require<br>satisfactory Security, guarantees and/or indemnities for any possible liability and anticipated costs and expenses from those Bondholders<br>who have given that instruction and/or who voted in favour of the decision to instruct the Bond Trustee. | | --- | --- | | 16.5 | Replacement of the Bond Trustee | | --- | --- | | (a) | The Bond Trustee may be replaced by a majority of 2/3 of Voting Bonds in accordance with the procedures set out in Clause 15 (Bondholders'Decisions), and the Bondholders may resolve to replace the Bond Trustee without the Issuer's approval. | | --- | --- | | (b) | The Bond Trustee may resign by giving notice to the Issuer and the Bondholders, in which case a successor Bond Trustee shall be elected<br>pursuant to this Clause 16.5 (Replacement of the Bond Trustee), initiated by the retiring Bond Trustee. | | --- | --- | | (c) | If the Bond Trustee is Insolvent, or otherwise is permanently unable to fulfil its obligations under these Bond Terms, the Bond Trustee<br>shall be deemed to have resigned and a successor Bond Trustee shall be appointed in accordance with this Clause 16.5 (Replacement ofthe Bond Trustee). The Issuer may appoint a temporary Bond Trustee until a new Bond Trustee is elected in accordance with paragraph<br>(a) above. | | --- | --- | | (d) | The change of Bond Trustee shall only take effect upon execution of all necessary actions to effectively substitute the retiring Bond<br>Trustee, and the retiring Bond Trustee undertakes to co-operate in all reasonable manners without delay to such effect. The retiring Bond<br>Trustee shall be discharged from any further obligation in respect of the Finance Documents from the change takes effect, but shall remain<br>liable under the Finance Documents in respect of any action which it took or failed to take whilst acting as Bond Trustee. The retiring<br>Bond Trustee remains entitled to any benefits and any unpaid fees or expenses under the Finance Documents before the change has taken<br>place. | | --- | --- |
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| --- | | (e) | Upon change of Bond Trustee the Issuer shall co-operate in all reasonable manners without delay to replace the retiring Bond Trustee<br>with the successor Bond Trustee and release the retiring Bond Trustee from any future obligations under the Finance Documents and any<br>other documents. | | --- | --- | | 16.6 | Security Agent | | --- | --- | | (a) | The Bond Trustee is appointed to act as Security Agent for the Bonds, unless any other person is appointed. The main functions of<br>the Security Agent may include holding Transaction Security on behalf of the Secured Parties and monitoring compliance by the Issuer and<br>other relevant parties of their respective obligations under the Transaction Security Documents with respect to the Transaction Security<br>on the basis of information made available to it pursuant to the Finance Documents. | | --- | --- | | (b) | The Bond Trustee shall, when acting as Security Agent for the Bonds, at all times maintain and keep all certificates and other documents<br>received by it, that are bearers of right relating to the Transaction Security in safe custody on behalf of the Bondholders. The Bond<br>Trustee shall not be responsible for or required to insure against any loss incurred in connection with such safe custody. | | --- | --- | | (c) | Before the appointment of a Security Agent other than the Bond Trustee, the Issuer shall be given the opportunity to state its views<br>on the proposed Security Agent, but the final decision as to appointment shall lie exclusively with the Bond Trustee. | | --- | --- | | (d) | The functions, rights and obligations of the Security Agent may be determined by a Security Agent Agreement to be entered into between<br>the Bond Trustee and the Security Agent, which the Bond Trustee shall have the right to require each Obligor and any other party to a<br>Finance Document to sign as a party, or, at the discretion of the Bond Trustee, to acknowledge. The Bond Trustee shall at all times retain<br>the right to instruct the Security Agent in all matters, whether or not a separate Security Agent Agreement has been entered into^1^. | | --- | --- | | (e) | The provisions set out in Clause 16.4 (Expenses, liability and indemnity) shall apply mutatis mutandis to any expenses<br>and liabilities of the Security Agent in connection with the Finance Documents. | | --- | --- | | 17. | AMENDMENTS AND WAIVERS | | --- | --- | | 17.1 | Procedure for amendments and waivers | | --- | --- | | (a) | The Issuer and the Bond Trustee (acting on behalf of the Bondholders) may agree to amend the Finance Documents or waive a past default<br>or anticipated failure to comply with any provision in a Finance Document, provided that: | | --- | --- | | (i) | such amendment or waiver is not detrimental to the rights and benefits of the Bondholders in any material respect, or is made solely<br>for the purpose of rectifying obvious errors and mistakes; | | --- | --- |
^1^ Need for additional Security Trust Agreement under Irish and certain other laws TBC
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| --- | | (ii) | such amendment or waiver is required by applicable law, a court ruling or a decision by a relevant authority; or | | --- | --- | | (iii) | such amendment or waiver has been duly approved by the Bondholders in accordance with Clause 15 (Bondholders' Decisions). | | --- | --- | | (b) | Any changes to these Bond Terms necessary or appropriate in connection with the appointment of a Security Agent other than the Bond<br>Trustee shall be documented in an amendment to these Bond Terms, signed by the Bond Trustee (in its discretion). If so desired by the<br>Bond Trustee, any or all of the Transaction Security Documents shall be amended, assigned or re-issued, so that the Security Agent is<br>the holder of the relevant Security (on behalf of the Bondholders). The costs incurred in connection with such amendment, assignment or<br>re-issue shall be for the account of the Issuer. | | --- | --- | | 17.2 | Authority with respect to documentation | | --- | --- |
If the Bondholders have resolved the substance of an amendment to any Finance Document, without resolving on the specific or final form of such amendment, the Bond Trustee shall be considered authorised to draft, approve and/or finalise (as applicable) any required documentation or any outstanding matters in such documentation without any further approvals or involvement from the Bondholders being required.
| 17.3 | Notification of amendments or waivers |
|---|---|
| (a) | The Bond Trustee shall as soon as possible notify the Bondholders of any amendments or waivers made in accordance with this Clause<br>17 (Amendments and waivers), setting out the date from which the amendment or waiver will be effective, unless such notice according<br>to the Bond Trustee's sole discretion is unnecessary. The Issuer shall ensure that any amendment to these Bond Terms is duly registered<br>with the CSD. |
| --- | --- |
| (b) | Prior to agreeing to an amendment or granting a waiver in accordance with Clause 17.1(a)(i) (Procedure for amendments andwaivers), the Bond Trustee may inform the Bondholders of such waiver or amendment at a relevant information platform. |
| --- | --- |
| 18. | MISCELLANEOUS |
| --- | --- |
| 18.1 | Limitation of claims |
| --- | --- |
All claims under the Finance Documents for payment, including interest and principal, will be subject to the legislation regarding time-bar provisions of the Relevant Jurisdiction.
| 18.2 | Access to information |
|---|---|
| (a) | These Bond Terms will be made available to the public and copies may be obtained from the Bond Trustee or the Issuer. The Bond Trustee<br>will not have any obligation to distribute any other information to the Bondholders or any other person, and the Bondholders have no right<br>to obtain information from the Bond Trustee, other than as explicitly stated in these Bond Terms or pursuant to statutory provisions of<br>law. |
| --- | --- |
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| --- | | (b) | In order to carry out its functions and obligations under these Bond Terms, the Bond Trustee will have access to the relevant information<br>regarding ownership of the Bonds, as recorded and regulated with the CSD. | | --- | --- | | (c) | The information referred to in paragraph (b) above may only be used for the purposes of carrying out their duties and exercising<br>their rights in accordance with the Finance Documents and shall not disclose such information to any Bondholder or third party unless<br>necessary for such purposes. | | --- | --- | | 18.3 | Notices, contact information | | --- | --- |
Written notices to the Bondholders made by the Bond Trustee will be sent to the Bondholders via the CSD with a copy to the Issuer and the Exchange (if the Bonds are listed). Any such notice or communication will be deemed to be given or made via the CSD, when sent from the CSD.
| (a) | The Issuer's written notifications to the Bondholders will be sent to the Bondholders via the Bond Trustee or through the CSD with<br>a copy to the Bond Trustee and the Exchange (if the Bonds are listed). |
|---|---|
| (b) | Notwithstanding paragraph (a) above and provided that such written notification does not require the Bondholders to take any<br>action under the Finance Documents, the Issuer's written notifications to the Bondholders may be published by the Bond Trustee on a relevant<br>information platform only. |
| --- | --- |
| (c) | Unless otherwise specifically provided, all notices or other communications under or in connection with these Bond Terms between the<br>Bond Trustee and the Issuer will be given or made in writing, by letter, e-mail or fax. Any such notice or communication will be deemed<br>to be given or made as follows: |
| --- | --- |
| (i) | if by letter, when delivered at the address of the relevant party; |
| --- | --- |
| (ii) | if by e-mail, when received; |
| --- | --- |
| (iii) | if by fax, when received; and |
| --- | --- |
| (iv) | if by publication on a relevant information platform, when published. |
| --- | --- |
| (d) | The Issuer and the Bond Trustee shall each ensure that the other party is kept informed of changes in postal address, e-mail address,<br>telephone and fax numbers and contact persons. |
| --- | --- |
| (e) | When determining deadlines set out in these Bond Terms, the following will apply (unless otherwise stated): |
| --- | --- |
| (i) | if the deadline is set out in days, the first day of the relevant period will not be included and the last day of the relevant period<br>will be included; |
| --- | --- |
| (ii) | if the deadline is set out in weeks, months or years, the deadline will end on the day in the last week or the last month which, according<br>to its name or number, corresponds to the first day the deadline is in force. If<br>such day is not a part of an actual month, the deadline will be the last day of such month; and |
| --- | --- |
| (iii) | if a deadline ends on a day which is not a Business Day, the deadline is postponed to the next Business Day. |
| --- | --- |
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| --- | | 18.4 | Defeasance | | --- | --- | | (a) | Subject to paragraph (b) below and provided that: | | --- | --- | | (i) | an amount sufficient for the payment of principal and interest on the Outstanding Bonds to the relevant Repayment Date (including,<br>to the extent applicable, any premium payable upon exercise of a Call Option), and always subject to paragraph (c) below (the "DefeasanceAmount") is credited by the Issuer to an account in a financial institution acceptable to the Bond Trustee (the "DefeasanceAccount"); | | --- | --- | | (ii) | the Defeasance Account is irrevocably pledged and blocked in favour of the Bond Trustee on such terms as the Bond Trustee shall request<br>(the "Defeasance Pledge"); and | | --- | --- | | (iii) | the Bond Trustee has received such legal opinions and statements reasonably required by it, including (but not necessarily limited<br>to) with respect to the validity and enforceability of the Defeasance Pledge, | | --- | --- |
then;
| (A) | the Issuer will be relieved from its obligations under Clause 12.2 (Requirements as to Financial Reports) paragraph (a), Clause<br>12.3 (Put Option Event), Clause 12.5 (Information: Miscellaneous) and Clause 13 (General and financial undertakings); |
|---|---|
| (B) | any Transaction Security shall be released and the Defeasance Pledge shall be considered replacement of the Transaction Security;<br>and |
| --- | --- |
| (C) | any Obligor shall be released from any Guarantee or other obligation applicable to it under any Finance Document. |
| --- | --- |
| (b) | The Bond Trustee shall be authorised to apply any amount credited to the Defeasance Account towards any amount payable by the Issuer<br>under any Finance Document on the due date for the relevant payment until all obligations of the Issuer and all amounts outstanding under<br>the Finance Documents are repaid and discharged in full. |
| --- | --- |
| (c) | The Bond Trustee may, if the Defeasance Amount cannot be finally and conclusively determined, decide the amount to be deposited to<br>the Defeasance Account in its discretion, applying such buffer amount as it deems necessary. |
| --- | --- |
A defeasance established according to this Clause 18.4 may not be reversed.
| 58 |
| --- | | 19. | GOVERNING LAW AND JURISDICTION | | --- | --- | | 19.1 | Governing law | | --- | --- |
These Bond Terms are governed by the laws of the Relevant Jurisdiction, without regard to its conflict of law provisions.
| 19.2 | Main jurisdiction |
|---|
The Bond Trustee and the Issuer agree for the benefit of the Bond Trustee and the Bondholders that the City Court of the capital of the Relevant Jurisdiction shall have jurisdiction with respect to any dispute arising out of or in connection with these Bond Terms. The Issuer agrees for the benefit of the Bond Trustee and the Bondholders that any legal action or proceedings arising out of or in connection with these Bond Terms against the Issuer or any of its assets may be brought in such court.
| 19.3 | Alternative jurisdiction |
|---|
Clause 19 (Governing law and jurisdiction) is for the exclusive benefit of the Bond Trustee and the Bondholders and the Bond Trustee have the right:
| (a) | to commence proceedings against the Issuer or any other Obligor or any of their respective assets in any court in any jurisdiction;<br>and |
|---|---|
| (b) | to commence such proceedings, including enforcement proceedings, in any competent jurisdiction concurrently. |
| --- | --- |
| 19.4 | Service of process |
| --- | --- |
| (a) | Without prejudice to any other mode of service allowed under any relevant law, the Issuer: |
| --- | --- |
| (i) | irrevocably appoints Advokatfirmaet Thommessen AS as its agent for service of process in relation to any proceedings in connection<br>with these Bond Terms; and |
| --- | --- |
| (ii) | agrees that failure by an agent for service of process to notify the Issuer of the process will not invalidate the proceedings concerned. |
| --- | --- |
| (b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Issuer<br>must immediately (and in any event within ten (10) Business Days of such event<br>taking place) appoint another agent on terms acceptable to the Bond Trustee. Failing this, the Bond Trustee may appoint another agent<br>for this purpose. |
| --- | --- |
-000-
| 59 |
| --- |
These Bond Terms have been executed in two originals, of which the Issuer and the Bond Trustee shall retain one each.
SIGNATURES:
| The Issuer: | As Bond Trustee and Security Agent: | ||
|---|---|---|---|
| SOLIS BOND COMPANY DESIGNATED ACTIVITY COMPANY | NORDIC TRUSTEE AS | ||
| By: | /s/ Vincent Browne | By: | /s/ Ellen Soiland |
| Position: Director | Position: Authorized Signatory |
| 60 |
| --- |
Exhibit 10.2
Execution version
AMENDMENT AGREEMENT NO. 1
dated 5 July 2021
in respect of
BOND TERMS
dated 5 January 2021
between, amongst others,
SOLIS BOND COMPANY DESIGNATEDACTIVITY COMPANY
as Issuer
and
NORDIC TRUSTEE AS
as Bond Trustee
on behalf of the Bondholders
in the bond issue
Solis Bond Company DesignatedActivity Company FRN Senior Secured EUR 200,000,000 Green Bonds 2021/2024
ISIN NO 001 0914914
| Page 2 of 9 |
| --- | | TABLE OF CONTENTS | | | | --- | --- | --- | | 1. | BACKGROUND | 3 | | 2. | DEFINITIONS AND INTERPRETATION | 3 | | 3. | AMENDMENT DATE | 4 | | 4. | AMENDMENTS TO THE BOND TERMS | 4 | | 5. | FEES, COSTS AND EXPENSES | 5 | | 6. | REPRESENTATIONS | 5 | | 7. | CONTINUITY AND FURTHER ASSURANCE | 5 | | 8. | MISCELLANEOUS | 6 | | 9. | GOVERNING LAW AND JURISDICTION | 6 | | Schedule<br>1 Conditions Precedent | | 8 |
| Page 3 of 9 |
| --- |
THIS AMENDMENT AGREEMENT no. 1 (the "Agreement") is made on 5 July 2021 by and between:
| (1) | SOLIS BOND COMPANY DESIGNATED ACTIVITY COMPANY, a company existing under the laws of Ireland<br>with registered office address at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin and company registration<br>number 679734, as issuer (the "Issuer"); |
|---|---|
| (2) | ALTERNUS ENERGY GROUP PLC, a public limited company incorporated under the laws of Ireland having its registered office address<br>at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin, with company number 642708 (the "Parent");<br>and |
| --- | --- |
| (3) | NORDIC TRUSTEE AS, Norwegian registration no. 963 342 624, with registered offices at Kronprinsesse Märthas plass 1, N-0160<br>Oslo, Norway as bond trustee on behalf of the Bondholders (the "Bond Trustee"). |
| --- | --- |
| 1. | BACKGROUND |
| --- | --- |
| (A) | Pursuant to the bond terms dated 5 January 2021 (the "Bond Terms"), made between the Issuer as issuer and the Bond<br>Trustee as bond trustee for the Bondholders, the Issuer has issued a series of bonds (with ISIN NO 0010914914) in an aggregate maximum<br>amount equal to EUR 110,000,000 (together the "Bonds") subject to the terms and conditions of the Bond Terms. |
| --- | --- |
| (B) | On 4 June 2021 the Bond Trustee issued a notice of written bondholders' resolutions in which the Issuer put forward to the Bondholders<br>a proposal to make certain amendments to the Bond Terms (the "Written Resolutions Request"). The Written Resolutions<br>Request was approved and resolved on 21 June 2021. |
| --- | --- |
| (C) | This Agreement sets out the amendments to the Bond Terms as approved by the Bondholders pursuant to the approved and resolved Written<br>Resolutions Request. |
| --- | --- |
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
| 2. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 2.1 | Definitions |
| --- | --- |
Terms and expressions defined in the Bond Terms shall have the meaning assigned to them therein when used in this Agreement (including in the preamble) unless otherwise specifically defined or expressed herein. In addition:
"EffectiveDate" means the date on which the Bond Trustee is satisfied that all conditions precedent set out in Schedule 1 (ConditionsPrecedent) have been met or waived. The Bond Trustee shall notify the Issuer upon being so satisfied.
"Party" means a party to this Agreement.
| Page 4 of 9 |
| --- | | 2.2 | Construction | | --- | --- |
The provisions of Clause 1.2 (Construction) of the Bond Terms apply to this Agreement as if they were set out herein in their entirety.
SECTION 2
AMENDMENTS
| 3. | AMENDMENT DATE |
|---|---|
| (a) | Subject to satisfaction or waiver of the conditions precedent set out in Schedule 1 (Conditions Precedent), which shall be<br>in form and with content satisfactory to the Bond Trustee, the Parties agree that on and with effect from the Effective Date the Bond<br>Terms shall be amended as set out in Clause 4 (Amendments to the Bond Terms). |
| --- | --- |
| (b) | Furthermore, with effect from the Effective Date, references in the Bond Terms to "this Bond Terms", "hereof",<br> "hereby", "hereto", and the like and references to the "Bond Terms" in any other Finance Document shall<br>be construed as references to the Bond Terms as amended by this Agreement. |
| --- | --- |
| 4. | AMENDMENTS TO THE BOND TERMS |
| --- | --- |
| 4.1 | The following definition in Clause 1.1 (Definitions) of the Bond Terms shall be amended to read: |
| --- | --- |
"LongstopDate" means 6 October 2021.
| 4.2 | The following definition shall be added to Clause 1.1 (Definitions) of the Bond Terms: |
|---|
"AmendmentAgreement no. 1" means an amendment agreement no. 1 to these Bond Terms dated 5 July 2021, entered into between the Issueras Issuer and the Bond Trustee as bond trustee.
| 4.3 | Clause 10.5 (Mandatory early redemption at the Longstop Date) of the Bond Terms shall be amended to read: |
|---|
10.5Mandatoryearly redemption at the Longstop Date
In the event thatthe conditions precedent set out in Clause 6.1 (Conditions precedent for disbursement to the Issuer) have not been fulfilled within theLongstop Date, any remaining amount standing to the credit of the Escrow Account shall:
| (a) | in case such remaining amount is less than EUR 7,500,000, at the request of the Issuer be released to the Issuer for general corporatepurposes; or |
|---|---|
| (b) | in case such remaining amount is EUR 7,500,000 or higher, no later than on the Longstop Repayment Date, be used to redeem all ofthe Outstanding Bonds at a price equal to 102 per cent. of the Nominal Amount (plus accrued and unpaid interest thereon), |
| --- | --- |
and the Bond Trusteeshall be authorised to either (i) release amounts pursuant to (a) above or (as applicable) (ii) take all necessary measuresto effectuate redemption pursuant to (b) above and return such remaining proceeds to the Bondholders applying the funds depositedon the Escrow Accountfor such redemption (on a pro rata basis to the Bondholders in accordance with the applicable regulations of the CSD).
| Page 5 of 9 |
| --- |
SECTION 3
MISCELLANEOUS
| 5. | FEES, COSTS AND EXPENSES |
|---|---|
| 5.1 | Amendment Fee |
| --- | --- |
The Issuer shall no later than 5 July 2021 pay to the Bond Trustee (for further distribution to the Bondholders on a pro rata basis) a one-time amendment fee (the "Amendment Fee") in the amount of EUR 550,000.
| 5.2 | Transaction expenses |
|---|
The Issuer shall promptly on demand pay the Bond Trustee the amount of all costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation, printing, execution, perfection, amendment, enforcement and preservation of this Agreement and any other documents referred to in this Agreement.
| 5.3 | Non-recoverable costs |
|---|
The costs and expenses specified in this Clause 5.3 (Fees, costs and expenses) shall be payable by the Issuer in any event and shall under no circumstances be recoverable. The Issuer's obligation to pay any costs and expenses hereunder shall survive the termination date of the Bonds and of this Agreement.
| 6. | REPRESENTATIONS |
|---|---|
| 6.1 | Representations and warranties |
| --- | --- |
| (a) | The Issuer hereby represents and warrants to the Bond Trustee that as of the date of this Agreement all representations and warranties<br>set out in Clause 7 (Representations and warranties) of the Bond Terms are true in all material respects. |
| --- | --- |
| (b) | The representations and warranties are deemed to be repeated on the Effective Date, with reference to the facts and circumstances<br>then existing. |
| --- | --- |
| (c) | The Issuer acknowledges that the Bond Trustee has entered into this Agreement in full reliance on the representations and warranties<br>made by it pursuant to this Clause 6. |
| --- | --- |
| 7. | CONTINUITY AND FURTHER ASSURANCE |
| --- | --- |
| 7.1 | Continuing obligations |
| --- | --- |
The Issuer confirms that, notwithstanding the amendments effected by this Agreement each Finance Document (save for the amendments described above and/or any other amendment agreement) to which it is a party shall continue in full force and effect and shall extend to the liabilities and the obligations of the Issuer, under the Bond Terms as amended by this Agreement and all other Finance Documents.
| Page 6 of 9 |
| --- | | 7.2 | Security confirmation | | --- | --- |
In consideration for the entry into this Agreement, each of the Issuer and the Parent confirms, acknowledges and agrees that the Security created or purporting to be created by it (and in the case of the Issuer) each other Obligor under any Transaction Security Documents shall, save as amended by this Agreement, continue in full force and effect as continuing security and extend to and secure all the liabilities and obligations of the Issuer under the Bond Terms (including, for the avoidance of doubt, any such liabilities and obligations as amended by the terms of this Agreement).
| 8. | MISCELLANEOUS |
|---|---|
| 8.1 | Finance Document |
| --- | --- |
This Agreement is a Finance Document for the purpose of the Bond Terms.
| 8.2 | Effective Date |
|---|
If the Effective Date has not occurred on or prior to 5 July 2021, this Agreement shall terminate and no amendments pursuant to this Agreement will come into effect.
| 8.3 | Incorporation of terms |
|---|
The provisions of Clause 18.3 (Notices, contact information) of the Bond Terms shall apply correspondingly to this Agreement.
SECTION 4
GOVERNING LAW AND ENFORCEMENT
| 9. | GOVERNING LAW AND JURISDICTION |
|---|---|
| 9.1 | Governing law |
| --- | --- |
This Agreement and any dispute arising out of or in connection with it, shall be governed by, and construed in accordance with Norwegian law.
| 9.2 | Jurisdiction |
|---|---|
| (a) | The courts of Norway, with Oslo district court (Nw. Oslo tingrett) have jurisdiction to settle any dispute arising out of or<br>in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement a "Dispute"). |
| --- | --- |
| (b) | The Parties agree that the courts of Norway are the most appropriate and convenient courts to settle Disputes and accordingly no Party<br>will argue to the contrary. |
| --- | --- |
| (c) | This Clause 9.2 (Jurisdiction) is for the benefit of the Bond Trustee only. As a result, the Bond Trustee shall not be prevented<br>from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Bond Trustee may<br>take concurrent proceedings in any number of jurisdictions. |
| --- | --- |
| Page 7 of 9 |
| --- | | 9.3 | Service of process | | --- | --- | | (a) | Without prejudice to any other mode of service allowed under any relevant law, the Issuer: | | --- | --- | | (i) | irrevocably appoints Advokatfirmaet Thommessen AS as its agent for service of process in relation to<br>any proceedings in connection with this Agreement; and | | --- | --- | | (ii) | agrees that failure by an agent for service of process to notify the Issuer of the process will not invalidate<br>the proceedings concerned. | | --- | --- | | (b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Issuer<br>must immediately (and in any event within ten (10) Business Days of such event taking place) appoint another agent on terms acceptable<br>to the Bond Trustee. Failing this, the Bond Trustee may appoint another agent for this purpose. | | --- | --- |
[Signature page to follow]
| Page 8 of 9 |
| --- |
Schedule 1
Conditions Precedent
| 1. | The Issuer and the Parent |
|---|---|
| (a) | A copy of the constitutional documents of the Issuer and the Parent. |
| --- | --- |
| (b) | A copy of a resolution of the board of directors of the Issuer and the Parent: |
| --- | --- |
| (i) | approving the terms of, and the transactions contemplated by, the Agreement and the Finance Documents to which it is a party and resolving<br>that it execute, deliver and perform the Finance Documents to which it is a party; |
| --- | --- |
| (ii) | authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and |
| --- | --- |
| (iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched<br>by it under or in connection with the Finance Documents to which it is a party. |
| --- | --- |
| (c) | An original Power of Attorney granted by the Issuer and the Parent (as applicable). |
| --- | --- |
| (d) | If applicable, a copy of a resolution signed by all the holders of the issued shares in the Issuer or a resolution of the board of<br>directors of the holder of the issued shares in the Issuer, approving the terms of, and the transactions contemplated by, the Finance<br>Documents to which the Issuer is a party. |
| --- | --- |
| (e) | A copy of a certificate from a director of each of the Issuer and the Parent confirming that each copy document relating to it set<br>out in this Schedule 1 is correct, complete and in full force and effect as at the Effective Date and including a specimen signature of<br>each person authorised by the resolutions referred to in paragraph (b) above. |
| --- | --- |
| 2. | Finance Documents |
| --- | --- |
| (a) | This Agreement duly executed by the parties hereto and any other agreement required for the implementation of the amendments, duly<br>executed by the parties thereto. |
| --- | --- |
| 3. | Other documents and evidence |
| --- | --- |
| (a) | Evidence that the Proposal (as defined in the Written Resolutions Request) having been duly approved by the necessary 2/3 majority<br>of Voting Bonds. |
| --- | --- |
| (b) | No Event of Default having occurred and being continuing. |
| --- | --- |
| (c) | The Amendment Fee having been paid. |
| --- | --- |
| 4. | Legal opinion |
| --- | --- |
The delivery to the Bond Trustee of any legal opinions as may be reasonably required by the Bond Trustee in relation to the implementation of the Proposal and confirming the due execution by the Issuer of the Agreement and any other Finance Document.
| Page 9 of 9 |
| --- |
SIGNATURE PAGE
Signed as lawfully appointed attorney for and on behalf of
SOLIS BOND COMPANY DESIGNATEDACTIVITY COMPANY
(as Issuer)
| By: | /s/ Vincent Browne |
|---|---|
| Name: | Vincent Browne |
| Title: | Director |
Signed as lawfully appointed attorney for and on behalf of
Alternus enegy group plc
(as Parent)
| By: | /s/ Vincent Browne |
|---|---|
| Name: | Vincent Browne |
| Title: | Director |
For and on behalf of
NORDIC TRUSTEE AS
(as Pledgee)
| By: | /s/ Ellen Soiland |
|---|---|
| Name: | Ellen Soiland |
| Title: | Authorized Signatory |
Exhibit 10.3
Execution Version
AMENDMENT AGREEMENT NO. 2
dated __ May 2023
in respect of
BOND TERMS
dated 5 January 2021
between, amongst others,
SOLIS BOND COMPANY DESIGNATEDACTIVITY COMPANY
as Issuer
and
NORDIC TRUSTEEAS
as Bond Trustee
on behalf of the Bondholders
in the bond issue
Solis Bond Company DesignatedActivity Company FRN Senior Secured EUR 200,000,000 Green Bonds 2021/2024
ISIN NO0010914914
| Page 2 of 14 |
| --- |
Table of Contents
| 1. | BACKGROUND | 3 |
|---|---|---|
| 2. | DEFINITIONS AND INTERPRETATION | 3 |
| 3. | CONDITIONS PRECEDENT AND SUBSEQUENT | 4 |
| 4. | AMENDMENTS TO THE BOND TERMS | 4 |
| 5. | FEES, COSTS AND EXPENSES | 9 |
| 6. | REPRESENTATIONS | 9 |
| 7. | CONTINUITY AND FURTHER ASSURANCE | 10 |
| 8. | MISCELLANEOUS | 10 |
| 9. | GOVERNING LAW AND JURISDICTION | 10 |
| SCHEDULE 1 CONDITIONS PRECEDENT AND SUBSEQUENT | 12 |
| Page 3 of 14 |
| --- |
THIS AMENDMENT AGREEMENT no.2 (the "Agreement") is made on __ May 2023 by and between:
| (1) | SOLIS BOND COMPANY DESIGNATED ACTIVITY COMPANY, a company existing under the laws of Ireland with<br>registered office address at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin and company registration number<br>679734, as issuer (the "Issuer"); |
|---|---|
| (2) | ALTERNUS ENERGY GROUP PLC, a public limited company incorporated under the laws of Ireland having<br>its registered office address at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin, with company number 642708<br>(the "Parent"); and |
| --- | --- |
| (3) | NORDIC TRUSTEE AS, Norwegian registration no. 963 342 624, with registered offices at Kronprinsesse<br>Märthas plass 1, N-0160 Oslo, Norway as bond trustee on behalf of the Bondholders (the "Bond Trustee"). |
| --- | --- |
| 1. | BACKGROUND |
| --- | --- |
| (A) | Pursuant to the bond terms dated 5 January 2021 (as amended by an amendment agreement no. 1 dated<br>5 July 2021, the "Bond Terms"), made between the Issuer as issuer and the Bond Trustee as bond trustee for the Bondholders,<br>the Issuer has issued a series of bonds (with ISIN NO0010914914) in an aggregate amount equal to EUR 140,000,000 (together the "Bonds")<br>subject to the terms and conditions of the Bond Terms. |
| --- | --- |
| (B) | On 27 March 2023 the Bond Trustee issued a notice of a written resolutions in which the Issuer put<br>forward to the Bondholders a proposal to make certain amendments to the Bond Terms (the "Written Resolutions Request").<br>The Written Resolutions Request was approved and resolved on 14 April 2023. |
| --- | --- |
| (C) | This Agreement sets out the amendments to the Bond Terms as approved by the Bondholders pursuant to the<br>approved and resolved Written Resolutions Request. |
| --- | --- |
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
| 2. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 2.1 | Definitions |
| --- | --- |
Terms and expressions defined in the Bond Terms shall have the meaning assigned to them therein when used in this Agreement (including in the preamble) unless otherwise specifically defined or expressed herein. In addition:
"Effective Date" means the date on which the Bond Trustee is satisfied that all conditions precedent set out in Part I (Conditions Precedent) of Schedule 1 (Conditions Precedent and Subsequent) have been met or waived. The Bond Trustee shall notify the Issuer upon being so satisfied.
"Party" means a party to this Agreement.
| Page 4 of 14 |
| --- | | 2.2 | Construction | | --- | --- |
The provisions of Clause 1.2 (Construction) of the Bond Terms apply to this Agreement as if they were set out herein in their entirety.
SECTION 2
AMENDMENTS
| 3. | conditions precedent and subsequent |
|---|---|
| 3.1 | Effective Date |
| --- | --- |
| (a) | Subject to satisfaction or waiver of the conditions precedent set out in Part I (Conditions Precedent)<br>of Schedule 1 (Conditions Precedent and Subsequent), which shall be in form and with content satisfactory to the Bond Trustee,<br>the Parties agree that on and with effect from the Effective Date the Bond Terms shall be amended as set out in Clause 4 (Amendmentsto the Bond Terms). |
| --- | --- |
| (b) | Furthermore, with effect from the Effective Date, references in the Bond Terms to "this Bond Terms",<br> "hereof", "hereby", "hereto", and the like and references to the "Bond Terms" in any other Finance<br>Document shall be construed as references to the Bond Terms as amended by this Agreement. |
| --- | --- |
| 3.2 | Conditions subsequent |
| --- | --- |
| (a) | Each of the Issuer and the Parent shall deliver (and shall procure that each other relevant Obligor deliver)<br>to the Bond Trustee of all documents mentioned in paragraph (b) of Clause 7.2 (Security confirmation) of this Agreement and<br>all documents listed in Part II (Conditions Subsequent) of Schedule 1 (Conditions Precedent and Subsequent) to this<br>Agreement, in form and substance acceptable to the Agent, on or before 9 June 2023. |
| --- | --- |
| (b) | If the Issuer and/or the Parent (as the case may be) fails to comply with this Clause 3.2 (Conditionssubsequent), the Bond Trustee may by notice to the Issuer and the Parent declare: |
| --- | --- |
| (i) | that the Issuer and the Parent are in breach of their obligations contained herein and as a consequence<br>thereof the amendments set out in Clause 4 (Amendments to the Bond Terms) of this Agreement shall be reversed and become null and<br>void; and |
| --- | --- |
| (ii) | Event of Default under the Bond Agreement and accelerate the Bonds in accordance with Clause 14.2 (Accelerationof the Bonds) and Clause 14.3 (Bondholders' instructions) of the Bond Terms (as the case may be). |
| --- | --- |
| 4. | AMENDMENTS TO THE BOND TERMS |
| --- | --- |
| (a) | The following definition in Clause 1.1 (Definitions) of the Bond Terms shall be amended to read: |
| --- | --- |
"Changeof Control Event" means:
| (a) | if the Parent ceases to own and control, directly or indirectly, 100 per cent of the issued capitaland votes of the Issuer, except if the Parent ceases to own, directly or indirectly, 100 per cent., but always continue to own, directlyor indirectly, above 50 per cent., of the issued capital and vote of the Issuer, as a result of the business combination agreement withClean Earth Acquisition Corp.; or |
|---|
| Page 5 of 14 |
| --- | | (b) | if any person, or a group of persons under the same Decisive Influence, or two or more persons actingin concert, other than the Major Shareholder, obtain Decisive Influence over the Parent. | | --- | --- | | (b) | The following definition shall be added to Clause 1.1 (Definitions) of the Bond Terms: | | --- | --- |
"EquityCure" has the meaning given to it in Clause 13.2.12 (Equity Cure).
| (c) | The following definition shall be added to Clause 1.1 (Definitions) of the Bond Terms: |
|---|
"EquityOffering" has the meaning given to it in Clause 13.2.12 (Equity Cure).
| (d) | The following definition shall be added to Clause 1.1 (Definitions) of the Bond Terms: |
|---|
"Midco" means AEGJD 03 Limited, an existing Irish registered company ultimately owned by Alternus Energy Group Plc, to be the intercompany transferredbelow Alternus Energy Group Plc and its wholly owned Subsidiary Alternus LUX 01 S.à r.l. and above the Issuer and AEG MH 02 Limited(the holdco entity holding certain development assets) for the purpose of issuance of the Preference Shares as described in Clause 13.2.14.
| (e) | The following definition shall be added to Clause 1.1 (Definitions) of the Bond Terms: |
|---|
"Sale Proceeds" hasthe meaning prescribed to it in Clause 13.2.13 (Sales and Repayment Cure).
| (f) | The following definition shall be added to Clause 1.1 (Definitions) of the Bond Terms: |
|---|
"Sales and Repayment Cure"has the meaning prescribed to it in Clause 13.2.13 (Sales and Repayment Cure).
| (g) | Clause 10.1 (Redemption of Bonds) shall be amended to read as follows: |
|---|
The Outstanding Bonds will maturein full on the Maturity Date and shall be redeemed by the Issuer on the Maturity Date at a price equal to 107.5 per cent of the NominalAmount.
| Page 6 of 14 |
| --- | | (h) | Clause 10.2 (Voluntary early redemption – Call Option) shall be amended to read as follows: | | --- | --- | | (a) | The Issuer may redeem all or some of the Outstanding Bonds (the "Call Option") onany Business Day: | | --- | --- | | (i) | to, but excluding 30 June 2023 at a price of 105 per cent of the Nominal Value, plus all interestincurred on the redeemed Bonds; | | --- | --- | | (ii) | from and including 30 June 2023 at a price of 107.5 per cent of the Nominal Amount, plus all interestincurred on the redeemed Bonds. | | --- | --- | | (b) | Any redemption of Bonds pursuant to paragraph (a) above shall be determined based upon the redemptionprices applicable on the Call Option Repayment Date. | | --- | --- | | (c) | If the Call Option is exercised for less than all of the Outstanding Bonds, the Call Option shall beexercised in respect of Outstanding Bonds with a Nominal Amount of EUR 7,000,000 or multiples thereof. | | --- | --- | | (d) | The Call Option may be exercised by the Issuer by written notice to the Bond Trustee at least ten (10) BusinessDays prior to the proposed Call Option Repayment Date. Such notice sent by the Issuer shall specify the Call Option Repayment Date, butmay be withdrawn at the discretion of the Issuer with no less than least three (3) Business Days written notice to the Bondholdersprior to the Call Option Repayment Date. | | --- | --- | | (e) | Any Call Option exercised in part will be used for pro rata payment to the Bondholders in accordancewith the applicable regulations of the CSD. | | --- | --- | | (i) | Clause 12.2 (Requirements as to Financial Reports) shall be amended to read as follows: | | --- | --- | | (a) | The Issuer shall supply to the Bond Trustee, in connection with the publication of its Financial Reportspursuant to Clause 12.1 (Financial Reports) and in connection with the application of the Incurrence Test and as otherwise required, aCompliance Certificate with a copy of the Financial Reports attached thereto. The Compliance Certificate shall be duly signed by the chiefexecutive officer of the Issuer, certifying inter alia that the Financial Reports are fairly representing its financial condition as atthe date of those financial statements and setting out (in reasonable detail) computations evidencing compliance with Clause 13.3 (FinancialCovenants) as at such date. | | --- | --- | | (b) | The Issuer shall procure that the Financial Reports delivered pursuant to Clause 12.1 (Financial Reports)are prepared using GAAP consistently applied. | | --- | --- |
| Page 7 of 14 |
| --- | | (c) | In addition to the reporting obligation above, the Issuer shall within 10 Business Days after the endof each month, provide key financial figures for the Restricted Group and a Compliance Certificate to the Bond Trustee and provide bi-weeklyupdates on the refinancing process, including any potential asset sales to the Bond Trustee (or its nominee) and its legal advisor; | | --- | --- | | (d) | The Issuer shall furthermore: | | --- | --- | | (i) | upon the request of Bondholders holding a majority of the Bonds, grant the Bond Trustee the right toappoint an observer to the board of the Issuer, which shall have the right to participate in all board meetings and receive all informationas requested (acting reasonably); and | | --- | --- | | (ii) | upon request of the Bond Trustee, attend weekly update calls relating to the refinancing process andany potential asset sales. | | --- | --- | | (j) | A new Clause 13.2.12 (Equity Cure) shall be included in the Bond Terms and read as follows: | | --- | --- | | (a) | The Parent and the Issuer shall undertake to use all reasonable endeavours to provide new equity tothe Issuer in the minimum amount of EUR 14,000,000 in the form of paid-in share capital and/or Subordinated Loan funded by the Parentby 15 May 2023 (the "Equity Cure"). | | --- | --- | | (b) | The Parent shall immediately initiate preparatory steps for an equity offering in the Norwegian market(the "Equity Offering") and shall engage two reputable Norwegian investment banks acceptable for the Bond Trustee asmanagers in order to conduct an equity offering. | | --- | --- | | (c) | If the Parent has not by 21 April 2023 provided a firm, committed, unconditional and signed termsheet for the Equity Cure in a form satisfactory to the Bond Trustee or its nominee, the Parent shall commence the Equity Offering onsuch date. | | --- | --- | | (d) | The amount of the Equity Cure shall be paid into an escrow account in the name of the Issuer whichshall be pledged and blocked in favour of the Bond Trustee (acting on behalf of the Bondholders) by 15 May 2023. | | --- | --- | | (k) | A new Clause 13.2.13 (Sales and Repayment Cure) shall be included in the Bond Terms and read as follows: | | --- | --- | | (a) | If the Issuer instead (i) is able to provide to the Bond Trustee an unconditional committed andsigned term sheet for the sale of one or more PV Assets in a minimum amount of EUR 50,000,000 (the "Sale Proceeds") by21 April 2023, and (ii) receives the Sale Proceeds (net of tax payable on such amount) in an escrow account held by the Issuerand pledged and blocked in favour of the Bond Trustee by 15 May 2023 and immediately thereafter to be applied towards partial redemptionof the Bonds (the "Sales and Repayment Cure"), then the requirement to complete the Equity Cure will cease. | | --- | --- |
| Page 8 of 14 |
| --- | | (b) | A disposal of PV Assets shall be an arm's length transaction at fair market value pursuant to Clauses13.1.9 (Arm's length transactions) and 13.2.3 (Disposals). | | --- | --- | | (l) | A new Clause 13.2.14 (Preference Shares) shall be included in the Bond Terms and read as follows: | | --- | --- | | (a) | The Parent shall make arrangements whereby the Bond Trustee (or its nominee) by 30 April 2023will receive a preference share (the "Preference Share") without any compensation being paid by the Bond Trustee in aMidco that will hold certain development assets indirectly owned by the Parent. | | --- | --- | | (b) | The Preference Share will be non-controlling, non-voting, but will provide preference to the Bond Trustee(on behalf of Bondholders) on any distributions from the development assets through Midco up to an amount of EUR 10,000,000. | | --- | --- | | (c) | The Preference Share will be redeemable at the option of Midco upon the full redemption and settlementof any outstanding amounts in respect of the Bonds but nevertheless mandatorily redeemable at EUR 10,000,000 to be paid in cash on thedate falling 20 Business Days after the Maturity Date if the Bonds have not been fully repaid. | | --- | --- | | (d) | In the event that the Preference Share is not redeemed as set out above, the Bond Trustee will on behalfof the Bondholders have the right to instruct the board of Midco to effect and complete a sale process of certain development assets heldby the Subsidiaries of Midco to procure the payment of the EUR 10,000,000 redemption amount. | | --- | --- | | (e) | The Parent will also undertake and ensure that: | | --- | --- | | (i) | no Distributions are made by Midco (or by any Subsidiaries of Midco to any direct or indirect shareholderof Midco) until the Preference Share has been redeemed in full; | | --- | --- | | (ii) | Midco and its Subsidiaries shall not incur, create or permit to subsist any Financial Indebtednessin excess of an aggregate amount of EUR 40,000,000 unless an amount of EUR 10,000,000 been paid into an escrow account in the name ofthe Parent or the Issuer which shall be pledged and blocked in favour of the Bond Trustee (acting on behalf of the Bondholders); and | | --- | --- | | (iii) | Midco and its Subsidiaries shall not create, permit to subsist or allow to exist any Security overany of its present or future assets, its revenues or its shares securing indebtedness exceeding EUR 40,000,000. | | --- | --- |
| Page 9 of 14 |
| --- | | (m) | A new Clause 13.3.6 (Temporarily Waiver) shall be included in the Bond Terms and read as follows: | | --- | --- |
Notwithstanding anything set out abovein this Clause 13.3, until but excluding 30 June 2023, the Liquidity covenant set out in Clause 13.3.1 (Liquidity), the Equity Ratiocovenant set out in Clause 13.3.2 (Equity Ratio) and the Leverage Ratio covenant set out in Clause 13.3.3 (Leverage Ratio) shall be temporarilywaived.
SECTION 3
MISCELLANEOUS
| 5. | Fees, costs and expenses |
|---|---|
| 5.1 | Amendment Fee |
| --- | --- |
The Issuer shall no later than 21 April 2023 pay to the Bondholders on a pro rata basis a one-time amendment fee of 1 per cent. of the Nominal Amount of the Outstanding Bonds (equal to EUR 1,400,000 in aggregate) (the "Amendment Fee").
| 5.2 | Transaction expenses |
|---|
The Issuer shall promptly on demand pay the Bond Trustee the amount of all costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation, printing, execution, perfection, amendment, enforcement and preservation of this Agreement and any other documents referred to in this Agreement.
| 5.3 | Non-recoverable costs |
|---|
The costs and expenses specified in this Clause 5.3 (Fees, costs and expenses) shall be payable by the Issuer in any event and shall under no circumstances be recoverable. The Issuer's obligation to pay any costs and expenses hereunder shall survive the termination date of the Bonds and of this Agreement.
| 6. | REPRESENTATIONS |
|---|---|
| 6.1 | Representations and warranties |
| --- | --- |
| (a) | The Issuer hereby represents and warrants to the Bond Trustee that as of<br>the date of this Agreement all representations and warranties set out in Clause 7 (Representations and warranties) of the Bond<br>Terms are true in all material respects, save for the Liquidity covenant set out in Clause 13.3.1 (Liquidity), the Equity<br>Ratio covenant set out in Clause 13.3.2 (Equity Ratio) and the Leverage Ratio covenant set out in Clause 13.3.3 (Leverage Ratio)<br>which shall be temporarily waived. |
| --- | --- |
| (b) | The representations and warranties are deemed to be repeated on the Effective Date, with reference to<br>the facts and circumstances then existing. |
| --- | --- |
| (c) | The Issuer acknowledges that the Bond Trustee has entered into this Agreement in full reliance on the<br>representations and warranties made by it pursuant to this Clause 6. |
| --- | --- |
| Page 10 of 14 |
| --- | | 7. | Continuity and further assurance | | --- | --- | | 7.1 | Continuing obligations | | --- | --- |
The Issuer confirms that, notwithstanding the amendments effected by this Agreement each Finance Document (save for the amendments described above and/or any other amendment agreement) to which it is a party shall continue in full force and effect and shall extend to the liabilities and the obligations of the Issuer, under the Bond Terms as amended by this Agreement and all other Finance Documents.
| 7.2 | Security confirmation |
|---|---|
| (a) | In consideration for the entry into this Agreement, each of the Issuer and the Parent confirms, acknowledges<br>and agrees that the Security created or purporting to be created by it and in the case of the Issuer each other Obligor under any Transaction<br>Security Documents shall, save as amended by this Agreement, continue in full force and effect as continuing security and extend to and<br>secure all the liabilities and obligations of the Issuer under the Bond Terms (including, for the avoidance of doubt, any such liabilities<br>and obligations as amended by the terms of this Agreement). |
| --- | --- |
| (b) | Without prejudice to the generality of paragraph (a) above, the Issuer and the Parent hereby undertakes<br>to also enter into any required Italian law governed confirmation and extension deeds with respect all existing Transaction Security governed<br>by Italian law created by it, and will procure that each of its Subsidiaries will enter into any required Italian law governed confirmation<br>and extension deeds with respect to all existing Transaction Security governed by Italian law created by each of them (if any), in each<br>case, in form and substance satisfactory to the Bond Trustee and by no later than 9 June 2023. |
| --- | --- |
| 8. | MISCELLANEOUS |
| --- | --- |
| 8.1 | Finance Document |
| --- | --- |
This Agreement is a Finance Document for the purpose of the Bond Terms.
| 8.2 | Effective Date |
|---|
If the Effective Date has not occurred on or prior to 16 May 2023, this Agreement shall terminate and no amendments pursuant to this Agreement will come into effect.
| 8.3 | Incorporation of terms |
|---|
The provisions of Clause 18.3 (Notices, contact information) of the Bond Terms shall apply correspondingly to this Agreement.
SECTION 4
GOVERNING LAW AND ENFORCEMENT
| 9. | Governing law and jurisdiction |
|---|---|
| 9.1 | Governing law |
| --- | --- |
| (a) | Subject to (b) below, this Agreement and any dispute arising out of or in connection with it, shall<br>be governed by, and construed in accordance with Norwegian law. |
| --- | --- |
| Page 11 of 14 |
| --- | | (b) | Paragraph (a) of Clause 7.2 (Security Confirmation) shall be governed by the laws of Ireland<br>to the extent the Transaction Security is governed by the laws of Ireland. | | --- | --- | | 9.2 | Jurisdiction | | --- | --- | | (a) | The courts of Norway, with Oslo district court (Nw. Oslo tingrett) have jurisdiction to settle<br>any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination<br>of this Agreement a "Dispute"). | | --- | --- | | (b) | The Parties agree that the courts of Norway are the most appropriate and convenient courts to settle Disputes<br>and accordingly no Party will argue to the contrary. | | --- | --- | | (c) | This Clause 9.2 (Jurisdiction) is for the benefit of the Bond Trustee only. As a result, the Bond<br>Trustee shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed<br>by law, the Bond Trustee may take concurrent proceedings in any number of jurisdictions. | | --- | --- | | 9.3 | Service of process | | --- | --- | | (a) | Without prejudice to any other mode of service allowed under any relevant law, the Issuer: | | --- | --- | | (i) | irrevocably appoints Advokatfirmaet Thommessen AS as its agent for service<br>of process in relation to any proceedings in connection with this Agreement; and | | --- | --- | | (ii) | agrees that failure by an agent for service of process to notify the Issuer<br>of the process will not invalidate the proceedings concerned. | | --- | --- | | (b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for<br>service of process, the Issuer must immediately (and in any event within ten (10) Business Days of such event taking place) appoint<br>another agent on terms acceptable to the Bond Trustee. Failing this, the Bond Trustee may appoint another agent for this purpose. | | --- | --- |
[Signature page to follow]
| Page 12 of 14 |
| --- |
Schedule 1
Conditions Precedent and Subsequent
Part I
Conditions Precedent
| 1. | The Issuer, Midco and the Parent |
|---|---|
| (a) | A copy of the constitutional documents of the Issuer, the Parent and Midco. |
| --- | --- |
| (b) | A copy of a resolution of the board of directors of the Issuer and the Parent: |
| --- | --- |
| (i) | approving the terms of, and the transactions contemplated by, the Agreement and any other Finance Documents<br>or Transaction Documents (as defined below) (together the "Documents") to which it is a party and resolving that it execute,<br>deliver and perform the Finance Documents to which it is a party; |
| --- | --- |
| (ii) | authorising a specified person or persons to execute the Documents to which it is a party on its behalf;<br>and |
| --- | --- |
| (iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices<br>to be signed and/or despatched by it under or in connection with the Documents to which it is a party. |
| --- | --- |
| (c) | All necessary corporate resolutions as required for the issuance of the Preference Share of Midco. |
| --- | --- |
| (d) | If applicable, a copy of a resolution signed by all the holders of the issued shares in the Issuer or<br>a resolution of the board of directors of the holder of the issued shares in the Issuer, approving the terms of, and the transactions<br>contemplated by, the Finance Documents to which the Issuer is a party. |
| --- | --- |
| (e) | A copy of a certificate from a director of each of the Issuer and the Parent confirming that each copy<br>document relating to it set out in Part I (Conditions Precedent) of this Schedule 1 is correct, complete and in full force<br>and effect as at the Effective Date and including a specimen signature of each person authorised by the resolutions referred to in paragraph<br>(b) above. |
| --- | --- |
| 2. | FinanceDocuments |
| --- | --- |
| (a) | This Agreement duly executed by the parties hereto and any other agreement required for the implementation<br>of the amendments, duly executed by the parties thereto. |
| --- | --- |
| (b) | Any other agreement (including any amendment, confirmation or similar documents in respect of any Security),<br>notice, undertaking, documents and registration or other action required to implement the relevant terms of the Proposal (the "TransactionDocuments"), duly executed by the parties thereto. |
| --- | --- |
| 3. | Other documents and evidence |
| --- | --- |
| (a) | No Event of Default having occurred and being continuing (unless the Event of Default have been waived). |
| --- | --- |
| Page 13 of 14 |
| --- | | (b) | Settlement of the Amendment Fee and any other fees or costs incurred by of the Bond Trustee, its advisors<br>and nominees. | | --- | --- | | 4. | Legal opinion | | --- | --- |
The delivery to the Bond Trustee of any legal opinions as may be reasonably required by the Bond Trustee in relation to the implementation of the Proposal and confirming the due execution by the Issuer of the Agreement and any other Finance Document or Transaction Document.
Part II
Conditions Subsequent
| 1. | The Obligors |
|---|---|
| (a) | A copy of the constitutional documents of the relevant Obligor. |
| --- | --- |
| (b) | A copy of a resolution of the board of directors of the relevant Obligor: |
| --- | --- |
| (i) | approving the terms of, and the transactions contemplated by any Finance Documents or any other document<br>that to which it is a party and resolving that it execute, deliver and perform the Finance Documents and any other document to which it<br>is a party (together the "Documents"); |
| --- | --- |
| (ii) | authorising a specified person or persons to execute all Documents to which it is a party on its behalf;<br>and |
| --- | --- |
| (iii) | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices<br>to be signed and/or despatched by it under or in connection with the Documents to which it is a party. |
| --- | --- |
| (c) | If applicable, a copy of a resolution signed by all the holders of the issued shares in the relevant Obligor<br>or a resolution of the board of directors of the holder of the issued shares in the relevant Obligor, approving the terms of, and the<br>transactions contemplated by, the Documents to which the Obligor is a party. |
| --- | --- |
| 2. | Finance Documents |
| --- | --- |
| (a) | An Italian law governed confirmation and extension deed in form and substance satisfactory to the Bond<br>Trustee executed by each party to an Italian law governed Transaction Security Document (including the Issuer and each Italian Guarantor)<br>to be duly executed, perfected and delivered to the Bond Trustee. |
| --- | --- |
| (b) | Any other agreement (including any amendment, confirmation or similar documents in respect of any Security),<br>notice, undertaking, documents and registration or other action required in connection with and implementation of the Italian law governed<br>confirmation and extension deed listed in paragraph (a) above. |
| --- | --- |
(All Finance Documents to be delivered in original).
| 3. | Legal opinion |
|---|
The delivery to the Bond Trustee of any legal opinions as may be reasonably required by the Bond Trustee in relation to the execution and delivery of the Documents and confirming the due execution by the Issuer of the Agreement and any other Finance Document or Transaction Document.
| Page 14 of 14 |
| --- |
SIGNATURE PAGE
| Signed by an authorised signatory for and on behalf of | |
|---|---|
| SOLIS BOND COMPANY DESIGNATED ACTIVITY COMPANY | |
| (as Issuer) | |
| By: | /s/ Vincent Browne |
| Name: Vincent Browne | |
| Title: Authorised signatory | |
| Signed by an authorised signatory for and on behalf of | |
| ALTERNUS ENERGY GROUP PLC | |
| (as Parent) | |
| By: | /s/ Vincent Browne |
| Name: Vincent Browne | |
| Title: Authorised signatory | |
| For and on behalf of | |
| NORDIC TRUSTEE AS | |
| (as Bond Trustee) | |
| By: | /s/ Lars Erik Laerum |
| Name: Lars Erik Laerum | |
| Title: Authorised Signatory |
Exhibit 10.4
Execution version
AMENDMENT AGREEMENT NO. 3
dated ____ July 2023
in respect of
BOND TERMS
dated 5 January 2021
between, amongst others,
SOLIS BOND COMPANY DESIGNATEDACTIVITY COMPANY
as Issuer
and
NORDIC TRUSTEEASas Bond Trustee
on behalf of the Bondholders
in the bond issue
Solis Bond Company DesignatedActivity Company FRN Senior Secured EUR 200,000,000
Green Bonds 2021/2024
ISIN NO0010914914
| Page 2 of 13 |
| --- | | TABLE OF CONTENTS | | | | --- | --- | --- | | 1. | BACKGROUND | 3 | | 2. | DEFINITIONS AND INTERPRETATION | 3 | | 3. | conditions precedent and subsequent | 4 | | 4. | AMENDMENTS TO THE BOND TERMS | 4 | | 5. | Fees, costs and expenses | 7 | | 6. | REPRESENTATIONS | 7 | | 7. | Continuity and further assurance | 7 | | 8. | MISCELLANEOUS | 8 | | 9. | Governing law and jurisdiction | 8 | | Schedule 1 Conditions Precedent and Subsequent | | 10 |
| Page 3 of 13 |
| --- |
THIS AMENDMENT AGREEMENT no.3 (the "Agreement") is made on __ July 2023 by and between:
| (1) | SOLIS BOND COMPANY DESIGNATED ACTIVITY COMPANY, a company existing under the laws of Ireland with registered office address<br> at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin and company<br> registration number 679734, as issuer (the "Issuer"); |
|---|---|
| (2) | ALTERNUS ENERGY GROUP PLC, a public<br> limited company incorporated under the laws of Ireland having its registered office address<br> at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, D15 PK64, Dublin, with company<br> number 642708 (the "Parent"); and |
| --- | --- |
| (3) | NORDIC TRUSTEE AS, Norwegian registration<br> no. 963 342 624, with registered offices at Kronprinsesse Märthas plass 1, N-0160<br> Oslo, Norway as bond trustee on behalf of the Bondholders (the "Bond Trustee"). |
| --- | --- |
| 1. | BACKGROUND |
| --- | --- |
| (A) | Pursuant to the bond terms dated 5 January 2021<br> (as amended by an amendment agreement no. 1 dated 5 July 2021 and an amendment agreement<br> no. 2 dated 16 May 2023, the "Bond Terms"), made between the Issuer<br> as issuer and the Bond Trustee as bond trustee for the Bondholders, the Issuer has issued<br> a series of bonds (with ISIN NO0010914914) in an aggregate amount equal to EUR 140,000,000<br> (together the "Bonds") subject to the terms and conditions of the Bond Terms. |
| --- | --- |
| (B) | On 16 May 2023 the Bond Trustee issued<br> a notice of a written resolutions in which the Issuer put forward to the Bondholders a proposal<br> to make certain amendments to the Bond Terms (the "Written Resolutions Request").<br> The Written Resolutions Request was approved and resolved on 2 June 2023. |
| --- | --- |
| (C) | This Agreement sets out the amendments to<br> the Bond Terms as approved by the Bondholders pursuant to the approved and resolved Written<br> Resolutions Request. |
| --- | --- |
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
| 2. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 2.1 | Definitions |
| --- | --- |
Terms and expressions defined in the Bond Terms shall have the meaning assigned to them therein when used in this Agreement (including in the preamble) unless otherwise specifically defined or expressed herein. In addition:
"EffectiveDate" means the date on which the Bond Trustee is satisfied that all conditions precedent set out in Part I (ConditionsPrecedent) of Schedule 1 (Conditions Precedent and Subsequent) have been met or waived. The Bond Trustee shall notify the Issuer upon being so satisfied.
"Party" means a party to this Agreement.
| Page 4 of 13 |
| --- | | 2.2 | Construction | | --- | --- |
The provisions of Clause 1.2 (Construction) of the Bond Terms apply to this Agreement as if they were set out herein in their entirety.
SECTION 2
AMENDMENTS
| 3. | conditions precedent and subsequent |
|---|---|
| 3.1 | Effective Date |
| --- | --- |
| (a) | Subject to satisfaction or waiver of the<br> conditions precedent set out in Part I (Conditions Precedent) of Schedule 1 (Conditions Precedent and Subsequent), which shall be in form and substance satisfactory to the Bond<br> Trustee, the Parties agree that on and with effect from the Effective Date the Bond Terms<br> shall be amended as set out in Clause 4 (Amendments to the Bond Terms). |
| --- | --- |
| (b) | Furthermore, with effect from the Effective<br> Date, references in the Bond Terms to "this Bond Terms", "hereof", "hereby",<br> "hereto", and the like and references to the "Bond Terms" in any other<br> Finance Document shall be construed as references to the Bond Terms as amended by this Agreement. |
| --- | --- |
| 3.2 | Conditions subsequent |
| --- | --- |
| (a) | Each of the Issuer and the Parent shall<br> deliver (and shall procure that each other relevant Obligor deliver) to the Bond Trustee<br> all documents mentioned in paragraph (b) of Clause 7.2 (Security confirmation)<br> of this Agreement and all documents listed in Part II (Conditions Subsequent)<br> of Schedule 1 (Conditions Precedent and Subsequent) to this Agreement, in form and<br> substance acceptable to the Bond Trustee, on or before 31 July 2023. |
| --- | --- |
| (b) | If the Issuer and/or the Parent (as the<br> case may be) fails to comply with this Clause 3.2 (Conditions subsequent), the Bond<br> Trustee may by notice to the Issuer and the Parent declare: |
| --- | --- |
| (i) | that the Issuer and the Parent are in breach<br> of their obligations contained herein and as a consequence thereof the amendments set out<br> in Clause 4 (Amendments to the Bond Terms) of this Agreement shall be reversed and<br> become null and void; and |
| --- | --- |
| (ii) | Event of Default under the Bond Terms and<br> accelerate the Bonds in accordance with Clause 14.2 (Acceleration of the Bonds) and<br> Clause 14.3 (Bondholders' instructions) of the Bond Terms (as the case may be). |
| --- | --- |
| 4. | AMENDMENTS TO THE BOND TERMS |
| --- | --- |
| (a) | The following definition shall be added<br> to Clause 1.1 (Definitions) of the Bond Terms: |
| --- | --- |
"BoardAppointment" has the meaning given to it in Clause 13.2.12.
| Page 5 of 13 |
| --- | | (b) | The following definitions included in<br> the Bond Terms shall be deleted; | | --- | --- |
"Equity Cure"
"Equity Offering"
"SaleProceeds"
"Salesand Repayment Cure"
| (c) | Clause 13.2.12 (Equity Cure) shall<br> be deleted. |
|---|---|
| (d) | Clause 13.2.13 (Sales and Repayment Cure) shall be deleted. |
| --- | --- |
| (e) | Clause 13.2.3 (Disposals) shall<br> be amended to read as follows: |
| --- | --- |
The Issuer shall not, and shall ensurethat no other Restricted Group Company shall, sell, or otherwise dispose of, all or a substantial part of such Restricted Group Company'sassets or operations (save for intra-group reorganisations within the Restricted Group) unless:
| (a) | the transaction is carried out a fair market value, on terms and conditions customary for such transactions; |
|---|---|
| (b) | such transaction would not have a Material Adverse Effect; and |
| --- | --- |
| (c) | all proceed from such transaction is transferred to a pledged and blocked bank account for the benefit of the Bond Trustee (on behalf of itself and the Bondholders). |
| --- | --- |
| (f) | Clause 13.3.6 (Temporarily Waiver)<br> shall be included in the Bond Terms and read as follows: |
| --- | --- |
Until but excluding 30 September 2023,the Liquidity covenant set out in Clause 13.3.1 (Liquidity), the Equity Ratio covenant set out in Clause 13.3.2 (Equity Ratio) and theLeverage Ratio covenant set out in Clause 13.3.3 (Leverage Ratio) shall be temporarily waived.
| (g) | New paragraph (h) shall be added<br> to Clause 12.6 (Temporarily Waiver) of the Bond Terms and read as follows: |
|---|---|
| (h) | To ensure adequate and clear communication between the Issuer and the Bond Trustee moving forward, the Issuer shall provide the Bond Trustee, its advisors and the Bond Trustee's board representatives (as referred to below) access to all information requested (acting reasonably), including access to: |
| --- | --- |
| (i) | data-rooms or reports prepared or held by the Issuer, its Parent or any of the Parent's subsidiaries; |
| --- | --- |
| (ii) | financial advisors of the Parent and the Issuer; and |
| --- | --- |
| (iii) | any relevant employee and/or officer of the Parent, Issuer and any other Obligor. |
| --- | --- |
| Page 6 of 13 |
| --- | | (i) | New Clause 13.2.12 (Appointment of board members) shall be included in the Bond Terms to reflect the immediate right provided<br> to the Bond Trustee upon the Written Resolution dated 16 May 2023 being resolved to<br> require the appointment of half the members of the board of directors of the Issuer as follows: | | --- | --- |
13.2.12 Appointmentof board members
| (a) | The Bond Trustee shall, upon the request of a Bondholders holding a majority of the Bonds, have the right to require the Issuer to immediately pass a resolution to appoint half the members of the Issuer's board of directors as nominated and directed by the Bond Trustee, with such board members having the casting votes upon any dead-lock/equal number of votes (the "Board Appointment"); |
|---|---|
| (b) | any liability for such board members shall be covered by an adequate D&O Insurance (as determined by the Bond Trustee in consultation with its legal advisor); |
| --- | --- |
| (c) | any costs connected with such Board Appointment (including remuneration for such appointed board members) shall be covered by the Issuer, and such costs shall also have priority ranking as the Bond Trustee's own cost and expenses in accordance with Clause 8.3 and Clause 16.4 of the Bond Terms; and |
| --- | --- |
| (d) | any remuneration for such board members will be decided by the Bond Trustee in consultation with a majority of the Bondholders and be covered by the Issuer in accordance with paragraph (c) above. |
| --- | --- |
| (j) | New Clause 13.2.13 (Perfection of Transaction Security) shall be included in the Bond Terms and read as follows: |
| --- | --- |
13.2.13Perfection of Transaction Security
The Issuer shall ensure that, uponthe Bond Trustee's request (acting at its discretion), any Transaction Security, including any Share Charge or Share Pledge, requiredto be perfected as a legal mortgage, such perfection is promptly made at the Issuer's cost (such cost to include, but not limited to,costs for any legal advisor, any perfection cost and cost for any requested legal opinion).
| (k) | New Clause 13.2.14 (Share Purchase Option) shall be included in the Bond Terms and read as follows: |
|---|
13.2.13 SharePurchase Option
If the Parent and the Issuer has notby 30 September 2023 repaid the Bonds in full, the Bond Trustee (acting on behalf of Bondholders) shall have the right to purchase100% of the shares in the Issuer for a full and final consideration of EUR 1 and request transfer of the shares of the Issuer to theBond Trustee (acting on behalf of the Bondholders), or a party nominated by the Bond Trustee.
| Page 7 of 13 |
| --- |
SECTION 3
MISCELLANEOUS
| 5. | Fees, costs and expenses |
|---|---|
| 5.1 | Transaction expenses |
| --- | --- |
The Issuer shall promptly on demand pay the Bond Trustee the amount of all costs and expenses (including legal fees) incurred by it in connection with the negotiation, preparation, printing, execution, perfection, amendment, enforcement and preservation of this Agreement and any other documents referred to in this Agreement.
| 5.2 | Non-recoverable costs |
|---|
The costs and expenses specified in this Clause 5.2 (Fees, costs and expenses) shall be payable by the Issuer in any event and shall under no circumstances be recoverable. The Issuer's obligation to pay any costs and expenses hereunder shall survive the termination date of the Bonds and of this Agreement.
| 6. | REPRESENTATIONS |
|---|---|
| 6.1 | Representations and warranties |
| --- | --- |
| (a) | The<br> Issuer hereby represents and warrants to the Bond Trustee that as of the date of this Agreement<br> all representations and warranties set out in Clause 7 (Representations and warranties)<br> of the Bond Terms are true in all material respects, save for the Liquidity covenant<br> set out in Clause 13.3.1 (Liquidity), the Equity Ratio covenant set out in Clause<br> 13.3.2 (Equity Ratio) and the Leverage Ratio covenant set out in Clause 13.3.3 (Leverage Ratio) which shall be temporarily waived. |
| --- | --- |
| (b) | The representations and warranties are<br> deemed to be repeated on the Effective Date, with reference to the facts and circumstances<br> then existing. |
| --- | --- |
| (c) | The Issuer acknowledges that the Bond<br> Trustee has entered into this Agreement in full reliance on the representations and warranties<br> made by it pursuant to this Clause 6. |
| --- | --- |
| 7. | Continuity and further assurance |
| --- | --- |
| 7.1 | Continuing obligations |
| --- | --- |
The Issuer confirms that, notwithstanding the amendments effected by this Agreement each Finance Document (save for the amendments described above and/or any other amendment agreement) to which it is a party shall continue in full force and effect and shall extend to the liabilities and the obligations of the Issuer, under the Bond Terms as amended by this Agreement and all other Finance Documents.
| Page 8 of 13 |
| --- | | 7.2 | Security confirmation | | --- | --- | | (a) | In consideration for the entry into this<br> Agreement, each of the Issuer and the Parent confirms, acknowledges and agrees that the Security<br> created or purporting to be created by it and in the case of the Issuer each other Obligor<br> under any Transaction Security Documents shall, save as amended by this Agreement, continue<br> in full force and effect as continuing security and extend to and secure all the liabilities<br> and obligations of the Issuer under the Bond Terms (including, for the avoidance of doubt,<br> any such liabilities and obligations as amended by the terms of this Agreement). | | --- | --- | | (b) | Without prejudice to the generality of<br> paragraph (a) above, the Issuer and the Parent hereby undertakes to also enter into<br> any required Italian law governed confirmation and extension deeds with respect all existing<br> Transaction Security governed by Italian law created by it, and will procure that each of<br> its Subsidiaries will enter into any required Italian law governed confirmation and extension<br> deeds with respect to all existing Transaction Security governed by Italian law created by<br> each of them (if any), in each case, in form and substance satisfactory to the Bond Trustee<br> and by no later than 21 July 2023. | | --- | --- | | 8. | MISCELLANEOUS | | --- | --- | | 8.1 | Finance Document | | --- | --- |
This Agreement is a Finance Document for the purpose of the Bond Terms.
| 8.2 | Effective Date |
|---|
If the Effective Date has not occurred on or prior to 21 July 2023, this Agreement shall terminate and no amendments pursuant to this Agreement will come into effect.
| 8.3 | Incorporation of terms |
|---|
The provisions of Clause 18.3 (Notices, contact information) of the Bond Terms shall apply correspondingly to this Agreement.
SECTION 4
GOVERNING LAW AND ENFORCEMENT
| 9. | Governing law and jurisdiction |
|---|---|
| 9.1 | Governing law |
| --- | --- |
| (a) | Subject to (b) below, this Agreement<br> and any dispute arising out of or in connection with it, shall be governed by, and construed<br> in accordance with Norwegian law. |
| --- | --- |
| (b) | Paragraph (a) of Clause 7.2 (Security Confirmation) shall be governed by the laws of Ireland to the extent the Transaction<br> Security is governed by the laws of Ireland. |
| --- | --- |
| 9.2 | Jurisdiction |
| --- | --- |
| (a) | The courts of Norway, with Oslo district<br> court (Nw. Oslo tingrett) have jurisdiction to settle any dispute arising out of or<br> in connection with this Agreement (including a dispute relating to the existence, validity<br> or termination of this Agreement a "Dispute"). |
| --- | --- |
| Page 9 of 13 |
| --- | | (b) | The Parties agree that the courts of Norway<br> are the most appropriate and convenient courts to settle Disputes and accordingly no Party<br> will argue to the contrary. | | --- | --- | | (c) | This Clause 9.2 (Jurisdiction)<br> is for the benefit of the Bond Trustee only. As a result, the Bond Trustee shall not be prevented<br> from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the<br> extent allowed by law, the Bond Trustee may take concurrent proceedings in any number of<br> jurisdictions. | | --- | --- | | 9.3 | Service of process | | --- | --- | | (a) | Without prejudice to any other mode of<br> service allowed under any relevant law, the Issuer: | | --- | --- | | (i) | irrevocably<br> appoints Advokatfirmaet Thommessen AS as its agent for service of process in relation to<br> any proceedings in connection with this Agreement; and | | --- | --- | | (ii) | agrees<br> that failure by an agent for service of process to notify the Issuer of the process will<br> not invalidate the proceedings concerned. | | --- | --- | | (b) | If any person appointed as an agent for<br> service of process is unable for any reason to act as agent for service of process, the Issuer<br> must immediately (and in any event within ten (10) Business Days of such event taking<br> place) appoint another agent on terms acceptable to the Bond Trustee. Failing this, the Bond<br> Trustee may appoint another agent for this purpose. | | --- | --- |
[Signature page to follow]
| Page 10 of 13 |
| --- |
Schedule 1Conditions Precedent and Subsequent
Part I
Conditions Precedent
| 1. | The Issuer, Midco and the Parent |
|---|---|
| (a) | A copy of the constitutional documents of<br> the Issuer, the Parent and Midco. |
| --- | --- |
| (b) | A copy of a resolution of the board of directors<br> of the Issuer and the Parent: |
| --- | --- |
| (i) | approving the terms of, and the transactions<br> contemplated by, the Agreement and any other Finance Documents or Transaction Documents (as<br> defined below) (together the "CP Documents") to which it is a party and<br> resolving that it execute, deliver and perform the Finance Documents to which it is a party; |
| --- | --- |
| (ii) | authorising a specified person or persons<br> to execute the CP Documents to which it is a party on its behalf; and |
| --- | --- |
| (iii) | authorising a specified person or persons,<br> on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched<br> by it under or in connection with the CP Documents to which it is a party. |
| --- | --- |
| (c) | All necessary corporate resolutions as required<br> for the issuance of the Preference Share of Midco. |
| --- | --- |
| (d) | If applicable, a copy of a resolution signed<br> by all the holders of the issued shares in the Issuer or a resolution of the board of directors<br> of the holder of the issued shares in the Issuer, approving the terms of, and the transactions<br> contemplated by, the Finance Documents to which the Issuer is a party. |
| --- | --- |
| (e) | A copy of a certificate from a director of<br> each of the Issuer and the Parent confirming that each copy document relating to it set out<br> in Part I (Conditions Precedent) of this Schedule 1 is correct, complete and<br> in full force and effect as at the Effective Date and including a specimen signature of each<br> person authorised by the resolutions referred to in paragraph (b) above. |
| --- | --- |
| 2. | Finance Documents |
| --- | --- |
| (a) | This Agreement duly executed by the parties<br> hereto and any other agreement required for the implementation of the amendments, duly executed<br> by the parties thereto. |
| --- | --- |
| (b) | Any other agreement (including any amendment,<br> confirmation or similar documents in respect of any Security), notice, undertaking, documents<br> and registration or other action required to implement the relevant terms of the Proposal<br> (the "Transaction Documents"), duly executed by the parties thereto. |
| --- | --- |
| 3. | Other documents and evidence |
| --- | --- |
| (a) | No Event of Default having occurred and being<br> continuing (unless the Event of Default have been waived). |
| --- | --- |
| Page 11 of 13 |
| --- | | (b) | Settlement of any fees or costs incurred by<br> of the Bond Trustee, its advisors and nominees. | | --- | --- | | (c) | Continuation of the on-going process connected<br> to sale of PV Assets, refinancing, and/or equity raise and regular updates of such processes<br> to the Bond Trustee and its advisors. | | --- | --- | | 4. | Legal opinion | | --- | --- |
The delivery to the Bond Trustee of any legal opinions as may be reasonably required by the Bond Trustee in relation to the implementation of the Proposal and confirming the due execution by the Issuer of the Agreement and any other Finance Document or Transaction Document.
Part II
Conditions Subsequent
**1.**TheObligors
| (a) | A copy of the constitutional documents of<br> the relevant Obligor. |
|---|---|
| (b) | A copy of a resolution of the board of directors<br> of the relevant Obligor: |
| --- | --- |
| (i) | approving the terms of, and the transactions<br> contemplated by any Finance Documents or any other document that to which it is a party and<br> resolving that it execute, deliver and perform the Finance Documents and any other document<br> to which it is a party (together the "CS Documents"); |
| --- | --- |
| (ii) | authorising a specified person or persons<br> to execute all CS Documents to which it is a party on its behalf; and |
| --- | --- |
| (iii) | authorising a specified person or persons,<br> on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched<br> by it under or in connection with the Documents to which it is a party. |
| --- | --- |
| (c) | If applicable, a copy of a resolution signed<br> by all the holders of the issued shares in the relevant Obligor or a resolution of the board<br> of directors of the holder of the issued shares in the relevant Obligor, approving the terms<br> of, and the transactions contemplated by, the Documents to which the Obligor is a party. |
| --- | --- |
| 2. | Finance Documents |
| --- | --- |
| (a) | An Italian law governed confirmation and extension<br> deed in form and substance satisfactory to the Bond Trustee executed by each party to an<br> Italian law governed Transaction Security Document (including the Issuer and each Italian<br> Guarantor) to be duly executed, perfected and delivered to the Bond Trustee. |
| --- | --- |
| (b) | Any other agreement (including any amendment,<br> confirmation or similar documents in respect of any Security), notice, undertaking, documents<br> and registration or other action required in connection with and implementation of the Italian<br> law governed confirmation and extension deed listed in paragraph (a) above. |
| --- | --- |
(All Finance Documents to be delivered in original).
| Page 12 of 13 |
| --- | | 3. | Legal opinion | | --- | --- |
The delivery to the Bond Trustee of any legal opinions as may be reasonably required by the Bond Trustee in relation to the execution and delivery of the Documents and confirming the due execution by the Issuer of the Agreement and any other Finance Document or Transaction Document.
| Page 13 of 13 |
| --- |
SIGNATURE PAGE
Signed by an authorised signatory for and on behalf of
SOLISBOND COMPANY DESIGNATED ACTIVITY COMPANY
(as Issuer)
| By: | /s/ Vincent Browne |
|---|---|
| Name: | Vincent Browne |
| Title: | Director |
Signed by an authorised signatory for and on behalf of
ALTERNUSENERGY GROUP PLC
(as Parent)
| By: | /s/ Vincent Browne |
|---|---|
| Name: | Vincent Browne |
| Title: | Director |
For and on behalf of
NORDICTRUSTEE AS
(as Bond Trustee)
| By: | /s/ Lars Erik Laerum |
|---|---|
| Name: | Lars Erik Laerum |
| Title: | Authorised Signatory |
Exhibit 10.5
DATED June 1, 2022
(1) OBNFINANCIAL SERVICES LIMITED (AS ARRANGER)
(2) PAULO’BRIEN (as LENDER)
(3) AEGMH 02 limited (AS BORROWER)
LOAN AGREEMENT
CONTENTS
Page
| 1 | INTERPRETATION | 1 |
|---|---|---|
| 2 | THE FACILITY | 3 |
| 3 | PURPOSE<br>AND APPLICATION OF ADVANCE | 3 |
| 4 | CONDITIONS<br>OF UTILISATION | 3 |
| 5 | AVAILABILITY OF ADVANCES | 3 |
| 6 | ARRANGEMENT FEES | 4 |
| 7 | REPAYMENT/PREPAYMENT | 4 |
| 8 | INTEREST | 4 |
| 9 | SECURITY | 5 |
| 10 | EVENTS<br>OF DEFAULT | 5 |
| 11 | ACCELERATION | 6 |
| 12 | ASSIGNMENT | 6 |
| 13 | AMENDMENTS<br>AND WAIVERS | 6 |
| 14 | PAYMENTS | 6 |
| 15 | CALCULATIONS<br>AND CERTIFICATES | 7 |
| 16 | PARTIAL<br>INVALIDITY | 7 |
| 17 | REMEDIES<br>AND WAIVERS | 7 |
| 18 | NOTICES | 7 |
| 19 | COUNTERPARTS | 8 |
| 20 | LAW<br>AND JURISDICTION | 8 |
| SCHEDULE 1<br>- CONDITIONS PRECEDENT | 9 |
THIS LOAN AGREEMENT (the "Agreement") is made on June 1, 2022
BETWEEN:-
| (1) | OBN FINANCIAL SERVICES LIMITED a private limited liability<br>company incorporated in Ireland (registered number 01841) with registered office at 10 Bridge Lane, Carrick-on-Shannon, Leitrim as agent<br>and arranger for the Lender (the "Arranger"); |
|---|---|
| (2) | PAUL O’BRIEN of 19 Ard na Si, Attyrory, Carrick on Shannon, Leitrim. (the "Lender");<br>and |
| --- | --- |
| (3) | AEG MH 02 LIMITED a private limited liability company incorporated in Ireland (registered number<br>714993) with registered office at Suite 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 R504 (the "Borrower"). |
| --- | --- |
WHEREAS the Borrower has requested the Lender to provide the Facility (as hereafter defined) upon the terms and conditions of this Agreement and the Lender has agreed to do so.
IT IS AGREED as follows:
| 1. | Interpretation |
|---|---|
| 1.1 | In this Agreement:- |
| --- | --- |
| "Advance" | means, save as otherwise provided herein, an advance made or to be made under the Facility of up to ten million euro (€10,000,000) by the Lender; |
| --- | --- |
| "Agreement" | means this Agreement (as amended, novated, varied, supplemented or replaced from time to time); |
| “Arrangement Fee” | means the sum of 2% of the total Advance,; |
| “Arranger Fee” | means the sum of 3% of the Advance; |
| "Authorisation" | means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration; |
| "Business Day" | means a day (other than a Saturday or Sunday) on which banks are open for general business in Dublin, Ireland; |
| “Debenture” | means the debenture dated on or about the date of this Agreement made between the Arranger and Borrower; |
| "Event of Default" | means any event or circumstance specified as such in Clause 10; |
| "Facility" | means the loan facility granted to the Borrower in Clause 2; |
| "Finance Documents" | means this Agreement, the Debenture, the Parent Company Guarantee and any other document designated as a "Finance Document" by the Arranger and the Borrower in writing and each a “Finance Document”; |
| “Parent Company Guarantee” | means the guarantee given by Alternus Energy Group PLC (company number 642708) to the Arranger on or about the date of this Agreement; |
| “Portfolio” | means various solar pv projects being acquired and developed by the Borrower in Ireland, Italy, Spain and Poland; |
1
| "Repayment Date" | means 31 May 2023; |
|---|---|
| “Semi-Annual Date” | means each of 30 November and 31 May; |
| "unable to pay its debts" | will be deemed to have the meaning given to it in Section 509(3) and Section 570 of the Irish Companies Act 2014; |
| 1.2 | Construction |
| --- | --- |
| 1.2.1 | Unless a contrary indication appears, a reference in this Agreement to:- |
| --- | --- |
| (a) | the "Borrower", “Arranger” and the "Lender", shall<br>be construed so as to include its/his successors in title, assigns and transferees to, or of, its/his rights and/or obligations under<br>the Finance Documents; |
| --- | --- |
| (b) | a document in "agreed form" is a document which is previously agreed in writing by or<br>on behalf of the Borrower and the Arranger or, if not so agreed, is in the form specified by the Arranger; |
| --- | --- |
| (c) | "assets" includes present and future properties, revenues and rights of every description; |
| --- | --- |
| (d) | a "Finance Document" or any other agreement or instrument is a reference to that Finance<br>Document or other agreement or instrument as amended, restated, novated, supplemented, extended, restated or otherwise varied or modified<br>(however fundamentally); |
| --- | --- |
| (e) | "guarantee" means any guarantee, letter of credit, bond, indemnity or similar assurance<br>against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to<br>make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order<br>to maintain or assist the ability of such person to meet its indebtedness; |
| --- | --- |
| (f) | "indebtedness" includes any obligation (whether incurred as principal or as surety) for<br>the payment or repayment of money, whether present or future, actual or contingent; |
| --- | --- |
| (g) | a "person" includes A "person" includes a natural person, personal representatives,<br>corporate or unincorporated body (whether or not having separate legal personality); |
| --- | --- |
| (h) | a "regulation" includes any regulation, rule, official directive, request or guideline<br>(whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory,<br>self-regulatory or other authority or organisation; |
| --- | --- |
| (i) | a provision of law is a reference to that provision as amended or re-enacted; and |
| --- | --- |
| (j) | a time of day is a reference to Dublin time. |
| --- | --- |
| 1.2.2 | Section, clause and Schedule headings are for ease of reference only. |
| --- | --- |
| 1.2.3 | Unless a contrary indication appears, a term used in any other Finance Document or in any notice given<br>under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. |
| --- | --- |
| 1.2.4 | An Event of Default is "continuing" if it has not been remedied or waived in writing<br>by the Arranger (acting reasonably). |
| --- | --- |
2
| 1.2.5 | In this Agreement and in each other Finance Document, the words "include", "includes",<br> "including" and "in particular" shall not be given a restrictive meaning and shall be deemed to be followed,<br>in each case, by the phrase "but without limitation". |
|---|---|
| 2. | TheFacility |
| --- | --- |
| 2.1 | For the benefit of the Borrower, the Lender unconditionally: |
| --- | --- |
| 2.1.1 | appoints the Arranger as his agent and arranger under the Finance Documents; |
| --- | --- |
| 2.1.2 | authorise and delegate to the Arranger the right to exercise the rights, powers, authorities and discretions<br>specifically given to Arranger under or in connection with the Finance Documents together with any other incidental rights, powers, authorities<br>and discretions; and |
| --- | --- |
| 2.1.3 | confirm that wherever the Lender is entitled or obliged to exercise or enforce a right or discretion,<br>or to give or receive any direction, consent or notice, save as otherwise expressly provided, such right or discretion may be validly<br>exercised, and such direction, consent or notice, may be validly given or received if it is exercised, enforced or given or received by<br>or to the Vendors' Representative and the Purchaser and the Guarantor may unconditionally rely on such confirmation. |
| --- | --- |
| 2.2 | The Lender has agreed, to grant to the Borrower upon the terms and conditions of this Agreement an aggregate<br>facility of up €10,000,000 (ten million euro). |
| --- | --- |
| 3. | Purpose And Application Of Advance |
| --- | --- |
The Borrower shall apply amounts borrowed by it under the Facility towards the financing of the pre-RTB Portfolio held by ALT MH 02 Ltd subsidiaries including assets in Italy, Ireland, Poland and Spain.
| 4. | Conditions Of Utilisation |
|---|---|
| 4.1 | Save as the Arranger may otherwise agree, no Advance may be drawn down by the Borrower under the Facility<br>unless, prior to the Advance, the Arranger has received all of the documents and other evidence listed in Schedule 1 (Conditions<br>Precedent) in form and substance satisfactory to the Arranger. The Arranger (acting reasonably) shall notify the Borrower upon being so<br>satisfied. |
| --- | --- |
| 4.2 | Save as the Arranger may otherwise agree, the Borrower cannot take or receive any additional debt from<br>any third party into the Borrower or its affiliates without repayment of the Advance. |
| --- | --- |
| 4.3 | The Borrower shall ensure that any unsecured and unsubordinated claims of the Lender against it under<br>the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors<br>whose claims are mandatorily preferred by Law of general application to companies. |
| --- | --- |
| 5. | Availability Of Advances |
| --- | --- |
| 5.1 | Subject to Clause 4 and other terms of this Agreement, and unless otherwise agreed, an Advance will be<br>made by the Lender to the Borrower once the Borrower has notified the Arranger by not less than 1 weeks’ notice (or such shorter<br>period as may be agreed between the parties to this Agreement) of the amount of the proposed Advance and the date on which it wishes the<br>Advance to be made. |
| --- | --- |
| 5.2 | Subject to Clause 4 and other terms of this Agreement, on the proposed date of drawdown of an Advance<br>the Lender shall fund the Advance to the Borrower without deduction unless otherwise agreed between the Arranger and the Borrower. |
| --- | --- |
3
| 6. | ARRANGEMENT FEES |
|---|---|
| 6.1 | On the date of drawdown of the Advance by the Borrower, the Borrower shall pay the Arranger the Arrangement<br>Fee to the following bank account: |
| --- | --- |
ACCOUNT NAME: OBN FINANCIAL SERVICES LTD.
IBAN: IE92BOFI90348815720158
BIC: BOFIIE2D
| 6.2 | On the date of drawdown of the Advance by the Borrower, the Borrower shall pay the Arranger Fee to the<br>following account: |
|---|
ACCOUNT NAME: OBN FINANCIAL SERVICES LTD.
IBAN: IE92BOFI90348815720158
BIC: BOFIIE2D
| 7. | REPAYMENT/PREPAYMENT |
|---|---|
| 7.1 | All Advances and amounts due in respect of the Facility are repayable on the Repayment Date. |
| --- | --- |
| 7.2 | On the Repayment Date the Borrower shall repay the Advance made to it. The Borrower may not re-borrow<br>any part of the Facility which is repaid. |
| --- | --- |
| 7.3 | The Borrower may, if it gives the Arranger not less than 3 Business Days’ (or such shorter period<br>as the Arranger may agree) prior notice, prepay the whole or any part of the Advance. |
| --- | --- |
| 7.4 | Where the Borrower repays the entire of the Advance before the Repayment Date, the Borrower shall pay<br>8% of the Advance in full (representing one year’s interest (as set out in Clause 8.2)) to the Arranger on the Repayment Date. |
| --- | --- |
| 7.5 | A certificate from the Arranger (acting reasonably) as to the amount at any time due from the Borrower<br>to the Lender under the Facility shall, in the absence of manifest error, be conclusive. |
| --- | --- |
| 7.6 | Where the Borrower fails to repay the Advance on the Repayment Date, the Facility shall be repayable on<br>not less than 10 Business Days written notice by the Arranger; together with all interest accrued thereon pursuant to Clause 8. |
| --- | --- |
| 7.7 | For the avoidance of doubt, on repayment of all Advances made under this Facility, this Agreement, and<br>each and any other Finance Document shall be fully and immediately discharged and released by the Lender and Arranger respectively. |
| --- | --- |
| 8. | Interest |
| --- | --- |
| 8.1 | Interest shall be payable by the Borrower to the Arranger on each Advance in an amount as set out in and<br>subject to Clause 8.2. |
| --- | --- |
| 8.2 | The rate of interest payable by the Borrower on the Advance shall be 8% per annum accruing from the date<br>of the first Advance hereunder. |
| --- | --- |
| 8.3 | Interest payable by the Borrower in accordance with this Clause 8 shall be payable semi-annually on each<br>Semi-Annual Date and interest shall accrue from day to day upon the aggregate balance of Advances under the Facility and shall be calculated<br>on the basis of a year of 360 days and in each case shall be calculated on the basis of the actual number of days elapsed. |
| --- | --- |
4
| 8.4 | Interest shall, subject to Clause 7 (Repayment/Prepayment) be rolled up at the end of each Bi-Annual<br>Date and capitalised. |
|---|---|
| 9. | Security |
| --- | --- |
The Facility and the obligations of the Borrower hereunder shall at all times be secured by the Debenture.
| 10. | Events Of Default |
|---|
Each of the events or circumstances set out in this Clause 10 is an Event of Default.
| 10.1 | Non-payment |
|---|
The Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:
| 10.1.1 | its failure to pay is caused by administrative or technical error; and |
|---|---|
| 10.1.2 | payment is made within fifteen Business Days of its due date. |
| --- | --- |
| 10.2 | Other obligations |
| --- | --- |
| 10.2.1 | The Borrower does not comply with any material provision of the Finance Documents. |
| --- | --- |
| 10.2.2 | No Event of Default under paragraph 10.2.1 above will occur if the failure to comply is capable of remedy<br>and is remedied within thirty Business Days of the earlier of (i) the Arranger giving notice to the Borrower and (ii) the Borrower<br>becoming aware of the failure to comply. |
| --- | --- |
| 10.3 | Insolvency |
| --- | --- |
| 10.3.1 | The Borrower:- |
| --- | --- |
| (a) | is unable or admits inability to pay its debts as they fall due; |
| --- | --- |
| (b) | is deemed to, or is declared to, be unable to pay its debts under applicable law; |
| --- | --- |
| (c) | suspends or threatens to suspend making payments on any of its debts; or |
| --- | --- |
| (d) | by reason of actual financial difficulties, commences negotiations with one or more of its creditors (excluding<br>a Lender or Arranger in its capacity as such) with a view to rescheduling any of its indebtedness. |
| --- | --- |
| 10.3.2 | A moratorium is declared in respect of any indebtedness of the Borrower. If a moratorium occurs, the ending<br>of the moratorium will not remedy any Event of Default caused by that moratorium. |
| --- | --- |
| 10.4 | Insolvency proceedings |
| --- | --- |
| 10.4.1 | Any corporate action, legal proceedings or other procedure or step is taken in relation to:- |
| --- | --- |
| (a) | the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration,<br>examinership or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower; |
| --- | --- |
| (b) | a composition, compromise, assignment or arrangement with any creditor of the Borrower; |
| --- | --- |
5
| (c) | the appointment of a liquidator, receiver, administrative receiver, administrator, examiner, compulsory<br>manager or other similar officer in respect of the Borrower or any of its assets; or |
|---|---|
| (d) | enforcement of any security over any assets of the Borrower or any analogous procedure or step is taken<br>in any jurisdiction, |
| --- | --- |
or any analogous procedure or step is taken in any jurisdiction.
| 10.4.2 | Paragraph 10.4.1 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged,<br>stayed or dismissed within ten days of commencement. |
|---|---|
| 10.5 | Creditors' Process |
| --- | --- |
Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of the Borrower and is not discharged within 20 Business Days.
| 11. | Acceleration |
|---|
Without prejudice to Clause 7.1, on and at any time after the occurrence of an Event of Default which is continuing the Arranger (acting on the instructions of the Lender) may by notice to the Borrower:-
| 11.1 | cancel the Facility whereupon the Facility shall immediately be cancelled; |
|---|---|
| 11.2 | declare that all or part of the Advance be immediately due and payable, whereupon they shall become immediately<br>due and payable; |
| --- | --- |
| 11.3 | declare that all or part of the Advance be payable on demand, whereupon they shall immediately become<br>payable on demand by the Arranger; and/or |
| --- | --- |
| 11.4 | exercise any or all of its rights, remedies, powers or discretions under this Agreement. |
| --- | --- |
| 12. | Assignment |
| --- | --- |
| 12.1 | Neither the Lender nor the Arranger may assign or transfer all or any of its rights and/or obligations<br>under this Deed to any party without the prior written consent of the Borrower after the 30^th^ of june 2022. |
| --- | --- |
| 12.2 | The Borrower may not assign any of its rights or transfer any of its rights or obligations under the Finance<br>Documents without the prior consent of the Arranger. |
| --- | --- |
| 13. | Amendments And Waivers |
| --- | --- |
Any term of the Finance Documents may be amended or varied with the agreement of the Borrower and the Arranger and any breach or prospective breach of any provision of this Agreement by the Borrower may be waived or sanctioned by the Arranger.
| 14. | Payments |
|---|---|
| 14.1 | All payments to be made by the Borrower under the Finance Documents shall be made in immediately available<br>funds at such bank as the Arranger may notify to the Borrower from time to time. |
| --- | --- |
| 14.2 | All payments to be made by the Borrower to the Arranger under the Finance Documents shall be calculated<br>and be made without (and free and clear of any deduction for) withholding tax, set-off or counterclaim unless the Borrower is required<br>by law to make any such deduction. |
| --- | --- |
6
| 14.3 | Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall<br>be made on the next Business Day in the same month (if there is one) or on the preceding Business Day (if there is not). |
|---|---|
| 15. | CALCULATIONS AND CERTIFICATES |
| --- | --- |
| 15.1 | In any litigation or arbitration proceedings arising out of or in connection with a Finance Document,<br>the entries made in the accounts maintained by the Arranger (acting reasonably) are prima facie evidence of the matters to which they<br>relate. |
| --- | --- |
| 15.2 | Any certification or determination by the Arranger (acting reasonably) of a rate or amount under any Finance<br>Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates. |
| --- | --- |
| 16. | Partial Invalidity |
| --- | --- |
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
| 17. | Remedies And Waivers |
|---|
No failure to exercise, nor any delay in exercising, on the part of the Arranger, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any Finance Document on the part of the Arranger shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
| 18. | Notices |
|---|---|
| 18.1 | Each communication, notice or document to be made hereunder shall be made in writing to the address of<br>each party specified below and may be made by email or letter. |
| --- | --- |
| 18.1 | A copy of any notice served to the Lender or the Arranger shall be to: |
| --- | --- |
| Name: | Paul O’Brien |
| --- | --- |
| Address: | OBN Financial Services, Chamber House, St Georges Terrace, Carrick-on-Shannon, Leitrim |
| Email: | paul@obn.ie |
| 18.2 | A copy of any notice served to the Borrower shall be to: |
| --- | --- |
| Name: | David<br>Farrell |
| --- | --- |
| Address: | Suite 9/10, Plaza<br>212, Blanchardstown Corporate Park 2, Dublin 15, D15 R504 |
| Email: | df@alternusenergy.com |
| 18.3 | Each communication, notice or document made or delivered by the Borrower to the Lender or Arranger will<br>only be effective: |
| --- | --- |
| 18.3.1 | if by way of letter, when it has been left at the relevant address or two Business Days after being deposited<br>in the post postage prepaid in an envelope addressed to it at that address; and |
| --- | --- |
| 18.3.2 | if by electronic mail, when actually received in readable form. |
| --- | --- |
| 18.4 | Any electronic mail which becomes effective, in accordance with paragraph 18.3.2, after 5.00pm in the<br>place of receipt, shall be deemed only to become effective on the following day. |
| --- | --- |
7
| 19. | Counterparts |
|---|
This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same agreement, and any party may enter into this Agreement by executing a counterpart.
| 20. | Law And Jurisdiction |
|---|
This Agreement shall be governed by and construed in accordance with the laws of Ireland and the parties agree that the Irish courts are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement or its subject matter or formation and accordingly that any suit, action or proceedings so arising may be brought in such courts, and each of the Borrower, Arranger and the Lender hereby irrevocably submits to the exclusive jurisdiction of the courts of Ireland.
IN WITNESS WHEREOF the parties have executed this Agreement the day and year first above written.
8
Schedule 1
conditionsprecedent
| 1. | Corporate Authorisations |
|---|---|
| 1.1 | A copy of the constitutional documents of the Borrower. |
| --- | --- |
| 1.2 | A copy of a resolution of the board of directors of the Borrower:- |
| --- | --- |
| 1.2.1 | approving the terms of, and the transactions contemplated by, the Finance Documents and resolving that<br>it execute, deliver and perform the Finance Documents; |
| --- | --- |
| 1.2.2 | authorising a specified person or persons to execute the Finance Documents on its behalf; and |
| --- | --- |
| 1.2.3 | authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices<br>to be signed and/or despatched by it under or in connection with the Finance Documents. |
| --- | --- |
| 1.3 | A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above. |
| --- | --- |
| 2. | Security and Other Finance Documents |
| --- | --- |
This Agreement executed by the Borrower.
9
SIGNATURES
ARRANGER
| SIGNED for and on behalf of OBN FINANCIAL | |
|---|---|
| SERVICES as Arranger | |
| Signature: | /s/ Paulo O’Brien |
| Name: | Paul O’Brien |
| Position: | Director |
BORROWER
| SIGNED for and on behalf of AEG MH 02 LIMITED | |
|---|---|
| Signature: | /s/ Vincent Browne |
| Name: | Vincent Browne |
| Position: | Director |
LENDER
| SIGNED and DELIVERED as a DEED | /s/ Paul O’Brien | |
|---|---|---|
| by PAUL O’BRIEN in the presence of: | ||
| Signature of witness: | /s/ Cathal L. Lynn Co. | |
| Name (printed): Catherine Gilmartin | ||
| Address: Carrick in Shannon | ||
| Occupation: Solicitor |
10
Exhibit 10.6
| CLIFFORDCHANCE |
|---|
| PARTNERSCHAFT<br>MIT |
| BESCHRÄNKTER<br>BERUFSHAFTUNG |
Execution Version
EUR 64,000,000
SECURED SENIOR FACILITY AGREEMENT
dated ______December 2022
for
AEG JD 01 LTD
arranged by
DEUTSCHE BANK AG
with
DEUTSCHE BANK AG
acting as hedge counterparty
and
LAW DEBENTURE CORPORATE SERVICES LIMITED
acting as Senior Agent
and
THE LAW DEBENTURE TRUST CORPORATION P.L.C.
acting as Common Security Agent
SENIOR REVOLVING FACILITY AGREEMENT
Notice: Under the CreditReporting Act 2013 lenders are required to provide personal and credit information for credit applications and credit agreements of €500and above to the Central Credit Register. This information will be held on the Central Credit Register and may be used by other lenderswhen making decisions on your credit applications and credit agreements.
CLIFFORD CHANCE PARTNERSCHAFT MIT BESCHRÄNKTER BERUFSHAFTUNG VON RECHTSANWÄLTEN,
STEUERBERATERN UND SOLICITORS · SITZ: FRANKFURT AM MAIN · AG FRANKFURT AM MAIN PR 2669
| CONTENTS | ||
|---|---|---|
| Clause | Page | |
| 1. | Definitions and Interpretation | 2 |
| --- | --- | --- |
| 2. | The Facility | 53 |
| --- | --- | --- |
| 3. | Purpose | 60 |
| --- | --- | --- |
| 4. | Conditions of Utilisation | 61 |
| --- | --- | --- |
| 5. | Utilisation | 65 |
| --- | --- | --- |
| 6. | Ancillary Facilities | 66 |
| --- | --- | --- |
| 7. | Repayment | 72 |
| --- | --- | --- |
| 8. | Prepayment and Cancellation | 73 |
| --- | --- | --- |
| 9. | Interest | 80 |
| --- | --- | --- |
| 10. | Interest Periods | 81 |
| --- | --- | --- |
| 11. | Changes to the Calculation<br> of Interest | 81 |
| --- | --- | --- |
| 12. | Fees | 83 |
| --- | --- | --- |
| 13. | Tax Gross Up and<br> Indemnities | 85 |
| --- | --- | --- |
| 14. | Increased Costs | 92 |
| --- | --- | --- |
| 15. | Other Indemnities | 94 |
| --- | --- | --- |
| 16. | Mitigation by the Lenders | 97 |
| --- | --- | --- |
| 17. | Costs and Expenses | 97 |
| --- | --- | --- |
| 18. | Bank Accounts | 100 |
| --- | --- | --- |
| 19. | Deposits into and<br> Withdrawals from Accounts | 103 |
| --- | --- | --- |
| 20. | Guarantee and Indemnity | 108 |
| --- | --- | --- |
| 21. | Representations | 112 |
| --- | --- | --- |
| 22. | Information Undertakings | 123 |
| --- | --- | --- |
| 23. | Financial Covenants | 136 |
| --- | --- | --- |
| 24. | General Undertakings | 136 |
| --- | --- | --- |
| 25. | Events of Default | 153 |
| --- | --- | --- |
| 26. | Changes to the Lenders<br> and Hedge Counterparties | 161 |
| --- | --- | --- |
| 27. | Restrictions on<br> Debt Purchase Transactions | 167 |
| --- | --- | --- |
| 28. | Changes to the Obligors | 167 |
| --- | --- | --- |
| 29. | Role of the Senior<br> Agent and, the Arranger and the Reference Banks | 170 |
| --- | --- | --- |
| 30. | Conduct of business<br> by the Finance Parties | 182 |
| --- | --- | --- |
| 31. | Sharing among the<br> Finance Parties | 182 |
| --- | --- | --- |
| 32. | Payment Mechanics | 185 |
| --- | --- | --- |
| 33. | Set-off | 189 |
| --- | --- | --- |
| 34. | Notices | 190 |
| --- | --- | --- |
| 35. | Calculations and Certificates | 192 |
| --- | --- | --- |
| 36. | Partial Invalidity | 193 |
| --- | --- | --- |
- i -
| 37. | Remedies and Waivers | 193 |
|---|---|---|
| 38. | Amendments and Waivers | 193 |
| --- | --- | --- |
| 39. | Confidential Information | 199 |
| --- | --- | --- |
| 40. | Confidentiality<br> of Funding Rates and Reference Bank Quotations | 204 |
| --- | --- | --- |
| 41. | Bail-In | 206 |
| --- | --- | --- |
| 42. | Counterparts | 208 |
| --- | --- | --- |
| 43. | Governing Law | 209 |
| --- | --- | --- |
| 44. | Jurisdiction | 209 |
| --- | --- | --- |
| Schedule<br> 1 The Original Lenders | 212 | |
| --- | --- | |
| Schedule<br> 2 Conditions Precedent and Subsequent | 213 | |
| Part A<br> Initial Conditions Precedent | 213 | |
| Part B<br> Conditions Precedent for Project Close (ProjectCo) | 217 | |
| Part C<br> Conditions precedent for each Utilisation relating to a Warehouse Project | 222 | |
| Part D<br> Conditions precedent for an Guarantor | 223 | |
| Part E<br> Conditions Subsequent | 228 | |
| Schedule<br> 3 Eligibility Criteria | 229 | |
| Schedule<br> 4 Common Security Documents | 232 | |
| Schedule<br> 5 Utilisation Request | 233 | |
| Schedule<br> 6 Form of Transfer Certificate | 234 | |
| Schedule<br> 7 Form of Assignment Agreement | 237 | |
| Schedule<br> 8 Form of Guarantor Accession Letter | 240 | |
| Schedule<br> 9 Form of Hedge Counterparty Accession Letter | 241 | |
| Schedule<br> 10 Form of Resignation Letter | 242 | |
| Schedule<br> 11 Form of Compliance Certificate | 243 | |
| Schedule<br> 12 LMA Form of Confidentiality Undertaking | 244 | |
| Schedule<br> 13 Timetables | 245 | |
| Schedule<br> 14 Form of Warehouse Report | 246 | |
| Schedule<br> 15 Form of Affiliate Accession Undertaking | 249 | |
| Schedule<br> 16 Form of Increase Confirmation | 250 | |
| Schedule<br> 17 Insurance | 254 | |
| Schedule<br> 18 Form of Financial Summary | 262 | |
| Schedule<br> 19 Hedging Policy | 263 |
- ii -
THISAGREEMENT is dated _____December 2022 and made between:
| (1) | AEG JD 01 LIMITED, a private limited company incorporated and existing under the laws of<br> Ireland having its registered office at Suite 9/10, Plaza 212, Blanchardstown Corporate<br> Park 2, Dublin 15, D15R504, Ireland and with registered number 715577, as borrower (the<br> "Borrower"); |
|---|---|
| (2) | DEUTSCHE BANK AG as mandated lead arranger (the "Arranger"); |
| --- | --- |
| (3) | DEUTSCHE BANK AG as hedge counterparty (the "Original Hedge Counterparty"); |
| --- | --- |
| (4) | THE FINANCIAL INSTITUTIONS listed in Schedule 1 (The Original Lenders) as lenders<br> (the "Original Lenders"); |
| --- | --- |
| (5) | LAW DEBENTURE CORPORATE SERVICES LIMITED, as agent of the other Finance Parties (the "Senior Agent"); and |
| --- | --- |
| (6) | THE LAW DEBENTURE TRUST CORPORATION P.L.C., as security trustee for the Common Secured Parties<br> (the "Common Security Agent"). |
| --- | --- |
IT ISAGREED as follows:
- 1 -
SECTION 1
INTERPRETATION
| 1. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 1.1 | Definitions |
| --- | --- |
In this Agreement:
"Acceptable Bank" means a bank or financial institution which has the Requisite Rating.
"AcceptingLender" has the meaning given to that term in paragraph (k) of Clause 2.3 (Increase – Accordion Option).
"AccordionAvailability Period" has the meaning given to that term in paragraph (a) of Clause 2.3 (Increase – AccordionOption).
"AccordionIncrease Amount" means the amount of the proposed increase of the Total Commitments pursuant to Clause 2.3 (Increase – Accordion Option) as set out in the Accordion Increase Request.
"AccordionIncrease Date" has the meaning given to that term in paragraph (e) of Clause 2.3 (Increase – AccordionOption).
"AccordionIncrease Request" means a request by the Borrower to increase the Total Commitments delivered in accordance with paragraphs (a) and (b) of Clause 2.3 (Increase – Accordion Option).
"Accordion Increase SupplementalSecurity" means, in relation to an Accordion Increase Amount, such documents (if any) as are reasonably necessary to provide the Accordion Increase Lenders with the benefit of Security, guarantees, indemnities and other assurance against loss equivalent to the Security, guarantees, indemnities and other assurance against loss provided to the Lenders under the Facility pursuant to the Finance Documents (other than any lack of equivalence directly consequent to:
| (a) | being<br> provided later in time; or |
|---|---|
| (b) | constituting<br> new / an increase of the respective Secured Obligations under the relevant Common Security<br> Documents). |
| --- | --- |
"Account" means each Borrower Account and each Proceeds Account.
"Account Bank" means:
| (c) | each<br> Borrower Account Bank; |
|---|---|
| (d) | each<br> ProjectCo Account Bank; and |
| --- | --- |
| (e) | each<br> other bank in which an Account is opened and maintained to effect the replacement referenced<br> pursuant to paragraph (b) of Clause 18.3 (Account Bank). |
| --- | --- |
- 2 -
"AccountCharge (Borrower)" has the meaning given to it in Schedule 4 (Common Security Documents).
"Accounting Principles" means, in respect of any Obligor and each of its respective Subsidiaries, generally accepted accounting principles in the Original Jurisdiction of that Obligor or, as applicable, its respective Subsidiaries, in each case including IFRS.
"Acquisition" means the acquisition (whether direct or indirect) of an Eligible Project or, as the case may be, a ProjectCo owning an Eligible Project, by an Obligor.
"Acquisition Agreement" means any sale and purchase agreement for the acquisition of a ProjectCo or several ProjectCos (or any other entity which indirectly holds one (1) or several ProjectCos or which shall accede to this Agreement as CountryHoldCo) made between (a) the Borrower or any Country HoldCo and/or and Project HoldCo (as applicable) as purchaser and (b) the respective vendor.
"Acquisition Costs" means all fees, costs and expenses, stamp, registration and other Taxes incurred by the Borrower, the Sponsor or any other member of the Group in connection with an Acquisition or the Transaction Documents relating to such Acquisition and/or the relevant ProjectCo, in each and every case, as set out in the Financial Model (as the same has been updated in connection with approving a solar PV project as a Warehouse Project under this Agreement and the Mezzanine Facility Agreement).
"Acquisition Date" means, with respect to each ProjectCo, Project HoldCo, Country HoldCo or, as applicable, Eligible Project, the date of the completion of the acquisition of it by a member of the Group (being a subsidiary of the Borrower).
"AdditionalHedge Counterparty" means a bank or financial institution which becomes a Hedge Counterparty in accordance with Clause 26.9 (Additional Hedge Counterparties).
"Advisers" means each of the Lenders' Technical Adviser, the Lenders' Tax and Accounting Adviser, the Lenders' Insurance Adviser, the Lenders' Legal Advisers and the Model Auditor.
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"AffiliateAccession Undertaking" means an undertaking in the form set out in Schedule 15 (Form of Affiliate Accession Undertaking).
"AIF" has the meaning given to that term under AIFMD Law.
"AIFM" has the meaning given to that term under AIFMD Law.
"AIFMD" means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (in each case as incorporated into English law under the European Union (Withdrawal) Act 2018 (as amended), as the same may be amended, supplemented, superseded or re-adopted from time to time (whether with or without qualifications).
- 3 -
"AIFMD Law" means
| (a) | the<br> AIFMD, and |
|---|---|
| (b) | any<br> applicable law of a member state of the European Union implementing the AIFMD. |
| --- | --- |
"Allocated Loan Amount" means, with respect to any Warehouse Project, the aggregate of:
| (a) | the<br> Allocated Senior Facility Amount; and |
|---|---|
| (b) | the<br> Allocated Mezzanine Facility Amount, for such Warehouse Project. |
| --- | --- |
"Allocated Mezzanine Facility Amount" means the amount confirmed as such with respect to a Warehouse Project by the Mezzanine Agent.
"Allocated Senior FacilityAmount" means the amount of the Loan(s) which shall be allocated to each Warehouse Project as determined on the basis of the Financial Model by applying the Senior Debt Sizing Assumptions.
"Ancillary Commencement Date" means, in relation to an Ancillary Facility, the date on which that Ancillary Facility is first made available, which date shall be a Business Day within the Availability Period.
"AncillaryCommitment" means, in relation to an Ancillary Lender and an Ancillary Facility, the maximum amount in euro which that Ancillary Lender has agreed (whether or not subject to satisfaction of conditions precedent) to make available from time to time under an Ancillary Facility and which has been authorised as such under Clause 6 (Ancillary Facilities), to the extent that amount is not cancelled or reduced under this Agreement or the Ancillary Documents relating to that Ancillary Facility.
"Ancillary Document" means each document relating to or evidencing the terms of an Ancillary Facility.
"AncillaryFacility" means any ancillary facility made available by an Ancillary Lender in accordance with Clause 6 (AncillaryFacilities).
"AncillaryLender" means each Lender (or Affiliate of a Lender) which makes available an Ancillary Facility in accordance with Clause 6 (Ancillary Facilities).
"Ancillary Outstandings" means, at any time, in relation to an Ancillary Lender and an Ancillary Facility then in force the aggregate of the equivalents (as calculated by that Ancillary Lender) in euro of the following amounts outstanding under that Ancillary Facility:
| (a) | the<br> principal amount under each overdraft facility and on demand short term loan facility (net<br> of any Available Credit Balance); |
|---|
- 4 -
| (b) | the<br> face amount of each guarantee, bond and letter of credit under that Ancillary Facility; and |
|---|---|
| (c) | the<br> amount fairly representing the aggregate exposure (excluding interest and similar charges)<br> of that Ancillary Lender under each other type of accommodation provided under that Ancillary<br> Facility, |
| --- | --- |
in each case as determined by such Ancillary Lender acting reasonably in accordance with the relevant Ancillary Document and normal banking practice.
"Anti-Bribery and CorruptionLaws" means:
| (a) | the<br> OECD Convention on Combating Bribery of Foreign Public Officials in International Business<br> Transactions, 1997, |
|---|---|
| (b) | the<br> Foreign Corrupt Practices Act of 1977 of the United States of America, as amended by the<br> Foreign Corrupt Practices Act Amendments of 1988 and 1998; and as may be further amended<br> and supplemented from time to time, |
| --- | --- |
| (c) | the<br> Bribery Act 2010; |
| --- | --- |
| (d) | the<br> Irish Prevention of Corruption Acts 1889 to 2012, the Irish Criminal Justice (Corruption<br> Offences) Act 2018, the Irish Protected Disclosures Act 2014; or |
| --- | --- |
| (e) | any<br> similar applicable law or regulation. |
| --- | --- |
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
"AssetManagement Agreement" means each asset management agreement delivered by the Borrower for the purposes of paragraph 1(e)(ii) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"AssetManager" means each person proposed to act as the asset manager in connection with an Eligible Project as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent.
"AssignmentAgreement" means an agreement substantially in the form set out in Schedule 8 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.
"Assignmentof Intragroup Loans" has the meaning given to it in Schedule 4 (Common Security Documents).
"Assignmentof Shareholder Loans (Borrower)" has the meaning given to it in Schedule 4 (Common Security Documents).
- 5 -
"Assumptions" means the assumptions set out in the Original Base Case (including technical, economic (including merchant price forecasts based on the relevant most recent Market Study), accounting, timing and tax assumptions) on which the projections of Revenue, Operating Costs, repayment of principal and other financing costs under this Agreement and the Mezzanine Facility Agreement and related finance documents and other amounts set out and/or determined in the Original Base Case are based, as updated from time to time in accordance with Clause 22.6 (Assumptions).
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
"Availability Period" means the period commencing on the Signing Date to and including the date falling thirty (30) months thereafter.
"Available Cashflow" means, in relation to any period, the sum (without double counting) of:
| (a) | Revenue<br> for such period, |
|---|
minus
| (b) | the<br> aggregate amounts of: |
|---|---|
| (i) | Operating<br> Costs and Project Costs, in each case to the extent not funded by way of the Loans paid or<br> payable during such period; and |
| --- | --- |
| (ii) | Fees,<br> Costs and expenses under the Finance Documents paid or payable during such period; and |
| --- | --- |
providedthat, for the purpose of determining Available Cashflow for any period, with respect to any amount received (or projected to be received) by the Group in a currency other than the currency of the Loans:
| (A) | if<br> such amount or part thereof is converted or expected to be converted into the currency of<br> the Loans, only the amount received or expected to be received upon such conversion shall<br> be taken into account; and |
|---|---|
| (B) | otherwise,<br> such amount shall not be taken into account. |
| --- | --- |
"Available Commitment" means a Lender's Commitment minus (subject as set out below):
| (a) | the<br> amount of its participation in any outstanding Loans and the amount of the aggregate of its<br> (and its Affiliate's) Ancillary Commitments; and |
|---|---|
| (b) | in<br> relation to any proposed Utilisation, the amount of its participation in any other Loans<br> that are due to be made on or before the proposed Utilisation Date, and the amount of its<br> (and its Affiliate's) Ancillary Commitment in relation to any new Ancillary Facility that<br> is due to be made available on or before the proposed Utilisation Date. |
| --- | --- |
- 6 -
For the purposes of calculating a Lender's Available Commitment in relation to any proposed Utilisation the following amounts shall not be deducted from that Lender's Commitment:
| (i) | that<br> Lender's participation in any Loans that are due to be repaid or prepaid on or before the<br> proposed Utilisation Date; and |
|---|---|
| (ii) | that<br> Lender's (and its Affiliate's) Ancillary Commitments to the extent that they are due to be<br> reduced or cancelled on or before the proposed Utilisation Date. |
| --- | --- |
"Available Credit Balance" means in relation to an Ancillary Facility, credit balances on any account of the Borrower of that Ancillary Facility with the Ancillary Lender making available that Ancillary Facility to the extent that those credit balances are freely available to be set off by that Ancillary Lender against liabilities owed to it by that Borrower under that Ancillary Facility.
"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.
"Bad Boy Guarantee" means the guarantee issued by the Sponsor in connection with this Agreement and the Mezzanine Facility Agreement.
"Bail-InAction" means the exercise of any Write-down and Conversion Powers.
"Bail-In Legislation" means:
| (a) | in<br> relation to an EEA Member Country which has implemented, or which at any time implements,<br> Article 55 BRRD, the relevant implementing law or regulation as described in the EU<br> Bail-In Legislation Schedule from time to time; |
|---|---|
| (b) | in<br> relation to the United Kingdom, the UK Bail-In Legislation; and |
| --- | --- |
| (c) | in<br> relation to any state other than such an EEA Member Country and the United Kingdom, any analogous<br> law or regulation from time to time which requires contractual recognition of any Write-down<br> and Conversion Powers contained in that law or regulation. |
| --- | --- |
"Base Case" means:
| (a) | the<br> Original Base Case; or |
|---|---|
| (b) | if<br> produced in accordance with Clause 22.5 (Updated Base Case), the most recently agreed<br> Updated Base Case. |
| --- | --- |
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"Base Equity" means, in respect of any Warehouse Project or, if applicable, several Warehouse Projects being subject to the same Acquisition, the amount specified in the Original Project Close Confirmation, being the difference between:
| (a) | the<br> aggregate total amount of (i) Project Costs, (ii) the purchase price in respect<br> of each relevant Eligible Project, and (iii) the Acquisition Costs for each relevant<br> Eligible Project (as applicable); minus |
|---|---|
| (b) | the<br> Allocated Loan Amount, |
| --- | --- |
in each case, specified in the Project Close Confirmation for that Warehouse Project. For the avoidance of doubt, any amount made available pursuant to Clause 25.25 (Equity Cure) shall not constitute Base Equity for the purposes of this Agreement.
"Base Equity Contribution" means a contribution of Base Equity, whether in the form of share capital or Shareholder Loans, made available by a Holding Company (including MidCo) to the Borrower.
"Blocking Regulation" means the UK Blocking Regulation, the German Blocking Regulation, the EU Blocking Regulation and any similar anti-boycott or similar laws or regulations.
"BorrowerAccount Bank" means JP Morgan, Dublin and each other bank in which an Account is opened and maintained to effect the replacement referenced pursuant to paragraph (b) of Clause 18.3 (Account Bank).
"BorrowerAccounts" means each of the bank accounts set out in Clause 18.1 (Designation of Accounts).
"Break Costs" means the amount (if any) by which:
| (a) | the<br> interest (excluding the Margin) which a Lender should have received for the period from the<br> date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last<br> day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal<br> amount or Unpaid Sum received been paid on the last day of that Interest Period; |
|---|
exceeds:
| (b) | the<br> amount which that Lender would be able to obtain by placing an amount equal to the principal<br> amount or Unpaid Sum received by it on deposit with a leading bank for a period starting<br> on the Business Day following receipt or recovery and ending on the last day of the current<br> Interest Period. |
|---|
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Dublin, London, Frankfurt am Main, Luxembourg and which is a TARGET Day.
"BusinessPlan" means the Original Business Plan, as updated by the Obligors from time to time for the purposes of Clause 4.3 (Conditionsprecedent for each Utilisation to pay other Eligible Project Costs).
"Calculation Date" means 31 December 2022 and each 31 March, 30 June, 30 September and 31 December in each calendar year thereafter and falling on or before the Termination Date.
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"Calculation Period" means, in relation to any Calculation Date, the period starting on the day following such Calculation Date and ending twelve (12) Months thereafter.
"CashTrap Account" has the meaning given to it in Clause 18.1 (Designation of Accounts).
"Cash Trap Event" means, on the last day of any Interest Period, a Default has occurred and is continuing.
"Certain Funds Period" means the period commencing on the date the Senior Agent confirms (in its sole discretion acting on the instructions of each Lender) that the certain funds concept shall apply with respect to a particular Acquisition and ending on the earlier of:
| (a) | ten<br> (10) days after the date of that confirmation or such later date as agreed by the Senior<br> Agent (acting on the instructions of each Lender); and |
|---|---|
| (b) | the<br> date on which the Certain Funds Utilisation occurs. |
| --- | --- |
"Certain Funds Utilisation" means a Loan made or to be made under the Facility during the Certain Funds Period, with its predominant purpose to finance any Acquisition.
"Change of Control" means the Sponsor ceases to control (whether directly or indirectly) at least fifty-one per cent. (51%) of the Group.
For the purposes herein, "control" means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
| (a) | cast,<br> or control the casting of, more than one-half of the maximum number of votes that might be<br> cast at a general meeting of any member of the Group; |
|---|---|
| (b) | appoint<br> or remove all, or the majority, of the directors or other equivalent officers of any member<br> of the Group; or |
| --- | --- |
| (c) | give<br> directions with respect to the operating and financial policies of any member of the Group<br> which the directors or other equivalent officers of any member of the Group are obliged to<br> comply with. |
| --- | --- |
"Charged Property" means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Common Transaction Security.
"Code" means the US Internal Revenue Code of 1986.
"Commercial Operation Date" means, with regard to a Warehouse Project, either:
| (a) | the<br> date of the Senior Agent's notification (acting in consultation with the Lenders' Technical<br> Adviser) to the Borrower and each other Obligor that owns (whether directly or indirectly)<br> the relevant Warehouse Project that the following tests have been met: |
|---|---|
| (i) | all<br> acceptance certificates under the EPC Contract and (if applicable) other construction contracts<br> relevant to the Warehouse Project have been issued by the EPC Contractor and (if applicable)<br> other sub- contractors (as confirmed by the Lenders' Technical Adviser); |
| --- | --- |
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| (ii) | no<br> litigation, arbitration or administrative proceeding has commenced, or been threatened in<br> writing to commence, in connection with the relevant Warehouse Project, including in connection<br> with any Authorisations or Project Documents or other agreement; |
|---|---|
| (iii) | all<br> Authorisations required to commence operations have been obtained and are in full force and<br> effect for the relevant Warehouse Project; |
| --- | --- |
| (iv) | an<br> executed O&M Contract and PPA, in each case, in form and substance satisfactory to the<br> Senior Agent; and |
| --- | --- |
| (v) | the<br> relevant Warehouse Project has commenced commercial operations (as confirmed by the Lenders'<br> Technical Adviser); or |
| --- | --- |
| (b) | the<br> date of any determination pursuant to the Resolution Procedure that the tests in paragraph<br> (a) above have been met. |
| --- | --- |
"Commitment" means:
| (a) | in<br> relation to an Original Lender, the amount set opposite its name under the heading "Commitment"<br> in Schedule 1 (The Original Lenders) and the amount of any other Commitment transferred<br> to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase);<br> and |
|---|---|
| (b) | in<br> relation to any other Lender, the amount of any Commitment transferred to it under this Agreement<br> or assumed by it in accordance with Clause 2.2 (Increase) or Clause 2.3 (Increase – Accordion Option), |
| --- | --- |
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Common Secured Parties" has the meaning given to it in the Intercreditor and Subordination Deed.
"Common Security Documents" means:
| (a) | the<br> Original Common Security Documents; |
|---|---|
| (b) | each<br> Power of Attorney; |
| --- | --- |
| (c) | any<br> document entered into by any Guarantor pursuant to Clause 28.2 (Guarantor); and |
| --- | --- |
| (d) | any<br> other document entered into by any Obligor creating or expressed to create any Common Transaction<br> Security over all or any part of its assets in respect of the obligations of any of the Obligors<br> under any of the Finance Documents. |
| --- | --- |
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"Common Transaction Security" means the Security created or expressed to be created in favour of the Common Security Agent (on behalf of the Common Secured Parties) under the Common Security Documents.
"Compensation Proceeds" means:
| (a) | any<br> compensation payment (however described) received by the Obligors (or any of them) for damage<br> or loss or by way of liquidated damages, purchase price reductions or penalties or otherwise<br> in respect of any defect, failure to meet any specification or standard, any delay or for<br> any other reason under or in connection with any Project Documents including any amount received<br> as a result of the termination, cancellation, revocation, withdrawal or anticipated or natural<br> expiry, in whole or in part, of a Project Document and any money received pursuant to any<br> guarantee, bond or other security or the proceeds of any arbitral awards or court orders<br> in respect thereof, however excluding Revenue Replacing Compensation; |
|---|---|
| (b) | all<br> consideration received by any Obligor in respect of the partial or total nationalisation,<br> expropriation, compulsory purchase or requisition of any of the assets or interests of a<br> Warehouse Project and/or of any shares or interests in the ProjectCos; or |
| --- | --- |
| (c) | any<br> sum received by any Obligor in respect of the termination, withdrawal, refusal, revocation,<br> suspension or modification of any Authorisation or any other official order or notice restricting<br> the construction or operation of any Warehouse Project. |
| --- | --- |
"ComplianceCertificate" means a certificate substantially in the form set out in Schedule 11 (Form of Compliance Certificate).
"Compliance Standards" means all applicable laws and regulations, the E&S Standards and Good Industry Practice.
"Confidential Information" means all information relating to the Borrower, any Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
| (a) | any<br> member of the Group or any of its advisers; or |
|---|
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| (b) | another<br> Finance Party, if the information was obtained by that Finance Party directly or indirectly<br> from any member of the Group or any of its advisers, in whatever form, and includes information<br> given orally and any document, electronic file or any other way of representing or recording<br> information which contains or is derived or copied from such information but excludes: |
|---|---|
| (i) | information<br> that: |
| --- | --- |
| (A) | is<br> or becomes public information other than as a direct or indirect result of any breach by<br> that Finance Party of Clause 39 (Confidential Information); or |
| --- | --- |
| (B) | is<br> identified in writing at the time of delivery as non-confidential by any member of the Group<br> or any of its advisers; or |
| --- | --- |
| (C) | is<br> known by that Finance Party before the date the information is disclosed to it in accordance<br> with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party<br> after that date, from a source which is, as far as that Finance Party is aware, unconnected<br> with the Group and which, in either case, as far as that Finance Party is aware, has not<br> been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;<br> and |
| --- | --- |
| (ii) | any<br> Funding Rate or Reference Bank Quotation. |
| --- | --- |
"ConfidentialityUndertaking" means a confidentiality undertaking substantially in a recommended form of the LMA as set out in Schedule 12 (LMA Form of Confidentiality Undertaking) or in any other form agreed between the Borrower and the Senior Agent.
"Construction Budget" means:
| (a) | the<br> Original Construction Budget; and |
|---|---|
| (b) | any<br> update to the Original Construction Budget, and any additional updates thereto, in each case,<br> pursuant to Clause 22.7 (Construction Budget and Project Close Confirmation). |
| --- | --- |
"Contingent Equity" means a share capital contribution and/or a Shareholder Loan made available (whether directly or indirectly) by a Holding Company of any member of the Group to a ProjectCo. For the avoidance of doubt, no Equity Cure shall constitute Contingent Equity for the purposes of this Agreement.
"Cost Overrun" means, in respect of a Warehouse Project, the circumstance where the aggregate Project Costs required to achieve the Commercial Operation Date is greater than an amount equal to the aggregate of (i) the Allocated Loan Amount plus (ii) the Base Equity, in each case, in respect of that Warehouse Project.
"Costs" means any amount payable by the Borrower under Clause 17 (Costs and Expenses).
"CountryHoldCo" means, with respect to each Eligible Jurisdiction, a Subsidiary of the Borrower incorporated in Ireland which is in connection with the relevant Eligible Project described as such in paragraph 2 of Schedule 3 (Eligibility Criteria) and which the Borrower is obliged to procure the accession to this Agreement as Guarantor pursuant to paragraph (a)(i) of Clause 28.2 (Guarantors).
- 12 -
"CPPA" means any contract of sale of GoOs generated by a Warehouse Project, if any, and entered into by an Obligor.
"CTA" means the Corporation Tax Act 2009.
"Debt Purchase Transaction" means, in relation to a person, a transaction where such person:
| (a) | purchases<br> by way of assignment or transfer; |
|---|---|
| (b) | enters<br> into any sub–participation in respect of; or |
| --- | --- |
| (c) | enters<br> into any other agreement or arrangement having an economic effect substantially similar to<br> a sub–participation in respect of, |
| --- | --- |
any Commitment or amount outstanding under this Agreement.
"Debt Sizing Case" means the debt sizing case incorporated in the Financial Model based on the debt sizing assumptions which will be used to determine for the purposes of this Agreement and the Mezzanine Facility Agreement the Allocated Senior Facility Amount, the Allocated Mezzanine Facility Amount and the Allocated Loan Amount in respect to a particular Eligible Project.
"DecliningLender" has the meaning given to that term in paragraph (k) of Clause 2.3 (Increase – Accordion Option).
"Deed of Guarantee Confirmation" means written confirmation by each Guarantor confirming for the benefit of the Finance Parties that all guarantee obligations owed by it under the Finance Documents remain in full force and effect and extend to any new obligations assumed by any Obligor under the Finance Documents (including, but not limited to, any Guarantor Accession Letter).
"Default" means an Event of Default or any event or circumstance specified in Clause 25 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
"Defaulting Lender" means any Lender:
| (a) | which<br> has failed to make its participation in a Loan available (or has notified the Senior Agent<br> or the Borrower (which has notified the Senior Agent) that it will not make its participation<br> in a Loan available) by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders' participation); |
|---|---|
| (b) | which<br> has otherwise rescinded or repudiated a Finance Document; or |
| --- | --- |
| (c) | with<br> respect to which an Insolvency Event has occurred and is continuing,; or |
| --- | --- |
| (d) | an<br> Affiliate of which is a Defaulting Lender, |
| --- | --- |
- 13 -
unless, in the case of paragraph (a) above:
| (i) | its<br> failure to pay is caused by: |
|---|---|
| (A) | administrative<br> or technical error; or |
| --- | --- |
| (B) | a<br> Disruption Event; and |
| --- | --- |
| (C) | payment<br> is made within three (3) Business Days of its due date; or |
| --- | --- |
| (ii) | the<br> Lender is disputing in good faith whether it is contractually obliged to make the payment<br> in question. |
| --- | --- |
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Common Security Agent.
"Designated Gross Amount" means the amount notified by the Borrower to the Senior Agent upon the establishment of a Multi-account Overdraft as being the maximum amount of Gross Outstandings that will, at any time, be outstanding under that Multi- account Overdraft.
"Designated Net Amount" means the amount notified by the Borrower to the Senior Agent upon the establishment of a Multi-account Overdraft as being the maximum amount of Net Outstandings that will, at any time, be outstanding under that Multi- account Overdraft.
"DisbursementAccount" has the meaning given to it in Clause 18.1 (Designation of Accounts).
"Discounted Aggregate AvailableCashflow" means, in relation to any Calculation Date and with respect to all Warehouse Projects, the Available Cashflow projected in the then current Base Case:
| (a) | for<br> the Calculation Period ending on such Calculation Date; and |
|---|---|
| (b) | for<br> each subsequent Calculation Period discounted back to such Calculation Date on the basis<br> that: |
| --- | --- |
| (i) | the<br> discount rate to be applied shall be the weighted average (calculated by the Senior Agent<br> by reference to the amount outstanding under the Facility) of the rates assumed in the then<br> current Financial Model to be the rates at which interest will accrue under the Facility<br> from such Calculation Date until the final date of the 20-year amortising profile of the<br> Loans as determined by the Senior Debt Sizing Assumptions, in each case, taking into account<br> any interest rate hedging applicable under the Hedging Agreements; and |
| --- | --- |
| (ii) | the<br> discounting shall be made on a monthly basis and on the assumption that cashflow for a monthly<br> period occurs at the end of that period. |
| --- | --- |
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"Disposal Equity Amount" means the amount of the Disposal Proceeds generated by a disposal minus the aggregate of:
| (a) | the<br> amount of the Prepayment Disposal Proceeds; and |
|---|---|
| (b) | the<br> amount of the Mezzanine Prepayment Disposal Proceeds plus any Hedging Delta. |
| --- | --- |
"Disposal Proceeds" means the net disposal proceeds derived from a Permitted Disposal (other than the proceeds incurred from an Excluded Permitted Disposal).
"DisposalProceeds Account" has the meaning given to it in Clause 18.1 (Designation of Accounts).
"Disruption Event" means either or both of:
| (a) | a<br> material disruption to those payment or communications systems or to those financial markets<br> which are, in each case, required to operate in order for payments to be made in connection<br> with the Facility (or otherwise in order for the transactions contemplated by the Finance<br> Documents to be carried out) which disruption is not caused by, and is beyond the control<br> of, any of the Parties; or |
|---|---|
| (b) | the<br> occurrence of any other event which results in a disruption (of a technical or systems-related<br> nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
| --- | --- |
| (i) | from<br> performing its payment obligations under the Finance Documents; or |
| --- | --- |
| (ii) | from<br> communicating with other Parties in accordance with the terms of the Finance Documents, |
| --- | --- |
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
"Distribution" means, with respect to an Obligor and any other member of the Group:
| (a) | any<br> dividend, charge, fee, cash distribution or other distribution (or interest on any unpaid<br> dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect<br> of the shares of that member of the Group (or any part or class thereof); |
|---|---|
| (b) | any<br> redemption, reduction, repurchase, defeasance, retirement or repayment of share capital,<br> share premium or other capital reserves; |
| --- | --- |
| (c) | repayment<br> of principal, payment of interest or payment of other amounts in respect of: |
| --- | --- |
| (i) | in<br> case of the Borrower, Shareholder Loans, except for the Permitted Mezzanine Distribution;<br> and |
| --- | --- |
- 15 -
| (ii) | in<br> case of any ProjectCo, Intragroup Loans, except for the Permitted Intragroup Repayments;<br> and |
|---|---|
| (d) | any<br> other payment of management, advisory or other fee or distribution of any kind by: |
| --- | --- |
| (i) | any<br> of the Obligors to any other member of the Group or to any of the Shareholders and any of<br> their Affiliates; and |
| --- | --- |
| (ii) | any<br> of the ProjectCos, to any of the Shareholders and any of their Affiliates, |
| --- | --- |
provided that, in any case, the payment by the Borrower to MidCo of an amount to achieve the Eligible Pre-RtB Costs Rebalance in accordance with this Agreement shall not constitute a "Distribution" for the purposes of this Agreement.
"EligibilityCriteria" has the meaning given to it in Schedule 3 (Eligibility Criteria).
"Eligible Institution" means any Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower and which, in each case, is not a member of the Group.
"Eligible Jurisdiction" means each of Ireland, Italy, Poland, Portugal, Spain, the Netherlands and the United Kingdom.
"Eligible Letter of Credit" means each letter of credit issued on behalf of the seller in connection with an Acquisition Agreement securing the refunding of any advance payment made available to the seller under that Acquisition Agreement approved by the Mezzanine Agent.
"Eligible Pre-RtB Costs" for the purpose of an Eligible Project, means:
| (a) | refundable<br> grid deposits, by way of letter of credit or cash deposits, required to be paid under relevant<br> Project Documents and/or Acquisition Agreements; and |
|---|---|
| (b) | advance<br> payments backed by Eligible Letters of Credit, |
| --- | --- |
in each case:
| (i) | approved<br> by the Senior Agent (acting on the instructions of the Majority Lenders, in consultation<br> with the Lenders' Technical Adviser and based on the Due Diligence Reports) in the Financial<br> Model as an "Eligible Pre-RtB Cost"; and |
|---|---|
| (ii) | |
| --- |
provided that:
| (A) | the<br> aggregate amount of Eligible Pre-RtB Costs may not exceed ten (10) per cent of the aggregate<br> of the Total Commitments and the Mezzanine Total Commitments; and |
|---|
- 16 -
| (B) | in<br> case of Eligible Pre-RtB Costs with respect to refundable grid deposits, the terms of the<br> refundable grid deposits must have been approved by the Senior Agent. |
|---|
"Eligible Pre-RtB Costs Rebalance" means, in connection with a Warehouse Project that has achieved RtB Status, the amount required under this Agreement to refinance all Eligible Pre-RtB Costs financed to MidCo under the Mezzanine Facility Agreement such that, following all relevant amounts disbursed under the Facility in accordance with this Agreement, the Eligible Pre-RtB Costs financed hereunder shall amount to the pro rata financing of such total costs across under both this Agreement and the Mezzanine Facility Agreement.
"Eligible Project" means a solar PV project which:
| (a) | satisfies<br> the Eligibility Criteria; and |
|---|---|
| (b) | whether<br> or not the Eligibility Criteria having been satisfied, the Majority Lenders have agreed to<br> finance under this Agreement. |
| --- | --- |
"Eligible Project Costs" means, in connection with an Eligible Project:
| (a) | means<br> development, planning, incorporation and start-up costs incurred prior to RtB Status; and |
|---|---|
| (b) | means<br> all costs, expenses and fees properly incurred by the ProjectCo in connection with the construction<br> and commissioning of the Eligible Project in accordance with the EPC Contract, and |
| --- | --- |
in each case, approved by the Senior Agent (acting on the instructions of the Majority Lenders, in consultation with the Lenders' Technical Adviser and based on the Due Diligence Reports) in the Financial Model as an "Eligible Project Cost".
"Eligible Status" means each of:
| (a) | the<br> RtB Status; or |
|---|---|
| (b) | Commercial<br> Operation Date has been achieved. |
| --- | --- |
"Enhancement PPAs" means a power purchase agreement for such period and for such amount as the relevant ProjectCo considers to be advantageous to be entered into from time to time or such other arrangement from time to time entered into by the relevant ProjectCo to hedge power price risks, in each case (a) where such arrangement or agreement does not undermine, impact or result in termination of any relevant feed-in tariff, subsidized arrangement or existing power purchase arrangements that formed part of the Eligibility Criteria for the relevant Warehouse Project and (b) the Debt Sizing Case for the relevant Warehouse Project would not be prejudiced, nor deteriorate in any way, if such agreement and/or arrangement were entered into.
"Environment" means the environment including the air (including, the air within buildings and the air within other natural or man-made structures above or below ground), water (including, territorial, coastal and inland waters, ground and surface water and water in drains and sewers), land (including, surface and sub-surface soil), animals, plants, natural habitats and human health.
- 17 -
"EPCContract" means each EPC contract delivered by the Borrower for the purposes of paragraph 1(e)(i) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"EPC Contractor" means:
| (a) | Unisun<br> Energy BV with registered address Westblaak 35, 3012 KD Rotterdam, The Netherlands; or |
|---|---|
| (b) | any<br> other person proposed to act as EPC contractor in connection with an Eligible Project as<br> identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and<br> approved as such by the Senior Agent. |
| --- | --- |
"Equator Principles" means the set of principles set out in the paper entitled "A financial industry benchmark for determining, assessing and managing environmental and social risk in projects" dated June 2013 and adopted by certain financial institutions.
"E&S Authorisation" means any Authorisation and the filing of any notification, report or assessment required under any E&S Law to carry out any of the Warehouse Project(s).
"E&S Claim" means any claim, proceeding or investigation by any person in respect of any E&S Law.
"E&S Laws" means any applicable laws relating to E&S Matters.
"E&S Matters" means matters relating to the Environment (including the pollution or protection of any part thereof) or Social Fabric, including those environmental and social aspects identified by the Lenders' Technical Adviser as relevant to any of the Warehouse Project(s).
"E&S Standards" means, as applicable to the Borrower and the Warehouse Project, the Equator Principles and all E&S Laws.
"EU Blocking Regulation" means Regulation (EU) No 2271/96 of the European Parliament and of the Council of 22 November 1996 as amended by Commission Delegated Regulation (EU) 2018/1100 of 6 June 2018 (including as it forms part of domestic law for the purposes of the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020) as amended, varied, superseded or substituted from time to time), protecting against the effects of the extraterritorial application of legislation adopted by a third country, and actions based on or resulting therefrom.
"EU Insolvency Regulation" means Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast).
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"EURIBOR" means, in relation to any Loan in euro:
| (a) | the<br> applicable Screen Rate as of the Specified Time for euro and for a period equal in length<br> to the Interest Period of that Loan; or |
|---|---|
| (b) | as<br> otherwise determined pursuant to Clause 11.1 (Unavailability of Screen Rate), |
| --- | --- |
and if, in either case, that rate is less than zero, EURIBOR shall be deemed to be zero.
"Eventof Default" means any event or circumstance specified as such in Clause 25 (Events of Default).
"Excluded Permitted Disposal" means any solar PV project owned by a Subsidiary of the Borrower but not a project that is financed by any Finance Document or Mezzanine Facility Agreement and not a Warehouse Project for the purposes of the Finance Documents.
"Facility" means the revolving loan facility made available under this Agreement as described in Clause 2.1 (The Facility).
"Facility Office" means the office or offices notified by a Lender to the Senior Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement
"FATCA" means:
| (a) | sections<br> 1471 to 1474 of the Code or any associated regulations; |
|---|---|
| (b) | any<br> treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental<br> agreement between the US and any other jurisdiction, which (in either case) facilitates the<br> implementation of any law or regulation referred to in paragraph (a) above; or |
| --- | --- |
| (c) | any<br> agreement pursuant to the implementation of any treaty, law or regulation referred to in<br> paragraphs (a) or (b) above with the US Internal Revenue Service, the US government<br> or any governmental or taxation authority in any other jurisdiction. |
| --- | --- |
"FATCA Application Date" means:
| (a) | in<br> relation to a "withholdable payment" described in section 1473(1)(A)(i) of<br> the Code (which relates to payments of interest and certain other payments from sources within<br> the US), 1 July 2014; or |
|---|---|
| (b) | in<br> relation to a "passthru payment" described in section 1471(d)(7) of the Code<br> not falling within paragraph (a) above, the first date from which such payment may become<br> subject to a deduction or withholding required by FATCA. |
| --- | --- |
"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.
- 19 -
"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.
"Fee Letter" means:
| (a) | any<br> letter or letters dated on or about the Signing Date between the Arranger and the Borrower<br> (or the Senior Agent and the Borrower or the Common Security Agent and the Borrower) setting<br> out any of the fees referred to in Clause 12 (Fees); and |
|---|---|
| (b) | any<br> other agreement setting out fees referred to in Clause 2.3 (Increase – Accordion Option) or Clause 12.6 (Interest, commission and fees on Ancillary Facilities). |
| --- | --- |
"Fee" means any amount payable by the Borrower under Clause 12 (Fees) and/or any Fee Letter.
"Finance Document" means this Agreement, the Intercreditor and Subordination Deed, each Common Security Document, the Bad Boy Guarantee, any Hedging Agreement, the Hedging Policy, any Fee Letter, any Guarantor Accession Letter, any Hedge Counterparty Accession Letter, any Resignation Letter, any Ancillary Document and any other document designated as such by the Senior Agent and the Borrower , provided that where the term "Finance Document" is used in, and construed for the purposes of, this Agreement or the Intercreditor and Subordination Deed, a Hedging Agreement shall only be a Finance Document for the purposes of:
| (a) | the<br> definition of "Common Security Documents"; |
|---|---|
| (b) | the<br> definition of "Material Adverse Effect"; |
| --- | --- |
| (c) | the<br> "definition of Secured Obligations"; |
| --- | --- |
| (d) | the<br> definition of "Transaction Document"; |
| --- | --- |
| (e) | paragraph<br> (a)(iv) of Clause 1.2 (Construction); |
| --- | --- |
| (f) | Clause<br> 19 (Deposits and Withdrawals from Accounts); |
| --- | --- |
| (g) | Clause<br> 20 (Guarantee and Indemnity); and |
| --- | --- |
| (h) | Clause<br> 40 (Amendments and Waivers). |
| --- | --- |
"Finance Party" means the Senior Agent, the Arranger, the Common Security Agent, a Hedge Counterparty, any Ancillary Lender or a Lender, provided that where the term "Finance Party" is used in, and construed for the purposes of, this Agreement or the Intercreditor and Subordination Deed, a Hedge Counterparty shall only be a Finance Party for the purposes of:
| (a) | the<br> definition of "Material Adverse Effect"; |
|---|---|
| (b) | the<br> definition of "Secured Party"; |
| --- | --- |
- 20 -
| (c) | paragraph<br> (a)(iv) of Clause 1.2 (Construction); |
|---|---|
| (d) | Clause<br> 18 (Bank Accounts); |
| --- | --- |
| (e) | Clause<br> 19 (Deposits and Withdrawals from Accounts); |
| --- | --- |
| (f) | Clause<br> 20 (Guarantee and Indemnity); |
| --- | --- |
| (g) | Clause<br> 31 (Conduct of Business by the Finance Parties); and |
| --- | --- |
| (h) | Clause<br> 40 (Amendments and Waivers). |
| --- | --- |
"Financial Close" means the date on which the Senior Agent delivers the notification set out in Clause 4.1 (Initial conditions precedent).
"FinancialClose (ProjectCo)" means, with respect to a ProjectCo, the date on which the Senior Agent delivers the Original Project Close Confirmation under Clause 4.2 (Conditions precedent for Eligible Project to become Warehouse Project).
"Financial Indebtedness" means any indebtedness for or in respect of:
| (a) | moneys<br> borrowed; |
|---|---|
| (b) | any<br> amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; |
| --- | --- |
| (c) | any<br> amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures,<br> loan stock or any similar instrument; |
| --- | --- |
| (d) | the<br> amount of any liability in respect of any lease or hire purchase contract which would, in<br> accordance with IFRS, be treated as a balance sheet liability (other than any liability in<br> respect of a lease or hire purchase contract which would, in accordance with IFRS in force<br> prior to 1 January 2019 have been treated as an operating lease); |
| --- | --- |
| (e) | receivables<br> sold or discounted (other than any receivables to the extent they are sold on a non-recourse<br> basis); |
| --- | --- |
| (f) | any<br> amount raised under any other transaction (including any forward sale or purchase agreement)<br> of a type not referred to in any other paragraph of this definition having the commercial<br> effect of a borrowing; |
| --- | --- |
| (g) | any<br> derivative transaction entered into in connection with protection against or benefit from<br> fluctuation in any rate or price (and, when calculating the value of any derivative transaction,<br> only the marked to market value (or, if any actual amount is due as a result of the termination<br> or close-out of that derivative transaction, that amount) shall be taken into account); |
| --- | --- |
| (h) | any<br> counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary<br> letter of credit or any other instrument issued by a bank or financial institution; |
| --- | --- |
- 21 -
| (i) | any<br> amount raised by the issue of redeemable shares; |
|---|---|
| (j) | any<br> amount of any liability under an advance or deferred purchase agreement if one of the primary<br> reasons behind the entry into this agreement is to raise finance; and |
| --- | --- |
| (k) | (without<br> double counting) the amount of any liability in respect of any guarantee or indemnity for<br> any of the items referred to in paragraphs (a) to (j) above. |
| --- | --- |
"Financial Model" means the Original Financial Model and the Updated Financial Model.
"Force Majeure" means, in respect of a Project Document, any event or circumstance (or series of events of circumstances) beyond the reasonable control of a party to the Project Document having the effect of suspending, excusing or limiting the performance of the obligations of a party to the Project Document, including any event or circumstance described as a force majeure in that Project Document.
"FundingRate" means any individual rate notified by a Lender to the Senior Agent pursuant to paragraph (a)(ii) of Clause 11.4 (Cost of funds).
"Funding Shortfall" means, with respect to a Warehouse Project, at any time up to (and including) the Commercial Operation Date, the then remaining aggregate amount of (i) Project Costs, (ii) outstanding amount of purchase price in respect of the relevant Acquisition, and (iii) Acquisition Costs required to be payable by the relevant ProjectCo until and including the Commercial Operation Date exceed the aggregate sum of:
| (a) | the<br> Allocated Loan Amount minus the amount of the Loans and Rollover Loans that have been drawn<br> for that Warehouse Project; and |
|---|---|
| (b) | any<br> other amounts (including the Base Equity Contributions) that the Senior Agent is satisfied<br> have been unconditionally committed to an Obligor to pay Project Costs payable by the relevant<br> ProjectCo with respect the relevant Warehouse Project on or, as applicable, prior to the<br> respective Commercial Operation Date, |
| --- | --- |
in each case at the relevant time. For the avoidance of doubt, Contingent Equity shall not form a part of the calculation expressed in paragraph (b) of the definition of "Funding Shortfall" unless such Contingent Equity is committed in accordance with this Agreement and the Mezzanine Facility Agreement.
"FundsFlow Statement" means, in connection with the acquisition of any Eligible Project (as applicable), the proposed funds flow statement set out in paragraph 7(c) of Part B (Conditions Precedent for Project Close (ProjectCo)) of Schedule 2 (ConditionsPrecedent and Subsequent) and approved by the Senior Agent in connection with Financial Close (ProjectCo).
"German Blocking Regulation" means section 7 foreign trade rules (AWV) (Außenwirtschaftsverordnung) (in connection with section 4 paragraph 1 a no. 3 foreign trade law (AWG) (Außenwirtschaftsgesetz)).
- 22 -
"Good Industry Practice" means the exercise of that degree of skill, diligence, prudence, foresight and operating practice which would reasonably and ordinarily be expected from a reasonable and prudent operator of the same type of undertaking as any Warehouse Project.
"GoOs" means the guarantees of origin issued by the competent authority in any Relevant Jurisdiction in accordance with the Circular 1/2018 together with any other legislation implementing Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources.
"GridConnection Agreement" means each grid connection agreement delivered by the Borrower for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"GridOperator" means each person proposed to act as a grid operator in connection with an Eligible Project as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent.
"Group" means the Borrower and each of its Subsidiaries for the time being.
"GrossOutstandings" means, in relation to a Multi-account Overdraft, the Ancillary Outstandings of that Multi-account Overdraft but calculated on the basis that the words "(net of any Available Credit Balance)" in paragraph (a) of the definition of "Ancillary Outstandings" were deleted.
"Group Structure Chart" means:
| (a) | the<br> Original Group Structure Chart; and |
|---|---|
| (b) | the<br> Original Group Structure Chart as updated by the Sponsor from time to time for the purposes<br> of Clause 4.3 (Conditions precedent for each Utilisation to pay Eligible Project Costs). |
| --- | --- |
"Guarantor" means a company which becomes a Guarantor in accordance with Clause 28.2 (Guarantors) and as from the Guarantor Accession Date relevant to that Guarantor unless, in any case, such Additional Guarantor has ceased to be a Guarantor in accordance with Clause 28 (Changes to the Obligors).
"Guarantor Accession Date" means the date on which each Guarantor accedes to this Agreement and/or the Intercreditor and Subordination Deed.
"GuarantorAccession Letter" means a document substantially in the form set out in Schedule 8 (Form of Guarantor AccessionLetter).
"Hedge" means any currency or interest cap or collar agreement, forward rate agreements, interest rate or currency future or option contract, foreign exchange or currency purchase or sale agreement, interest rate swap or currency swap or combined interest rate and/or currency swap agreement and any other similar agreement.
- 23 -
"Hedge Counterparty" means any Original Hedge Counterparty or any Additional Hedge Counterparty.
"HedgeCounterparty Accession Letter" means a document substantially in the form set out in Schedule 9 (Form of HedgeCounterparty Accession Letter).
"Hedging Agreement" means any master agreement, confirmation, transaction, schedule or other agreement in agreed form entered into or to be entered into by the Borrower for the purpose of hedging risks and/or liabilities in connection with interest rate or currency exchange fluctuations that arise in connection with this Agreement.
"HedgingDelta" has the meaning given to it under Clause 24.25 (Disposals)
"Hedging Partial Breakage" means, in respect of any prepayment, the minimum amount of transactions under the Hedging Agreements that are required to be terminated so that, immediately following such prepayment, the amount of the Loans hedged under the Hedging Agreements complies with the Hedging Policy.
"HedgingPolicy" means the policy set out in Schedule 19 (Hedging Policy).
"Hedging Termination Costs" means any amount that the Borrower is required to pay to a Hedge Counterparty under a Hedging Agreement as a result of termination, close- out or total or partial notional amount adjustment, whether due to the Borrower's default or otherwise.
"Holding Company" means, in relation to a person, any other person in respect of which it is a Subsidiary.
"IFRS" means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
"Impaired Senior Agent" means the Senior Agent at any time when:
| (a) | it<br> has failed to make (or has notified a Party that it will not make) a payment required to<br> be made by it under the Finance Documents by the due date for payment; |
|---|---|
| (b) | the<br> Senior Agent otherwise rescinds or repudiates a Finance Document; |
| --- | --- |
| (c) | (if<br> the Senior Agent is also a Lender) it is a Defaulting Lender under paragraph (a)or (b) of<br> the definition of "Defaulting Lender"; or |
| --- | --- |
| (d) | an<br> Insolvency Event has occurred and is continuing with respect to the Senior Agent; |
| --- | --- |
unless, in the case of paragraph (a) above:
| (i) | its<br> failure to pay is caused by: |
|---|---|
| (A) | administrative<br> or technical error; or |
| --- | --- |
| (B) | a<br> Disruption Event; and payment is made within three (3) Business Days of its due date;<br> or |
| --- | --- |
- 24 -
| (ii) | the<br> Senior Agent is disputing in good faith whether it is contractually obliged to make the payment<br> in question. |
|---|
"IncreaseConfirmation" means a confirmation substantially in the form set out in Schedule 16 (Form of Increase Confirmation).
"IncreaseLender" has the meaning given to that term in Clause 2.2 (Increase).
"Information Memorandum" means the document in the form approved by the Borrower concerning the Group which, at the Borrower's request and on its behalf, is to be prepared in relation to this transaction and distributed by the Arranger prior to the Syndication Date in connection with this syndication.
"Insolvency Event" in relation to an entity means that the entity:
| (a) | is<br> dissolved (other than pursuant to a consolidation, amalgamation or merger); |
|---|---|
| (b) | becomes<br> insolvent or is unable to pay its debts or fails or admits in writing its inability generally<br> to pay its debts as they become due; |
| --- | --- |
| (c) | makes<br> a general assignment, arrangement or composition with or for the benefit of its creditors; |
| --- | --- |
| (d) | institutes<br> or has instituted against it, by a regulator, supervisor or any similar official with primary<br> insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its<br> incorporation or organisation or the jurisdiction of its head or home office, a proceeding<br> seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or<br> insolvency law or other similar law affecting creditors' rights, or a petition is presented<br> for its winding- up, examinership or liquidation by it or such regulator, supervisor or similar<br> official; |
| --- | --- |
| (e) | has<br> instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any<br> other relief under any bankruptcy or insolvency law or other similar law affecting creditors'<br> rights, or a petition is presented for its winding- up, examinership or liquidation, and,<br> in the case of any such proceeding or petition instituted or presented against it, such proceeding<br> or petition is instituted or presented by a person or entity not described in paragraph (d) above<br> and: |
| --- | --- |
| (i) | results<br> in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making<br> of an order for its winding-up, examinership or liquidation; or |
| --- | --- |
| (ii) | is<br> not dismissed, discharged, stayed or restrained in each case within 30 days of the institution<br> or presentation thereof; |
| --- | --- |
| (f) | has<br> a resolution passed for its winding-up, official management, examinership or liquidation<br> (other than pursuant to a consolidation, amalgamation or merger); |
| --- | --- |
- 25 -
| (g) | seeks<br> or becomes subject to the appointment of an administrator, provisional liquidator, examiner,<br> conservator, receiver, trustee, custodian or other similar official for it or for all or<br> substantially all its assets (other than for so long as it is required by law or regulation<br> not to be publicly disclosed, any such appointment which is to be made, or is made, by a<br> person or entity described in paragraph (d) above); |
|---|---|
| (h) | has<br> a Secured Party take possession of all or substantially all its assets or has a distress,<br> execution, attachment, sequestration or other legal process levied, enforced or sued on or<br> against all or substantially all its assets and such Secured Party maintains possession,<br> or any such process is not dismissed, discharged, stayed or restrained, in each case within<br> thirty (30) days thereafter; |
| --- | --- |
| (i) | causes<br> or is subject to any event with respect to it which, under the applicable laws of any jurisdiction,<br> has an analogous effect to any of the events specified in paragraphs (a) to (h) above; |
| --- | --- |
| (j) | takes<br> any action in furtherance of, or indicating its consent to, approval of, or acquiescence<br> in, any of the foregoing acts; or |
| --- | --- |
| (k) | any<br> other similar process or proceeding in any Relevant Jurisdiction. |
| --- | --- |
"Insurance Proceeds" means all proceeds and amounts payable or paid in respect of any claim under any of the Insurances other than Third Party Liability Insurance.
"Insurances" means each of the contracts of insurance or reinsurance taken out or maintained (or required to be taken out or maintained) in accordance with Schedule 17 (Insurance).
"Intellectual Property" means any patents, trademarks, service marks, designs, business and trade names, copyrights, database rights, design rights, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered, and the benefit of all applications and rights to use such assets in which each Obligor may from time to time have an interest.
"Intercreditor and SubordinationDeed" means the intercreditor and subordination agreement dated on or about the Signing Date between, amongst others, the Senior Agent, the Mezzanine Agent, the Lenders, the Mezzanine Lenders, the Hedge Counterparty and the Obligors.
"InterestPeriod" means, in relation to a Loan, each period determined in accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 9.3 (Default interest).
"Interpolated Screen Rate" means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
| (a) | the<br> applicable Screen Rate for the longest period (for which that Screen Rate is available) which<br> is less than the Interest Period of that Loan; and |
|---|
- 26 -
| (b) | the<br> applicable Screen Rate for the shortest period (for which that Screen Rate is available)<br> which exceeds the Interest Period of that Loan, |
|---|
each as of the Specified Time for euro.
"Intragroup Loan" means the outstanding principal amount of each loan that the Borrower or any other member of the Group makes to another member of the Group under an Intragroup Loan Agreement.
"Intragroup Loan Agreement" means each Shareholder Loan Agreement entered into between the Borrower or any other member of the Group as lender with another member of the Group (other than the Borrower) as borrower.
"Ireland" means Ireland excluding, for the avoidance of doubt, Northern Ireland.
"Irish Companies Act 2014" means the Companies Act 2014 of Ireland, as amended from time to time.
"Key Project Milestones" means, with respect to a Warehouse Project:
| (a) | the<br> Warehouse Project Completion Longstop Date; |
|---|---|
| (b) | the<br> Warehouse Project COD Longstop Date; and |
| --- | --- |
| (c) | the<br> Warehouse Guaranteed Revenue Commencement Date. |
| --- | --- |
| "Legal Reservation" means: | |
| (a) | the<br> principle that equitable remedies may be granted or refused at the discretion of a court<br> and the limitation of enforcement by laws relating to insolvency, examinership, reorganisation<br> and other laws generally affecting the rights of creditors; |
| --- | --- |
| (b) | the<br> time barring of claims under the Limitation Acts, the possibility that an undertaking to<br> assume liability for or indemnify a person against non-payment of UK stamp duty may be void<br> and defences of set-off or counterclaim; |
| --- | --- |
| (c) | the<br> limitation of the enforcement of the terms of leases of real property by laws of general<br> application to those leases; |
| --- | --- |
| (d) | similar<br> principles, defences of set-off or counterclaim, rights and remedies under the laws of any<br> Relevant Jurisdiction; and |
| --- | --- |
| (e) | any<br> other matters which are set out as qualifications or reservations as to matters of law of<br> general application in any legal opinions supplied to the Senior Agent as a condition precedent<br> under this Agreement on or before the first Utilisation Date or (in case of a ProjectCo in<br> a jurisdiction other than England) on or before the first Utilisation Date relating to an<br> Obligor in such jurisdiction. |
| --- | --- |
"Lender" means:
| (a) | any<br> Original Lender; and |
|---|
- 27 -
| (b) | any<br> bank, financial institution, trust, fund or other entity which has become a Party as a "Lender"<br> in accordance with Clause 2.2 (Increase), Clause 2.3 (Increase – Accordion Option) or Clause 26 (Changes to the Lenders and Hedge Counterparties), |
|---|
which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.
"Lenders' Insurance Adviser" means Marsh, S.A. Paseo de la Castellana, 216 28046 Madrid or such other reputable insurance adviser as the Senior Agent may appoint.
"Lenders' Legal Advisers" means:
| (a) | in<br> respect of English law, Clifford Chance Partnerschaft mbB; |
|---|---|
| (b) | in<br> respect of Irish law, Arthur Cox LLP; and |
| --- | --- |
| (c) | in<br> respect of any other Eligible Jurisdiction, such reputable legal counsel as appointed by<br> the Senior Agent. |
| --- | --- |
"Lenders' Tax and AccountingAdviser" means KPMG or such other reputable tax and accounting adviser as the Senior Agent may appoint.
"Lenders' Technical Adviser" means Evergy Engineering GmbH, Malsenstrasse 84, 80638 Munich, Germany or such other reputable technical adviser as the Senior Agent may appoint.
"Limitation Acts" means the Limitation Act 1980, the Foreign Limitation Periods Act 1984 and the Irish Statute of Limitations 1957.
"LLCR" (Loan LifeCover Ratio) means, in relation to any Calculation Date and with respect to all Warehouse Projects:
| (a) | the<br> aggregate of the Discounted Aggregate Available Cashflow projected to be received by such<br> Warehouse Projects from the respective Commercial Operation Date until, with respect to all<br> such Warehouse Projects, twenty (20) years from the Commercial Operation Date of each such<br> Warehouse Project; |
|---|
to
| (b) | the<br> aggregate of the Allocated Loan Amount of all such Warehouse Projects (minus any amount credited,<br> on such Calculation Date, to the Cash Trap Account), |
|---|
in each case, having taken into account all repayments to be made on such Calculation Date.
"LMA" means the Loan Market Association.
"Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.
- 28 -
"Loan-to-Cost Ratio" means the ratio of, expressed as a percentage:
| (a) | with<br> respect to a Warehouse Project, at any time, the Allocated Senior Facility Amount for that<br> Warehouse Project to the aggregate total amount of: |
|---|---|
| (i) | Project<br> Costs; |
| --- | --- |
| (ii) | purchase<br> price in respect of that Eligible Project; and |
| --- | --- |
| (iii) | the<br> Acquisition Costs, |
| --- | --- |
then spent on that Warehouse Project at such time; and
| (b) | with<br> respect to all Warehouse Projects, at any time, the aggregate of the Allocated Senior Facility<br> Amount across all Warehouse Projects to the aggregate amount of: |
|---|---|
| (i) | Project<br> Costs; |
| --- | --- |
| (ii) | purchase<br> price in respect of all Eligible Projects; and |
| --- | --- |
| (iii) | Acquisition<br> Costs, |
| --- | --- |
then spent on all such Warehouse Projects at such time.
"Loss of Revenue Insurance" means Insurance against loss of income or revenue resulting from delays in start-up or business interruption.
"LTAReport" means the report referenced as such in Schedule 3 (Eligibility Criteria) in connection with a proposed Eligible Project as updated (if required) as a condition precedent to Utilisation pursuant to Clause 4.3 (Conditions precedent foreach Utilisation to pay Eligible Project Costs).
"Major Event of Default" means, with respect to the Borrower, any event or circumstance constituting a Default under any of:
| (a) | Clause<br> 25.1 (Non-payment); |
|---|---|
| (b) | Clause<br> 25.2 (Specific undertakings); |
| --- | --- |
| (c) | Clause<br> 25.3 (Other obligations) insofar as such Default relates to a breach of any of Clause<br> 24.5 (E&S Compliance), Clause 24.7 (Anti-Bribery and Anti- corruption),<br> Clause 24.8 (Sanctions), Clause 24.9 (Use of proceeds) 24.10 (Non-AIF status),<br> Clause 24.11 (AML compliance), Clause 24.21 (Sale of electricity), Clause 24.25<br> (Disposals), Clause 24.32 (Distributions) or the Intercreditor and Subordination<br> Deed; |
| --- | --- |
| (d) | Clause<br> 25.4 (Misrepresentation) insofar as such Default relates to a Major Representation; |
| --- | --- |
| (e) | Clause<br> 25.5 (Cross default); |
| --- | --- |
| (f) | Clause<br> 25.6 (Insolvency); |
| --- | --- |
- 29 -
| (g) | Clause<br> 25.7 (Insolvency proceedings); |
|---|---|
| (h) | Clause<br> 25.8 (Creditors’ process); |
| --- | --- |
| (i) | Clause<br> 25.9 (Unlawfulness) |
| --- | --- |
| (j) | Clause<br> 25.19 (Sanctions); and |
| --- | --- |
| (k) | Clause 25.20 (Non-AIF status). |
| --- | --- |
"MajorRepresentation" means each of the following representations set out in Clauses 21.1 (Status), 21.2 (Bindingobligations), 21.3 (Non-conflict with other obligations), 21.5 (Power and authority), 21.6 (Validity and admissibilityin evidence), 21.8 (Insolvency), Clause 21.24 (Anti-Bribery and anti-corruption), Clause 21.25 (Sanctions), Clause 21.26 (Non-AIFstatus), Clause 21.27 (AML compliance) and Clause 21.43 (Dealings with SRCs and SDNs).
"Major Project Party" means:
| (a) | each<br> Obligor; |
|---|---|
| (b) | each<br> ProjectCo owning a Warehouse Project, if not an Obligor; |
| --- | --- |
| (c) | each<br> EPC Contractor; |
| --- | --- |
| (d) | the<br> O&M Contractor |
| --- | --- |
| (e) | each<br> Asset Manager; |
| --- | --- |
| (f) | each<br> Grid Operator; and |
| --- | --- |
| (g) | each<br> PPA Offtaker. |
| --- | --- |
"MajorityLenders" means a Lender or Lenders whose Commitments aggregate more than 66^2^/3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66^2^/3 per cent. of the Total Commitments immediately prior to the reduction).
"MandatoryPrepayment Account" has the meaning given to it in Clause 18.1 (Designation of Accounts).
"Margin" means three per cent (3%) per annum.
"Market Study" means each power price study delivered:
| (a) | pursuant<br> to Clause 22.10 (Market Study); and |
|---|---|
| (b) | as<br> a condition precedent to Financial Close (ProjectCo). |
| --- | --- |
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"Material Adverse Effect" means any event or circumstance which could or could reasonably be expected to have a material adverse effect on:
| (a) | the<br> business, operations, property or condition (financial or otherwise) of any Obligor and/or<br> any Warehouse Project; |
|---|---|
| (b) | the<br> ability of an Obligor to perform its obligations under the Finance Documents; or |
| --- | --- |
| (c) | the<br> legality, validity or enforceability of the Finance Documents or the rights or remedies of<br> any Finance Party under the Finance Documents. |
| --- | --- |
"Mezzanine Agent" means Law Debenture Corporate Services Limited, in its capacity as mezzanine agent under the Mezzanine Facility Agreement.
"Mezzanine Available Facility" means the amount confirmed as such by the Mezzanine Agent.
"MezzanineBlocked Debt Service Amount" has the meaning given to it in paragraph (b)of Clause 19.2 (Operating Account).
"Mezzanine Debt Service Account" means the debt service account opened and maintained in connection with the Mezzanine Facility Agreement.
"Mezzanine Disposal ProceedsAccount" means the "disposal proceeds account" as defined in the Mezzanine Facility Agreement.
"Mezzanine Facility Agreement" means the English law governed mezzanine facility agreement dated on or about the Signing Date between, amongst others, MidCo as borrower, the Parent as guarantor, Deutsche Bank AG, as arranger, and the lenders specified therein as original lenders.
"Mezzanine Hedging Receipt" means all amounts received by the Borrower from any relevant Hedge Counterparty under any Hedging Agreement which constitute initial or scheduled payments under any Hedge and to the extent such payments relate to one or more Mezzanine Loans. For the avoidance of doubt, any amounts received by the Borrower from any relevant Hedge Counterparty after such Hedge Counterparty has taken any Enforcement Action (as defined in the Intercreditor and Subordination Deed) against the Borrower shall not constitute a Mezzanine Hedging Receipt.
"Mezzanine Lenders" means the lenders under the Mezzanine Facility Agreement.
"Mezzanine Loan" means a "Loan" as defined in the Mezzanine Facility Agreement.
"Mezzanine Payment Stop Notice" has the meaning given to that term in the Intercreditor and Subordination Deed.
"Mezzanine Prepayment DisposalProceeds" means, with respect to a disposal of a Warehouse Project, a ProjectCo, a Project HoldCo and/or a Country HoldCo, the amount which has been notified by the Mezzanine Agent to the Senior Agent to be the amount which is required to be prepaid in relation to such disposal under and pursuant to the Mezzanine Facility Agreement.
"Mezzanine Total Commitments" means has the meaning given to it in the Mezzanine Facility Agreement, namely as at the date of this Agreement being EUR 16,000,000.
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"MidCo" means AEG MH 03 Ltd.
"Model Auditor" means Ernst & Young LLP.
"Money Laundering Laws" means applicable financial record keeping and reporting requirements and money laundering laws in its Original Jurisdiction and any other jurisdiction in which an Obligor conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency.
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
| (a) | (subject<br> to paragraph (c) below) if the numerically corresponding day is not a Business Day,<br> that period shall end on the next Business Day in that calendar month in which that period<br> is to end if there is one, or if there is not, on the immediately preceding Business Day; |
|---|---|
| (b) | if<br> there is no numerically corresponding day in the calendar month in which that period is to<br> end, that period shall end on the last Business Day in that calendar month; and |
| --- | --- |
| (c) | if<br> an Interest Period begins on the last Business Day of a calendar month, that Interest Period<br> shall end on the last Business Day in the calendar month in which that Interest Period is<br> to end. |
| --- | --- |
The above rules will only apply to the last Month of any period.
"Multi-account Overdraft" means an Ancillary Facility which is an overdraft facility comprising more than one account.
"Net Outstandings" means, in relation to a Multi-account Overdraft, the Ancillary Outstandings of that Multi-account Overdraft.
"NewLender" has the meaning given to that term in Clause 26 (Changes to the Lenders and Hedge Counterparties).
"Non-Euro Cap" means thirty-three per cent. (33%).
"Non-Euro Ratio" means, at any time, the ratio, expressed as a percentage, of:
| (a) | the<br> aggregate of the Eligible Pre-RtB Costs and Eligible Project Costs which, in each case, has<br> been spent and applied by the Obligors at that time and which is denominated in a currency<br> other than EUR or is incurred in a Warehouse Project which does not use EUR as its only currency<br> or the Warehouse Project does not or will not generate Revenues in EUR; |
|---|
to
| (b) | the<br> aggregate of the Eligible Pre-RtB Costs and Eligible Project Costs which has been spent in<br> any currency and, to the extent denominated in a currency other than EUR, converted into<br> EUR at the Senior Agent's Spot Rate of Exchange at that time. |
|---|
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"Non-Merchant Revenue" means, in respect of a Warehouse Project, Revenue generated by that Warehouse Project from either:
| (a) | feed-in<br> tariffs; |
|---|---|
| (b) | other<br> subsidies; and/or |
| --- | --- |
| (c) | a<br> Power Purchase Agreement. |
| --- | --- |
"O&MContract" means each O&M contract delivered by the Borrower for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"O&M Contractor" means:
| (a) | UPER<br> Energy Europe B.V.; or |
|---|---|
| (b) | any<br> other person proposed to act as O&M contractor in connection with an Eligible Project<br> as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria)<br> and approved as such by the Senior Agent. |
| --- | --- |
"Obligor" means the Borrower and each Guarantor.
"Obligors' Agent" means the Borrower.
"OperatingAccount" has the meaning given to it in Clause 18.1 (Designation of Accounts).
"Operating Budget" means:
| (a) | the<br> Original Operating Budget; and |
|---|---|
| (b) | any<br> update thereafter pursuant to paragraph (b) of Clause 22.8 (Operating Budget). |
| --- | --- |
"Operating Costs" means, in respect of a Warehouse Project and for any period as from the Commercial Operation Date for that Warehouse Project, the following costs and expenses paid or payable by any Obligor during such period (without double counting):
| (a) | payments<br> under or in relation to the O&M Contract and any PPA (including Enhancement PPAs); |
|---|---|
| (b) | Tax<br> and any Tax Deductions required by law related to that Warehouse Project and the Borrower; |
| --- | --- |
| (c) | insurance<br> premia in respect of the Insurances; |
| --- | --- |
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| (d) | costs<br> of maintenance and/or repair of that Warehouse Project or replacement of any part of the<br> same (including major maintenance and/or repair); |
|---|---|
| (e) | administrative,<br> accounting and professional costs; |
| --- | --- |
| (f) | fees<br> payable in respect of, including the costs of renewing, any Required Authorisation; |
| --- | --- |
| (g) | other<br> fees, expenses and payments necessary for the continued operation and maintenance of that<br> Warehouse Project and which have been disclosed to the Lenders as part of the Base Case for<br> that Warehouse Project; and |
| --- | --- |
| (h) | any<br> other amounts which the Senior Agent agrees shall be "Operating Costs". |
| --- | --- |
"Operating Period" means, in respect of a Warehouse Project:
| (i) | commencing<br> on the Commercial Operation Date for that Warehouse Project up until (and including) the<br> Business Day immediately prior to the next Calculation Date to immediately occur after the<br> Commercial Operation Date; and |
|---|---|
| (j) | thereafter,<br> the period commencing on the Calculation Date referred to in paragraph (a) above and<br> ending on the Business Day immediately prior to the next Calculation Date and, thereafter,<br> so continuing for each quarterly period between each Calculation Date. |
| --- | --- |
"Original Base Case" means the financial projections produced by the Original Financial Model and the Assumptions used to prepare those financial projections.
"OriginalBusiness Plan" means the business plan delivered by the Borrower in connection with Clause 4.1 (Initial conditionsprecedent), in form and substance satisfactory to the Senior Agent.
"OriginalCommon Security Documents" means the documents listed in Schedule 4 (Common Security Documents).
"Original Construction Budget" means, in respect of any Warehouse Project, the month-by-month construction timeline and budget, up until the Warehouse Project COD Longstop Date, as set out in the Original Project Close Confirmation that the Senior Agent has issued in respect of that Warehouse Project.
"OriginalFinancial Model" means the financial model delivered by the Borrower in connection with Clause 4.1 (Initial conditionsprecedent), in form and substance satisfactory to the Senior Agent, including the Senior Debt Sizing Assumptions.
"Original Financial Statements" means:
| (a) | in<br> relation to the Borrower, the audited consolidated financial statements of the Group for<br> the financial year ended 31 December 2021; |
|---|---|
| (b) | in<br> relation to a Guarantor, the most recent audited financial statements available at the respective<br> Guarantor Accession Date and delivered to the Senior Agent as a condition precedent for the<br> accession of such Guarantor; and |
| --- | --- |
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| (c) | in<br> relation to a ProjectCo which is not a Guarantor, the most recent audited financial statements<br> available at the respective Acquisition Date and delivered to the Senior Agent as a condition<br> precedent for the Utilisation relation to such Acquisition. |
|---|
"Original Group Structure Chart" means the group structure chart showing:
| (a) | all<br> members of the Group, including current name and company registration number, its Original<br> Jurisdiction (in the case of an Obligor), its jurisdiction of incorporation (in the case<br> of a member of the Group which is not an Obligor) and/or its jurisdiction of establishment<br> and a list of shareholders; |
|---|---|
| (b) | any<br> person in which any member of the Group holds shares in its issued share capital or equivalent<br> ownership interest of such person. |
| --- | --- |
"Original Jurisdiction" means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the Signing Date or, in the case of a Guarantor, as at the date on which that Guarantor accedes to this Agreement.
"OriginalOperating Budget" means, in respect of a Warehouse Project, the budget the Borrower is required to deliver to the Senior Agent (in form and substance satisfactory to the Senior Agent) pursuant to paragraph (a) of Clause 22.8 (Operating Budget).
"OriginalProject Close Confirmation" means, in respect of a Warehouse Project, the confirmation issued by the Senior Agent pursuant to Clause 4.2 (Conditions precedent for Eligible Project to become Warehouse Project) setting out:
| (a) | in<br> consultation with the Lenders' Technical Adviser: |
|---|---|
| (i) | the<br> then agreed total Project Costs required to reach the Commercial Operation Date; |
| --- | --- |
| (ii) | the<br> Key Project Milestones; and |
| --- | --- |
| (iii) | the<br> Original Construction Budget required to achieve the Commercial Operation Date; |
| --- | --- |
| (b) | the<br> applicable Allocated Loan Amount for that Warehouse Project, including the applicable Allocated<br> Senior Facility Amount; |
| --- | --- |
| (c) | the<br> required Base Equity (excluding the Allocated Mezzanine Facility Amount and any additional<br> equity required in connection with any cost exceeding the agreed total Project Costs referenced<br> in paragraph (a) above); |
| --- | --- |
| (d) | the<br> projected Available Cashflow with respect to that Warehouse Project; and |
| --- | --- |
| (e) | the<br> additional security requirements of the Lenders (if any) in agreeing to that Warehouse Project. |
| --- | --- |
"Parallel Obligations" has the meaning given to that term in clause 19.2 (Parallel debt) of the Intercreditor and Subordination Deed.
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"Parallel Mezzanine UtilisationRequest" means the "utilisation request" (howsoever described) under the Mezzanine Facility Agreement that relates to the equivalent Utilisation Request delivered for the purposes of a Utilisation under this Agreement.
"Parent" means AEG MH 01 Limited, a private limited liability company incorporated and existing under the laws of Ireland having its registered office at Suite 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15R504, Ireland with registration number 714976.
"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
"Party" means a party to this Agreement.
"Performance Liquidated Damages" means any damages and/or penalty (including delay and/or defect) payments required to be paid by any Major Project Party (other than an Obligor) to an Obligor under any Project Document or otherwise.
"Permitted Disposal" means the disposal of a Warehouse Project or the shares in a ProjectCo, Project HoldCo and/or in a Country HoldCo in accordance with paragraph (c) of Clause 24.25 (Disposals).
"Permitted Gross Outstandings" means, in relation to a Multi-account Overdraft, any amount, not exceeding its Designated Gross Amount, which is the amount of the Gross Outstandings of that Multi-account Overdraft.
"Permitted Intragroup Repayments" means repayments of the Intragroup Loans. For the avoidance of doubt, a payment from the Borrower to MidCo and/or any (whether direct or indirect) Holding Company of MidCo is not a Permitted Intragroup Repayment for the purposes of this Agreement and any other Finance Document.
"PermittedMezzanine Distribution" means any withdrawal from the Operating Account, Cash Trap Account and the Disbursement Account to MidCo in accordance with Clause 19 (Deposits into and Withdrawals from Accounts).
"Portfolio Effect" means, with respect to an event or circumstance, or a series of events or circumstances (including without limitation an effect or circumstance of whatever nature affecting one or more Finance Documents), that it affects either:
| (a) | Warehouse<br> Projects; or, as the case may be, |
|---|---|
| (b) | ProjectCos<br> owning Warehouse Projects, |
| --- | --- |
in each case having an aggregate value of five per cent. (5%) or more of the Total Commitments.
"Power of Attorney" means an irrevocable power of attorney issued by a ProjectCo or Project HoldCo authorising the Common Security Agent to take full asset level security when a Default has occurred and is continuing.
- 36 -
"PowerPurchase Agreement" or "PPA" means each power purchase agreement delivered by the Borrower for the purposes of paragraph 1(iv) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"PPAOfftaker" means each person proposed to act as a PPA offtaker in connection with an Eligible Project as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and approved as such by the Senior Agent.
"Pre-RtB Stage" means a solar PV project or portfolio of projects (as applicable) that has not yet achieved the RtB Status.
"Prepayment Disposal Proceeds" means, with respect to a disposal of a Warehouse Project or, as the case may be, a ProjectCo, Project HoldCo or a Country HoldCo:
| (a) | if<br> no Default is continuing at the time of the disposal, an amount determined pursuant to paragraph<br> 24.25(c)(v) of Clause of 24.25 (Disposals); and |
|---|---|
| (b) | if<br> a Default is continuing at the time of the disposal, the aggregate amount of the net disposal<br> proceeds generated by the relevant disposal. |
| --- | --- |
"Prepayment Insurance Proceeds" means the amount of all Insurance Proceeds other than Insurance Proceeds constituting Revenue Replacing Compensation:
| (a) | which<br> fall below the threshold, or in relation to which the Borrower has not given notice in accordance<br> with paragraph (b) of Clause 8.55 (Mandatory prepayment – Insurance Proceeds and Compensation Proceeds); |
|---|---|
| (b) | in<br> relation to which the Borrower has failed to deliver a Reinstatement Plan within the timeline<br> set forth, or the Reinstatement Plan which has been delivered has not been in form and substance<br> satisfactory to the Senior Agent; |
| --- | --- |
| (c) | which<br> have not been spent in reinstatement in accordance with a Reinstatement Plan within twelve<br> (12) months after the respective insured event; or |
| --- | --- |
| (d) | which<br> are not required to implement the Reinstatement Plan in full (as determined by the Senior<br> Agent on or after completion of the relevant works). |
| --- | --- |
"Prepayment Refinancing Proceeds" means, with respect to a refinancing of a Warehouse Project or, as the case may be, a ProjectCo, a Project HoldCo or a Country HoldCo:
| (a) | if<br> no Default is continuing at the time of the disposal, an amount determined pursuant to paragraph<br> (c)(v)of Clause of 24.25 (Disposals); and |
|---|---|
| (b) | if<br> a Default is continuing at the time of the disposal, the aggregate amount of the net disposal<br> proceeds generated by the relevant disposal. |
| --- | --- |
"Project Close Confirmation" means:
| (a) | the<br> Original Project Close Confirmation; and |
|---|
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| (b) | any<br> update to the Original Project Close Confirmation, and any additional updates thereto, in<br> each case, pursuant to Clause 22.7 (Construction Budget and Project Close Confirmation). |
|---|
"ProjectCo" means each entity described as such in paragraph 2 of Schedule 3 (Eligibility Criteria) that is the direct owner of the relevant Eligible Project that the Borrower requests be a Warehouse Project under this Agreement and which, pursuant to paragraph (a)(ii) of Clause 28.2 (Guarantors), the Borrower is obliged to procure the accession of such entity as Guarantor under this Agreement.
"ProjectCoAccount Bank" has the meaning given to it in paragraph (a) of Clause 18.3 (Account Bank).
"Project Costs" means, in respect of any Warehouse Project, all Eligible Pre-RtB Costs and all Eligible Project Costs in connection with that Warehouse Project.
"Project Document" means each of:
| (a) | each<br> EPC Contract; |
|---|---|
| (b) | each<br> O&M Contract; |
| --- | --- |
| (c) | each<br> Asset Management Agreement |
| --- | --- |
| (d) | each<br> Grid Connection Agreement; and |
| --- | --- |
| (e) | each<br> PPA. |
| --- | --- |
"ProjectHoldCo" means, in case one Eligible Project for the purposes of this Agreement comprises several sub-Eligible Projects, which is each entity described as such in paragraph 2 of Schedule 3 (Eligibility Criteria) in connection with the relevant Eligible Project and which the Borrower is obliged to procure the accession to this Agreement as Guarantor pursuant to paragraph (a)(ii) of Clause 28.2 (Guarantors).
"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
"QualifyingLender" has the meaning given to it in Clause 13 (Tax gross-up and indemnities).
"Quotation Day" means, in relation to any period for which an interest rate is to be determined two (2) TARGET Days before the first day of that period.
"Real Estate Agreement" means any agreement, however described, under which a ProjectCo derives its interest in the Real Property required for its respective Warehouse Project.
- 38 -
"Real Property" means:
| (a) | any<br> freehold, leasehold, easement rights or immovable property in respect of the Site; and |
|---|---|
| (b) | any<br> buildings, fixtures, fittings, fixed plant or machinery from time to time situated on or<br> forming part of that leasehold property. |
| --- | --- |
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.
"Reference Bank Quotation" means any quotation supplied to the Senior Agent by a Reference Bank.
"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Senior Agent at its request by the Reference Banks:
| (a) | (other<br> than where paragraph (b) below applies) as the rate at which the relevant Reference<br> Bank believes one prime bank is quoting to another prime bank for interbank term deposits<br> in euro within the Participating Member States for the relevant period; or |
|---|---|
| (b) | if<br> different, as the rate (if any and applied to the relevant Reference Bank and the relevant<br> period) which contributors to the applicable Screen Rate are asked to submit to the relevant<br> administrator. |
| --- | --- |
"Reference Banks" means the principal London offices of such entities as may be appointed by the Senior Agent or the Majority Lenders in consultation with the Borrower.
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
"Relevant Insurances" means any of the Insurances covering all risks relating to the physical loss of, or damage to, any asset of each Warehouse Project.
"Relevant Jurisdiction" means:
| (a) | the<br> Original Jurisdiction of each Obligor and the jurisdiction of incorporation of each other<br> member of the Group; and |
|---|---|
| (b) | the<br> jurisdiction where any asset subject to or intended to be subject to the Common Transaction<br> Security is situated; |
| --- | --- |
| (c) | the<br> jurisdiction whose laws govern the perfection of any of the Common Security Documents; and |
| --- | --- |
| (d) | the<br> jurisdiction in which any Eligible Project is situated. |
| --- | --- |
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"Relevant Market" means the European interbank market.
"RepeatingRepresentations" means each of the representations set out in Clause 21 (Representations) other than those set out in Clause 21.10 (Deduction of Tax), paragraph (c) of Clause 21.12 (Taxation), Clause 21.13(Relationships withothers), paragraph (e) of Clause 21.19 (Financial statements) and Clause 21.20 (No proceedings).
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
"Required Authorisation" means any Authorisation required under any law or regulation of the Relevant Jurisdictions to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in each Relevant Jurisdiction of any Finance Document.
"Requisite Rating" means, with respect to the Account Bank, a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB+ or higher by S&P Global Ratings, a division of S&P Global Inc. or Fitch Ratings Ltd or Baa1 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.
"ResignationLetter" means a letter substantially in the form set out in Schedule 10 (Form of Resignation Letter).
"ResolutionProcedure" means the procedure set out in Clause 44.3 (Resolution Procedure).
"RestrictedLender" has the meaning given to it in Clause 38.8 (Sanction Provisions).
"Revenue" means, in relation to any period, all amounts received (or, in the case of a projection, projected to be received) by the Group during such period (without double counting), comprising:
| (a) | revenues<br> received from or in connection with the Warehouse Projects (including any subsidy and/or<br> tariff related payments); |
|---|---|
| (b) | Revenue<br> Replacing Compensation; |
| --- | --- |
| (c) | any<br> penalty payment (including related to delay and/or defects) received from a Major Project<br> Party in connection with any Project Document (including penalty payments related to any<br> non-achievement of the guaranteed performance ratio under any EPC Contract); |
| --- | --- |
| (d) | insurance<br> proceeds received under Loss of Revenue Insurance; |
| --- | --- |
| (e) | interest<br> earned on the Accounts; |
| --- | --- |
| (f) | refunds<br> of Tax of any kind; |
| --- | --- |
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| (g) | (if<br> a positive amount) net scheduled amounts paid (or, in the case of a projection, projected<br> to be paid) to the Borrower pursuant to the Hedging Agreements (other than Hedging Termination<br> Costs); and |
|---|---|
| (h) | other<br> amounts which the Senior Agent agrees shall be Revenue, |
| --- | --- |
but Revenue shall not include the proceeds of any Financial Indebtedness, Base Equity, Contingent Equity nor any Equity Cure (or amounts received or projected to be received pursuant to any guarantee or other insurance in respect of any Financial Indebtedness), Compensation Proceeds (other than, for the avoidance of doubt, Revenue Replacing Compensation or Performance Liquidated Damages).
"Revenue Commissioners" means the Revenue Commissioners of Ireland.
"Revenue Replacing Compensation" means any proceeds referred to under paragraph (a) of the definition of Compensation Proceeds which compensate for any loss of income or revenue, however only if and to the extent such proceeds are not paid in one lump sum.
"Rollover Loan" means one or more Loans:
| (a) | made<br> or to be made on the same day that a maturing Loan is due to be repaid and, so long as such<br> day is prior to the Commercial Operation Date, interest that is due to be paid in respect<br> of such maturing Loan; |
|---|---|
| (b) | the<br> aggregate amount of which is equal to or less than the amount of the maturing Loan and the<br> interest that is due to be paid in respect of such maturing Loan; and |
| --- | --- |
| (c) | made<br> or to be made to the Borrower for the purpose of refinancing that maturing Loan or paying<br> the interest due and payable in respect of such maturing Loan. |
| --- | --- |
"RtB Status" means that the relevant Warehouse Project has obtained all Authorisations, secured all rights (in particular any Real Property) and:
| (a) | with<br> respect to an Eligible Project located in Poland, the RtB Status Tests (Poland) have been<br> satisfied (in form and substance satisfactory to the Senior Agent, acting in consultation<br> with the Lenders' Technical Adviser); and |
|---|---|
| (b) | with<br> respect to an Eligible Project located outside of Poland, the RtB Status Tests (Eligible<br> Project) have been satisfied (in form and substance satisfactory to the Senior Agent, acting<br> in consultation with the Lenders' Technical Adviser). |
| --- | --- |
"RtBStatus Tests (Eligible Project)" means, with respect to the first Eligible Project in an Eligible Jurisdiction other than in Poland, the deliverables and tests agreed with the Senior Agent (in consultation with the Lenders' Technical Adviser) in satisfying the condition set out in paragraph 5(g) of Part B (Conditions precedent for Project Close (ProjectCo)) of Schedule 2 (Conditions Precedent and Subsequent).
- 41 -
"RtB Status Tests (Poland)" means, with respect to an Eligible Project located in Poland, the following deliverables and tests:
| (a) | legal<br> title to land under the PV panels has been secured by agreements in a form with signatures<br> certified by notary; |
|---|---|
| (b) | an<br> administrative decision on environmental conditions (decyzja o środowiskowych uwarunkowaniach przedsięwzięcia) for the development of the Eligible Project, or a decision<br> that no decision on environmental conditions is required for the Eligible Project, in each<br> case issued by the competent authority, has been obtained by the relevant ProjectCo, such<br> decision being stamped as final and non-appealable; |
| --- | --- |
| (c) | an<br> administrative decision on the zoning conditions (decyzja o warunkach zabudowy i zagospodarowania terenu) for the development of a Eligible Project, issued by the competent authority,<br> has been obtained by the relevant ProjectCo, such decision being stamped as final and non-appealable,<br> unless the Eligible Project is developed based on local master plan (miejscowy plan zagospodarowania przestrzennego); |
| --- | --- |
| (d) | the<br> ProjectCo has received grid connection conditions in respect of the Eligible Project it is<br> carrying out; |
| --- | --- |
| (e) | a<br> Grid Connection Agreement has been signed with the relevant ProjectCo; and |
| --- | --- |
| (f) | an<br> administrative decision on approval of the building design and issuing authorization to conduct<br> construction works for the Eligible Project, issued by the competent authority, has been<br> obtained by the relevant ProjectCo, such decision being stamped as final and non-appealable. |
| --- | --- |
"SanctionProvisions" means Clause 8.4 (Mandatory prepayment - Sanctions), Clause 21.25 (Sanctions), Clause 21.43 (Dealings with SRCs and SDNs), Clause 24.8 (Sanctions), Clause 24.9 (Use of proceeds), and Clause 25.19 (Sanctions).
"Sanctioned Territory" means any country or other territory subject to a general export, import, financial or (investment) trade embargo under the Sanctions, including, as of the date of this Agreement, Afghanistan, Crimea, Cuba, Iran, North Korea, the occupied territories in the so-called "Donetsk People’s Republic", the "Luhansk People’s Republic", Kherson region, Zaporizhzhia region of Ukraine, Sudan and Syria.
"Sanctions" means the economic or financial sanctions laws, regulations, trade embargoes or other restrictive measures enacted, administered, implemented and/or enforced from time to time by any relevant Sanctions Authority.
"Sanctions Authority" means any of:
| (a) | the<br> government of the United States of America; |
|---|---|
| (b) | the<br> United Nations; |
| --- | --- |
| (c) | the<br> European Union (including any of its member states); |
| --- | --- |
| (d) | the<br> government of the United Kingdom; |
| --- | --- |
| (e) | the<br> government of the Federal Republic of Germany; |
| --- | --- |
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| (f) | the<br> government of any Eligible Jurisdiction; |
|---|---|
| (g) | any<br> governmental institution or agency of any Relevant Jurisdiction; and |
| --- | --- |
| (h) | the<br> respective governmental institutions and agencies of any of the foregoing, including, without<br> limitation, the Department of the Treasury's Office of Foreign Assets Control of the United<br> States of America (OFAC), the United States Department of State or the United States Department<br> of Commerce, the United Nations Security Council ("UNSC"), the European<br> Union ("EU"), the United Kingdom ("UK") and His Majesty's<br> Treasury or any other relevant sanctions authority. |
| --- | --- |
"Sanctions Mandatory PrepaymentEvent" means:
| (a) | any<br> of the representations set out in Clause 21.25 (Sanctions) are or were untrue when<br> made or repeated; or |
|---|---|
| (b) | an<br> Obligor does not perform or is in breach of an undertaking as set out in Clause 24.8 (Sanctions). |
| --- | --- |
"Screen Rate" means the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate), or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Senior Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.
"Secured Obligations" means all present and future obligations and liabilities at any time due, owing or incurred by any Obligor to any Secured Party under the Finance Documents (including, but not limited to, the Parallel Obligations), whether actual or contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.
"Secured Parties" means the Common Security Agent, any Receiver or Delegate, the Senior Agent, each Lender, the Arranger and each Ancillary Lender (including any Affiliate of a Lender which is an Ancillary Lender) from time-to-time party to this Agreement.
"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
"SecurityAssignment (Hedging Receivables)" has the meaning assigned to it in Schedule 4 (Common Security Documents).
"Senior Agent's Spot Rate ofExchange" means:
| (a) | the<br> Senior Agent's spot rate of exchange; or |
|---|
- 43 -
| (b) | (if<br> the Senior Agent does not have an available spot rate of exchange) any other publicly available<br> spot rate of exchange selected by the Senior Agent (acting reasonably), |
|---|
for the purchase of euro in the London foreign exchange market at or about 11:00 a.m. on a particular day.
"Senior/Mezz Ratio" means the ratio, expressed as a percentage, of:
| (a) | the<br> Total Commitments; and |
|---|---|
| (b) | the<br> Mezzanine Total Commitments. |
| --- | --- |
"Senior Debt Sizing Assumptions" means the financial, economic, technical and other assumptions contained in the Original Financial Model and Updated Financial Model (as applicable), including (but not limited to):
| (a) | Cap: capped at the lower of: |
|---|---|
| (i) | in respect<br> of an Eligible Project located in Poland, a Loan-to-Cost Ratio of 60%; and |
| --- | --- |
| (ii) | in<br> respect of an Eligible Project not located in Poland, 65%; |
| --- | --- |
| (b) | Production:<br> P90 – 10-year average yield estimation (based on Lenders' Technical Adviser's yield<br> assessment, as set out in the relevant LTA Report); |
| --- | --- |
| (c) | Minimum DSCR: (i) 1.50x merchant; and (ii) 1.20x contracted (based on IG PPA and feed-in-tariff<br> auction revenues); |
| --- | --- |
| (d) | Tenor: Up to a 20-year amortising profile starting six (6) months after the Warehouse Project<br> COD Longstop Date; |
| --- | --- |
| (e) | DSRA and MRA, if recommended by Lenders' Technical Adviser: only for debt sizing, i.e. timing<br> impact on cash flows; |
| --- | --- |
| (f) | Long-term inflation and all-in interest rate: each at such rate as shall be decided at the time<br> an Eligible Project is brought forward for approval and that is approved by the Majority<br> Lenders; and |
| --- | --- |
| (g) | Power price: Power price based on blend of low curve and average price based on the most recently<br> available Market Study. |
| --- | --- |
"ShareCharge over Borrower" has the meaning given to it in Schedule 4 (Common Security Documents).
"Shareholder" means the Holding Company directly owning share capital in the relevant entity. For the avoidance of doubt, no indirect owner of any share capital in the relevant entity shall constitute a Shareholder for the purposes of this Agreement and any other Finance Document.
- 44 -
"Shareholder Loan Agreement" means any agreement setting out the terms of a Shareholder Loan made or to be made to the Borrower, any Country HoldCo, Project HoldCo or ProjectCo.
"Shareholder Loans" means a loan made or to be made by the Borrower under a Shareholder Loan Agreement or the principal amount outstanding for the time being of that loan.
"Signing Date" means the date of this Agreement.
"Site" means the area of land on which a Warehouse Project including all ancillary facilities forming part of such Warehouse Project are located.
"Social Fabric" means the social fabric including labour, social security, the regulation of industrial relations (between government, employers and employees), the protection of occupational as well as public health and safety, the regulation of public participation, the protection and regulation of ownership of land rights (both formal and traditional), land use planning and development, immovable goods and intellectual and cultural property rights, the protection and empowerment of indigenous peoples or ethnic groups, the protection, restoration and promotion of cultural heritage or archaeological artefacts, health, safety, quality of life and legal rights of the community and the protection of employees and citizens.
"SpecifiedTime" means a day or time determined in accordance with Schedule 13 (Timetables).
"Sponsor" means Alternus Energy Group PLC.
"Subsidiary" means any person (referred to as the "first person") in respect of which another person (referred to as the "secondperson"):
| (a) | holds<br> a majority of the voting rights in that first person or has the right under the constitution<br> of the first person to direct the overall policy of the first person or alter the terms of<br> its constitution; or |
|---|---|
| (b) | is<br> a member of that first person and has the right to appoint or remove a majority of its board<br> of directors or equivalent administration, management or supervisory body; or |
| --- | --- |
| (c) | has<br> the right to exercise a dominant influence (which must include the right to give directions<br> with respect to operating and financial policies of the first person which its directors<br> are obliged to comply with whether or not for its benefit) over the first person by virtue<br> of provisions contained in the articles (or equivalent) of the first person or by virtue<br> of a control contract which is in writing and is authorised by the articles (or equivalent)<br> of the first person and is permitted by the law under which such first person is established;<br> or |
| --- | --- |
| (d) | is<br> a member of that first person and controls alone, pursuant to an agreement with other shareholders<br> or members, a majority of the voting rights in the first person or the rights under its constitution<br> to direct the overall policy of the first person or alter the terms of its constitution;<br> or |
| --- | --- |
- 45 -
| (e) | has<br> the power to exercise, or actually exercises dominant influence or control over the first<br> person; or |
|---|---|
| (f) | together<br> with the first person are managed on a unified basis. |
| --- | --- |
For the purposes of this definition: (i) a person shall be treated as a member of another person if any of that person's Subsidiaries is a member of that other person or if any shares in that other person are held by a person acting on behalf of it or any of its Subsidiaries; (ii) a second person shall be treated as satisfying any one of conditions (a) to (f) above in respect of any person in relation to which any of its Subsidiaries are, or are to be treated as, satisfying any of conditions (a) to (f) above; and (iii) a first person shall include any person the shares or ownership interests in which are subject to Security and where the legal title to the shares or ownership interests so secured are registered in the name of the secured party or its nominee pursuant to such Security.
"Syndication Date" means the day specified by the Arranger as the day on which primary syndication of the Facility is completed.
"TARGET Day" means any day on which TARGET2 is open for the settlement of payments in euro.
"TARGET2" means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007 or any successor/replacement system.
"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).
"TCA" means the Taxes Consolidation Act 1997 of Ireland (as amended).
"Termination Date" means the date falling thirty-six (36) months from the first Utilisation Date.
"Total Commitments" means the aggregate of the Commitments, being EUR 64,000,000 at the Signing Date.
"Transaction Documents" means the Finance Documents and the Project Documents.
"Transfer" means any withdrawal, payment, transfer or other disposition of monies from an Account.
"TransferCertificate" means a certificate substantially in the form set out in Schedule 6 (Form of Transfer Certificate) or any other form agreed between the Senior Agent and the Borrower.
"Transfer Date" means, in relation to an assignment or a transfer, the later of:
| (a) | the<br> proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate;<br> and |
|---|
- 46 -
| (b) | the<br> date on which the Senior Agent executes the relevant Assignment Agreement or Transfer Certificate. |
|---|
"UK Blocking Regulation" means Regulation (EU) No 2271/96 of the European Parliament and of the Council of 22 November 1996 protecting against the effects of the extraterritorial application of legislation adopted by a third country, and actions based on or resulting therefrom as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018.
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.
"Updated Financial Model" means:
| (a) | the<br> Original Financial Model and any amendment, update or replacement made thereto from time<br> to time in accordance with Clause 22 (Information Undertakings); and |
|---|---|
| (b) | the<br> Original Financial Model (as such form has been amended, updated or replaced from time to<br> time in accordance with Clause 22 (Information Undertakings)) as amended and/or updated<br> or replace for the purpose of satisfying paragraph 7(b)(i) of Part B (Conditions Precedent for Project Close (ProjectCo)) of Schedule 2 (Conditions Precedent and Subsequent)<br> in connection with approving an Eligible Project as a Warehouse Project. |
| --- | --- |
"US" means the United States of America.
"US Tax Obligor" means:
| (a) | the<br> Borrower which is resident for tax purposes in the US; or |
|---|---|
| (b) | an<br> Obligor some or all of whose payments under the Finance Documents are from sources within<br> the US for US federal income tax purposes. |
| --- | --- |
"Utilisation" means a utilisation of the Facility.
"Utilisation Date" means the date of a Utilisation, being the date on which the relevant Loan is to be made.
"UtilisationRequest" means a notice substantially in the form set out in Schedule 5 (Utilisation Request).
"VAT" means:
| (a) | value<br> added tax imposed by the Value Added Tax Act 1994 as provided for in VATCA; |
|---|---|
| (b) | any<br> tax imposed in compliance with the Council Directive of 28 November 2006 on the common<br> system of value added tax (EC Directive 2006/112); and |
| --- | --- |
- 47 -
| (c) | any<br> other tax of a similar nature, whether imposed in the United Kingdom or in a member state<br> of the European Union in substitution for, or levied in addition to, such tax referred to<br> in paragraphs (a) above, or imposed elsewhere. |
|---|
"VAT Group" means a group or unity or fiscal unity for VAT purposes within the meaning of section 15 VATCA, and otherwise as applicable to a group or unity or fiscal unity for VAT purposes under any applicable law implementing Article 11 of Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112).
"VATCA" means the Value-Added Tax Consolidation Act 2010 of Ireland (as amended).
"Warehouse Guaranteed RevenueCommencement Date" means, in respect of any Warehouse Project, the date by which the relevant ProjectCo is scheduled to generate Revenues from either:
| (a) | any<br> applicable feed-in-tariff or subsidy; or |
|---|---|
| (b) | the<br> relevant Power Purchase Agreement. |
| --- | --- |
"WarehouseProject" means each Eligible Project in relation to which the Senior Agent has delivered the Original Project Close Confirmation under Clause 4.2 (Conditions precedent for Eligible Project to become Warehouse Project).
"Warehouse Project COD LongstopDate" means in respect of any Warehouse Project, the date by which that Warehouse Project is expected to achieve the Commercial Operation Date as set out in Project Close Confirmation that the Senior Agent has issued and approved in respect of that Warehouse Project.
"Warehouse Project CompletionLongstop Date" means, in respect of any Warehouse Project, the date by which the relevant ProjectCo is expected to receive all acceptance certificates under the EPC Contract and (if applicable) other construction contracts relevant to that Warehouse Project, such date as set out in the Project Close Confirmation that the Senior Agent has issued and approved in respect of that Warehouse Project.
"WarehouseReport" means a report relating to, inter alia, the revenue projection, construction progress, operation, market price, off-taker arrangements and other matters in connection with the Warehouse Projects in substantially the form set out in Schedule 14 (Form of Warehouse Report).
| 1.2 | Construction |
|---|---|
| (a) | Unless<br> a contrary indication appears any reference in this Agreement to: |
| --- | --- |
| (i) | the<br> "Senior Agent", the "Arranger", the "Common Security Agent", any "Finance Party", any "Hedge Counterparty",<br> any "Secured Party", any "Lender", any "Obligor"<br> or any "Party" shall be construed so as to include its successors in title,<br> permitted assigns and permitted transferees to, or of, its rights and/or obligations under<br> the Finance Documents and, in the case of the Common Security Agent, any person for the time<br> being appointed as Common Security Agent or Common Security Agents in accordance with this<br> Agreement; |
| --- | --- |
- 48 -
| (ii) | "assets"<br> includes present and future properties, revenues and rights of every description; |
|---|---|
| (iii) | "carry out a Warehouse Project", "carrying out the respective Warehouse Project"<br> or "carried out the Warehouse Project" (or similar references) means to<br> carry out all aspects of the relevant Warehouse Project of the respective ProjectCo; |
| --- | --- |
| (iv) | a<br> "Transaction Document", a "Finance Document", a "Project Document" or any other agreement or instrument is a reference to that Transaction<br> Document, Finance Document, Project Document or other agreement or instrument as amended,<br> novated, supplemented, extended, replaced or restated; |
| --- | --- |
| (v) | a "group of Lenders" includes all the Lenders; |
| --- | --- |
| (vi) | "including"<br> means including without limitation; |
| --- | --- |
| (vii) | "indebtedness"<br> includes any obligation (whether incurred as principal or as surety) for the payment or repayment<br> of money, whether present or future, actual or contingent; |
| --- | --- |
| (viii) | a<br> "law" includes any law (including statutory and common law), statute, constitution,<br> decree, judgment, treaty, regulation, rule, by-law, order, official directive, request or<br> guideline (whether or not having the force of law) of any authority; |
| --- | --- |
| (ix) | a<br> "person", "party" or "entity" includes<br> any individual, firm, company, corporation, government, state or agency of a state or any<br> association, trust, joint venture, consortium, partnership or other entity (whether or not<br> having separate legal personality); |
| --- | --- |
| (x) | a<br> "regulation" includes any regulation, rule, official directive, request,<br> regulatory technical standard, code of practice or guideline (whether or not having the force<br> of law) of any governmental, intergovernmental or supranational body, agency, department<br> or of any regulatory, self- regulatory or other authority or organisation; |
| --- | --- |
| (xi) | a<br> provision of law is a reference to that provision as amended or re- enacted from time to<br> time; and |
| --- | --- |
| (xii) | a<br> time of day is a reference to London time. |
| --- | --- |
| (b) | The<br> determination of the extent to which a rate is "for a period equal in length"<br> to an Interest Period shall disregard any inconsistency arising from the last day of that<br> Interest Period being determined pursuant to the terms of this Agreement. |
| --- | --- |
| (c) | A<br> reference to "determines" or "determined" means a determination made<br> in the absolute discretion of the person making the determination. |
| --- | --- |
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| (d) | Section,<br> Clause and Schedule headings are for ease of reference only. |
|---|---|
| (e) | Unless<br> a contrary indication appears, a term used in any other Finance Document or in any notice<br> given under or in connection with any Finance Document has the same meaning in that Finance<br> Document or notice as in this Agreement. |
| --- | --- |
| (f) | A<br> Borrower providing "cash cover" for an Ancillary Facility means the Borrower<br> paying an amount in the currency of the Ancillary Facility to an interest-bearing account<br> and the following conditions being met: |
| --- | --- |
| (i) | either: |
| --- | --- |
| (A) | the<br> account is in the name of the Borrower and is with the Ancillary Lender for which that cash<br> cover is to be provided and until no amount is or may be outstanding under that Ancillary<br> Facility withdrawals from the account may only be made to pay the relevant Ancillary Lender<br> amounts due and payable to it under this Agreement in respect of that Ancillary Facility;<br> or |
| --- | --- |
| (B) | the<br> account is in the name of the Ancillary Lender for which that cash cover is to be provided;<br> and |
| --- | --- |
| (ii) | the<br> Borrower has executed documentation, in form and substance satisfactory to the Ancillary<br> Lender for which that cash cover is to be provided, creating a first ranking security interest<br> or other collateral arrangement, in respect of the amount of that cash cover. |
| --- | --- |
| (g) | A<br> Default (other than an Event of Default) or a Cash Trap Event is "continuing"<br> if it has not been remedied or waived and an Event of Default is "continuing"<br> if it has not been waived. |
| --- | --- |
| (h) | A<br> Borrower "repaying" or "prepaying" Ancillary Outstandings<br> means: |
| --- | --- |
| (i) | that<br> Borrower providing cash cover in respect of those Ancillary Outstandings; |
| --- | --- |
| (ii) | the<br> maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance<br> with its terms; or |
| --- | --- |
| (iii) | the<br> Ancillary Lender being satisfied that it has no further liability under that Ancillary Facility, |
| --- | --- |
and the amount by which Ancillary Outstandings are repaid or prepaid under paragraphs (i) and (ii) above is the amount of the relevant cash cover, reduction or cancellation.
| (i) | An<br> amount borrowed includes any amount utilised under an Ancillary Facility. |
|---|---|
| 1.3 | Currency symbols and definitions |
| --- | --- |
"€", "EUR" and "euro" denote the single currency of the Participating Member States.
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| 1.4 | Third party rights |
|---|---|
| (a) | Unless<br> expressly provided to the contrary in a Finance Document, a person who is not a Party has<br> no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement. |
| --- | --- |
| (b) | Subject<br> to Clause 38.3 (Other exceptions) but otherwise notwithstanding, any term of any Finance<br> Document, the consent of any person who is not a Party is not required to rescind or vary<br> this Agreement at any time. |
| --- | --- |
| 1.5 | Irish Terms |
| --- | --- |
| (a) | In<br> this Agreement, a reference to "examiner" and "examinership"<br> shall have the meaning ascribed to such terms in Part 10 of the Irish Companies Act<br> 2014; and |
| --- | --- |
| (b) | an<br> entity being "unable to pay its debts or fails or admits in writing its inability generally to pay its debts" includes that entity being unable to pay its debts within<br> the meaning of section 509(3) or section 570 of the Irish Companies Act 2014. |
| --- | --- |
| 1.6 | Actions of Senior Agent and Common Security Agent |
| --- | --- |
Notwithstanding any provision in any Finance Document to the contrary, any provision in this Agreement or any other Finance Document (in relation to a matter not affecting the personal interests of the Senior Agent or the Common Security Agent, as applicable) which refers to:
| (a) | consent<br> or approval being required to be given by the Senior Agent or the Common Security Agent; |
|---|---|
| (b) | matter<br> being to the satisfaction of the Senior Agent or the Common Security Agent; |
| --- | --- |
| (c) | the<br> Senior Agent or the Common Security Agent acting reasonably or in a reasonable manner or<br> coming to any determination (including determination that is reasonable (or any similar or<br> analogous wording is used)); |
| --- | --- |
| (d) | the<br> Senior Agent or the Common Security Agent acting, exercising any discretion (or refraining<br> from acting or exercising any discretion) or coming to an opinion; or |
| --- | --- |
| (e) | any<br> consent of the Senior Agent or the Common Security Agent not to be unreasonably withheld<br> or delayed, |
| --- | --- |
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in each case shall be construed as requiring the relevant instructing persons (as determined in accordance with the Intercreditor and Subordination Deed and this Agreement) of the Senior Agent or the Common Security Agent, when providing their instructions to the Senior Agent or the Common Security Agent, as applicable (i) as being required to give such consent or approval, (ii) to be satisfied with such matter,(iii) to act reasonably or in a reasonable manner or to come to such determination, (iv) to act, to exercise such discretion (or refrain from acting or exercising such discretion) or to come to such opinion or (v) not to unreasonably withhold or delay their consent, but shall neither fetter the ability of the Senior Agent or the Common Security Agent to act in accordance with the instructions of such instructing persons nor to be construed as requiring the Senior Agent or the Common Security Agent to give such consent or approval, to be satisfied with such matter, to act reasonably or in a reasonable manner to come to such determination, to act, to exercise such discretion (or to refrain from acting or exercising such discretion) or to come to such opinion or not to unreasonably withhold or delay its consent, in each case in its independent capacity in the absence of corresponding instructions from such instructing persons.
If there is any inconsistency between any term of the Intercreditor and Subordination Deed and any term of this Agreement, the Intercreditor and Subordination Deed shall prevail.
| 1.7 | Common Security Agent |
|---|
The Common Security Agent has entered into this Agreement for the better enforcement and preservation of its rights under the Intercreditor and Subordination Deed and in acting hereunder shall do so in accordance with the Intercreditor and Subordination Deed and with the benefit of the protections, indemnities and rights in its favour set out therein.
- 52 -
SECTION 2
THE FACILITY
| 2. | THE FACILITY |
|---|---|
| 2.1 | The Facility |
| --- | --- |
| (a) | Subject<br> to the terms of this Agreement, the Lenders make available to the Borrower a euro revolving<br> loan facility in an aggregate amount equal to the Total Commitments. |
| --- | --- |
| (b) | Subject<br> to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make<br> all or part of its Commitment available to the Borrower as an Ancillary Facility. |
| --- | --- |
| 2.2 | Increase |
| --- | --- |
| (a) | The<br> Borrower may by giving prior notice to the Senior Agent by no later than the date falling<br> ten (10) Business Days after the effective date of a cancellation of: |
| --- | --- |
| (i) | the<br> Available Commitment of a Defaulting Lender in accordance with paragraph (g) of Clause<br> 8.9 (Right of replacement or repayment and cancellation in relation to a single Lender);<br> or |
| --- | --- |
| (ii) | the<br> Commitment of a Lender in accordance with: |
| --- | --- |
| (A) | Clause<br> 8.1 (Illegality); or |
| --- | --- |
| (B) | paragraph<br> (a) of Clause 8.9 (Right of replacement or repayment and cancellation in relation to a single Lender), |
| --- | --- |
request that the Commitments be increased (and the Commitments shall be so increased) in an aggregate amount of up to the amount of the Available Commitments or Commitments so cancelled as follows:
| (iii) | the<br> increased Commitments will be assumed by one or more Eligible Institutions (each an "Increase Lender") each of which confirms in writing (whether in the relevant Increase Confirmation<br> or otherwise) its willingness to assume and does assume all the obligations of a Lender corresponding<br> to that part of the increased Commitments which it is to assume, as if it had been an Original<br> Lender in respect of those Commitments; |
|---|---|
| (iv) | each<br> of the Obligors and any Increase Lender shall assume obligations towards one another and/or<br> acquire rights against one another as the Obligors and the Increase Lender would have assumed<br> and/or acquired had the Increase Lender been an Original Lender in respect of that part of<br> the increased Commitments which it is to assume; |
| --- | --- |
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| (v) | each<br> Increase Lender shall become a Party as a "Lender" and any Increase Lender and<br> each of the other Finance Parties shall assume obligations towards one another and acquire<br> rights against one another as that Increase Lender and those Finance Parties would have assumed<br> and/or acquired had the Increase Lender been an Original Lender in respect of that part of<br> the increased Commitments which it is to assume; |
|---|---|
| (vi) | the<br> Commitments of the other Lenders shall continue in full force and effect; and |
| --- | --- |
| (vii) | any<br> increase in the Commitments shall take effect on the date specified by the Borrower in the<br> notice referred to above or any later date on which the Senior Agent executes an otherwise<br> duly completed Increase Confirmation delivered to it by the relevant Increase Lender. |
| --- | --- |
| (b) | The<br> Senior Agent shall, subject to paragraph (c) below, as soon as reasonably practicable<br> after receipt by it of a duly completed Increase Confirmation appearing on its face to comply<br> with the terms of this Agreement and delivered in accordance with the terms of this Agreement,<br> execute that Increase Confirmation. |
| --- | --- |
| (c) | The<br> Senior Agent shall only be obliged to execute an Increase Confirmation delivered to it by<br> an Increase Lender once it is satisfied it has complied with all necessary "know your<br> customer" or other similar checks under all applicable laws and regulations in relation<br> to the assumption of the increased Commitments by that Increase Lender. |
| --- | --- |
| (d) | Each<br> Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt)<br> that the Senior Agent has authority to execute on its behalf any amendment or waiver that<br> has been approved by or on behalf of the requisite Lender or Lenders in accordance with this<br> Agreement on or prior to the date on which the increase becomes effective in accordance with<br> this Agreement and that it is bound by that decision to the same extent as it would have<br> been had it been an Original Lender. |
| --- | --- |
| (e) | The<br> Borrower shall, promptly on demand, pay the Senior Agent and the Common Security Agent the<br> amount of all costs and expenses (including legal fees) properly incurred by either of them<br> and, in the case of the Common Security Agent, by any Receiver or Delegate in connection<br> with any increase in Commitments under this Clause 2.2. |
| --- | --- |
| (f) | The<br> Increase Lender shall, on the date upon which the increase takes effect, pay to the Senior<br> Agent (for its own account) a fee in an amount equal to the fee which would be payable under<br> Clause 26.4 (Assignment or transfer fee) if the increase was a transfer pursuant to<br> Clause 26.6 (Procedure for transfer) and if the Increase Lender was a New Lender. |
| --- | --- |
| (g) | The<br> Borrower may pay to the Increase Lender a fee in the amount and at the times agreed between<br> the Borrower and the Increase Lender in a letter between the Borrower and the Increase Lender<br> setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter<br> referred to in this paragraph (g). |
| --- | --- |
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| (h) | The<br> Borrower must apply the Prepayment Disposal Proceeds and any Hedging Delta and the Prepayment<br> Refinancing Proceeds in prepayment of the Loans and payment of any Hedging Termination Costs<br> and the other amounts referred to in paragraph (b) of Clause 8.10 (Restrictions)<br> at the time and in the order of application contemplated by Clause 8.11 (Application of prepayments). |
|---|---|
| (i) | In<br> case an Event of Default has occurred and is continuing at the time of a disposal, an amount<br> of Commitments equal to the amount of the Disposal Equity Amount shall be cancelled immediately<br> upon completion of the relevant disposal. |
| --- | --- |
| (j) | Neither<br> the Senior Agent nor any Lender shall have any obligation to find an Increase Lender and<br> in no event shall any Lender whose Commitment is replaced by an Increase Lender be required<br> to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents. |
| --- | --- |
| (k) | Clause<br> 26.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause<br> to: |
| --- | --- |
| (i) | an<br> "Existing Lender" were references to all the Lenders immediately prior to<br> the relevant increase; |
| --- | --- |
| (ii) | the<br> "New Lender" were references to that "Increase Lender";<br> and |
| --- | --- |
| (iii) | a<br> "re-transfer" and "re-assignment" were references to respectively<br> a "transfer" and "assignment". |
| --- | --- |
| 2.3 | Increase – Accordion Option |
| --- | --- |
| (a) | The<br> Borrower may at any time, but not later than the last day of the Availability Period (the<br> "Accordion Availability Period") by delivery to the Senior Agent of a duly<br> completed Accordion Increase Request, request that the Total Commitments be increased (and<br> the Total Commitments shall be so increased) as described in, and in accordance with, this<br> Clause 2.3. |
| --- | --- |
| (b) | Each<br> Accordion Increase Request shall be irrevocable and will not be regarded as being duly completed<br> unless it specifies the following matters: |
| --- | --- |
| (i) | a proposed<br> Accordion Increase Amount; |
| --- | --- |
| (ii) | a proposed<br> Accordion Increase Date; and |
| --- | --- |
| (iii) | the<br> fee (if any) payable to any Accordion Increase Lender pursuant to paragraph (j) below;<br> and |
| --- | --- |
| (iv) | such<br> other information that the Senior Agent may reasonably require in relation to such request. |
| --- | --- |
| (c) | Upon<br> receipt of an Accordion Increase Request, the Senior Agent shall promptly notify the Lenders. |
| --- | --- |
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| (d) | The<br> increase in the Total Commitments requested in an Accordion Increase Request is subject to<br> the following conditions: |
|---|---|
| (i) | the<br> increased Commitments will be assumed by one or more existing Lenders willing to provide<br> such increase and/or, subject to paragraph (k) below, by other banks, financial institutions,<br> trusts, funds or other entities which are regularly engaged in or established for the purpose<br> of making, purchasing or investing in loans, securities or other financial assets (each an<br> "Accordion Increase Lender") selected by the Borrower and acceptable to<br> the Senior Agent (acting reasonably), which shall become a Party as a Lender; |
| --- | --- |
| (ii) | the<br> Accordion Increase Amount is a minimum amount of EUR 50,000,000 or such lower amount as agreed<br> to by the Senior Agent; |
| --- | --- |
| (iii) | no<br> more than four (4) Accordion Increase Requests are delivered; |
| --- | --- |
| (iv) | the<br> Accordion Increase Request is delivered no later than the date following twenty (20) Business<br> Days prior to the last day of the Accordion Availability Period. The proposed Accordion Increase<br> Date must be a date within the Accordion Availability Period; |
| --- | --- |
| (v) | the<br> Total Commitments, after the increase, will not exceed EUR 336,000,000 or any other amount<br> agreed to by all the Lenders; |
| --- | --- |
| (vi) | any<br> Accordion Increase Amount is matched pro rata by an increase under the Mezzanine Facility<br> Agreement; |
| --- | --- |
| (vii) | any<br> Loan made available from any Accordion Increase Amount shall not be prepaid nor mature at<br> a time earlier than any other Loan made available to that Loan; |
| --- | --- |
| (viii) | the<br> Repeating Representation to be made by each Obligor are true and correct in all material<br> respects on the date of the on which the Accordion Increase Request is delivered; |
| --- | --- |
| (ix) | no<br> Default is continuing or would result from the proposed increase in the Facility, in each<br> case on the date of the Accordion Increase Request or the Accordion Increase Date; |
| --- | --- |
| (x) | such<br> documents (if any) as are reasonably necessary as a result of the establishment of that Accordion<br> Increase Amount to maintain the effectiveness of the Security, guarantees, indemnities and<br> other assurance against loss provided to the Finance Parties pursuant to the Finance Documents;<br> and |
| --- | --- |
| (xi) | any<br> applicable Accordion Increase Supplemental Security; and |
| --- | --- |
| (xii) | in<br> respect of each proposed Accordion Increase Lender: |
| --- | --- |
| (A) | the<br> Senior Agent has received and executed a duly completed Increase Confirmation from that Accordion<br> Increase Lender; and |
| --- | --- |
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| (B) | which<br> is not already a Lender on the date of the Increase Confirmation, the Senior Agent has performed<br> all necessary "know your customer" or other similar checks under all applicable<br> laws and regulations in relation to the assumption of the additional Commitments by that<br> Accordion Increase Lender, the completion of which the Senior Agent shall promptly notify<br> to the Borrower and the Accordion Increase Lender; and |
|---|---|
| (xiii) | each<br> Accordion Increase Lender agrees to assume all the obligations of a Lender corresponding<br> to the relevant additional Commitments in an aggregate amount equal to the respective portion<br> of the Accordion Increase Amount, as if it had been an Original Lender in respect of those<br> Commitments. |
| --- | --- |
| (e) | The<br> increase in the Total Commitments and the assumption of the additional Commitments by the<br> Accordion Increase Lenders will take effect on the date within the Accordion Availability<br> Period (the "Accordion Increase Date") which is the later of: |
| --- | --- |
| (i) | the<br> date specified by the Borrower in the Accordion Increase Request; and |
| --- | --- |
| (ii) | the<br> date on which all of the conditions described in paragraph (b)(iii) above have been<br> met in form and substance satisfactory to the Senior Agent. |
| --- | --- |
| (f) | On<br> and from the Accordion Increase Date: |
| --- | --- |
| (i) | the<br> Total Commitments will be increased by the Accordion Increase Amount; |
| --- | --- |
| (ii) | each<br> Accordion Increase Lender will assume all the obligations of a Lender in respect of the additional<br> Commitments specified in the Increase Confirmation of that Accordion Increase Lender; |
| --- | --- |
| (iii) | each<br> of the Obligors and each Accordion Increase Lender which is not a Lender immediately prior<br> to the Accordion Increase Date shall assume obligations towards one another and/or acquire<br> rights against one another as the Obligors and the Accordion Increase Lender would have assumed<br> and/or acquired had the Accordion Increase Lender been an Original Lender in respect of that<br> part of the additional Commitments which it is to assume; |
| --- | --- |
| (iv) | each<br> Accordion Increase Lender which is not a Lender immediately prior to the Accordion Increase<br> Date shall become a Party as a "Lender" and any such Accordion Increase Lender<br> and each of the other Finance Parties shall assume obligations towards one another and acquire<br> rights against one another as that Accordion Increase Lender and those Finance Parties would<br> have assumed and/or acquired had the Accordion Increase Lender been an Original Lender in<br> respect of that part of the additional Commitments which it is to assume; and |
| --- | --- |
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| (v) | the<br> Commitments of the other Lenders shall continue in full force and effect. |
|---|---|
| (g) | Each<br> Accordion Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance<br> of doubt) that the Senior Agent has authority to execute on its behalf any amendment or waiver<br> that has been approved by or on behalf of the requisite Lender or Lenders in accordance with<br> this Agreement on or prior to the date on which the increase becomes effective. |
| --- | --- |
| (h) | The<br> Senior Agent shall, subject to paragraph (d)(xii)(B) above, as soon as reasonably practicable<br> after receipt by it of a duly completed Increase Confirmation appearing on its face to comply<br> with the terms of this Agreement and delivered in accordance with the terms of this Agreement,<br> execute that Increase Confirmation. |
| --- | --- |
| (i) | The<br> Accordion Increase Lender shall, on the Accordion Increase Date, pay to the Senior Agent<br> (for its own account) a fee in an amount equal to the fee which would be payable under Clause<br> 26.4 (Assignment or transfer fee) if the increase was a transfer pursuant to Clause<br> 26.6 (Procedure for transfer). |
| --- | --- |
| (j) | The<br> Borrower may pay to an Accordion Increase Lender a fee in the amount and at the times agreed<br> between the Borrower and the Accordion Increase Lender in a letter between the Borrower and<br> the Accordion Increase Lender setting out that fee, provided that the amount of any<br> such fee paid to a person who was not already a Lender prior to the relevant Accordion Increase<br> Date shall not exceed the amount of the fee offered to the Lenders under paragraph (k) below.<br> A reference in this Agreement to a Fee Letter shall include any letter referred to in this<br> paragraph (j). |
| --- | --- |
| (k) | The<br> increased Accordion Increase Amount may be assumed by an Eligible Institution provided that each Lender has been offered the opportunity by the Borrower to become an Accordion<br> Increase Lender by assuming a proportion of the requested Accordion Increase Amount equal<br> to its pro rata share of the then current Commitments and has been offered the respective<br> fees it is prepared to pay in the context of such increase. Any Lender that accepts such<br> offer within ten (10) Business Days (an "Accepting Lender") shall be<br> allocated the relevant portion of the Accordion Increase Amount. Any Lender that declines<br> the offer, or fails to respond within ten (10) Business Days (in each case a "Declining Lender"), shall not participate in the Accordion Increase Amount. Any portion of<br> the Accordion Increase Amount that otherwise would have been allocated to the Declining Lenders<br> shall be allocated as between any Accepting Lenders who are willing to accept an increase<br> in their allocation of the Accordion Increase Amount and/or any Eligible Institution at the<br> sole and absolute discretion of the Lender. |
| --- | --- |
| (l) | No<br> Lender shall be under any obligation to execute any Increase Confirmation. |
| --- | --- |
| (m) | The<br> Borrower may, subject to the overall limit set out in paragraph (d)(iv) above, request<br> an increase in the Total Commitments pursuant to this Clause 2.3. |
| --- | --- |
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| (n) | Clause<br> 26.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.3 in relation to an Increase Lender as if references in that Clause<br> to: |
|---|---|
| (i) | an<br> "Existing Lender" were references to all the Lenders immediately prior to<br> the relevant increase; |
| --- | --- |
| (ii) | the<br> "New Lender" were references to that "Increase Lender";<br> and |
| --- | --- |
a "re-transfer" and "re-assignment" were references to respectively a "transfer" and "assignment".
| 2.4 | Finance Parties' rights and obligations |
|---|---|
| (a) | The<br> obligations of each Finance Party under the Finance Documents are several. Failure by a Finance<br> Party to perform its obligations under the Finance Documents does not affect the obligations<br> of any other Party under the Finance Documents. No Finance Party is responsible for the obligations<br> of any other Finance Party under the Finance Documents. |
| --- | --- |
| (b) | The<br> rights of each Finance Party under or in connection with the Finance Documents are separate<br> and independent rights and any debt arising under the Finance Documents to a Finance Party<br> from an Obligor is a separate and independent debt in respect of which a Finance Party shall<br> be entitled to enforce its rights in accordance with paragraph (c) below. The rights<br> of each Finance Party include any debt owing to that Finance Party under the Finance Documents<br> and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor<br> which relates to a Finance Party's participation in the Facility or its role under a Finance<br> Document (including any such amount payable to the Senior Agent on its behalf) is a debt<br> owing to that Finance Party by that Obligor. |
| --- | --- |
| (c) | A<br> Finance Party may, except as specifically provided in the Finance Documents, separately enforce<br> its rights under or in connection with the Finance Documents. |
| --- | --- |
| 2.5 | Obligors' Agent |
| --- | --- |
| (a) | Each<br> Obligor by its execution of this Agreement or a Guarantor Accession Letter irrevocably appoints<br> the Borrower (acting through one or more authorised signatories) to act on its behalf as<br> its agent in relation to the Finance Documents (and, in the case of any Guarantor incorporated<br> in Ireland, also irrevocably appoints the Obligors’ Agent to act on its behalf as its<br> attorney in relation to any deeds of confirmation or other deeds in relation to any Finance<br> Documents) and irrevocably authorises: |
| --- | --- |
| (i) | the<br> Borrower on its behalf to supply all information concerning itself contemplated by this Agreement<br> to the Finance Parties and to give all notices and instructions, to execute such deeds of<br> confirmation or other deeds, make such agreements and to effect the relevant amendments,<br> supplements and variations capable of being given, made or effected by any Obligor notwithstanding<br> that they may affect the Obligor, without further reference to or the consent of that Obligor;<br> and |
| --- | --- |
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| (ii) | each<br> Finance Party to give any notice, demand or other communication to that Obligor pursuant<br> to the Finance Documents to the Borrower, |
|---|
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
| (b) | Every<br> act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation,<br> notice or other communication given or made by the Obligors' Agent or given to the Obligors'<br> Agent under any Finance Document on behalf of another Obligor or in connection with any Finance<br> Document (whether or not known to any other Obligor and whether occurring before or after<br> such other Obligor became an Obligor under any Finance Document) shall be binding for all<br> purposes on that Obligor as if that Obligor had expressly made, given or concurred with it.<br> In the event of any conflict between any notices or other communications of the Obligors'<br> Agent and any other Obligor, those of the Obligors' Agent shall prevail. |
|---|---|
| 3. | PURPOSE |
| --- | --- |
| 3.1 | Purpose |
| --- | --- |
The Borrower shall apply all amounts borrowed by it under the Facility towards:
| (a) | payment<br> of the purchase price under the relevant Acquisition Agreement for any Eligible Project; |
|---|---|
| (b) | payment<br> of the Acquisition Costs related to the relevant Acquisition Agreement; |
| --- | --- |
| (c) | payment<br> of the Eligible Project Costs to develop the Eligible Projects; |
| --- | --- |
| (d) | payment<br> of accrued interest and other financing costs, in each case, due and payable, in connection<br> with any Loan up until the date on which the relevant Warehouse Project in respect of the<br> same achieves the Commercial Operation Date; and |
| --- | --- |
| (e) | the<br> payment of an amount to MidCo to achieve the Eligible Pre-RtB Costs Rebalance. |
| --- | --- |
| 3.2 | Monitoring |
| --- | --- |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
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| 4. | CONDITIONS OF UTILISATION |
|---|---|
| 4.1 | Initial conditions precedent |
| --- | --- |
Subject to Clause 4.2 (Conditions precedent for Eligible Project to become Warehouse Project), Clause 4.3 (Conditions precedentfor each Utilisation to pay Eligible Project Costs), and Clause 4.4 (Further conditions precedent to each Utilisation), the Borrower may not deliver a Utilisation Request unless the Senior Agent has received all of the documents and other evidence listed in Part A (Initial Conditions Precedent) of Schedule 2 (Conditions Precedent and Subsequent) in form and substance satisfactory to the Senior Agent. The Senior Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.
| 4.2 | Conditions precedent for Eligible Project to become Warehouse Project |
|---|---|
| (a) | The<br> Borrower may not deliver a Utilisation Request for the purpose of payment of any amount with<br> respect to an Eligible Project which is not a Warehouse Project unless the Senior Agent has<br> received all of the documents and other evidence listed in Part B (Conditions Precedent to Project Close (ProjectCo)) of Schedule 2 (Conditions Precedent Subsequent)<br> in form and substance satisfactory to the Senior Agent. |
| --- | --- |
| (b) | The<br> Senior Agent shall notify the Borrower and the Lenders promptly upon being satisfied with<br> the matters set out in paragraph (a) above by delivering the dated and executed version<br> of the agreed form Original Project Close Confirmation relevant to that Warehouse Project. |
| --- | --- |
| 4.3 | Conditions precedent for each Utilisation to pay Eligible Project Costs |
| --- | --- |
The Borrower may not deliver a Utilisation Request for the purpose of application towards payment of Eligible Project Costs to acquire a ProjectCo holding a Warehouse Project and/or develop a Warehouse Project unless the Senior Agent has received all of the documents and other evidence listed in Part C (Conditions precedent for Eligible Project Costs) of Schedule 2 (Conditions Precedentand Subsequent) in form and substance satisfactory to the Senior Agent. The Senior Agent shall notify the Borrower and the Lenders in writing promptly upon being so satisfied.
| 4.4 | Further conditions precedent to each Utilisation |
|---|
Subject to Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent for Eligible Project to become WarehouseProject) and Clause 4.3 (Conditions precedent for each Utilisation to pay Eligible Project Costs), the Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:
| (a) | all<br> Base Equity Contributions have been made available to the Borrower such that the Loan-to-Cost<br> Ratio is complied with; |
|---|---|
| (b) | in<br> the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed<br> Loan; |
| --- | --- |
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| (c) | in<br> the case of any Loan (other than a Rollover Loan and the Loan to which Clause 4.8 (Utilisations during Certain Funds Period) applies), no Default is continuing or would result from<br> the proposed Loan; |
|---|---|
| (d) | (other<br> than the Loan to which Clause 4.8 (Utilisations during Certain Funds Period) applies),<br> the Repeating Representations to be made by each Obligor are true in all material respects; |
| --- | --- |
| (e) | in<br> connection with a Utilisation to be applied towards a Warehouse Project (including any Rollover<br> Loan relating to that individual Warehouse Project): |
| --- | --- |
| (i) | certification<br> from the Lenders' Technical Adviser that: |
| --- | --- |
| (A) | no<br> Funding Shortfall applies in connection with that Warehouse Project; or |
| --- | --- |
| (B) | no<br> delay applies, or is reasonably foreseeable to apply, in connection with any Key Project<br> Milestone applicable to that Warehouse Project; or |
| --- | --- |
| (ii) | any<br> Transaction Document relevant to that individual Warehouse Project is terminated, cancelled,<br> repudiated or rescinded prior to its originally stated maturity or not renewed upon its expiry<br> unless replaced in the manner described in paragraph (c) of Clause 25.12 (Termination or Repudiation); |
| --- | --- |
| (f) | no<br> Funding Shortfall which has (whether on a stand-alone basis or in aggregate across multiple<br> Warehouse Projects) a Portfolio Effect applies; |
| --- | --- |
| (g) | no<br> Key Project Milestones have been missed having a Portfolio Effect (whether on a stand-alone<br> basis or in aggregate across multiple Warehouse Projects); and |
| --- | --- |
| (h) | evidence<br> that the Parallel Mezzanine Utilisation Request has been delivered and that all conditions<br> precedent (howsoever defined under the Mezzanine Facility Agreement) for a utilisation (howsoever<br> defined under the Mezzanine Facility Agreement) (other than the equivalent condition therein)<br> are satisfied under the Mezzanine Facility Agreement. |
| --- | --- |
| 4.5 | Conditions subsequent |
| --- | --- |
| (a) | The<br> Borrower and the other Obligors shall procure that the Senior Agent has received each document<br> and other items listed in Part E (Conditions Subsequent) of Schedule 2 (Conditions Precedent and Subsequent) by not later than the date specified in that Schedule in form<br> and substance satisfactory to the Senior Agent. |
| --- | --- |
| (b) | The<br> Senior Agent shall notify the Borrower, the other Obligors and the Lenders in writing promptly<br> upon being so satisfied. |
| --- | --- |
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| 4.6 | Senior Agent notification |
|---|
Other than to the extent that the Majority Lenders notify the Senior Agent in writing to the contrary before the Senior Agent gives any of the notifications described in Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent for EligibleProject to become Warehouse Project) and/or Clause 4.5 (Conditions subsequent), the Lenders authorise (but do not require) the Senior Agent to give that notification. The Senior Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
| 4.7 | Maximum number of Loans |
|---|---|
| (a) | A<br> Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation: |
| --- | --- |
| (i) | two<br> (2) or more Utilisations would be made in any calendar month; or |
| --- | --- |
| (ii) | twenty-five<br> (25) or more Loans would be outstanding. |
| --- | --- |
| 4.8 | Utilisations during Certain Funds Period |
| --- | --- |
| (a) | Subject<br> to Clause 4.1 (Initial conditions precedent) and Clause 4.2 (Conditions precedent for Eligible Project to become Warehouse Project), Clause 4.3 (Conditions precedent for each Utilisation to pay Eligible Project Costs), and Clause 4.4 (Further conditions precedent to each Utilisation), and only during the Certain Funds Period, each Lender<br> will only be obliged to comply with Clause 5.4 (Lenders' participation) in relation<br> to a Certain Funds Utilisation if, on the date of the Utilisation Request and on the proposed<br> Utilisation Date: |
| --- | --- |
| (i) | no Major<br> Event of Default is continuing or would result from the proposed Certain Funds Utilisation; |
| --- | --- |
| (ii) | no<br> Change of Control has occurred and is continuing; and |
| --- | --- |
| (iii) | all<br> the Major Representations are true and correct. |
| --- | --- |
| (b) | During<br> the Certain Funds Period (save in circumstances where, pursuant to paragraph (a) above,<br> a Lender is not obliged to comply with Clause 5.4 (Lenders' participation)) and subject<br> as provided in Clause 8.1 (Illegality) and Clause 8.2 (Change of Control) none<br> of the Finance Parties shall be entitled to: |
| --- | --- |
| (i) | cancel<br> any of its Commitments to the extent that to do so would prevent or limit the making of a<br> Certain Funds Utilisation; |
| --- | --- |
| (ii) | rescind,<br> terminate or cancel this Agreement or the Facility or exercise any similar right or remedy<br> or make or enforce any claim under the Finance Documents it may have, to the extent that<br> to do so would prevent or limit the making of a Certain Funds Utilisation; |
| --- | --- |
| (iii) | exercise<br> any right of set-off or counterclaim in respect of a Utilisation to the extent to do so would<br> prevent or limit the making of a Certain Funds Utilisation; or |
| --- | --- |
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| (iv) | cancel,<br> accelerate or cause repayment or prepayment of any amounts owing under this Agreement or<br> under any other Finance Document to the extent to do so would prevent or limit the making<br> of a Certain Funds Utilisation, |
|---|
providedthat immediately upon the expiry of the Certain Funds Period all such rights, remedies and entitlements shall be available to the Finance Parties notwithstanding that they may not have been used or been available for use during the Certain Funds Period.
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SECTION 3
UTILISATION
| 5. | UTILISATION |
|---|---|
| 5.1 | Delivery of a Utilisation Request |
| --- | --- |
A Borrower may utilise the Facility by delivery to the Senior Agent of a duly completed Utilisation Request not later than the Specified Time.
| 5.2 | Completion of a Utilisation Request |
|---|---|
| (a) | Each<br> Utilisation Request is irrevocable and will not be regarded as having been duly completed<br> unless: |
| --- | --- |
| (i) | the<br> proposed Utilisation Date is a Business Day within the Availability Period; |
| --- | --- |
| (ii) | the<br> proposed Loan is confirmed to comply with Clause 3.1 (Purpose); |
| --- | --- |
| (iii) | the<br> currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); |
| --- | --- |
| (iv) | the<br> proposed Interest Period complies with Clause 10 (Interest Periods); and |
| --- | --- |
| (v) | it specifies<br> the Eligible Project it relates to. |
| --- | --- |
| (b) | Only<br> one (1) Loan may be requested in each Utilisation Request. |
| --- | --- |
| 5.3 | Currency and amount |
| --- | --- |
| (a) | The<br> currency specified in a Utilisation Request must be euro. |
| --- | --- |
| (b) | The<br> amount of the proposed Loan must be an amount which is not more than the Available Facility<br> and which is a minimum of EUR 10,000,000 or, if less, the Available Facility. |
| --- | --- |
| (c) | The<br> amount of the proposed Loan, when aggregated with the amount of all Loans utilised with respect<br> to the same Eligible Project, must be an amount which does not exceed the Allocated Senior<br> Facility Amount for such Eligible Project. |
| --- | --- |
| (d) | In<br> connection with a Utilisation for a Warehouse Project that has either achieved RtB Status<br> or the Commercial Operation Date, the amount of the proposed Loan must be an amount which<br> reflects the Senior/Mezz Ratio of the aggregate amount of the proposed Loan and the Mezzanine<br> Loan proposed in the Parallel Mezzanine Utilisation Request. |
| --- | --- |
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| 5.4 | Lenders' participation |
|---|---|
| (a) | If<br> the conditions set out in this Agreement have been met, and subject to Clause 7.1 (Repayment of Loans)) each Lender shall make its participation in each Loan available by the Utilisation<br> Date through its Facility Office. |
| --- | --- |
| (b) | Other<br> than as set out in paragraph (c) below, the amount of each Lender's participation in<br> each Loan will be equal to the proportion borne by its Available Commitment to the Available<br> Facility immediately prior to making the Loan. |
| --- | --- |
| (c) | If<br> a Utilisation is made to repay Ancillary Outstandings, each Lender's participation in that<br> Utilisation will be in an amount (as determined by the Senior Agent) which will result as<br> nearly as possible in the aggregate amount of its participation in the Utilisations then<br> outstanding bearing the same proportion to the aggregate amount of the Utilisations then<br> outstanding as its Commitment bears to the Total Commitments. |
| --- | --- |
| 5.5 | Cancellation of Commitment |
| --- | --- |
| (a) | The<br> Original Lender may, in its full, absolute and unfettered discretion, cancel any and all<br> Commitments six (6) months following the Signing Date if no Eligible Project has become<br> a Warehouse Project under this Agreement and has not been financed by any such Commitments. |
| --- | --- |
| (b) | Subject<br> to paragraph (b) above, the Commitments which, at that time, are unutilised shall be<br> immediately cancelled at the end of the Availability Period. |
| --- | --- |
| 6. | ANCILLARY FACILITIES |
| --- | --- |
| 6.1 | Type of Facility |
| --- | --- |
An Ancillary Facility may be made available by way of:
| (a) | a<br> foreign exchange facility; or |
|---|---|
| (b) | any<br> other facility or accommodation which is agreed between the Borrower and an Ancillary Lender. |
| --- | --- |
| 6.2 | Availability |
| --- | --- |
| (a) | If<br> the Borrower and a Lender agree and except as otherwise provided in this Agreement, the Lender<br> may provide all or part of its Commitment as an Ancillary Facility. |
| --- | --- |
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| (b) | An<br> Ancillary Facility shall not be made available unless, not later than ten (10) Business<br> Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Senior Agent<br> has received from the Borrower: |
|---|---|
| (i) | a<br> notice in writing requesting the establishment of an Ancillary Facility and specifying: |
| --- | --- |
| (A) | the<br> proposed Ancillary Commencement Date and expiry date of the Ancillary Facility; |
| --- | --- |
| (B) | the<br> proposed type of Ancillary Facility to be provided; |
| --- | --- |
| (C) | the<br> proposed Ancillary Lender; |
| --- | --- |
| (D) | the<br> proposed Ancillary Commitment, the maximum amount of the Ancillary Facility and, in the case<br> of a Multi-account Overdraft, its Designated Gross Amount and its Designated Net Amount;<br> and |
| --- | --- |
| (E) | the<br> proposed currency of the Ancillary Facility which must be euro; and |
| --- | --- |
| (ii) | any<br> other information which the Senior Agent may reasonably request in connection with the Ancillary<br> Facility. |
| --- | --- |
| (c) | The<br> Senior Agent shall promptly notify the Borrower, the Ancillary Lender and the other Lenders<br> of the establishment of an Ancillary Facility. |
| --- | --- |
| (d) | Subject<br> to compliance with paragraph (b) above: |
| --- | --- |
| (i) | the<br> Lender concerned will become an Ancillary Lender; and |
| --- | --- |
| (ii) | the<br> Ancillary Facility will be available, |
| --- | --- |
with effect from the date agreed by the Borrower and the Ancillary Lender.
| 6.3 | Terms of Ancillary Facilities |
|---|---|
| (a) | Except<br> as provided in this Agreement, the terms of any Ancillary Facility will be those agreed by<br> the Ancillary Lender and the Borrower on a bilateral basis. |
| --- | --- |
| (b) | Those<br> terms: |
| --- | --- |
| (i) | must<br> be based upon normal commercial terms at that time (except as varied by this Agreement); |
| --- | --- |
| (ii) | may<br> allow only the Borrower to use the Ancillary Facility; |
| --- | --- |
| (iii) | may<br> not allow the Ancillary Outstandings to exceed the Ancillary Commitment; |
| --- | --- |
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| (iv) | may<br> not allow a Lender's Ancillary Commitment to exceed that Lender's Available Commitment (before<br> taking into account the effect of the Ancillary Facility on that Available Commitment); and |
|---|---|
| (v) | must<br> require that the Ancillary Commitment is reduced to zero, and that all Ancillary Outstandings<br> are repaid not later than the Termination Date applicable to the Facility (or such earlier<br> date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to<br> zero). |
| --- | --- |
| (c) | If<br> there is any inconsistency between any term of an Ancillary Facility and any term of this<br> Agreement, this Agreement shall prevail except for: |
| --- | --- |
| (i) | Clause<br> 35.3 (Day count convention) which shall not prevail for the purposes of calculating<br> fees, interest or commission relating to an Ancillary Facility; |
| --- | --- |
| (ii) | an<br> Ancillary Facility comprising more than one account where the terms of the Ancillary Documents<br> shall prevail to the extent required to permit the netting of balances on those accounts;<br> and |
| --- | --- |
| (iii) | where<br> the relevant term of this Agreement would be contrary to, or inconsistent with, the law governing<br> the relevant Ancillary Document in which case that term of this Agreement shall not prevail. |
| --- | --- |
| (d) | Interest,<br> commission and fees on Ancillary Facilities are dealt with in Clause 12.6 (Interest, commission and fees on Ancillary Facilities). |
| --- | --- |
| 6.4 | Repayment of Ancillary Facility |
| --- | --- |
| (a) | An<br> Ancillary Facility shall cease to be available on the Termination Date or such earlier date<br> on which its expiry date occurs or on which it is cancelled in accordance with the terms<br> of this Agreement. |
| --- | --- |
| (b) | If<br> an Ancillary Facility expires in accordance with its terms, the Ancillary Commitment of the<br> Ancillary Lender shall be reduced to zero. |
| --- | --- |
| (c) | No<br> Ancillary Lender may demand repayment or prepayment of any Ancillary Outstandings prior to<br> the expiry date of the relevant Ancillary Facility unless: |
| --- | --- |
| (i) | required<br> to reduce the Gross Outstandings of a Multi-account Overdraft to or towards an amount equal<br> to its Net Outstandings; |
| --- | --- |
| (ii) | the<br> Total Commitments have been cancelled in full, or all outstanding Loans have become due and<br> payable in accordance with the terms of this Agreement; |
| --- | --- |
| (iii) | it<br> becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of<br> its obligations as contemplated by this Agreement or to fund, issue or maintain its participation<br> in its Ancillary Facility (or it becomes unlawful for any Affiliate of the Ancillary Lender<br> for the Ancillary Lender to do so); or |
| --- | --- |
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| (iv) | both: |
|---|---|
| (A) | the<br> Available Commitments relating to; and |
| --- | --- |
| (B) | the<br> notice of the demand given by the Ancillary Lender, |
| --- | --- |
would not prevent the relevant Borrower funding the repayment of those Ancillary Outstandings in full by way of Utilisation.
| (d) | If<br> a Utilisation is made to repay Ancillary Outstandings in full, the relevant Ancillary Commitment<br> shall be reduced to zero. |
|---|---|
| 6.5 | Limitation on Ancillary Outstandings |
| --- | --- |
The Borrower shall procure that:
| (a) | the<br> Ancillary Outstandings under any Ancillary Facility shall not exceed the Ancillary Commitment<br> applicable to that Ancillary Facility; and |
|---|---|
| (b) | in<br> relation to a Multi-account Overdraft: |
| --- | --- |
| (i) | the<br> Ancillary Outstandings shall not exceed the Designated Net Amount applicable to that Multi-account<br> Overdraft; and |
| --- | --- |
| (ii) | the<br> Gross Outstandings shall not exceed the Designated Gross Amount applicable to that Multi-account<br> Overdraft. |
| --- | --- |
| 6.6 | Adjustment for Ancillary Facilities upon acceleration |
| --- | --- |
| (a) | In<br> this Clause 6.6: |
| --- | --- |
| (i) | "Facility Outstandings" means, in relation to a Lender, the aggregate of: |
| --- | --- |
| (A) | its<br> participation in each Loan then outstanding (together with the aggregate amount of all accrued<br> interest, fees and commission owed to it as a Lender under); and |
| --- | --- |
| (B) | if<br> the Lender is also an Ancillary Lender, the Ancillary Outstandings in respect of Ancillary<br> Facilities provided by that Ancillary Lender (or by its Affiliate) (together with the aggregate<br> amount of all accrued interest, fees and commission owed to it (or to its Affiliate) as an<br> Ancillary Lender in respect of the Ancillary Facility); and |
| --- | --- |
| (ii) | "Total Facility Outstandings" means the aggregate of all Facility Outstandings. |
| --- | --- |
| (b) | If<br> the Senior Agent exercises any of its rights under Clause 25.26 (Acceleration) (other<br> than declaring Loans to be due on demand), each Lender and each Ancillary Lender shall (subject<br> to paragraph (g) below) promptly adjust (by making or receiving (as the case may be)<br> corresponding transfers of rights and obligations under the Finance Documents relating to<br> Facility Outstandings) their claims in respect of amounts outstanding to them under the Facility<br> and each Ancillary Facility to the extent necessary to ensure that after such transfers the<br> Facility Outstandings of each Lender bear the same proportion to the Total Facility Outstandings<br> as such Lender's Commitment bears to the Total Commitments, each as at the date the Senior<br> Agent exercises the relevant right(s) under Clause 25.26 (Acceleration). |
| --- | --- |
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| (c) | If<br> an amount outstanding under an Ancillary Facility is a contingent liability and that contingent<br> liability becomes an actual liability or is reduced to zero after the original adjustment<br> is made under paragraph (b) above, then each Lender and each Ancillary Lender will make<br> a further adjustment (by making or receiving (as the case may be) corresponding transfers<br> of rights and obligations under the Finance Documents relating to Facility Outstandings to<br> the extent necessary) to put themselves in the position they would have been in had the original<br> adjustment been determined by reference to the actual liability or, as the case may be, zero<br> liability and not the contingent liability. |
|---|---|
| (d) | Any<br> transfer of rights and obligations relating to Facility Outstandings made pursuant to this<br> Clause 6 shall be made for a purchase price in cash, payable at the time of transfer, in<br> an amount equal to those Facility Outstandings (less any accrued interest, fees and commission<br> to which the transferor will remain entitled to receive notwithstanding that transfer pursuant<br> to Clause 26.11 (Pro rata interest settlement)). |
| --- | --- |
| (e) | Prior<br> to the application of the provisions of paragraph (b) above, an Ancillary Lender that<br> has provided a Multi-account Overdraft shall set-off any Available Credit Balance on any<br> account comprised in that Multi-account Overdraft. |
| --- | --- |
| (f) | All<br> calculations to be made pursuant to this Clause 6.6 shall be made by the Senior Agent based<br> upon information provided to it by the Lenders and Ancillary Lenders and the Senior Agent's<br> Spot Rate of Exchange. |
| --- | --- |
| (g) | This<br> Clause 6.6 shall not oblige any Lender to accept the transfer of a claim relating to an amount<br> outstanding under an Ancillary Facility which is not denominated (pursuant to the relevant<br> Finance Document) in either euro or in another currency which is acceptable to that Lender. |
| --- | --- |
| 6.7 | Information |
| --- | --- |
The Borrower and each Ancillary Lender shall, promptly upon request by the Senior Agent, supply the Senior Agent with any information relating to the operation of an Ancillary Facility (including the Ancillary Outstandings) as the Senior Agent may reasonably request from time to time. The Borrower consents to all such information being released to the Senior Agent and the other Finance Parties.
| 6.8 | Affiliates of Lenders as Ancillary Lenders |
|---|---|
| (a) | Subject<br> to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender.<br> In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment<br> is the amount set out opposite the relevant Lender's name in Schedule 1 (The Original Lenders) and/or the amount of any Commitment transferred to or assumed by that Lender<br> under this Agreement, to the extent (in each case) not cancelled, reduced or transferred<br> by it under this Agreement. |
| --- | --- |
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| (b) | The<br> Borrower shall specify any relevant Affiliate of a Lender in any notice delivered by the<br> Borrower to the Senior Agent pursuant to paragraph (b)(i) of Clause 6.2 (Availability). |
|---|---|
| (c) | An<br> Affiliate of a Lender which becomes an Ancillary Lender shall become a Party by delivery<br> to the Senior Agent of a duly completed Affiliate Accession Undertaking. |
| --- | --- |
| (d) | If<br> a Lender assigns all of its rights and benefits or transfers all of its rights and obligations<br> to a New Lender, its Affiliate shall cease to have any obligations under this Agreement or<br> any Ancillary Document. |
| --- | --- |
| (e) | Where<br> this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender<br> and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that<br> document, the relevant Lender shall ensure that the obligation is performed by its Affiliate. |
| --- | --- |
| 6.9 | Commitment Amounts |
| --- | --- |
Notwithstanding any other term of this Agreement, each Lender shall ensure that at all times its Commitment is not less than the aggregate of:
| (a) | its<br> Ancillary Commitment; and |
|---|---|
| (b) | the<br> Ancillary Commitment of its Affiliate. |
| --- | --- |
| 6.10 | Amendments and Waivers – Ancillary Facilities |
| --- | --- |
No amendment or waiver of a term of any Ancillary Facility shall require the consent of any Finance Party other than the relevant Ancillary Lender unless such amendment or waiver itself relates to or gives rise to a matter which would require an amendment of or under this Agreement (including, for the avoidance of doubt, under this Clause 6). In such a case, Clause 38 (Amendments and Waivers) will apply.
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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
| 7. | REPAYMENT |
|---|---|
| 7.1 | Repayment of Loans |
| --- | --- |
| (a) | The<br> Borrower shall repay each Loan on the last day of its Interest Period. |
| --- | --- |
| (b) | Without<br> prejudice to the Borrower's obligation under paragraph (a) above, if: |
| --- | --- |
| (i) | one<br> or more Loans are to be made available to the Borrower: |
| --- | --- |
| (A) | on<br> the same day that a maturing Loan is due to be repaid by that Borrower; and |
| --- | --- |
| (B) | in<br> whole or in part for the purpose of refinancing the maturing Loan; and |
| --- | --- |
| (ii) | the<br> proportion borne by each Lender's participation in the maturing Loan to the amount of that<br> maturing Loan is the same as the proportion borne by that Lender's participation in the new<br> Loans to the aggregate amount of those new Loans, |
| --- | --- |
the aggregate amount of the new Loans shall, unless the Borrower notifies the Senior Agent to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Loan so that:
| (A) | if<br> the amount of the maturing Loan exceeds the aggregate amount of the new Loans: |
|---|---|
| (1) | the<br> relevant Borrower will only be required to make a payment under Clause 32.1 (Payments to the Senior Agent) in an amount in the relevant currency equal to that excess; and |
| --- | --- |
| (2) | each<br> Lender's participation in the new Loans shall be treated as having been made available and<br> applied by the Borrower in or towards repayment of that Lender's participation in the maturing<br> Loan and that Lender will not be required to make a payment under Clause 32.1 (Payments to the Senior Agent) in respect of its participation in the new Loans; and |
| --- | --- |
| (B) | if<br> the amount of the maturing Loan is equal to or less than the aggregate amount of the new<br> Loans: |
| --- | --- |
| (1) | the<br> relevant Borrower will not be required to make a payment under Clause 32.1 (Payments to the Senior Agent); and |
| --- | --- |
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| (2) | each<br> Lender will be required to make a payment under Clause 32.1 (Payments to the Senior Agent)<br> in respect of its participation in the new Loans only to the extent that its participation<br> in the new Loans exceeds that Lender's participation in the maturing Loan and the remainder<br> of that Lender's participation in the new Loans shall be treated as having been made available<br> and applied by the Borrower in or towards repayment of that Lender's participation in the<br> maturing Loan. |
|---|---|
| 8. | PREPAYMENT AND CANCELLATION |
| --- | --- |
| 8.1 | Illegality |
| --- | --- |
If, in any applicable jurisdiction, it is or becomes unlawful for any Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Loan or it is or becomes unlawful for any Affiliate of a Lender for that Lender to do so:
| (a) | that<br> Lender shall promptly notify the Senior Agent upon becoming aware of that event; |
|---|---|
| (b) | upon<br> the Senior Agent notifying the Borrower, the Available Commitment of that Lender will be<br> immediately cancelled; and |
| --- | --- |
| (c) | to<br> the extent that the Lender's participation has not been transferred pursuant to paragraph<br> (a) of Clause 8.9 (Right of replacement or repayment and cancellation in relation to a single Lender), the Borrower shall repay that Lender's participation in the Loans<br> made to that Borrower on the last day of the Interest Period for each Loan occurring after<br> the Senior Agent has notified the Borrower or, if earlier, the date specified by the Lender<br> in the notice delivered to the Senior Agent and that Lender's corresponding Commitment(s) shall<br> be immediately cancelled in the amount of the participations repaid. |
| --- | --- |
| 8.2 | Change of Control |
| --- | --- |
| (a) | Subject<br> to paragraph (b), upon the occurrence of a Change of Control: |
| --- | --- |
| (i) | the<br> Borrower shall promptly notify the Senior Agent upon becoming aware of that event; |
| --- | --- |
| (ii) | a<br> Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan); and |
| --- | --- |
| (iii) | if<br> a Lender so requires, and notifies the Senior Agent within thirty (30) Business Days of the<br> Borrower notifying the Senior Agent of the event, the Senior Agent shall, by not less than<br> five (5) days' notice to the Borrower, cancel the Available Commitments of that Lender<br> and declare the participation of that Lender in all outstanding Loans and Ancillary Outstandings<br> of that Lender or Affiliate of that Lender, together with accrued interest, and all other<br> amounts accrued or outstanding under the Finance Documents towards that Lender immediately<br> due and payable, whereupon each such Available Commitment will be immediately cancelled,<br> the Facility shall immediately cease to be available for further utilisation and all such<br> Loans, Ancillary Outstandings, accrued interest and other amounts will become immediately<br> due and payable. |
| --- | --- |
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| (b) | This<br> Clause 8.2 shall not apply in the circumstances described, and agreed, in clause 3.2 (Senior Change of Control) of the Intercreditor and Subordination Deed. |
|---|---|
| 8.3 | Mandatory prepayment – Disposal of a Warehouse Project |
| --- | --- |
| (a) | The<br> Borrower must apply the Prepayment Disposal Proceeds, any Hedging Delta and the Prepayment<br> Refinancing Proceeds in prepayment of the Loans and payment of any Hedging Termination Costs<br> and the other amounts referred to in paragraph (b) of Clause 8.10 (Restrictions)<br> at the time and in the order of application contemplated by Clause 8.11 (Application of prepayments). |
| --- | --- |
| (b) | In<br> case an Event of Default has occurred and is continuing at the time of a disposal, an amount<br> of Commitments equal to the amount of the Disposal Equity Amount shall be cancelled immediately<br> upon completion of the relevant disposal. |
| --- | --- |
| 8.4 | Mandatory prepayment – Sanctions |
| --- | --- |
Upon the occurrence of a Sanctions Mandatory Prepayment Event:
| (a) | the<br> Borrower shall promptly notify the Senior Agent upon becoming aware of that event; |
|---|---|
| (b) | a<br> Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan); and |
| --- | --- |
| (c) | if<br> a Lender so requires, and notifies the Senior Agent within thirty (30) Business Days of the<br> Borrower notifying the Senior Agent of the event, the Senior Agent shall, by not less than<br> five (5) days' notice to the Borrower, cancel the Available Commitments of that Lender<br> and declare the participation of that Lender in all outstanding Loans and Ancillary Outstandings<br> of that Lender or Affiliate of that Lender, together with accrued interest, and all other<br> amounts accrued or outstanding under the Finance Documents towards that Lender immediately<br> due and payable, whereupon each such Available Commitment will be immediately cancelled,<br> the Facility shall immediately cease to be available for further utilisation and all such<br> Loans, Ancillary Outstandings, accrued interest and other amounts will become immediately<br> due and payable. |
| --- | --- |
| 8.5 | Mandatory prepayment – Insurance Proceeds and Compensation Proceeds |
| --- | --- |
| (a) | Subject<br> to paragraphs (b) to (d) below, the Borrower shall apply the Prepayment Insurance<br> Proceeds and any Compensation Proceeds in prepayment of the Loans and payment of any Hedging<br> Termination Costs and the other amounts referred to in paragraph (b) of Clause 8.10<br> (Restrictions) at the time and in the order of application contemplated by Clause<br> 8.11 (Application of prepayments). |
| --- | --- |
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| (b) | No<br> prepayment of an amount shall be required under paragraph (a) above where the Borrower<br> has satisfied each of the following conditions: |
|---|---|
| (i) | the<br> aggregate amount of the Insurance Proceeds or (as applicable) Compensation Proceeds) is not<br> more than EUR 1,000,000 (or its equivalent in the currency or currencies of the Eligible<br> Jurisdiction in which the relevant Warehouse Project is situated) for occurrence and not<br> more than EUR2,000,000 in aggregate on any calendar year; |
| --- | --- |
| (ii) | within<br> forty-five (45) days of the receipt of the Insurance Proceeds or (as applicable) Compensation<br> Proceeds, the Borrower has delivered to the Senior Agent a reinstatement plan, and such plan<br> is approved by the Senior Agent acting on the advice of the Lenders' Technical Adviser (such<br> approved plan, the "Reinstatement Plan"); |
| --- | --- |
| (iii) | in<br> the reasonable opinion of the Senior Agent (following consultation with the Lenders' Insurance<br> Adviser and the Lenders' Technical Adviser), the damaged facilities or property can be repaired,<br> reinstated or replaced in accordance with the Reinstatement Plan within time limits imposed<br> under the Project Documents and such Insurance Proceeds or (as applicable) Compensation Proceeds<br> are sufficient to do so; and |
| --- | --- |
| (iv) | the<br> contractual arrangements to effect such repair, reinstatement or replacement are satisfactory<br> to the Senior Agent; and |
| --- | --- |
following such repair, and based on a pro forma calculation on the basis of the relevant Project Close Confirmation, the Senior Debt Sizing Assumptions in connection with the Allocated Senior Facility Amount applicable to that Warehouse Project continues to apply in all respects, provided that any such amount received by the Borrower in excess of the amount required to repair, reinstate or replace all or part of the relevant Warehouse Project pursuant to the Reinstatement Plan shall be applied in prepayment in accordance with paragraphs (a) above upon completion of the reinstatement works.
| (c) | The<br> Borrower shall procure that each Reinstatement Plan is promptly and diligently implemented<br> and, on a monthly basis, report on the progress made against such plan to the Senior Agent<br> and Lenders' Technical Adviser. |
|---|---|
| (d) | If<br> (i) the Borrower fails to deliver a Reinstatement Plan in accordance with paragraph<br> (b)(ii) above or (ii) the Reinstatement Plan delivered by the Borrower to the Senior<br> Agent is not approved by the Senior Agent, the Prepayment Insurance Proceeds or (as applicable)<br> Compensation Proceeds shall be applied in prepayment in accordance with paragraph (a) above. |
| --- | --- |
| 8.6 | Mandatory Prepayment – Equity Cure |
| --- | --- |
| (a) | The<br> Borrower shall apply any Equity Cure, within one (1) Business Day of receipt of such<br> Equity Cure, in prepayment of the whole or any part of the Facility. |
| --- | --- |
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| (b) | A<br> Loan may only be prepaid under paragraph (a) above if the Borrower pays at the same<br> time Hedging Partial Breakage (if any) and Hedging Termination Costs (if any) resulting from<br> such prepayment. |
|---|---|
| 8.7 | Voluntary cancellation |
| --- | --- |
| (a) | The<br> Borrower may, if it gives the Senior Agent not less than ten (10) Business Days' (or<br> such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or<br> any part (being a minimum amount of EUR 1,000,000) of the Available Facility. |
| --- | --- |
| (b) | Any<br> cancellation under this Clause 8.7 shall reduce the Commitments of the Lenders rateably. |
| --- | --- |
| (c) | The<br> Borrower may not cancel any part of the Available Facility: |
| --- | --- |
| (i) | prior<br> to the date falling twelve (12) Months after the date of Financial Close; and |
| --- | --- |
| (ii) | if,<br> as a consequence of the cancellation, the aggregate of the Available Facility and the Mezzanine<br> Available Facility would be lower than the aggregate of the Allocated Loan Amount. |
| --- | --- |
| 8.8 | Voluntary prepayment of Loans |
| --- | --- |
| (a) | The<br> Borrower, if it gives the Senior Agent not less than ten (10) Business Days' (or such<br> shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part<br> of a Loan (but if in part, being an amount that reduces the amount of the Loan by a minimum<br> amount of EUR 200,000). |
| --- | --- |
| (b) | A<br> Loan shall only be prepaid if all Loan which relate to the same Warehouse Project, are prepaid<br> at the same time. |
| --- | --- |
| (c) | A<br> Loan shall only be prepaid at a date falling no earlier than the date falling twelve (12)<br> Months after the date of Financial Close. |
| --- | --- |
| 8.9 | Right of replacement or repayment and cancellation in relation to a single Lender |
| --- | --- |
| (a) | If: |
| --- | --- |
| (i) | any<br> sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of<br> Clause 13.2 (Tax gross-up); or |
| --- | --- |
| (ii) | any<br> Lender or Issuing Bank claims indemnification from the Borrower under Clause 13.3 (Tax indemnity) or Clause 14.1 (Increased Costs), |
| --- | --- |
the Borrower may, whilst (in the case of paragraphs (i) and (ii) above) the circumstance giving rise to the requirement for that increase or indemnification continues or (in the case of paragraph (ii) above) that additional cost rate is greater than zero, give the Senior Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender's participation in the Loans or give the Senior Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.
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| (b) | On<br> receipt of a notice of cancellation referred to in paragraph (a) above, the Available<br> Commitment(s) of that Lender shall be immediately reduced to zero. |
|---|---|
| (c) | On<br> the last day of each Interest Period which ends after the Borrower has given notice of cancellation<br> under paragraph (a) above (or, if earlier, the date specified by the Borrower in that<br> notice), the Borrower to which a Loan is outstanding shall repay that Lender's participation<br> in that Loan and that Lender's corresponding Commitment(s) shall be immediately cancelled<br> in the amount of the participations repaid. |
| --- | --- |
| (d) | If: |
| --- | --- |
| (i) | any<br> of the circumstances set out in paragraph (a) above apply to a Lender; or |
| --- | --- |
| (ii) | an<br> Obligor becomes obliged to pay any amount in accordance with Clause 8.1 (Illegality)<br> to any Lender, |
| --- | --- |
the Borrower may, on twenty (20) Business Days' prior notice to the Senior Agent and that Lender, replace that Lender by requiring that Lender to (and to the extent permitted by law, that Lender shall) transfer pursuant to Clause 26 (Changes to the Lenders andHedge Counterparties) all (and not part only) of its rights and obligations under this Agreement to an Eligible Institution which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 26 (Changesto the Lenders and Hedge Counterparties) for a purchase price in cash payable at the time of the transfer in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and all accrued interest (to the extent that the Senior Agent has not given a notification under Clause 26.11 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents.
| (e) | The<br> replacement of a Lender pursuant to paragraph (d) above shall be subject to the following<br> conditions: |
|---|---|
| (i) | the<br> Borrower shall have no right to replace the Senior Agent; |
| --- | --- |
| (ii) | neither<br> the Senior Agent nor any Lender shall have any obligation to find a replacement Lender; |
| --- | --- |
| (iii) | in<br> no event shall the Lender replaced under paragraph (d) above be required to pay or surrender<br> any of the fees received by such Lender pursuant to the Finance Documents; and |
| --- | --- |
| (iv) | the<br> Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph<br> (d) above once it is satisfied that it has complied with all necessary "know your<br> customer" or other similar checks under all applicable laws and regulations in relation<br> to that transfer. |
| --- | --- |
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| (f) | A<br> Lender shall perform the checks described in paragraph (e)(iv) above as soon as reasonably<br> practicable following delivery of a notice referred to in paragraph (d) above and shall<br> notify the Senior Agent and the Borrower when it is satisfied that it has complied with those<br> checks. |
|---|---|
| (g) | |
| --- | |
| (i) | If<br> any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues<br> to be a Defaulting Lender, give the Senior Agent fifteen (15) Business Days' notice of cancellation<br> of the Available Commitment of that Lender. |
| --- | --- |
| (ii) | On<br> the notice referred to in limb (i) above becoming effective, the Available Commitment<br> of the Defaulting Lender shall immediately be reduced to zero. |
| --- | --- |
| (iii) | The<br> Senior Agent shall as soon as practicable after receipt of a notice referred to in limb (i) above,<br> notify all the Lenders. |
| --- | --- |
| 8.10 | Restrictions |
| --- | --- |
| (a) | Any<br> notice of cancellation or prepayment given by any Party under this Clause 8 shall be irrevocable<br> and, unless a contrary indication appears in this Agreement, shall specify the date or dates<br> upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation<br> or prepayment. |
| --- | --- |
| (b) | Any<br> prepayment under this Agreement shall be made together with accrued interest on the amount<br> prepaid and, subject to any Break Costs and Hedging Termination Costs resulting from a Hedging<br> Partial Breakage, without premium or penalty. |
| --- | --- |
| (c) | Unless<br> a contrary indication appears in this Agreement, any part of the Facility which is prepaid<br> or repaid may be reborrowed during the Availability Period in accordance with the terms of<br> this Agreement. |
| --- | --- |
| (d) | The<br> Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part<br> of the Commitments except at the times and in the manner expressly provided for in this Agreement<br> (including as set out in paragraph (d)(vii) of Clause 2.3 (Increase – Accordion Option)). |
| --- | --- |
| (e) | Subject<br> to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this<br> Agreement may be subsequently reinstated. |
| --- | --- |
| (f) | If<br> the Senior Agent receives a notice under this Clause 8 it shall promptly forward a copy of<br> that notice to either the Borrower or the affected Lender and/or Hedge Counterparties, as<br> appropriate. |
| --- | --- |
| (g) | If<br> all or part of any Lender's participation in a Loan is repaid or prepaid and is not available<br> for redrawing (other than by operation of Clause 4.4 (Further conditions precedent to each Utilisation)), an amount of that Lender's Commitment (equal<br> to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled<br> on the date of repayment or prepayment. |
| --- | --- |
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| 8.11 | Application of prepayments |
|---|---|
| (a) | Any<br> prepayment of a Loan pursuant to this Clause 8 shall be applied pro rata to each Lender's<br> participation in that Loan. |
| --- | --- |
| (b) | Any<br> prepayment pursuant to Clause 8.1 (Illegality), Clause 8.2 (Change of Control),<br> Clause 8.4 (Sanctions) and Clause 8.6 (Mandatory prepayment – Equity Cure)<br> shall be applied across all Loans on a pro rata basis. |
| --- | --- |
| (c) | Any<br> prepayment pursuant to Clause 8.3 (Mandatory prepayment – Disposal of a Warehouse Project) shall be applied only towards the Loans relating to the disposed Warehouse Project. |
| --- | --- |
| (d) | Any<br> prepayment pursuant to Clause 8.5 (Mandatory prepayment – Insurance Proceeds and Compensation Proceeds) shall be applied only towards the Loans relating to the relevant<br> Warehouse Project. |
| --- | --- |
| (e) | Any<br> prepayment of a Loan pursuant to Clause 8.3 (Mandatory prepayment – Disposal of a Warehouse Project) and Clause 8.5 (Mandatory prepayment – Insurance Proceeds and Compensation Proceeds) shall be made on the last day of the Interest Periods of the<br> relevant Loans relating to the affected Warehouse Projects, in each case which fall after<br> the date of closing of the relevant disposal (or, if earlier, the receipt of the relevant<br> disposal proceeds) provided that, in the case of a prepayment of a Loan pursuant to Clause<br> 8.3 (Mandatory prepayment – Disposal of a Warehouse Project), such prepayment<br> may be made on an earlier date with the prior written consent of the Senior Agent. |
| --- | --- |
| (f) | Any<br> prepayment of a Loan pursuant to Clause 8.6 (Mandatory prepayment – Equity Cure)<br> shall be made within one (1) Business Day of receipt of the Equity Cure received by<br> the Borrower pursuant to Clause 25.25 (Equity Cure). |
| --- | --- |
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SECTION 5
COSTS OF UTILISATION
| 9. | INTEREST |
|---|---|
| 9.1 | Calculation of interest |
| --- | --- |
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
| (a) | Margin;<br> and |
|---|---|
| (b) | EURIBOR. |
| --- | --- |
| 9.2 | Payment of interest |
| --- | --- |
The Borrower shall pay accrued interest on a Loan on the last day of each Interest Period relating to the Loan made to it.
| 9.3 | Default interest |
|---|---|
| (a) | If<br> an Obligor fails to pay any amount payable by it under a Finance Document other than a Hedging<br> Agreement on its due date, interest shall accrue on the overdue amount from the due date<br> up to the date of actual payment (both before and after judgment) at a rate which, subject<br> to paragraph (b) below, is one per cent. (1%) per annum higher than the rate which would<br> have been payable if the overdue amount had, during the period of non-payment, constituted<br> a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration<br> selected by the Senior Agent (acting reasonably). Any interest accruing under this Clause<br> 9.3 shall be immediately payable by the Obligor on demand by the Senior Agent. |
| --- | --- |
| (b) | If<br> any overdue amount consists of all or part of a Loan which became due on a day which was<br> not the last day of an Interest Period relating to that Loan: |
| --- | --- |
| (i) | the<br> first Interest Period for that overdue amount shall have a duration equal to the unexpired<br> portion of the current Interest Period relating to that Loan; and |
| --- | --- |
| (ii) | the<br> rate of interest applying to the overdue amount during that first Interest Period shall be<br> one per cent. per annum higher than the rate which would have applied if the overdue amount<br> had not become due. |
| --- | --- |
| (c) | Default<br> interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount<br> at the end of each Interest Period applicable to that overdue amount but will remain immediately<br> due and payable. |
| --- | --- |
| 9.4 | Notification of rates of interest |
| --- | --- |
| (a) | The<br> Senior Agent shall promptly notify the Lenders and the relevant Borrower of the determination<br> of a rate of interest under this Agreement. |
| --- | --- |
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| (b) | The<br> Senior Agent shall promptly notify the relevant Borrower of each Funding Rate relating to<br> a Loan. |
|---|---|
| 10. | INTEREST PERIODS |
| --- | --- |
| 10.1 | Selection of Interest Periods |
| --- | --- |
| (a) | The<br> Borrower may select an Interest Period for a Loan in the Utilisation Request for that Loan. |
| --- | --- |
| (b) | Subject<br> to this Clause 10, the Borrower may select an Interest Period of three (3) Months or<br> of any other period agreed between the Borrower and the Senior Agent (acting on the instructions<br> of all the Lenders). |
| --- | --- |
| (c) | An<br> Interest Period for a Loan shall not extend beyond the Termination Date. |
| --- | --- |
| (d) | Each<br> Interest Period for a Loan shall start on the Utilisation Date. |
| --- | --- |
| (e) | A<br> Loan has one (1) Interest Period only. |
| --- | --- |
| (f) | Prior<br> to the Syndication Date, Interest Periods shall be one (1) Month or such other<br> period as the Senior Agent and the Borrower may agree and any Interest Period which would<br> otherwise end during the Month preceding or extend beyond the Syndication Date shall end<br> on the Syndication Date. |
| --- | --- |
| 10.2 | Non-Business Days |
| --- | --- |
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
| 11. | CHANGES TO THE CALCULATION OF INTEREST |
|---|---|
| 11.1 | Unavailability of Screen Rate |
| --- | --- |
| (a) | Interpolated Screen Rate: If no Screen Rate is available for EURIBOR for the Interest Period of a<br> Loan, the applicable or EURIBOR shall be the Interpolated Screen Rate for a period equal<br> in length to the Interest Period of that Loan. |
| --- | --- |
| (b) | Reference Bank Rate: If no Screen Rate is available for EURIBOR for: |
| --- | --- |
| (i) | the<br> currency of a Loan; or |
| --- | --- |
| (ii) | the<br> Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate, |
| --- | --- |
the applicable EURIBOR shall be the Reference Bank Rate as of the Specified Time for the currency of that Loan and for a period equal in length to the Interest Period of that Loan.
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| 11.2 | Calculation of Reference Bank Rate |
|---|---|
| (a) | Subject<br> to paragraph (b) below, if EURIBOR is to be determined on the basis of a Reference Bank<br> Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference<br> Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks. |
| --- | --- |
| (b) | If<br> at or about noon on the Quotation Day none, or only one, of the Reference Banks supplies<br> a quotation, there shall be no Reference Bank Rate for the relevant Interest Period. |
| --- | --- |
| 11.3 | Market disruption |
| --- | --- |
If before close of business in London on the Quotation Day for the relevant Interest Period the Senior Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed thirty-five (35) per cent. of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of EURIBOR then Clause 11.4 (Costof funds) shall apply to that Loan for the relevant Interest Period.
| 11.4 | Cost of funds |
|---|---|
| (a) | If<br> this Clause 11.4 applies, the rate of interest on each Lender's share of the relevant Loan<br> for the relevant Interest Period shall be the percentage rate per annum which is the sum<br> of: |
| --- | --- |
| (i) | the<br> Margin; and |
| --- | --- |
| (ii) | the<br> weighted average of the rates notified to the Senior Agent by each Lender as soon as practicable<br> and in any event by close of business on the date falling five (5) Business Days before<br> the date on which interest is due to be paid in respect of that Interest Period), to be that<br> which expresses as a percentage rate per annum the cost to the relevant Lender of funding<br> its participation in that Loan from whatever source it may reasonably select. |
| --- | --- |
| (b) | If<br> this Clause 11.4 applies and the Senior Agent or the Borrower so requires, the Senior Agent<br> and the Borrower shall enter into negotiations (for a period of not more than thirty days)<br> with a view to agreeing a substitute basis for determining the rate of interest. |
| --- | --- |
| (c) | Any<br> alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent<br> of all the Lenders and the Borrower, be binding on all Parties. |
| --- | --- |
| (d) | If<br> this Clause 11.4 applies pursuant to Clause 11.3 (Market disruption) and: |
| --- | --- |
| (i) | a<br> Lender's Funding Rate is less than EURIBOR; or |
| --- | --- |
| (ii) | a<br> Lender does not supply a quotation by the time specified in paragraph (a)(ii) above,<br> the cost to that Lender of funding<br> its participation in that Loan for that Interest Period shall be deemed, for the purposes<br> of paragraph (a) above, to be EURIBOR. |
| --- | --- |
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| 11.5 | Notification to Borrower |
|---|
If Clause 11.4 (Cost of funds) applies, the Senior Agent shall, as soon as is practicable, notify the Borrower.
| 11.6 | Break Costs |
|---|---|
| (a) | The<br> Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to<br> that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum<br> being paid by that Borrower on a day other than the last day of an Interest Period for that<br> Loan or Unpaid Sum. |
| --- | --- |
| (b) | Each<br> Lender shall, as soon as reasonably practicable after a demand by the Senior Agent, provide<br> a certificate confirming the amount of its Break Costs for any Interest Period in which they<br> accrue. |
| --- | --- |
| 12. | FEES |
| --- | --- |
| 12.1 | Commitment fee |
| --- | --- |
| (a) | The<br> Borrower shall pay to the Senior Agent (for the account of each Lender) a fee computed at<br> the rate of thirty-five per cent. 35% of the applicable Margin per annum on that Lender's<br> Available Commitment for the Availability Period. |
| --- | --- |
| (b) | The<br> accrued commitment fee is payable on the last day of each successive period of three (3) Months<br> which ends during the Availability Period, on the last day of the Availability Period and,<br> if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the<br> time the cancellation is effective. |
| --- | --- |
| 12.2 | Arrangement fee |
| --- | --- |
The Borrower shall pay to the Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter.
| 12.3 | Agency fee |
|---|
The Borrower shall pay to the Senior Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
| 12.4 | Common Security Agent fee |
|---|
The Borrower shall pay to the Common Security Agent (for its own account) a security agent fee in the amount and at the times agreed in a Fee Letter.
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| 12.5 | Drawdown fee |
|---|---|
| (a) | On<br> the first Utilisation Date relating to a Warehouse Project, the Borrower shall pay to the<br> Senior Agent (for the account of each Lender) a fee in an amount equal to 0.35% of the Allocated<br> Senior Facility Amount applicable to that Warehouse Project (the "Drawdown Fee"). |
| --- | --- |
| (b) | All<br> payments will be made in euro in immediately available funds without set- off or counterclaim. |
| --- | --- |
| (c) | The<br> Drawdown Fee will be withheld and deducted from the proceeds of the relevant Loan on the<br> relevant Utilisation Date in full and final payment of the Drawdown Fee due on that date. |
| --- | --- |
| (d) | The<br> Drawdown Fee is non-refundable. |
| --- | --- |
| 12.6 | Interest, commission and fees on Ancillary Facilities |
| --- | --- |
The rate and time of payment of interest, commission, fees and any other remuneration in respect of each Ancillary Facility shall be determined by agreement between the relevant Ancillary Lender and the Borrower of that Ancillary Facility based upon normal market rates and terms.
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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
| 13. | TAX GROSS UP AND INDEMNITIES |
|---|---|
| 13.1 | Definitions |
| --- | --- |
In this Agreement:
"Qualifying Lender" means a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:
| (a) | a<br> bank, within the meaning of section 246(1) TCA which is carrying on a bona fide banking<br> business in Ireland for the purposes of section 246(3)(a) TCA; or |
|---|---|
| (b) | a<br> body corporate: |
| --- | --- |
| (i) | which<br> is resident for the purposes of tax in a Relevant Territory (residence for these purposes<br> is to be determined in accordance with the laws of the Relevant Territory of which the Lender<br> claims to be resident) where that Relevant Territory imposes a tax that generally applies<br> to interest receivable in that Relevant Territory or where that Relevant Territory provides<br> for a remittance basis of taxation and interest payable under this Agreement is payable into<br> an account located in that Relevant Territory by bodies corporate from sources outside that<br> Relevant Territory; or |
| --- | --- |
| (ii) | where<br> interest is payable under this Agreement: |
| --- | --- |
| (A) | is<br> exempted from the charge to income tax under a Treaty in force between Ireland and the country<br> in which the Lender is resident for tax purposes; or |
| --- | --- |
| (B) | would<br> be exempted from the charge to income tax under a Treaty signed between Ireland and the country<br> in which the Lender is resident for tax purposes if such Treaty had the force of law by virtue<br> of section 826(1) TCA; |
| --- | --- |
except where interest is paid under this Agreement to the body corporate in connection with a trade or business which is carried on by it in Ireland through a branch or agency; or
| (c) | a<br> company that is incorporated in the US and taxed in the US on its worldwide income except<br> where interest is paid under this Agreement to the US company in connection with a trade<br> or business which is carried on by it in Ireland through a branch or agency; or |
|---|---|
| (d) | a<br> US limited liability company (“LLC”), where the ultimate recipients of<br> the interest payable under this Agreement are Qualifying Lenders within paragraphs (ii) ,<br> (iii) or (v) of this definition and the business conducted through the LLC is so<br> structured for market reasons and not for tax avoidance purposes except where interest is<br> paid under this Agreement to the LLC in connection with a trade or business which is carried<br> on by it or them in Ireland through a branch or agency; or |
| --- | --- |
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| (e) | a<br> qualifying company within the meaning of section 110 TCA; |
|---|---|
| (f) | an<br> exempt approved scheme within the meaning of section 774 TCA; |
| --- | --- |
| (g) | an<br> investment undertaking within the meaning of section 739B TCA; or |
| --- | --- |
| (h) | a<br> body corporate: |
| --- | --- |
| (iii) | which<br> advances money in the ordinary course of a trade which includes the lending of money; |
| --- | --- |
| (iv) | where<br> interest on an advance under this Agreement is taken into account in computing the trading<br> income of such body corporate; and |
| --- | --- |
| (v) | which<br> has made the appropriate notifications under section 246(5)(a) TCA to the Revenue Commissioners<br> and the Borrower; or |
| --- | --- |
| (vi) | a<br> Treaty Lender. |
| --- | --- |
| "Relevant Territory” means: | |
| (b) | a<br> member state of the European Union (other than Ireland); |
| --- | --- |
| (c) | not<br> being such a member state, a country with which Ireland has a Treaty in force by virtue of<br> section 826(1) TCA; or |
| --- | --- |
| (d) | not<br> being a territory referred to in (i) or (ii) above, a country with which Ireland<br> has signed such a Treaty which will come into force once the procedures set out in section<br> 826(1) TCA have been completed. |
| --- | --- |
"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.
"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.
"TaxPayment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 13.2 (Tax gross-up) or a payment under Clause 13.3 (Tax indemnity).
"Treaty Lender" means a Lender which:
| (a) | is<br> treated as a resident of a Treaty State for the purposes of the Treaty; |
|---|---|
| (b) | does<br> not carry on a business in Ireland through a permanent establishment with which that Lender's<br> participation in the Loan is effectively connected, |
| --- | --- |
provided that a Lender shall not be a Treaty Lender if it falls within sub-paragraph (ii), (iii) or (iv) of the definition of Qualifying Lender.
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"Treaty State" means a jurisdiction having a double taxation agreement (a "Treaty") with Ireland which makes provision for full exemption from tax imposed by Ireland on interest.
This Clause 13 shall not apply to any Hedging Agreement.
| 13.2 | Tax gross-up |
|---|---|
| (a) | Each<br> Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax<br> Deduction is required by law. |
| --- | --- |
| (b) | The<br> Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or<br> that there is any change in the rate or the basis of a Tax Deduction) notify the Senior Agent<br> accordingly. Similarly, a Lender shall notify the Senior Agent on becoming so aware in respect<br> of a payment payable to that Lender. If the Senior Agent receives such notification from<br> a Lender it shall notify the Borrower and that Obligor. |
| --- | --- |
| (c) | If<br> a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due<br> from that Obligor shall be increased to an amount which (after making any Tax Deduction)<br> leaves an amount equal to the payment which would have been due if no Tax Deduction had been<br> required. |
| --- | --- |
| (d) | If<br> an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction<br> and any payment required in connection with that Tax Deduction within the time allowed and<br> in the minimum amount required by law. |
| --- | --- |
| (e) | Within<br> thirty (30) days of making either a Tax Deduction or any payment required in connection with<br> that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Senior Agent<br> for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance<br> Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid<br> to the relevant taxing authority. |
| --- | --- |
| 13.3 | Tax Indemnity |
| --- | --- |
| (a) | The<br> Borrower shall (within three Business Days of demand by the Senior Agent) pay to a Protected<br> Party an amount equal to the loss, liability or cost which that Protected Party determines<br> will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected<br> Party in respect of a Finance Document. |
| --- | --- |
| (b) | Paragraph<br> (a) above shall not apply: |
| --- | --- |
| (i) | with<br> respect to any Tax assessed on a Finance Party: |
| --- | --- |
| (A) | under<br> the law of the jurisdiction in which that Finance Party is incorporated or, if different,<br> the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for<br> tax purposes; or |
| --- | --- |
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| (B) | under<br> the law of the jurisdiction in which that Finance Party's Facility Office is located in respect<br> 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 that Finance Party; or
| (ii) | to<br> the extent a loss, liability or cost: |
|---|---|
| (A) | is<br> compensated for by an increased payment under Clause 13.2 (Tax gross-up); or |
| --- | --- |
| (B) | relates<br> to a FATCA Deduction required to be made by a Party. |
| --- | --- |
| (c) | A<br> Protected Party making, or intending to make a claim under paragraph (a) above shall<br> promptly notify the Senior Agent of the event which will give, or has given, rise to the<br> claim, following which the Senior Agent shall notify the Borrower. |
| --- | --- |
| (d) | A<br> Protected Party shall, on receiving a payment from an Obligor under this Clause 13.3, notify<br> the Senior Agent. |
| --- | --- |
| 13.4 | Tax Credit |
| --- | --- |
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
| (a) | a<br> Tax Credit is attributable to an increased payment of which that Tax Payment forms part,<br> to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required;<br> and |
|---|---|
| (b) | that<br> Finance Party has obtained and utilised that Tax Credit, |
| --- | --- |
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
| 13.5 | Lender status confirmation |
|---|
Each Lender which is not an Original Lender shall indicate, in the documentation which it executes on becoming a Party as a Lender, and for the benefit of the Senior Agent and without liability to any Obligor, which of the following categories it falls in:
| (a) | not<br> a Qualifying Lender; |
|---|---|
| (b) | a<br> Qualifying Lender (other than a Treaty Lender); or |
| --- | --- |
| (c) | a<br> Treaty Lender. |
| --- | --- |
If such a Lender fails to indicate its status in accordance with this Clause 13.5 then that Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Senior Agent which category applies (and the Senior Agent, upon receipt of such notification, shall inform the Borrower). For the avoidance of doubt, the documentation which a Lender executes on becoming a Party as a Lender shall not be invalidated by any failure of a Lender to comply with this Clause 13.5.
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| 13.6 | Stamp taxes |
|---|
The Borrower shall pay and, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability that Secured Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
| 13.7 | VAT |
|---|---|
| (a) | All<br> amounts expressed to be payable under a Finance Document by any Party to a Finance Party<br> which (in whole or in part) constitute the consideration for any supply for VAT purposes<br> are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly,<br> subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by<br> any Finance Party to any Party under a Finance Document and such Finance Party is required<br> to account to the relevant tax authority for the VAT, that Party must pay to such Finance<br> Party (in addition to and at the same time as paying any other consideration for such supply)<br> an amount equal to the amount of the VAT (and such Finance Party must promptly provide an<br> appropriate VAT invoice to that Party). |
| --- | --- |
| (b) | If<br> VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier")<br> to any other Finance Party (the "Recipient") under a Finance Document, and<br> any Party other than the Recipient (the "Relevant Party") is required by<br> the terms of any Finance Document to pay an amount equal to the consideration for that supply<br> to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect<br> of that consideration): |
| --- | --- |
| (i) | (where<br> the Supplier is the person required to account to the relevant tax authority for the VAT)<br> the Relevant Party must also pay to the Supplier (at the same time as paying that amount)<br> an additional amount equal to the amount of the VAT. The Recipient must (where this limb<br> (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment<br> the Recipient receives from the relevant tax authority which the Recipient reasonably determines<br> relates to the VAT chargeable on that supply; and |
| --- | --- |
| (ii) | (where<br> the Recipient is the person required to account to the relevant tax authority for the VAT)<br> the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient<br> an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient<br> reasonably determines that it is not entitled to credit or repayment from the relevant tax<br> authority in respect of that VAT. |
| --- | --- |
| (c) | Where<br> a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost<br> or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party<br> for the full amount of such cost or expense, including such part thereof as represents VAT,<br> save to the extent that such Finance Party reasonably determines that it is entitled to credit<br> or repayment in respect of such VAT from the relevant tax authority. |
| --- | --- |
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| (d) | Any<br> reference in this Clause 13.7 to any Party shall, at any time when such Party is treated<br> as a member of a VAT Group, include (where appropriate and unless the context otherwise requires)<br> a reference to the person who is treated at that time as making the supply, or (as appropriate)<br> receiving the supply, under the grouping rules (provided for in Article 11 of Council<br> Directive 2006/112/EC (or as implemented by the relevant member state of the European Union)<br> or any other similar provision in any jurisdiction which is not a member state of the European<br> Union) so that a reference to a Party shall be construed as a reference to that Party or<br> the relevant VAT Group of which that Party is a member at the relevant time or the relevant<br> representative member (or head) of that VAT Group at the relevant time (as the case may be). |
|---|---|
| (e) | In<br> relation to any supply made by a Finance Party to any Party under a Finance Document, if<br> reasonably requested by such Finance Party, that Party must promptly provide such Finance<br> Party with details of that Party's VAT registration and such other information as is reasonably<br> requested in connection with such Finance Party's VAT reporting requirements in relation<br> to such supply. |
| --- | --- |
| 13.8 | FATCA information |
| --- | --- |
| (a) | Subject<br> to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request<br> by another Party: |
| --- | --- |
| (i) | confirm<br> to that other Party whether it is: |
| --- | --- |
| (A) | a<br> FATCA Exempt Party; or |
| --- | --- |
| (B) | not<br> a FATCA Exempt Party; |
| --- | --- |
| (ii) | supply<br> to that other Party such forms, documentation and other information relating to its status<br> under FATCA as that other Party reasonably requests for the purposes of that other Party's<br> compliance with FATCA; and |
| --- | --- |
| (iii) | supply<br> to that other Party such forms, documentation and other information relating to its status<br> as that other Party reasonably requests for the purposes of that other Party's compliance<br> with any other law, regulation, or exchange of information regime. |
| --- | --- |
| (b) | If<br> a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA<br> Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA<br> Exempt Party, that Party shall notify that other Party reasonably promptly. |
| --- | --- |
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| (c) | Paragraph<br> (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above<br> shall not oblige any other Party to do anything, which would or might in its reasonable opinion<br> constitute a breach of: |
|---|---|
| (i) | any<br> law or regulation; |
| --- | --- |
| (ii) | any<br> fiduciary duty; or |
| --- | --- |
| (iii) | any<br> duty of confidentiality. |
| --- | --- |
| (d) | If<br> a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation<br> or other information requested in accordance with paragraph (a)(i) or (ii) above<br> (including, for the avoidance of doubt, where paragraph (c) above applies), then such<br> Party shall be treated for the purposes of the Finance Documents (and payments under them)<br> as if it is not a FATCA Exempt Party until such time as the Party in question provides the<br> requested confirmation, forms, documentation or other information. |
| --- | --- |
| (e) | If<br> the Borrower is a US Tax Obligor or the Senior Agent reasonably believes that its obligations<br> under FATCA or any other applicable law or regulation require it, each Lender shall, within<br> ten (10) Business Days of: |
| --- | --- |
| (i) | where<br> the Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the Signing<br> Date; |
| --- | --- |
| (ii) | where<br> the Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a<br> Lender, that date; |
| --- | --- |
| (iii) | the<br> date a new US Tax Obligor accedes as the Borrower; or |
| --- | --- |
| (iv) | where<br> the Borrower is not a US Tax Obligor, the date of a request from the Senior Agent, |
| --- | --- |
supply to the Senior Agent:
| (A) | a<br> withholding certificate on Form W-8, Form W-9 or any other relevant form; or |
|---|---|
| (B) | any<br> withholding statement or other document, authorisation or waiver as the Senior Agent may<br> require to certify or establish the status of such Lender under FATCA or that other law or<br> regulation. |
| --- | --- |
| (f) | The<br> Senior Agent shall provide any withholding certificate, withholding statement, document,<br> authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to<br> the relevant Borrower. |
| --- | --- |
| (g) | If<br> any withholding certificate, withholding statement, document, authorisation or waiver provided<br> to the Senior Agent by a Lender pursuant to paragraph (e) above is or becomes materially<br> inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding<br> certificate, withholding statement, document, authorisation or waiver to the Senior Agent<br> unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify<br> the Senior Agent). The Senior Agent shall provide any such updated withholding certificate,<br> withholding statement, document, authorisation or waiver to the relevant Borrower. |
| --- | --- |
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| (h) | The<br> Senior Agent may rely on any withholding certificate, withholding statement, document, authorisation<br> or waiver it receives from a Lender pursuant to paragraph (e) or (g) above without<br> further verification. The Senior Agent shall not be liable for any action taken by it under<br> or in connection with paragraphs (e), (f) or (g) above. |
|---|---|
| 13.9 | FATCA Deduction |
| --- | --- |
| (a) | Each<br> Party may make any FATCA Deduction it is required to make by FATCA, and any payment required<br> in connection with that FATCA Deduction, and no Party shall be required to increase any payment<br> in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient<br> of the payment for that FATCA Deduction. |
| --- | --- |
| (b) | Each<br> Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there<br> is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom<br> it is making the payment and, in addition, shall notify the Borrower and the Senior Agent<br> and the Senior Agent shall notify the other Finance Parties. |
| --- | --- |
| 14. | INCREASED COSTS |
| --- | --- |
| 14.1 | Increased costs |
| --- | --- |
| (a) | Subject<br> to Clause 14.3 (Exceptions) the Borrower shall, within three Business Days of a demand<br> by the Senior Agent, pay for the account of a Finance Party the amount of any Increased Costs<br> incurred by that Finance Party or any of its Affiliates as a result of: |
| --- | --- |
| (i) | the<br> introduction of or any change in (or in the interpretation, administration or application<br> of) any law or regulation after the Signing Date; |
| --- | --- |
| (ii) | compliance<br> with any law or regulation made after the Signing Date; or |
| --- | --- |
| (iii) | the<br> implementation or application of, or compliance with, Basel III or CRD IV or any law or regulation<br> that implements or applies Basel III or CRD IV, to the extent such Increased Costs are not<br> reasonably foreseeable on the date of this Agreement. |
| --- | --- |
| (b) | In<br> this Agreement: |
| --- | --- |
| (i) | "Increased Costs" means: |
| --- | --- |
| (A) | a<br> reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's)<br> overall capital; |
| --- | --- |
| (B) | an<br> additional or increased cost; or |
| --- | --- |
| (C) | a<br> reduction of any amount due and payable under any Finance Document, |
| --- | --- |
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which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or an Ancillary Commitment or funding or performing its obligations under any Finance Document;
| (ii) | "Basel III" means: |
|---|---|
| (A) | the<br> agreements on capital requirements, a leverage ratio and liquidity standards contained in<br> "Basel III: A global regulatory framework for more resilient banks and banking systems",<br> "Basel III: International framework for liquidity risk measurement, standards and monitoring"<br> and "Guidance for national authorities operating the countercyclical capital buffer"<br> published by the Basel Committee on Banking Supervision in December 2010, each as amended,<br> supplemented or restated; |
| --- | --- |
| (B) | the<br> rules for global systemically important banks contained in "Global systemically<br> important banks: assessment methodology and the additional loss absorbency requirement –<br> Rules text" published by the Basel Committee on Banking Supervision in November 2011,<br> as amended, supplemented or restated; and |
| --- | --- |
| (C) | any<br> further guidance or standards published by the Basel Committee on Banking Supervision relating<br> to "Basel III"; |
| --- | --- |
| (iii) | "CRD IV" means EU CRD IV and UK CRD IV; |
| --- | --- |
| (iv) | "EU CRD IV" means: |
| --- | --- |
| (A) | Regulation<br> (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential<br> requirements for credit institutions and investment firms; and |
| --- | --- |
| (B) | Directive<br> 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to<br> the activity of credit institutions and the prudential supervision of credit institutions<br> and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and<br> 2006/49/EC; |
| --- | --- |
| (v) | "UK CRD IV" means: |
| --- | --- |
| (A) | Regulation<br> (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential<br> requirements for credit institutions and investment firms as it forms part of domestic law<br> of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the "Withdrawal Act"); |
| --- | --- |
| (B) | the<br> law of the United Kingdom or any part of it, which immediately before IP completion day (as<br> defined in the European Union (Withdrawal Agreement) Act 2020) implemented Directive 2013/36/EU<br> of the European Parliament and of the Council of 26 June 2013 on access to the activity<br> of credit institutions and the prudential supervision of credit institutions and investment<br> firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC and<br> its implementing measures; and |
| --- | --- |
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| (C) | direct<br> EU legislation (as defined in the Withdrawal Act), which immediately before IP completion<br> day (as defined in the European Union (Withdrawal Agreement) Act 2020) implemented EU CRD<br> IV as it forms part of domestic law of the United Kingdom by virtue of the Withdrawal Act. |
|---|---|
| 14.2 | Increased Cost claims |
| --- | --- |
| (a) | A<br> Finance Party intending to make a claim pursuant to Clause 14.1 (Increased Costs)<br> shall notify the Senior Agent of the event giving rise to the claim, following which the<br> Senior Agent shall promptly notify the Borrower. |
| --- | --- |
| (b) | Each<br> Finance Party shall, as soon as practicable after a demand by the Senior Agent, provide a<br> certificate confirming the amount of its Increased Costs. |
| --- | --- |
| 14.3 | Exceptions |
| --- | --- |
| (a) | Clause<br> 14.1 (Increased Costs) does not apply to the extent any Increased Cost is: |
| --- | --- |
| (i) | attributable<br> to a Tax Deduction required by law to be made by an Obligor; |
| --- | --- |
| (ii) | attributable<br> to a FATCA Deduction required to be made by a Party; |
| --- | --- |
| (iii) | compensated<br> for by Clause 13.3 (Tax indemnity) (or would have been compensated for under Clause<br> 13.3 (Tax indemnity) but was not so compensated solely because any of the exclusions<br> in paragraph (b) of Clause 13.3 (Tax indemnity) applied); or |
| --- | --- |
| (iv) | attributable<br> to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. |
| --- | --- |
| (b) | Clause<br> 14.1 (Increased Costs) does not apply to the extent the Increased Cost is incurred<br> by a Hedge Counterparty in its capacity as such. |
| --- | --- |
| (c) | In<br> this Clause 14.3, a reference to a "Tax Deduction" has the same meaning<br> given to that term in Clause 13.1 (Definitions). |
| --- | --- |
| 15. | OTHER INDEMNITIES |
| --- | --- |
| 15.1 | Currency indemnity |
| --- | --- |
| (a) | If<br> any sum due from an Obligor under the Finance Documents (a "Sum"), or any<br> order, judgment or award given or made in relation to a Sum, has to be converted from the<br> currency (the "First Currency") in which that Sum is payable into another<br> currency (the "Second Currency") for the purpose of: |
| --- | --- |
| (i) | making<br> or filing a claim or proof against that Obligor; |
| --- | --- |
- 94 -
| (ii) | obtaining<br> or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
|---|
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Secured Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
| (b) | Each<br> Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance<br> Documents in a currency or currency unit other than that in which it is expressed to be payable. |
|---|---|
| (c) | This<br> Clause 15.1 does not apply to any sum due under a Hedging Agreement. |
| --- | --- |
| 15.2 | Other indemnities |
| --- | --- |
The Obligors shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability incurred by that Secured Party as a result of:
| (a) | the<br> occurrence of any Event of Default; |
|---|---|
| (b) | a<br> failure by an Obligor to pay any amount due under a Finance Document on its due date, including<br> without limitation, any cost, loss or liability arising as a result of Clause 31 (Sharing among the Finance Parties); |
| --- | --- |
| (c) | funding,<br> or making arrangements to fund, its participation in a Loan requested by the Borrower in<br> a Utilisation Request but not made by reason of the operation of any one or more of the provisions<br> of this Agreement (other than by reason of default or negligence by that Finance Party alone);<br> or |
| --- | --- |
| (d) | a<br> Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given<br> by the Borrower or the Borrower. |
| --- | --- |
| 15.3 | Indemnity to the Senior Agent |
| --- | --- |
The Obligors shall within three (3) Business Day of demand, indemnify the Senior Agent against:
| (a) | any<br> cost, loss or liability incurred by the Senior Agent as a result of: |
|---|---|
| (i) | investigating<br> any event which it reasonably believes is a Default; |
| --- | --- |
| (ii) | acting<br> or relying on any notice, request or instruction which it reasonably believes to be genuine,<br> correct and appropriately authorised; or |
| --- | --- |
- 95 -
| (iii) | instructing<br> lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as<br> permitted under this Agreement; and |
|---|---|
| (b) | any<br> cost, loss or liability (including, without limitation, for negligence or any other category<br> of liability whatsoever) incurred by the Senior Agent (otherwise than by reason of the Senior<br> Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability<br> pursuant to Clause 32.11 (Disruption to Payment Systems etc.) notwithstanding the<br> Senior Agent's negligence, gross negligence or any other category of liability whatsoever<br> but not including any claim based on the fraud of the Senior Agent in acting as Senior Agent<br> under the Finance Documents. |
| --- | --- |
| (c) | Each<br> Obligor's indemnity obligation under this Clause 15.3 (Indemnity to the Senior Agent) shall continue to be in force and effect notwithstanding the discharge or termination<br> of the Finance Documents or removal or resignation of the Common Security Agent. |
| --- | --- |
| 15.4 | Indemnity to the Common Security Agent |
| --- | --- |
| (a) | Each<br> Obligor jointly and severally shall within three (3) Business Days of demand indemnify<br> the Common Security Agent, each Secured Party and every Receiver and Delegate against any<br> cost, loss or liability incurred by any of them as a result of: |
| --- | --- |
| (i) | any<br> failure by an Obligor to comply with its obligations under Clause 17 (Costs and Expenses); |
| --- | --- |
| (ii) | acting<br> or relying on any notice, request or instruction which it reasonably believes to be genuine,<br> correct and appropriately authorised; |
| --- | --- |
| (iii) | the<br> taking, holding, protection or enforcement of the Common Transaction Security; |
| --- | --- |
| (iv) | instructing<br> lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as<br> permitted under this Agreement; |
| --- | --- |
| (v) | acting<br> as Common Security Agent, each Secured Party, Receiver or Delegate under the Finance Documents<br> or which otherwise relates to any of the Charged Property (otherwise, in each case, than<br> by reason of the Common Security Agent's, Receiver's or Delegate's gross negligence or wilful<br> misconduct); |
| --- | --- |
| (vi) | the<br> exercise of any of the rights, powers, discretions and remedies vested in the Common Security<br> Agent, each Secured Party and each Receiver and Delegate by the Finance Documents or by law;<br> and |
| --- | --- |
| (vii) | any<br> default by any Obligor in the performance of any of the obligations expressed to be assumed<br> by it in the Finance Documents. |
| --- | --- |
| (b) | The<br> Common Security Agent and every Receiver and Delegate may, in priority to any payment to<br> the other Secured Parties, indemnify itself out of the Charged Property in respect of, and<br> pay and retain, all sums necessary to give effect to the<br> indemnity in this Clause 15.4 (Indemnity to the Common Security Agent) and<br> shall have a lien on the Common Transaction Security and the proceeds of the enforcement<br> of the Common Transaction Security for all moneys payable to it. |
| --- | --- |
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| (c) | Each<br> Obligor's indemnity under this Clause 15.4 (Indemnity to the Common Security Agent) shall<br> continue to be in force and effect notwithstanding the discharge or termination of the Finance<br> Documents or removal or resignation of the Common Security Agent. |
|---|---|
| 16. | MITIGATION BY THE LENDERS |
| --- | --- |
| 16.1 | Mitigation |
| --- | --- |
| (a) | Each<br> Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate<br> any circumstances which arise and which would result in the Facility ceasing to be available<br> or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause<br> 8.1 (Illegality), Clause 13 (Tax gross-up and indemnities), or Clause 14 (Increased Costs) including (but not limited to) transferring its rights and obligations under the<br> Finance Documents to another Affiliate or Facility Office. |
| --- | --- |
| (b) | Paragraph<br> (a) above does not in any way limit the obligations of any Obligor under the Finance<br> Documents. |
| --- | --- |
| 16.2 | Limitation of liability |
| --- | --- |
| (a) | The<br> Obligors shall promptly indemnify each Finance Party for all costs and expenses reasonably<br> incurred by that Finance Party as a result of steps taken by it under Clause 16.1 (Mitigation). |
| --- | --- |
| (b) | A<br> Finance Party is not obliged to take any steps under Clause 16.1 (Mitigation) if,<br> in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to<br> it. |
| --- | --- |
| 17. | COSTS AND EXPENSES |
| --- | --- |
| 17.1 | Transaction expenses |
| --- | --- |
The Obligors shall within three (3) Business Days of demand pay the Senior Agent, the Arranger and the Common Security Agent the amount of all costs and expenses (including, but not limited to, pre-agreed legal fees) properly incurred by any of them (and, in the case of the Common Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
| (a) | this<br> Agreement and any other documents referred to in this Agreement and the Common Transaction<br> Security; and |
|---|---|
| (b) | any<br> other Finance Documents executed after the Signing Date. |
| --- | --- |
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| 17.2 | Amendment costs |
|---|
If:
| (a) | an<br> Obligor requests an amendment, waiver or consent; or |
|---|---|
| (b) | any<br> amendment or waiver is contemplated or agreed pursuant to Clause 38.4 (Replacement of Screen Rate), |
| --- | --- |
the Obligors shall, within three (3) Business Days of demand, reimburse each of the Senior Agent and the Common Security Agent for the amount of all costs and expenses (including, but not limited to, legal fees) properly incurred by the Senior Agent and the Common Security Agent (and in the case of the Common Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating, complying with or implementing that request, requirement or actual or contemplated agreement.
| 17.3 | Common Security Agent's management time and additional remuneration |
|---|---|
| (a) | Any<br> amount payable to the Common Security Agent under Clause 15.4 (Indemnity to the Common Security Agent) and this Clause 17.3 shall include the cost of utilising the Common Security<br> Agent's management time or other resources and will be calculated on the basis of such daily<br> or hourly rates as the Common Security Agent may notify to the Borrower and the Lenders,<br> and is in addition to any other fee paid or payable to the Common Security Agent. |
| --- | --- |
| (b) | Without<br> prejudice to paragraph (a) above, in the event of: |
| --- | --- |
| (i) | a Default; |
| --- | --- |
| (ii) | the<br> Common Security Agent (x) considering it expedient or necessary or (y) being requested<br> by an Obligor or Senior Agent (acting on the instructions of the Instructing Group (as defined<br> in the Intercreditor and Subordination Deed)) to undertake duties which the Common Security<br> Agent and the Borrower agree to be of an exceptional nature or outside the scope of the normal<br> duties of the Common Security Agent under the Finance Documents; or |
| --- | --- |
| (iii) | the<br> Common Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances, |
| --- | --- |
the Obligors shall pay to the Common Security Agent any additional remuneration (which shall be calculated at its standard hourly rates, and together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.
| (c) | If<br> the Common Security Agent and the Borrower fail to agree upon the nature of the duties, or<br> upon the additional remuneration referred to in paragraph (b) above or whether additional<br> remuneration is appropriate in the circumstances, any dispute shall be determined by an investment<br> bank (acting as an expert and not as an arbitrator) selected by the Common Security Agent<br> and approved by the Borrower or, failing approval, nominated (on the application of the Common<br> Security Agent) by the President for the time being of the Law Society of England and Wales<br> (the costs of the nomination and of the investment bank being payable by the Borrower) and<br> the determination of any investment bank shall be final and binding upon the Parties. |
|---|
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| 17.4 | Enforcement and preservation costs |
|---|
The Obligors shall, within three (3) Business Days of demand, pay to each Secured Party the amount of all costs and expenses (including, but not limited to, legal fees) incurred by that Secured Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and the Common Transaction Security and any proceedings instituted by or against the Common Security Agent as a consequence of taking or holding the Common Transaction Security or enforcing these rights.
| 17.5 | Advisers |
|---|---|
| (a) | The<br> Borrower acknowledges the appointment of each Adviser and the scope of work set out in the<br> terms of their respective appointments. |
| --- | --- |
| (b) | The<br> Borrower shall, within three (3) Business Days of demand by the Senior Agent, pay to<br> the Senior Agent the amount of all fees, costs and expenses of each Adviser appointed pursuant<br> to this Clause 17.5 (subject to any separate fee arrangement that the Borrower has agreed<br> in writing with such Adviser). |
| --- | --- |
| (c) | In<br> addition to any existing Advisers, any Senior Agent may, at the cost of the Borrower and<br> (unless a Default is continuing) with the prior written approval of the Borrower, from time<br> to time appoint (and dismiss) market, technical, model, legal, tax, insurance, social and<br> environmental or other advisers or accountants (or modify the scope of work of any Adviser)<br> in connection with: |
| --- | --- |
| (i) | any<br> Finance Document or information to be delivered by the Borrower under any Finance Document; |
| --- | --- |
| (ii) | any<br> breach by the Borrower of its obligations under the Transaction Documents; |
| --- | --- |
| (iii) | responding<br> to, evaluating, negotiating or complying with any request from the Borrower for an amendment,<br> waiver or consent; or |
| --- | --- |
| (iv) | any<br> steps necessary or desirable in connection with any Default or any proposal for remedying<br> or otherwise resolving any Default. |
| --- | --- |
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SECTION 7
BANK ACCOUNTS
| 18. | BANK ACCOUNTS |
|---|---|
| 18.1 | Designation of Accounts |
| --- | --- |
| (a) | The<br> Borrower shall, prior to Financial Close, open in its name and, thereafter, maintain: |
| --- | --- |
| (i) | a deposit<br> account designated the "Disbursement Account"; |
| --- | --- |
| (ii) | a deposit<br> account designated the "Operating Account"; |
| --- | --- |
| (iii) | a<br> deposit account designated the "Disposal Proceeds Account"; |
| --- | --- |
| (iv) | a deposit<br> account designated the "Mandatory Prepayment Account"; and |
| --- | --- |
| (v) | a deposit<br> account designated the "Cash Trap Account". |
| --- | --- |
| (b) | Each<br> ProjectCo shall, as from the relevant Guarantor Accession Date, have opened in its name and<br> maintained a deposit account designated the "Proceeds Account". |
| --- | --- |
| 18.2 | No other accounts |
| --- | --- |
No Obligor shall open and maintain any other bank account without the prior written consent of the Senior Agent.
| 18.3 | Account Bank |
|---|---|
| (a) | Subject<br> to paragraph (b) below: |
| --- | --- |
| (i) | each<br> Borrower Account must be held at the Borrower Account Bank; and |
| --- | --- |
| (ii) | each<br> Proceeds Account must be held at a bank that is an Acceptable Bank unless the prior written<br> consent of the Senior Agent is otherwise obtained (each a "ProjectCo Account Bank"). |
| --- | --- |
| (b) | The<br> relevant Obligor must replace an Account with a bank account at the Account Bank or another<br> bank (in form and substance satisfactory to the Senior Agent) at any time if the Senior Agent<br> so requests (acting reasonably). |
| --- | --- |
| (c) | The<br> replacement of an Account only becomes effective when the relevant bank agrees with the Senior<br> Agent and the relevant Obligor, in a manner satisfactory to the Senior Agent, to fulfil the<br> role of the bank holding that Account. |
| --- | --- |
| 18.4 | Currency |
| --- | --- |
| (a) | Each<br> Borrower Account shall be denominated in EUR. |
| --- | --- |
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| (b) | Each<br> Proceeds Account shall be denominated in the local currency corresponding to the jurisdiction<br> in which that ProjectCo is incorporated. |
|---|---|
| 18.5 | Interest |
| --- | --- |
Each amount from time to time standing to the credit of an Account shall bear interest at such rate as may from time to time be agreed between the relevant Obligor and the Account Bank or, if no such rate is agreed for any period, at the Account Bank's overnight rate for call deposits in EUR from time to time. Such interest shall be credited to the Operating Account.
| 18.6 | Access to books and records |
|---|---|
| (a) | Each<br> Obligor irrevocably grants each of the Senior Agent and the Common Security Agent and their<br> respective Advisers access to review the books and records and irrevocably waives any right<br> of confidentiality which may exist in respect of records to the extent necessary to allow<br> disclosure of such books and records to each of the Finance Parties and their respective<br> Advisers. |
| --- | --- |
| (b) | Each<br> Obligor shall authorise and instruct the Account Bank to give to the Senior Agent and the<br> Common Security Agent and their respective Advisers unrestricted access to review such books<br> and records held by the Account Bank. |
| --- | --- |
| (c) | The<br> Senior Agent shall only exercise the access rights under paragraphs (a) and (b) above<br> upon the occurrence of an Event of Default which is continuing. |
| --- | --- |
| 18.7 | Electronic viewing rights |
| --- | --- |
| (a) | Each<br> Obligor shall irrevocably grant to each of the Senior Agent and the Common Security Agent<br> electronic viewing rights to the Accounts. |
| --- | --- |
| (b) | In<br> case it is not feasible to grant such electronic viewing rights, the relevant Obligor shall<br> provide bank account statements: |
| --- | --- |
| (i) | at<br> least on a monthly basis or such other frequency as the Senior Agent or the Common Security<br> Agent may specify; and |
| --- | --- |
| (ii) | at<br> any time upon request by the Senior Agent or the Common Security Agent. |
| --- | --- |
| 18.8 | No overdraft |
| --- | --- |
| (a) | Subject<br> to paragraph (b) below, each Obligor shall not instruct the Account Bank to make any<br> Transfer from an Account if such Transfer would cause such Account to become overdrawn. |
| --- | --- |
| (b) | To<br> the extent the Transfer would, if made in full, cause the Account to become overdrawn, such<br> Transfer shall be made in part in as great an amount as possible without resulting in that<br> Account becoming overdrawn. |
| --- | --- |
| (c) | Each<br> Obligor shall procure that, if any Transfer cannot be made in full as a result of the provisions<br> of paragraph (a) above, the Account Bank will notify the Senior Agent and the Borrower<br> as soon as practicable (and in any event within five (5) Business Days of the requested<br> Transfer date) and provide details of the payment not made, the date on which it should have<br> been made and the amount unpaid. |
| --- | --- |
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| 18.9 | Operating procedures |
|---|
Each Obligor shall maintain each Account in accordance with any mandate agreed between it and the Account Bank and such Account Bank's normal practices, provided that, if there is any conflict between any provision of the Finance Documents and any such mandate (or the Account Bank's normal practices), the provisions of the Finance Documents shall prevail (and, the Borrower, nor any other Obligor, shall not enter into any bank account mandates which are contradictory to, or otherwise in conflict with, the Finance Documents) except where to comply with such provisions would be in breach of any applicable law.
| 18.10 | No effect on obligations |
|---|
No non-payment or partial payment by any Obligor of any sums due and payable to the Finance Parties as a result of:
| (a) | a<br> shortfall in funds available in any Account; |
|---|---|
| (b) | the<br> restrictions on the Transfer and use of funds standing to the credit of the Accounts in this<br> Agreement or any other Finance Document; or |
| --- | --- |
| (c) | the<br> order in which payments are to be made pursuant to this Agreement or any other Finance Document, |
| --- | --- |
shall relieve the Borrower and/or any of the other Obligors of its obligations to make payments due and payable to the Finance Parties pursuant to the Finance Documents.
| 18.11 | Bank charges |
|---|
Each Obligor shall pay to the Account Bank such transaction charges and fees as agreed prior to Financial Close in the bank account mandates.
| 18.12 | No other credits or withdrawal |
|---|
No payments to, or Transfer from, any Account shall be made except as expressly permitted by this Agreement.
| 18.13 | Instructions during a Default |
|---|
On and at any time after the occurrence of a Default which is continuing:
| (a) | each<br> Obligor shall continue to be entitled to Transfer (or instruct the Account Bank to Transfer)<br> amounts standing to the credit of an Account in accordance with Clause 19 (Deposits into and withdrawals from Accounts) provided that to the extent the Common Security Agent<br> has exercised its right under paragraph (b) below and to the extent the instructions of the<br> Common Security Agent are inconsistent with those of the relevant Obligor, the instructions<br> of the Common Security Agent shall prevail (and the Obligor shall procure that the instructions<br> of the Common Security Agent are satisfied); and |
|---|
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| (b) | subject<br> to the Intercreditor and Subordination Deed, the Common Security Agent may give instructions<br> to the Account Bank from time to time as to what Transfers may or may not be made on the<br> instructions of the relevant Obligor without further consent of the relevant Obligor and/or<br> the Common Security Agent. |
|---|---|
| 18.14 | Instructions during an Event of Default |
| --- | --- |
Notwithstanding Clause 19 (Deposits Into and Withdrawals from Accounts), on and at any time after the occurrence of an Event of Default which is continuing:
| (a) | the<br> Borrower and the ProjectCo shall no longer be entitled to make any Transfer (or instruct<br> the Account Bank to do so) using monies standing to the credit of, or which would otherwise<br> be credited to, the Accounts and the Borrower and the ProjectCo shall ensure that the Account<br> Bank shall make Transfers from the Accounts only on the instructions of the Senior Agent<br> and/or the Security Agent; and |
|---|---|
| (b) | the<br> Senior Agent and/or the Security Agent may give instructions to the Account Bank from time<br> to time to make Transfers using monies standing to the credit of an Account in and towards<br> the Senior Agent and/or the Security Agent (as applicable) so direct. |
| --- | --- |
| 18.15 | No closure of Accounts |
| --- | --- |
No Obligor shall close any Account without the prior written consent of the Senior Agent and Common Security Agent.
| 19. | DEPOSITS INTO AND WITHDRAWALS FROM ACCOUNTS |
|---|
All amounts held in any Account shall be applied in accordance with this Clause 19 and no amount shall be deposited in, or withdrawn from, any Account other than as set out in this Clause 19.
| 19.1 | Proceeds Account |
|---|---|
| (a) | Each<br> ProjectCo shall ensure that: |
| --- | --- |
| (i) | all<br> Revenues; |
| --- | --- |
| (ii) | all<br> other monies owed to that ProjectCo by its debtors or other payment obligors (including any<br> deposit required to be paid by any Major Project Party to such ProjectCo in connection with<br> any Project Document or any monies received from related bank guarantees provided in connection<br> with the same); and |
| --- | --- |
| (iii) | all<br> amounts expressly stated in the Finance Documents to be so payable, are immediately paid<br> into the Proceeds Account. |
| --- | --- |
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| (b) | Subject<br> to Clause 18.13 (Instructions during a Default), each Obligor shall, on the first<br> day of each calendar quarter, Transfer all amounts standing to the credit of its Proceeds<br> Account to the Operating Account (whether directly or indirectly) provided that the Operating<br> Cost budgeted for the calendar quarter commencing on that date (as set out in the latest<br> Warehouse Report delivered in accordance with Clause 22.9 (Warehouse and General Reporting)<br> shall remain credited to such Proceeds Account for application in or towards payment of the<br> Operating Costs falling due and payable during that calendar quarter (and as set out in the<br> then current Operating Budget). |
|---|---|
| 19.2 | Operating Account |
| --- | --- |
| (a) | The<br> Borrower shall ensure that: |
| --- | --- |
| (i) | all<br> amounts required to be transferred by each ProjectCo from each Proceeds Account pursuant<br> to Clause 19.1 (Proceeds Account); |
| --- | --- |
| (ii) | all<br> other monies owed to the Borrower by its debtors or other relevant payment obligors; and |
| --- | --- |
| (iii) | all<br> amounts expressly stated in the Finance Documents to be so payable, are immediately paid<br> into the Operating Account. |
| --- | --- |
| (b) | Subject<br> to Clause 18.13 (Instructions during a Default), the Borrower shall Transfer the amounts<br> standing to the credit of the Operating Account for the purposes and at the times and in<br> the order of priority. |
| --- | --- |
| (i) | firstly,<br> in or towards payment pro rata of any fees, costs and expenses owing to the Senior<br> Agent, the Common Security Agent and any other Finance Party (other than the Lenders) which<br> are due but unpaid under the Finance Documents; |
| --- | --- |
| (ii) | secondly,<br> in or towards payment of an amount equal to any Mezzanine Hedging Receipts received by the<br> Borrower under any Hedging Agreement on or prior to such date, but only to the extent not<br> previously transferred to the Mezzanine Borrower in accordance with this Clause 19.2, to<br> the Mezzanine Borrower by way of transfer to the Mezzanine Debt Service Account; |
| --- | --- |
| (iii) | thirdly,<br> in or towards payment pro rata to the Hedge Counterparty in respect of scheduled payments<br> under any Hedging Agreement and the Senior Agent for the relevant Finance Parties (other<br> than the Hedge Counterparty) of any accrued interest, fees and any other financing costs<br> which are due but unpaid under this Agreement and any costs and expenses of any Lender that<br> has prefunded the Senior Agent and/or Common Security Agent in connection with the taking<br> of any enforcement action by the Senior Agent and/or Common Security Agent (as applicable); |
| --- | --- |
| (iv) | fourthly,<br> in or towards repayment pro rata of any principal due but unpaid and Hedging Partial<br> Breakage and Hedging Termination Costs; |
| --- | --- |
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| (v) | fifthly,<br> on the last day of each Interest Period unless otherwise required pursuant to paragraph (b) of<br> Clause 8.11 (Application of prepayments), in connection with a mandatory prepayment<br> pursuant to Clause 8.1 (Illegality), Clause 8.2 (Change of Control) and Clause<br> 8.4 (Mandatory prepayment – Sanctions), to the Mandatory Prepayment Account; |
|---|---|
| (vi) | sixthly,<br> in or towards payment of any fees, costs and expenses owing to the Mezzanine Agent and any<br> other Finance Party (as such term is defined in the Mezzanine Facility Agreement) (other<br> than the Mezzanine Lenders) which are due but unpaid under the Finance Documents (as such<br> term is defined in the Mezzanine Facility Agreement); and |
| --- | --- |
| (vii) | seventhly,<br> in or towards payment of any accrued interest, fees and any other mezzanine financing costs<br> due but unpaid under the Mezzanine Facility Agreement (the "Mezzanine Blocked Debt Service Amount"): |
| --- | --- |
| (A) | if<br> no Mezzanine Payment Stop Notice is outstanding under the Intercreditor and Subordination<br> Deed, such amounts will be paid into the Mezzanine Debt Service Account; or |
| --- | --- |
| (B) | if<br> a Mezzanine Payment Stop Notice is outstanding under the Intercreditor and Subordination<br> Deed, the Mezzanine Blocked Debt Service Amount will be paid into the "Mezzanine Blocked<br> Amount Ledger" of the Cash Trap Account (such ledger maintained by the Common Security<br> Agent); and |
| --- | --- |
| (viii) | eighth,<br> in or towards payment into the Cash Trap Account. |
| --- | --- |
| 19.3 | Disposal Proceeds Account |
| --- | --- |
| (a) | The<br> Common Security Agent has sole signing rights in relation to the Disposal Proceeds Account. |
| --- | --- |
| (b) | The<br> Obligors must ensure that the Prepayment Disposal Proceeds and Prepayment Refinancing Proceeds<br> are, unless immediately applied in accordance with Clause 8.3 (Mandatory prepayment – Disposal of Warehouse Project), paid into the Disposal Proceeds Account in accordance<br> with Clause 24.25 (Disposals). |
| --- | --- |
| (c) | Subject<br> to the Intercreditor and Subordination Deed and Clause 32.6 (Partial payments): |
| --- | --- |
| (i) | on<br> the last day of each Interest Period relating to a Loan which has been utilised for the purpose<br> of funding any Eligible Project Costs and/or Eligible Pre-RtB Costs with respect to the Warehouse<br> Projects which have been disposed of; or |
| --- | --- |
| (ii) | earlier<br> at the request of the Borrower, if it gives the Senior Agent not less than three (3) Business<br> Days' notice, |
| --- | --- |
the Common Security Agent (acting on the instructions of the Instructing Group) shall withdraw from, and apply amounts standing to the credit of, the Disposal Proceeds Account for the following purposes and at the following times and in the following order of priority:
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| (A) | first,<br> in repayment of principal in an amount equal to the Allocated Senior Facility Amount for<br> the Warehouse Project the relevant Warehouse Project and Hedging Partial Breakage and any<br> Hedging Termination Costs; |
|---|---|
| (B) | second,<br> in payment pro rata to the Hedge Counterparty in respect of scheduled payments under<br> any Hedging Agreement and the Senior Agent for the relevant Finance Parties (other than the<br> Hedge Counterparty) of any interest accrued to the date of payment and fees and any other<br> amount that is or will become due and payable in accordance with paragraph (b) of Clause<br> 8.10 (Restrictions)<br> as a result of those prepayments; and |
| --- | --- |
| (C) | third,<br> if: |
| --- | --- |
| (1) | a<br> Default was continuing on the date of the disposal, in payment of any remaining surplus (including<br> any Disposal Equity Amount) to the Disbursement Account (such transferred amount being the<br> "Replacement Commitments"); or |
| --- | --- |
| (2) | no<br> Default was continuing on the date of the disposal, in payment of the remaining surplus (including<br> any Disposal Equity Amount) to the Mezzanine Disposal Proceeds Account for application in<br> accordance with the Mezzanine Facility Agreement. |
| --- | --- |
| 19.4 | Mandatory Prepayment Account |
| --- | --- |
| (a) | All<br> amounts held in the Mandatory Prepayment Account shall be applied in accordance with this<br> Clause 19.4. |
| --- | --- |
| (b) | The<br> Borrower shall ensure that: |
| --- | --- |
| (i) | any<br> and all Compensation Proceeds and Insurance Proceeds received by it are credited to the Mandatory<br> Prepayment Account and applied in accordance with paragraph (c) below; and |
| --- | --- |
| (ii) | all<br> amounts required to be transferred to the Mandatory Prepayment Account pursuant to paragraph<br> (b)(v) of Clause 19.2 (Operating Account) (such amounts being the "Mandatory Prepayment Proceeds – Other") are transferred to such Account and applied<br> in accordance with paragraph (d) below. |
| --- | --- |
| (c) | Any<br> and all Compensation Proceeds and Insurance Proceeds shall be applied in accordance with<br> Clause 8.5 (Mandatory prepayment - Insurance Proceeds and Compensation Proceeds) and<br> Clause 8.11 (Application of prepayments). |
| --- | --- |
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| (d) | All<br> Mandatory Prepayment Proceeds – Other shall be applied (as applicable) in accordance<br> with the provisions of Clause 8 (Prepayment and Cancellation) relating to the relevant<br> mandatory prepayment event. |
|---|---|
| 19.5 | Cash Trap Account |
| --- | --- |
| (a) | Notwithstanding<br> anything to the contrary in any other Finance Document, each Obligor shall Transfer amounts<br> into the Cash Trap Account at the times and in the order of priority set out in paragraph<br> (b) of Clause 19.2 (Operating Account). |
| --- | --- |
| (b) | The<br> Borrower shall Transfer the amounts standing to the credit of the Cash Trap Account in or<br> towards payment of outstanding principal and/or interest due but unpaid under the Mezzanine<br> Facility Agreement: |
| --- | --- |
| (i) | if<br> no Cash Trap Event is continuing, such amounts will be paid into the Mezzanine Debt Service<br> Account; and |
| --- | --- |
| (ii) | if<br> a Cash Trap Event is continuing, such amounts will be paid into the "Cash Trap Ledger"<br> of the Cash Trap Account (such ledger maintained with the Common Security Agent), |
| --- | --- |
provided that, in each case, no Mezzanine Payment Stop Notice is outstanding.
| 19.6 | Disbursement Account |
|---|---|
| (a) | The<br> Borrower shall credit all Utilisations and Replacement Commitments into the Disbursement<br> Account. |
| --- | --- |
| (b) | The<br> Borrower shall apply all Utilisations and Replacement Commitments, with Replacement Commitments<br> in priority to any Utilisation, for the purpose specified in the relevant Utilisation Request<br> and, if the purpose to which such Utilisation relates is: |
| --- | --- |
| (i) | to<br> pay the purchase price under the relevant Acquisition Agreement for any Eligible Project<br> and the payment of related Acquisition Costs, in accordance with the relevant Funds Flow<br> Statement; |
| --- | --- |
| (ii) | to<br> pay Eligible Project Costs, towards the invoice(s) and related costs approved by the<br> Senior Agent (acting in consultation with the Lenders' Technical Adviser) as part of approving<br> any invoice delivered by the Borrower to the Senior Agent pursuant to Clause 4.3 (Conditions precedent for each Utilisation to pay Eligible Project Costs); and |
| --- | --- |
| (iii) | to<br> achieve the Eligible Pre-RtB Costs Rebalance, to credit the Mezzanine Debt Service Account. |
| --- | --- |
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SECTION 8
GUARANTEE
| 20. | GUARANTEE AND INDEMNITY |
|---|---|
| 20.1 | Guarantee and indemnity |
| --- | --- |
Each Guarantor irrevocably and unconditionally jointly and severally:
| (a) | guarantees<br> to each Finance Party punctual performance by the Borrower of all that Borrower's obligations<br> under the Finance Documents; |
|---|---|
| (b) | undertakes<br> with each Finance Party that whenever the Borrower does not pay any amount when due under<br> or in connection with any Finance Document, that Guarantor shall immediately on demand pay<br> that amount as if it was the principal obligor; and |
| --- | --- |
| (c) | agrees<br> with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable,<br> invalid or illegal it will, as an independent and primary obligation, indemnify that Finance<br> Party immediately on demand against any cost, loss or liability it incurs as a result of<br> the Borrower not paying any amount which would, but for such unenforceability, invalidity<br> or illegality, have been payable by it under any Finance Document on the date when it would<br> have been due. The amount payable by a Guarantor under this indemnity will not exceed the<br> amount it would have had to pay under this Clause 20 if the amount claimed had been recoverable<br> on the basis of a guarantee. |
| --- | --- |
| 20.2 | Continuing guarantee |
| --- | --- |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
| 20.3 | Reinstatement |
|---|
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, examinership, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 20 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
| 20.4 | Waiver of defences |
|---|
The obligations of each Guarantor under this Clause 20 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 20 (without limitation and whether or not known to it or any Finance Party) including:
| (a) | any<br> time, waiver or consent granted to, or composition with, any Obligor or other person; |
|---|
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| (b) | the<br> release of any other Obligor or any other person under the terms of any composition or arrangement<br> with any creditor of any member of the Group; |
|---|---|
| (c) | the<br> taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to<br> perfect, take up or enforce, any rights against, or security over assets of, any Obligor<br> or other person or any non-presentation or non-observance of any formality or other requirement<br> in respect of any instrument or any failure to realise the full value of any security; |
| --- | --- |
| (d) | any<br> incapacity or lack of power, authority or legal personality of or dissolution or change in<br> the members or status of an Obligor or any other person; |
| --- | --- |
| (e) | any<br> amendment, novation, supplement, extension (whether of maturity or otherwise), restatement<br> (in each case however fundamental and of whatsoever nature, and whether or not more onerous)<br> or replacement of any Finance Document or any other document or security; |
| --- | --- |
| (f) | any<br> unenforceability, illegality or invalidity of any obligation of any person under any Finance<br> Document or any other document or security; or |
| --- | --- |
| (g) | any<br> insolvency or similar proceedings. |
| --- | --- |
| 20.5 | Guarantor intent |
| --- | --- |
Without prejudice to the generality of Clause 20.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental and of whatsoever nature and whether or not more onerous) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new Borrower; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
| 20.6 | Immediate recourse |
|---|
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 20. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
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| 20.7 | Appropriations |
|---|
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
| (a) | refrain<br> from applying or enforcing any other moneys, security or rights held or received by that<br> Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply<br> and enforce the same in such manner and order as it sees fit (whether against those amounts<br> or otherwise) and no Guarantor shall be entitled to the benefit of the same; and |
|---|---|
| (b) | hold<br> in an interest-bearing suspense account any moneys received from any Guarantor or on account<br> of any Guarantor's liability under this Clause 20. |
| --- | --- |
| 20.8 | Deferral of Guarantors' rights |
| --- | --- |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Senior Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 20:
| (a) | to<br> be indemnified by an Obligor; |
|---|---|
| (b) | to<br> claim any contribution from any other guarantor of any Obligor's obligations under the Finance<br> Documents; |
| --- | --- |
| (c) | to<br> take the benefit (in whole or in part and whether by way of subrogation or otherwise) of<br> any rights of the Finance Parties under the Finance Documents or of any other guarantee or<br> security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; |
| --- | --- |
| (d) | to<br> bring legal or other proceedings for an order requiring any Obligor to make any payment,<br> or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking<br> or indemnity under Clause 20.1 (Guarantee and indemnity); |
| --- | --- |
| (e) | to<br> exercise any right of set-off against any Obligor; and/or |
| --- | --- |
| (f) | to<br> claim or prove as a creditor of any Obligor in competition with any Finance Party. |
| --- | --- |
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Senior Agent or as the Senior Agent may direct for application in accordance with Clause 32 (Payment mechanics).
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| 20.9 | Release of Guarantors' right of contribution |
|---|
If any Guarantor (a "RetiringGuarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
| (a) | that<br> Retiring Guarantor is released by each other Guarantor from any liability (whether past,<br> present or future and whether actual or contingent) to make a contribution to any other Guarantor<br> arising by reason of the performance by any other Guarantor of its obligations under the<br> Finance Documents; and |
|---|---|
| (b) | each<br> other Guarantor waives any rights it may have by reason of the performance of its obligations<br> under the Finance Documents to take the benefit (in whole or in part and whether by way of<br> subrogation or otherwise) of any rights of the Finance Parties under any Finance Document<br> or of any other security taken pursuant to, or in connection with, any Finance Document where<br> such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
| --- | --- |
| 20.10 | Additional security |
| --- | --- |
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
| 20.11 | Limitations |
|---|
The obligations of a Guarantor shall be limited in case the Guarantor Accession Letter of such Guarantor contains a provisions setting out a respective limitation language, in accordance with such provision.
| 20.12 | Guarantee Limitations: Ireland |
|---|
This guarantee does not apply to any liability to the extent that it would (x) result in this guarantee constituting unlawful financial assistance under section 82 of the Irish Companies Act 2014 or (y) result in a breach of section 239 (related party transactions) of the Irish Companies Act 2014.
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SECTION 9
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OFDEFAULT
| 21. | REPRESENTATIONS |
|---|
Each Obligor makes the representations and warranties set out in this Clause 21 to each Finance Party on the Signing Date and, as applicable, the Guarantor Accession Date.
Status, authorisation and governing law
| 21.1 | Status |
|---|---|
| (a) | It<br> is a corporation, duly incorporated and validly existing under the law of its Original Jurisdiction. |
| --- | --- |
| (b) | Each<br> of its Subsidiaries is a limited liability corporation, duly incorporated and validly existing<br> under the law of its jurisdiction of incorporation. |
| --- | --- |
| (c) | It<br> and each of its Subsidiaries has the power to own its assets and carry on its business as<br> it is being conducted and, in case of a ProjectCo, to carry out its Warehouse Project. |
| --- | --- |
| (d) | It<br> is not a FATCA FFI or a US Tax Obligor. |
| --- | --- |
| 21.2 | Binding obligations |
| --- | --- |
Subject to the Legal Reservations:
| (a) | the<br> obligations expressed to be assumed: |
|---|---|
| (i) | by it;<br> and/or |
| --- | --- |
| (ii) | by<br> any of its Subsidiaries |
| --- | --- |
in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations;
| (b) | (without<br> limiting the generality of paragraph (a) above), each Common Security Document to which<br> it is a party creates the security interests which that Common Security Document purports<br> to create and those security interests are valid and effective. |
|---|---|
| 21.3 | Non-conflict with other obligations |
| --- | --- |
The entry into and performance by it and each of its Subsidiaries of, and the transactions contemplated by, the Transaction Documents and the granting of the Common Transaction Security do not and will not conflict with:
| (a) | any<br> law or regulation applicable to it; |
|---|---|
| (b) | its<br> or any of its Subsidiaries' constitutional documents; or |
| --- | --- |
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| (c) | any<br> agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of<br> its Subsidiaries' assets. |
|---|---|
| 21.4 | Consents obtained |
| --- | --- |
It has obtained, and procured that each of its Subsidiaries has obtained, all consents necessary to ensure that no other party to any agreement or arrangement entered into by the Obligor becomes entitled to terminate that agreement or arrangement as a consequence of that Obligor or any of its Subsidiaries entering into the Transaction Documents.
| 21.5 | Power and authority |
|---|
It and each of its Subsidiaries has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated by those Transaction Documents.
| 21.6 | Validity and admissibility in evidence |
|---|---|
| (a) | All<br> Authorisations required: |
| --- | --- |
| (i) | to<br> enable it lawfully to enter into, exercise its rights and comply with its obligations in<br> the Transaction Documents to which it is a party; and |
| --- | --- |
| (ii) | to<br> make the Transaction Documents to which it is a party admissible in evidence in each Relevant<br> Jurisdiction, |
| --- | --- |
have been obtained or effected and are in full force and effect.
| (b) | All<br> Authorisations required: |
|---|---|
| (i) | to<br> enable its Subsidiaries to lawfully to enter into, exercise their respective rights and comply<br> with their respective obligations under the Transaction Documents to which they are a party;<br> and |
| --- | --- |
| (ii) | to<br> make the Transaction Documents to which they are a party admissible in evidence in each Relevant<br> Jurisdiction, |
| --- | --- |
have been obtained or effected and are in full force and effect
| 21.7 | Governing law and enforcement |
|---|---|
| (a) | Subject<br> to the Legal Reservations, the choice of governing law of each of the Transaction Documents<br> will be recognised and enforced in each Relevant Jurisdiction. |
| --- | --- |
| (b) | Any<br> judgment obtained in the respective jurisdiction specified in each Finance Document and (if<br> applicable) any awards obtained in an arbitration forum which it has submitted itself to<br> will be recognised and enforced in each Relevant Jurisdiction. |
| --- | --- |
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No insolvency, default or tax liability
| 21.8 | Insolvency |
|---|
No:
| (a) | corporate<br> action, legal proceeding or other procedure or step described in Clause 25.7 (Insolvency proceedings); or |
|---|---|
| (b) | creditors'<br> process described in Clause 25.8 (Creditors' process), |
| --- | --- |
has, to the best of its knowledge (after having made due and careful enquiry), been taken or threatened in respect of it or any of its Subsidiaries and none of the circumstances described in Clause 25.6 (Insolvency) applies to it or any of its Subsidiaries.
| 21.9 | No default or other adverse event |
|---|---|
| (a) | No<br> Event of Default and, on the date of this Agreement and the date of Financial Close, no Default<br> is continuing or might reasonably be expected to result from the making of any Utilisation<br> or the entry into, the performance of, or any transaction contemplated by, any Transaction<br> Document. |
| --- | --- |
| (b) | No<br> other event or circumstance is outstanding which constitutes a default under any other agreement<br> or instrument which is binding on it or any of its Subsidiaries or to which its (or any of<br> its Subsidiaries') assets are subject which might have a Material Adverse Effect. |
| --- | --- |
| 21.10 | Deduction of Tax |
| --- | --- |
Neither it nor any of its Subsidiaries is required to make any Tax Deduction (as defined in Clause 13.1 (Definitions)) from any payment it may make under any Finance Document to a Lender which is a Qualifying Lender.
| 21.11 | No filing or stamp taxes |
|---|
Under the law of each Relevant Jurisdiction it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents other than as set out in the relevant Guarantor Accession Letter or separately agreed with the Senior Agent in writing with respect to a particular Eligible Jurisdiction and except for:
| (a) | registration<br> of particulars of the applicable Common Security Documents at the Companies Registration<br> Office ("CRO") in Ireland by way of a Form C1 under Section 409(3) of<br> the Irish Companies Act 2014 and, where applicable, notifications to the Irish Revenue Commissioners<br> within twenty-one (21) days of execution thereof. Each Obligor hereby irrevocably and unconditionally<br> authorises any and each solicitor from time to time in Arthur Cox LLP to (a) sign or<br> complete (whether electronically or otherwise) on behalf of that Obligor all required security<br> related registration forms required to be delivered to the CRO in connection with any of<br> the Common Security Documents; (b) file (whether electronically or otherwise) each such<br> registration form with the CRO; and (c) include an email address for a solicitor in<br> Arthur Cox LLP in each such registration form for the purposes of receiving any certificate<br> of registration of charge electronically from the CRO. |
|---|
- 114 -
| (b) | In<br> giving the authorisation at (a) above, each Obligor agrees and acknowledges that (a) no<br> solicitor/client relationship exists between Arthur Cox LLP (or any solicitor at that law<br> firm) and that Obligor; (b) it is that Obligor’s responsibility to comply with<br> the procedures set out in Sections 409(3) and (4) of the Companies Act (without<br> prejudice to Section 410(2) thereof); and (c) Arthur Cox LLP have no liability<br> or responsibility to that Obligor for any failure to comply with the terms of that authorisation. |
|---|---|
| 21.12 | Taxation |
| --- | --- |
| (a) | It<br> and each of it is Subsidiaries has duly and punctually paid and discharged all Taxes imposed<br> upon it or its assets within the time period allowed without incurring penalties (except<br> to the extent that (i) payment is being contested in good faith, (ii) it has maintained<br> adequate reserves for those Taxes and (iii) payment can be lawfully withheld). |
| --- | --- |
| (b) | Neither<br> it nor any of its Subsidiaries is materially overdue in the filing of any Tax returns. |
| --- | --- |
| (c) | No<br> claims are being or are reasonably likely to be asserted against it or any of its Subsidiaries<br> with respect to Taxes. |
| --- | --- |
| (d) | It<br> is a resident for Tax purposes only in its jurisdiction of incorporation. |
| --- | --- |
| (e) | It<br> is not a member of a VAT Group. |
| --- | --- |
No other business
| 21.13 | Relationships with others |
|---|---|
| (a) | Its<br> constitutional documents, each Shareholder Loan Agreement and each Finance Document to which<br> both the Borrower and the Shareholders are party contain all the material terms of the arrangements<br> between the Borrower and the Shareholders and their Affiliates. |
| --- | --- |
| (b) | Neither<br> it nor any of its Subsidiaries has any material rights against, or obligations to, any person<br> other than under: |
| --- | --- |
| (i) | the<br> Transaction Documents to which it is party and any transactions that they expressly contemplate. |
| --- | --- |
| (ii) | the<br> Shareholder Loan Agreements and the Intragroup Loan Agreements to which it is a party; and |
| --- | --- |
| (iii) | any<br> other contract or arrangement provided that the aggregate amount of payments under such contracts<br> or arrangements, across all Warehouse Projects, does not exceed EUR 250,000 (or equivalent<br> in any other currency) and, per Warehouse Project in any calendar year, EUR 50,000, |
| --- | --- |
- 115 -
and, in each case, any transaction that they expressly contemplate.
| (c) | Each<br> transaction or arrangement that it or any of its Subsidiaries has entered into with any person<br> is on an arm's length basis. |
|---|---|
| (d) | It<br> does not carry out any business other than: |
| --- | --- |
| (i) | in<br> case of the Borrower, directly or indirectly holding shares in ProjectCos which have acceded<br> to this Agreement as Guarantors by way of Guarantor Accession Letters; |
| --- | --- |
| (ii) | in<br> the case of its Subsidiaries: |
| --- | --- |
| (A) | which<br> are Country HoldCos, holding the shares directly in a Project HoldCo(s) and indirectly<br> in several ProjectCos in an Eligible Jurisdiction; |
| --- | --- |
| (B) | which<br> are Project HoldCos, holding shares directly in several ProjectCos in the Eligible Jurisdiction<br> in which it is incorporated; and |
| --- | --- |
| (C) | which<br> are ProjectCos, carrying out, the Eligible Project which it owns. |
| --- | --- |
| 21.14 | Financial Indebtedness |
| --- | --- |
Neither it nor any of its Subsidiaries has any Financial Indebtedness other than as permitted by this Agreement.
| 21.15 | Group Structure |
|---|
The most recent Group Structure Chart delivered to the Senior Agent:
| (a) | pursuant<br> to Schedule 2 (Conditions Precedent and Subsequent) or, as applicable |
|---|---|
| (b) | as<br> condition precedent for an accession of an Guarantor and/or a Utilisation, is true, complete<br> and accurate. |
| --- | --- |
| 21.16 | Ownership of the Borrower |
| --- | --- |
The Borrower is a wholly owned Subsidiary of MidCo which is in turn, a wholly owned Subsidiary of the Parent.
| 21.17 | Ownership of the Obligors |
|---|---|
| (a) | The<br> Obligors are, at the date of this Agreement, wholly owned Subsidiaries (whether directly<br> or indirectly) of the Sponsor. |
| --- | --- |
- 116 -
| (b) | After<br> the date of this Agreement, the Obligors remain majority-owned (whether directly or indirectly)<br> by the Sponsor. |
|---|
Provision of information – general
| 21.18 | No misleading information |
|---|---|
| (a) | Any<br> written factual information provided by it or any other member of the Group for the purposes<br> of the Information Memorandum and otherwise was true and accurate in all material respects<br> as at the date it was provided or as at the date (if any) at which it is stated. |
| --- | --- |
| (b) | The<br> financial projections contained in the Information Memorandum and provided by it or any other<br> member of the Group have been prepared on the basis of recent historical information and<br> on the basis of reasonable assumptions. |
| --- | --- |
| (c) | Nothing<br> has occurred or been omitted from the Information Memorandum and no information has been<br> given or withheld that results in any information contained in the Information Memorandum<br> and otherwise provided by it or any other member of the Group being untrue or misleading<br> in any material respect. |
| --- | --- |
| (d) | All<br> written information supplied by it or any other member of the Group is true, complete and<br> accurate in all material respects as at the date it was given and is not misleading in any<br> respect, and any projections contained in such information have been prepared on the basis<br> of recent historical information and on the basis of reasonable assumptions. |
| --- | --- |
| 21.19 | Financial statements |
| --- | --- |
| (a) | Its<br> and each of its respective Subsidiaries' Original Financial Statements were prepared in accordance<br> with the relevant Accounting Principles consistently applied unless expressly disclosed to<br> the Senior Agent in writing to the contrary before: |
| --- | --- |
| (i) | in the<br> case of the Borrower, the Signing Date; |
| --- | --- |
| (ii) | in<br> case of any Guarantor, the respective Guarantor Accession Date; and |
| --- | --- |
| (iii) | in<br> case of any ProjectCo which is not an Obligor, its Acquisition Date. |
| --- | --- |
| (b) | Its<br> and each of its respective Subsidiaries' Original Financial Statements fairly present its<br> (or, as applicable, the respective Subsidiary's) financial condition as at the end of the<br> relevant financial year and operations during the relevant financial year (consolidated in<br> the case of the Borrower). |
| --- | --- |
| (c) | Its<br> and each of its respective Subsidiaries' most recent financial statements delivered pursuant<br> to Clause 22.1 (Financial statements): |
| --- | --- |
| (i) | have<br> been prepared in accordance with the Accounting Principles as applied to the respective Original<br> Financial Statements; and |
| --- | --- |
- 117 -
| (ii) | fairly<br> present its consolidated financial condition as at the end of, and its consolidated results<br> of operations for, the period to which they relate. |
|---|---|
| (d) | The<br> budgets and forecasts supplied under this Agreement were arrived at after careful consideration<br> and have been prepared in good faith on the basis of recent historical information and on<br> the basis of assumptions which were reasonable as at the date they were prepared and supplied. |
| --- | --- |
| (e) | There<br> has been no material adverse change in its business or financial condition (or the business<br> or consolidated financial condition of the Group, in the case of the Borrower) since the<br> date on which its or, as applicable, its respective Subsidiaries, Original Financial Statements<br> are stated to have been prepared. |
| --- | --- |
No proceedings or breach of laws
| 21.20 | No proceedings |
|---|---|
| (a) | No<br> litigation, arbitration or administrative proceedings of or before any court, arbitral body<br> or agency which, if adversely determined, might reasonably be expected to have a Material<br> Adverse Effect has or have (to the best of its knowledge and belief) been started or threatened<br> against any member of the Group (or against the directors of any member of the Group) or<br> in relation to any Warehouse Project. |
| --- | --- |
| (b) | No<br> judgment or order of a court, arbitral body or agency which might reasonably be expected<br> to have a Material Adverse Effect has (to the best of its knowledge and belief) been made<br> against any member of the Group (or against the directors of any member of the Group) or<br> in relation to any Warehouse Project. |
| --- | --- |
| 21.21 | E&S compliance |
| --- | --- |
Each member of the Group has performed and observed in all material respects all E&S Standards, E&S Authorisations and all other material covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with any real property which is or was at any time owned, leased or occupied by any member of the Group or on which any member of the Group has conducted any activity where failure to do so might reasonably be expected to have a Material Adverse Effect.
| 21.22 | E&S Claims |
|---|
No E&S Claim has been commenced or (to the best of its knowledge and belief) is threatened against any member of the Group where that claim would be reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect.
| 21.23 | Compliance |
|---|
It and each of its Subsidiaries has performed and observed (and each Warehouse Project complies with), in all material respects, all Compliance Standards.
- 118 -
| 21.24 | Anti-Bribery and anti-corruption |
|---|---|
| (a) | It<br> and each of its Subsidiaries has conducted its business and operations and, in case of a<br> ProjectCo, has carried out the respective Warehouse Project in compliance with applicable<br> Anti-Bribery and Corruption Laws. |
| --- | --- |
| (b) | Neither<br> the Obligor nor, to the best of its knowledge, any director, officer, employee, associated<br> party or person acting on behalf of the Obligor or its Subsidiaries has engaged in any activity<br> which would breach any Anti-Bribery and Corruption Laws. |
| --- | --- |
| (c) | To<br> the best of its knowledge and belief, no actions or investigations by any governmental or<br> regulatory agency are ongoing or threatened against it or its Subsidiaries, or any of its<br> directors, officers, employee, associated party or person acting on their behalf in relation<br> to a breach of the Anti-Bribery and Corruption Laws. |
| --- | --- |
| (d) | It<br> and each of its Subsidiaries have instituted and enforce policies and procedures designed<br> to ensure compliance with the Anti-Bribery and Corruption Laws. |
| --- | --- |
| (e) | It<br> confirms to act as principal for its own account and not as agent or trustee in any capacity<br> on behalf of any party in relation to the Finance Documents. With regard to § 3 Abs.<br> 1 S. 1 Nr. 2, Abs. 4 GwG, the Guarantor confirms that it provides the Common Transaction<br> Security for the benefit of the Borrower. |
| --- | --- |
| 21.25 | Sanctions |
| --- | --- |
| (a) | Neither<br> it nor any of its Subsidiaries, and (to its knowledge) none of its or any of its Subsidiaries'<br> directors, officers, employees, agents, controlled affiliates, or other person acting on<br> behalf, at the direction or in the interest of the Obligor or any of their Subsidiaries is,<br> currently a designated target of, or is otherwise a subject of, Sanctions. |
| --- | --- |
| (b) | Each<br> Obligor has instituted and maintains policies and procedures designed to prevent Sanctions<br> violations (by such Obligor and its Subsidiaries and by persons associated with such Obligor<br> and its Subsidiaries). |
| --- | --- |
| (c) | It<br> neither knows nor has reason to believe that it is or may become subject of Sanctions- related<br> investigations or juridical proceedings. |
| --- | --- |
| 21.26 | Non-AIF status |
| --- | --- |
Neither it nor any of its Subsidiaries is an AIF or an AIFM.
| 21.27 | AML compliance |
|---|---|
| (a) | The<br> operations of each Obligor and each of their respective Subsidiaries are in compliance with<br> all Money Laundering Laws and have been conducted at all times in compliance with all Money<br> Laundering Laws. |
| --- | --- |
| (b) | No<br> action, suit or proceeding by or before any court or governmental agency, authority or body<br> or any arbitrator involving any Obligor or any of their respective Subsidiaries including<br> any of its existing or previous officers, directors, employees, agents, affiliates, associated<br> parties and persons acting on behalf of such Obligor or Subsidiary with respect to Money<br> Laundering Laws is pending and, to the best of its's knowledge, no such actions, suits or<br> proceedings are threatened or contemplated. |
| --- | --- |
- 119 -
| (c) | Each<br> Obligor and each of its respective Subsidiaries has instituted and enforces policies and<br> procedures designed to ensure compliance with Money Laundering Laws and prevent money laundering,<br> bribery and corruption by such person and by persons associated with such person. |
|---|
Security, ownership of assets, insurance
| 21.28 | Security |
|---|
No Security exists over all or any of its present or future assets or the present and future assets of any other member of the Group other than any Security permitted under Clause 24.23 (Negative Pledge).
| 21.29 | Ranking |
|---|
The Common Transaction Security has or will have first ranking priority and it is not subject to any prior ranking or pari passu ranking Security.
| 21.30 | Common Transaction Security |
|---|
Each Common Security Document to which it is a party validly creates the Security which is expressed to be created by that Common Security Document and evidences the Security it is expressed to evidence.
| 21.31 | Good title to assets and Real Property |
|---|---|
| (a) | It<br> and each of its Subsidiaries has good, valid and marketable title to, or valid leases or<br> licences of, and all appropriate Authorisations to use, the assets necessary to carry on<br> its business as presently conducted and, in case it or any of its Subsidiaries is a ProjectCo,<br> to carry out its respective Warehouse Project. |
| --- | --- |
| (b) | It<br> and each of its Subsidiaries which is a ProjectCo has rights to all Real Property, and where<br> applicable it legally and beneficially leases all Real Property, required to carry out the<br> Warehouse Project at the Site. |
| --- | --- |
| (c) | On: |
| --- | --- |
| (i) | the<br> date of Financial Close; and |
| --- | --- |
| (ii) | the<br> Acquisition Date relating to the relevant ProjectCo, |
| --- | --- |
there are or were (as applicable) no outstanding payments under the Real Estate Agreements and, thereafter, nothing overdue thereunder.
| 21.32 | No disposal of interests |
|---|
Neither it nor any of its Subsidiaries has sold or granted (or agreed to sell or grant) any right of pre-emption over, or any lease or tenancy of or otherwise disposed of any of its interests in any of the Charged Property other than the Permitted Disposals and Excluded Permitted Disposals.
- 120 -
| 21.33 | Legal and beneficial owner |
|---|
The Obligors and their respective Subsidiaries are the absolute legal owner and beneficial owners of the assets subject to the Common Transaction Security.
| 21.34 | Shares |
|---|
The shares which are subject to the Common Transaction Security are fully paid and not subject to any option to purchase or similar rights. The constitutional documents of companies whose shares are subject to the Common Transaction Security do not and could not restrict or inhibit any transfer of those shares on creation or on enforcement of the Common Transaction Security.
| 21.35 | Intellectual Property |
|---|---|
| (a) | Each<br> ProjectCo owns all Intellectual Property that is necessary to carry out the respective Warehouse<br> Project. |
| --- | --- |
| (b) | It<br> has taken all necessary action (including payments of fees and the making of all registrations)<br> to safeguard, maintain in full force and effect, use, and preserve its ability to enforce<br> all Intellectual Property owned or used by it. |
| --- | --- |
| (c) | Its<br> ownership or use of the Intellectual Property does not infringe any rights of any third party. |
| --- | --- |
| (d) | Neither<br> it nor any of its Subsidiaries which is a ProjectCo is aware of any adverse circumstance<br> relating to validity, subsistence or use of any of its Intellectual Property. |
| --- | --- |
| 21.36 | Insurance |
| --- | --- |
| (a) | It<br> and each of its Subsidiaries is in compliance with all of its obligations with respect to<br> insurance under the Transaction Documents to which it is a party. |
| --- | --- |
| (b) | All<br> Insurances which are required to have been effected under the Transaction Documents are in<br> full force and effect, and no event or circumstance has occurred (including any omission<br> to disclose any fact) which could validly entitle an insurer in respect of any of such Insurances<br> to terminate, rescind or otherwise avoid or reduce its or any of its Subsidiaries liability<br> under any such Insurances. |
| --- | --- |
Miscellaneous
| 21.37 | No Immunity |
|---|
In any proceedings taken in a Relevant Jurisdiction in relation to the Transaction Documents, neither it nor any of its Subsidiaries will be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
- 121 -
| 21.38 | Private and commercial acts |
|---|
Its execution of the Transaction Documents to which it or any of its Subsidiaries is or will be party constitutes, and its exercise of its rights and performance of its obligations under those Transaction Documents will constitute, private and commercial acts done and performed for private and commercial purposes.
| 21.39 | Pari passu ranking |
|---|
Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
| 21.40 | Centre of main interests and establishments |
|---|
In relation to each Obligor, for the purposes of the EU Insolvency Regulation, its centre of main interest (as that term is used in Article 3(1) of the EU Insolvency Regulation) is situated in its Original Jurisdiction and it has no “establishment” (as that term is used in Article 2(10) of the EU Insolvency Regulation) in any other jurisdiction.
| 21.41 | Bank Recovery and Resolution |
|---|
Neither it nor any member of the Group is an entity which is within the scope of the stabilisation, resolution or recovery powers under the Banking Act 2009, or similar powers under the laws of any other jurisdiction.
| 21.42 | DAC 6 |
|---|
No transaction contemplated by the Transaction Documents nor any transaction to be carried out in connection with any transaction contemplated by the Transaction Documents meets any hallmark set out in Annex IV of the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU.
| 21.43 | Dealings with SRCs and SDNs |
|---|
It neither has nor intends to have any business operations or other dealings
| (a) | in<br> any Sanctioned Territory, including the Crimea region, Cuba, Iran, Sudan, North Korea<br> and Syria, |
|---|---|
| (b) | with<br> any Specially Designated National ("SDN") on OFAC’s SDN list or with a designated<br> person targeted by asset freeze Sanctions imposed by the UN, EU, UK or HMT, |
| --- | --- |
| (c) | involving<br> commodities or services of a Sanctioned Territory origin or shipped to, through, or from<br> a Sanctioned Territory, or on Sanctioned Territory owned or registered vessels or aircraft,<br> or finance or subsidize any of the foregoing exceeding 5% aggregated in comparison to its<br> total assets or revenues. |
| --- | --- |
- 122 -
| 21.44 | Repetition |
|---|
The Repeating Representations are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on:
| (a) | the<br> date of each Utilisation Request, each Utilisation Date, the date of each Compliance Certificate,<br> each Acquisition Date and the first day of each Interest Period; and |
|---|---|
| (b) | in<br> the case of a Guarantor, the day on which such person becomes (or it is proposed that such<br> person becomes) an Guarantor. |
| --- | --- |
| 22. | INFORMATION UNDERTAKINGS |
| --- | --- |
The undertakings in this Clause 22 remain in force from the Signing Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
| 22.1 | Financial statements |
|---|
The Borrower shall supply to the Senior Agent in sufficient copies for all the Lenders:
| (a) | as<br> soon as the same become available, but in any event within 120 days after the end of each<br> of its financial years: |
|---|---|
| (i) | its<br> audited consolidated financial statements for that financial year; |
| --- | --- |
| (ii) | the<br> audited financial statements of each Obligor for that financial year; and |
| --- | --- |
| (iii) | the<br> audited financial statements of each ProjectCo that is not an Obligor for that financial<br> year; and |
| --- | --- |
| (b) | as<br> soon as the same become available, but in any event within sixty (60) days after the end<br> of each half of each of its financial years: |
| --- | --- |
| (i) | its<br> consolidated financial statements for that financial half year; |
| --- | --- |
| (ii) | the<br> financial statements of each Obligor for that financial half year; and |
| --- | --- |
| (iii) | the<br> financial statements of each ProjectCo that is not an Obligor for that financial year; and |
| --- | --- |
| (c) | as<br> soon as the same become available, but in any event within forty-five (45) days after the<br> end of each quarter of each of its financial years: |
| --- | --- |
| (i) | its<br> consolidated financial statements for that period; |
| --- | --- |
| (ii) | the<br> financial statements of each Obligor for that period; and |
| --- | --- |
| (iii) | the<br> financial statements of each ProjectCo that is not an Obligor for that period. |
| --- | --- |
- 123 -
| 22.2 | Compliance Certificate |
|---|---|
| (a) | The<br> Borrower shall supply to the Senior Agent, together with each set of financial statements<br> delivered pursuant to paragraph (a)(i) or (b)(i) of Clause 22.1 (Financial statements)<br> and on each Calculation Date, a Compliance Certificate setting out (in reasonable detail)<br> computations as to compliance with Clause 23 (Financial covenants) as at the date<br> as at which those financial statements were drawn up. |
| --- | --- |
| (b) | Each<br> Compliance Certificate shall be signed by two (2) directors of the Borrower and, if<br> required to be delivered with the financial statements delivered pursuant to paragraph (a)(i) of<br> Clause 22.1 (Financial statements), shall be reported on by the Borrower’s auditors<br> in the form agreed by the Borrower and all the Lenders before the Signing Date. |
| --- | --- |
| 22.3 | Requirements as to financial statements |
| --- | --- |
(a) The Borrower shall:
| (i) | deliver<br> each set of financial statements pursuant to Clause 22.1 (Financial statements) with: |
|---|---|
| (A) | a<br> balance sheet, a profit and loss account, a cashflow statement (in each case, incorporated<br> in such financial statement) and a management discussion and analysis; and |
| --- | --- |
| (B) | a<br> certification by a director of the relevant company as fairly presenting its financial condition<br> as at the date as at which those financial statements were drawn up; and |
| --- | --- |
| (ii) | procure<br> that the management of the Sponsor are available within three (3) Business Days of request<br> to have a detailed discussion and analysis with the Lenders in respect of such financial<br> statements. |
| --- | --- |
(b)
| (i) | The<br> Borrower shall procure that each set of financial statements of an Obligor or ProjectCo that<br> is not an Obligor delivered pursuant to Clause 22.1 (Financial statements) is prepared<br> using the Accounting Principles, accounting practices and financial reference periods consistent<br> with those applied in the preparation of the Original Financial Statements for that Obligor<br> or, as applicable, ProjectCo, unless, in relation to any set of financial statements, it<br> notifies the Senior Agent that there has been a change in the Accounting Principles, the<br> accounting practices or reference periods, and its auditors (or, if appropriate, the auditors<br> of the Obligor or, as applicable, ProjectCo) deliver to the Senior Agent: |
|---|---|
| (A) | a<br> description of any change necessary for those financial statements to reflect the Accounting<br> Principles, accounting practices and reference periods upon which that Obligor’s or,<br> as applicable, ProjectCo’s Original Financial Statements were prepared; and |
| --- | --- |
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| (B) | sufficient<br> information, in form and substance as may be reasonably required by the Senior Agent, to<br> enable the Lenders to determine whether Clause 23 (Financial covenants) has been complied<br> with and make an accurate comparison between the financial position indicated in those financial<br> statements and that Obligor’s or, as applicable, ProjectCo’s Original Financial<br> Statements. |
|---|---|
| (ii) | If<br> the Borrower notifies the Senior Agent of a change in accordance with paragraph (i) above<br> then the Borrower and Senior Agent shall enter into negotiations in good faith with a view<br> to agreeing: |
| --- | --- |
| (A) | whether<br> or not the change might result in any material alteration in the commercial effect of any<br> of the terms of this Agreement; and |
| --- | --- |
| (B) | if<br> so, any amendments to this Agreement which may be necessary to ensure that the change does<br> not result in any material alteration in the commercial effect of those terms, |
| --- | --- |
and if any amendments are agreed they shall take effect and be binding on each of the Parties in accordance with their terms.
Any reference in this Agreement to “those financial statements” shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
| 22.4 | Financial Model |
|---|---|
| (a) | The<br> Borrower shall maintain the Financial Model (including the Base Case) for the purpose of<br> preparing calculations and forecasts in accordance with this Agreement. |
| --- | --- |
| (b) | The<br> Borrower and the Senior Agent shall each retain one copy of the Financial Model as revised<br> from time to time. |
| --- | --- |
| (c) | The<br> Borrower shall not make any changes to the Financial Model without the Senior Agent’s<br> prior written consent. |
| --- | --- |
| (d) | Each<br> of the Borrower and the Senior Agent may propose structural changes to the Financial Model<br> (in the case of the Senior Agent, only for the purposes of correcting any error or deficiency<br> or to adjust any formula, logic or methodology for making calculations in accordance with<br> the Finance Documents) and any such proposal shall be accompanied by the reasons for such<br> proposal. |
| --- | --- |
| (e) | Notwithstanding,<br> and without prejudice to the provisions of this Clause 22.4, no changes shall be made to<br> the Financial Model unless the same changes are made to the “financial model”<br> (howsoever defined under the Mezzanine Facility Agreement) delivered pursuant to the Mezzanine<br> Facility Agreement. |
| --- | --- |
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| (f) | If,<br> without prejudice to paragraph (e) above, the Borrower and the Senior Agent agree on<br> any proposed changes to the Financial Model, it shall be updated accordingly and, if the<br> Senior Agent so requires, shall be re-audited by the Model Auditor. |
|---|---|
| 22.5 | Updated Base Case |
| --- | --- |
| (a) | The<br> Borrower shall produce and deliver to the Senior Agent an updated Base Case (an “Updated Base Case”): |
| --- | --- |
| (i) | on<br> each day that it is required to deliver a Warehouse Report pursuant to Clause 22.9 (Warehouse Reporting); |
| --- | --- |
| (ii) | no<br> later than fifteen (15) Business Days prior to the proposed entry to an Enhancement PPA; |
| --- | --- |
| (iii) | within<br> ten (10) Business Days of: |
| --- | --- |
| (A) | a<br> Funding Shortfall; |
| --- | --- |
| (B) | any<br> Key Project Milestone not being achieved by the stipulated date; |
| --- | --- |
| (C) | any<br> Transaction Document being terminated, cancelled, repudiated or rescinded prior to its originally<br> stated maturity or not renewed upon its expiry unless replaced in the manner described in<br> paragraph (c) of Clause 25.12 (Termination or Repudiation); or |
| --- | --- |
| (D) | any<br> circumstance equivalent to the matters described in paragraph (b) of Clause 25.13 (Governmental Intervention) (excluding any de minimis book value set out therein); |
| --- | --- |
| (iv) | as<br> soon as practicable following notification from the Senior Agent that any material event<br> has occurred that necessitates an update to the Assumptions included in the current Base<br> Case; |
| --- | --- |
| (v) | in<br> any other circumstances in which a calculation or determination is required to be made under<br> a Finance Document by reference to a revised Base Case. |
| --- | --- |
| (b) | Each<br> Updated Base Case shall be: |
| --- | --- |
| (i) | substantially<br> in the form of the Original Base Case; and |
| --- | --- |
| (ii) | prepared<br> on the basis of Assumptions determined in accordance with Clause 22.6 (Assumptions)<br> (which shall be the same as those used for the Mezzanine Facility Agreement). |
| --- | --- |
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| (c) | The<br> Borrower will ensure that, as at the delivery of any Updated Base Case to the Senior Agent: |
|---|---|
| (i) | all<br> the factual information set out in such Updated Base Case is true, complete and accurate<br> in all material respects and has been compiled in good faith and with due care and attention;<br> and |
| --- | --- |
| (ii) | all<br> projections, forecasts, estimates and opinions made by it in such Updated Base Case were<br> made in good faith and prepared on the basis of the values attributed to the Assumptions<br> disclosed therein, and it was reasonable for it to attribute those values. |
| --- | --- |
| (d) | The<br> Borrower shall, promptly upon request, deliver to the Senior Agent such information as the<br> Senior Agent may reasonably require in connection with its review of the Updated Base Case. |
| --- | --- |
| (e) | The<br> Senior Agent shall as soon as reasonably practicable after receipt of the Updated Base Case<br> notify the Borrower if it accepts the Updated Base Case, and if it does not: |
| --- | --- |
| (i) | the<br> Senior Agent and the Borrower shall discuss (for a period not longer than fifteen (15) Business<br> Days) any changes required to the Updated Base Case; and |
| --- | --- |
| (ii) | if<br> the Borrower and the Senior Agent are unable to agree on any changes required to the Updated<br> Base Case, the matter shall be referred to the Resolution Procedure and resolved within fifteen<br> (15) Business Days. |
| --- | --- |
| (f) | In<br> case the Borrower and the Senior Agent refer the matter to the Resolution Procedure, they<br> shall give the Mezzanine Agent and the MidCo an opportunity to join the Resolution Procedure<br> with the aim of ensuring that the results of the Resolution Procedure shall be binding both<br> under the Mezzanine Facility Agreement and this Agreement. |
| --- | --- |
| 22.6 | Assumptions |
| --- | --- |
| (a) | Either: |
| --- | --- |
| (i) | at<br> least five (5) Business Days prior to the date on which an Updated Base Case is required<br> to be delivered to the Senior Agent pursuant to Clause 22.5 (Updated Base Case), or<br> on the date on which the Borrower delivers such Updated Base Case in accordance with Clause<br> 22.5 (Updated Base Case); and |
| --- | --- |
| (ii) | in<br> any event, on each Calculation Date, |
the Borrower shall:
| (A) | update<br> the relevant Assumptions in good faith; and |
|---|
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| (B) | deliver<br> to the Senior Agent: |
|---|---|
| (1) | the<br> proposed updated relevant Assumptions; and |
| --- | --- |
| (2) | a<br> description of any material change to the value of any such updated Assumptions when compared<br> with the value of the Assumptions used to prepare the then current Base Case, giving reasonable<br> details of, and where reasonably available, supporting information for, the reasons for the<br> change. |
| --- | --- |
| (b) | The<br> Updated Base Case shall reflect the updated relevant Assumptions in the manner set out below: |
| --- | --- |
| (i) | taking<br> into account any: |
| --- | --- |
| (A) | Funding<br> Shortfall; |
| --- | --- |
| (B) | any<br> Key Project Milestone not being achieved by the stipulated date; |
| --- | --- |
| (C) | any<br> Transaction Document being terminated, cancelled, repudiated or rescinded prior to its originally<br> stated maturity or not renewed upon its expiry unless replaced in the manner described in<br> paragraph (c) of Clause 25.12 (Termination or Repudiation); and |
| --- | --- |
| (D) | any<br> circumstance equivalent to the matters described in paragraph (b) of Clause 25.13 (Governmental Intervention) (excluding any de minimis book value set out therein); |
| --- | --- |
| (ii) | the<br> updated power price assumptions; and |
| --- | --- |
| (iii) | any<br> change to any contractual sum that was assessed and analysed by the Lenders as part of determining<br> whether a solar PV project satisfies the Eligibility Criteria which has become a Warehouse<br> Project. |
| --- | --- |
| (c) | The<br> Senior Agent may challenge any Assumptions that the Borrower proposes to update, or that<br> it believes the Borrower should have updated, at any time within fifteen (15) Business Days<br> of its receipt of the proposed updated Assumptions. If the Senior Agent challenges any Assumptions<br> that the Borrower proposes to update, or that it believes the Borrower should have updated: |
| --- | --- |
| (i) | the<br> Senior Agent and the Borrower shall discuss (for a period not longer than ten (10) Business<br> Days) any changes required to the Assumptions; and |
| --- | --- |
| (ii) | if<br> the Borrower and the Senior Agent are unable to agree on the updated Assumptions, the matter<br> shall be referred to the Resolution Procedure and resolved within ten (10) Business<br> Days, and the updated Assumptions as determined pursuant to that procedure shall become the<br> updated Assumptions for the purposes of producing the Updated Base Case in accordance with<br> Clause 22.5 (Updated Base Case). |
| --- | --- |
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| 22.7 | Construction Budget and Project Close Confirmation |
|---|---|
| (a) | The<br> Original Construction Budget and the Original Project Close Confirmation shall be the current<br> Construction Budget and current Project Close Confirmation, in each case, in respect of the<br> relevant Warehouse Project to which it relates until updated in accordance with this Clause. |
| --- | --- |
| (b) | The<br> Borrower shall, following receipt by the Senior Agent of any Warehouse Report delivered to<br> it pursuant to Clause 22.9 (Warehouse Reporting) and within three (3) Business<br> Days of the Senior Agent’s request, deliver an updated draft Construction Budget and,<br> only if so requested by the Senior Agent, a draft update to paragraph (a) of the Project<br> Close Confirmation, to the Senior Agent (in each case, in form and substance satisfactory<br> to the Senior Agent acting in consultation with the Lenders’ Technical Adviser (including<br> subject to any condition the Senior Agent imposed by it (acting in its full discretion))<br> in respect of the relevant Warehouse Project(s) (any such draft prepared substantially<br> in the form of the Original Construction Budget or Original Project Close Confirmation, as<br> applicable). |
| --- | --- |
| 22.8 | Operating Budget |
| --- | --- |
| (a) | The<br> Borrower shall, within the period commencing on the date falling twenty (20)<br> Business Days prior to the Warehouse Project Completion Longstop Date of a Warehouse Project<br> (as set out in the then current Project Close Confirmation) and ending on the date falling<br> five (5) Business Days prior to the Commercial Operation Date of that Warehouse Project,<br> deliver to the Senior Agent (in form and substance satisfactory to the Senior Agent) an operating<br> budget in connection to that Warehouse Project (such budget being the “Original Operating Budget”) and for the period commencing from the Commercial Operation<br> Date until the date on which the Borrower is obliged to deliver the Warehouse Report pursuant<br> to paragraph (a)(ii) of Clause 22.9 (Warehouse Reporting). |
| --- | --- |
| (b) | The<br> Borrower shall, together with each Warehouse Report delivered to the Senior Agent pursuant<br> to paragraph (a)(ii) of Clause 22.9 (Warehouse Reporting), deliver an update<br> to the Operating Budget for the immediately forthcoming Operating Period. |
| --- | --- |
| (c) | The<br> Borrower shall ensure that each Operating Budget delivered and updated from time to time<br> pursuant to this Clause 22.8 shall set out the matters listed in paragraph 2(b) of Schedule<br> 14 (Form of Warehouse Report) in form and substance satisfactory to the Senior<br> Agent (and in respect of an update, shall be in the form of the Original Operating Budget<br> agreed to by the Senior Agent). |
| --- | --- |
| 22.9 | Warehouse Reporting |
| --- | --- |
| (a) | The<br> Borrower shall: |
| --- | --- |
| (i) | in<br> connection with Warehouse Projects yet to achieve the Commercial Operation Date, within three<br> (3) Business Days after the end of each calendar month, deliver to the Senior Agent<br> (in form and substance satisfactory<br> to the Senior Agent) the Warehouse Report, in so far as it relates to the construction of<br> each Warehouse Project (on a project-by- project basis and on a consolidated basis), substantially<br> in the form set out in Schedule 14 (Form of Warehouse Report); and |
| --- | --- |
| (ii) | in<br> connection with Warehouse Projects that have achieved the Commercial Operation Date, five<br> (5) Business Days prior to each Calculation Date, deliver to the Senior Agent (in form<br> and substance satisfactory to the Senior Agent) the Warehouse Report, substantially in the<br> form set out in Schedule 14 (Form of Warehouse Report). |
| --- | --- |
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| (b) | Each<br> Obligor shall: |
|---|---|
| (i) | promptly<br> from the date of receipt, deliver to the Senior Agent any report delivered to it by the EPC<br> Contractor and / or the O&M Contractor; and |
| --- | --- |
| (ii) | within<br> three (3) Business Days of request, any other report in connection with the construction<br> and/or operation of a Warehouse Project. |
| --- | --- |
| 22.10 | Market Study |
| --- | --- |
The Borrower shall, on each Calculation Date, deliver to the Senior Agent, in form and substance satisfactory to the Senior Agent, an updated Market Study.
| 22.11 | Financial summary |
|---|
The Borrower shall, within three (3) Business Days after the end of each calendar month, deliver to the Senior Agent a financial summary in the form set out in Schedule 18 (Form of financial summary) in respect of (a) each Warehouse Project and (b) all Warehouse Projects on a consolidated basis.
| 22.12 | E&S Claims |
|---|
The Borrower shall inform the Senior Agent in writing as soon as reasonably practicable upon becoming aware of:
| (a) | any<br> E&S Claim that has been commenced or (to the best of its knowledge and belief) is threatened<br> in writing against any member of the Group; or |
|---|---|
| (b) | any<br> facts or circumstances which will or are reasonably likely to result in any E&S Claim<br> being commenced or threatened against any member of the Group. |
| --- | --- |
| 22.13 | Insurance |
| --- | --- |
| (a) | The<br> Borrower shall effect and maintain (and procure that the relevant members of the Group effect<br> and maintain) at all times the Insurances specified in Schedule 17 (Insurance) and<br> all other insurances required at that time under the Project Documents or any other agreements<br> binding on it. |
| --- | --- |
| (b) | If<br> the Senior Agent determines at any time that terms more favourable to the interests of the<br> Finance Parties (and generally applied in project financings at that time) are available<br> in the international insurance or reinsurance market than those that the Borrower (and any<br> member of the Group) has currently effected, it may refer to the Resolution Procedure the<br> question as to whether the Insurance requirements under this Agreement shall be adjusted<br> to reflect those more favourable terms, and the outcome of that Resolution Procedure shall<br> be final and conclusive and binding on the Parties. |
| --- | --- |
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| (c) | The<br> Borrower (and any other member of the Group) may only effect and/or maintain insurance in<br> addition to that required under paragraph (a) above to the extent that any expenditure<br> relating to such additional insurance is included in the current Construction Budget or Operating<br> Budget (as applicable) and that such additional insurance does not affect in any way the<br> Borrower’s (or any other member of the Group’s) or Finance Parties’ rights<br> or remedies under the insurance required under paragraph (a) above. |
|---|---|
| (d) | The<br> Borrower shall (and shall procure that any member of the Group): |
| --- | --- |
| (i) | pay<br> all premiums and other amounts due and payable under the Insurances (and provide evidence<br> of payment to the Senior Agent upon request); |
| --- | --- |
| (ii) | promptly<br> (and in any event within three Business Days of demand) indemnify any Secured Party in respect<br> of any amount due and payable under the Insurances that it has paid on behalf of the Borrower<br> (or such member of the Group); |
| --- | --- |
| (iii) | comply<br> with the terms of the Insurances and use all reasonable endeavours to ensure that neither<br> it nor any other person does or fails to do anything that may render any Insurance void,<br> voidable, breached, suspended, impaired or defeated in whole or part; |
| --- | --- |
| (iv) | disclose<br> to each insurer under the Insurances all information required in order to comply with its<br> disclosure obligations under applicable law and industry standards (and put in place internal<br> procedures to ensure that this is done), and ensure that, where representations are made<br> or warranties given in respect of any of the Insurances, any such representations or warranties<br> are complete and accurate and complied with at all times and any conditions precedent to<br> the effectiveness of or liability under any Insurance are complied with at all times; |
| --- | --- |
| (v) | promptly<br> pursue its rights and remedies against each insurer/reinsurer under the Insurances; |
| --- | --- |
| (vi) | procure<br> that its broker promptly delivers a report to the Senior Agent on the details (including<br> losses) in respect of any event or circumstance giving rise to any claim (or series of claims<br> in respect of the same event or circumstance giving rise to the claim) under any of the Insurances;<br> and |
| --- | --- |
| (vii) | in<br> respect of any Insurance that is to be renewed, provide to the Mezzanine Agent a certificate<br> of renewal from the relevant insurer no later than fourteen (14) days prior to the expiry<br> of the policy. |
| --- | --- |
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| (e) | The<br> Borrower shall procure that all Insurances required under Schedule 17 (Insurance): |
|---|---|
| (i) | are<br> placed and maintained with insurers each of whom is of sound financial standing and international<br> repute, has a rating for its long-term unsecured and non-credit-enhanced debt obligations<br> of BBB+ or higher by S&P Global Ratings, a division of S&P Global Inc. or Baa1 or<br> higher by Moody’s Investors Service Limited or a comparable rating from an internationally<br> recognised credit rating agency, and is otherwise acceptable to the Senior Agent; |
| --- | --- |
| (ii) | contain<br> no restriction on assignment or transfer that might limit or otherwise affect the effectiveness,<br> attachment or perfection of any proposed Security; and |
| --- | --- |
| (iii) | provide<br> for payments of claims in the currency of the Revenue; and |
| --- | --- |
| (iv) | (in<br> the case of primary insurances) name each of the Secured Parties as co-insureds (and no Secured<br> Party shall be under any duty under such Insurance including in relation to information to<br> the insurer or liability to pay premiums). |
| --- | --- |
| (f) | If<br> at any time and for any reason any of the Insurances required to be maintained under this<br> Clause 22.13 is not in full force and effect then, without prejudice to the rights of the<br> Secured Parties, the Senior Agent shall have the right (but no obligation) to procure on<br> behalf of itself, the Borrower and the other Secured Parties insurance complying with the<br> requirements of this Clause 22.13. |
| --- | --- |
| (g) | No<br> Secured Party shall have any liability of any nature whatsoever to procure any insurance<br> under paragraph (e), whether in contract, tort, negligence or otherwise, and upon procuring<br> any such insurance the Senior Agent shall only have such liabilities as are expressly assumed<br> by it in respect of such insurance. |
| --- | --- |
| (h) | The<br> Senior Agent shall have the right (but no obligation) to pay any premiums due under any of<br> the Insurances if the Borrower fails to do so punctually. |
| --- | --- |
| (i) | The<br> Borrower shall indemnify each Secured Party against the costs and expenses of procuring any<br> insurance or reinsurance referred to in paragraph (e) and against any premiums paid<br> pursuant to paragraph (g). |
| --- | --- |
| (j) | Without<br> prejudice to any other obligations of the Borrower under the Finance Documents, the Borrower<br> shall, on the Senior Agent’s request, take all such steps at any time to minimise hazard<br> as the Senior Agent may reasonably consider expedient or necessary. |
| --- | --- |
| 22.14 | Further information |
| --- | --- |
| (a) | Upon<br> the Senior Agent’s request, the Borrower shall (and shall ensure that each member of<br> the Group will) promptly deliver (and, in any event, within three (3) Business Days<br> of such request) to the Senior Agent all and other information regarding any member of the<br> Group and / or any Warehouse Project. |
| --- | --- |
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| (b) | The<br> Borrower shall notify the Senior Agent promptly following: |
|---|---|
| (i) | the<br> Non-Euro Ratio exceeding the Non-Euro Cap; and |
| --- | --- |
| (ii) | when,<br> thereafter, the Non-Euro Ratio falls back to or under the Non- Euro Cap. |
| --- | --- |
| 22.15 | Information: miscellaneous |
| --- | --- |
The Borrower shall supply to the Senior Agent (in sufficient copies for all the Lenders, if the Senior Agent so requests):
| (a) | all<br> documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors<br> generally at the same time as they are dispatched; |
|---|---|
| (b) | promptly<br> upon becoming aware of them, the details of any litigation, arbitration or administrative<br> proceedings which are current, threatened or pending against any member of the Group (or<br> against the directors of any member of the Group), and which might, if adversely determined,<br> have a Material Adverse Effect; |
| --- | --- |
| (c) | promptly<br> upon becoming aware of them, the details of any judgment or order of a court, arbitral body<br> or agency which is made against any member of the Group (or against the directors of any<br> member of the Group), and which might have a Material Adverse Effect; |
| --- | --- |
| (d) | to<br> the extent permitted by law, any filing and/or report delivered to the U.S. Securities and<br> Exchange Commission by any of its Affiliates, in so far as it relates to any Finance Document<br> and/or the Mezzanine Facility Agreement, promptly after any such filing and/or report; and |
| --- | --- |
| (e) | promptly,<br> such further information regarding the financial condition, business and operations of any<br> member of the Group as any Finance Party (through the Senior Agent) may reasonably request. |
| --- | --- |
| 22.16 | Notification of default |
| --- | --- |
| (a) | Each<br> Obligor shall notify the Senior Agent and the Common Security Agent of any Default (and the<br> steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless<br> that Obligor is aware that a notification has already been provided by another Obligor). |
| --- | --- |
| (b) | Promptly<br> upon a request by the Senior Agent or the Common Security Agent, the Borrower shall supply<br> to the Senior Agent or the Common Security Agent a certificate signed by two (2) of<br> its directors or senior officers on its behalf certifying that no Default is continuing (or<br> if a Default is continuing, specifying the Default and the steps, if any, being taken to<br> remedy it). |
| --- | --- |
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| 22.17 | Direct electronic delivery by Obligors |
|---|
Any Obligor may satisfy its obligation under this Agreement to deliver any information in relation to those a Lender by delivering that information directly to that Lender in accordance with Clause 34.6 (Electronic communication) to the extent that Lender and the Senior Agent agree to this method of delivery.
| 22.18 | “Know your customer” checks |
|---|---|
| (a) | If: |
| --- | --- |
| (i) | the<br> introduction of or any change in (or in the interpretation, administration or application<br> of) any law or regulation made after the Signing Date; |
| --- | --- |
| (ii) | any<br> change in the status of an Obligor (or of a Holding Company of an Obligor) or the composition<br> of the shareholders of an Obligor (or of a Holding Company of an Obligor) after the Signing<br> Date; or |
| --- | --- |
| (iii) | a<br> proposed assignment or transfer by a Lender of any of its rights and obligations under this<br> Agreement to a party that is not a Lender prior to such assignment or transfer, |
| --- | --- |
obliges the Senior Agent or any Lender (or, in the case of limb (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Senior Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Senior Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in limb (iii) above, on behalf of any prospective new Lender) in order for the Senior Agent, such Lender or, in the case of the event described in limb (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
| (b) | Each<br> Lender shall promptly upon the request of the Senior Agent supply, or procure the supply<br> of, such documentation and other evidence as is reasonably requested by the Senior Agent<br> (for itself) in order for the Senior Agent to carry out and be satisfied it has complied<br> with all necessary “know your customer” or other similar checks under all applicable<br> laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
|---|---|
| (c) | The<br> Borrower shall, by not less than ten (10) Business Days’ prior written notice<br> to the Senior Agent, notify the Senior Agent (which shall promptly notify the Lenders) of<br> its intention to request that one of its Subsidiaries becomes a Guarantor pursuant to Clause<br> 27 (Changes to the Obligors). |
| --- | --- |
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| (d) | Following<br> the giving of any notice pursuant to paragraph (c) above, if the accession of such Guarantor<br> obliges the Senior Agent or any Lender to comply with “know your customer” or<br> similar identification procedures in circumstances where the necessary information is not<br> already available to it, the Borrower shall promptly upon the request of the Senior Agent<br> or any Lender supply, or procure the supply of, such documentation and other evidence as<br> is reasonably requested by the Senior Agent (for itself or on behalf of any Lender) or any<br> Lender (for itself or on behalf of any prospective new Lender) in order for the Senior Agent<br> or such Lender or any prospective new Lender to carry out and be satisfied it has complied<br> with all necessary “know your customer” or other similar checks under all applicable<br> laws and regulations pursuant to the accession of such Subsidiary to this Agreement as a<br> Guarantor. |
|---|---|
| 22.19 | DAC 6 |
| --- | --- |
| (a) | In<br> this Clause, “DAC6” means the Council Directive of 25 May 2018 (2018/822/EU)<br> amending Directive 2011/16/EU. |
| --- | --- |
| (b) | The<br> Borrower shall supply to the Senior Agent (in sufficient copies for all the Lenders, if the<br> Senior Agent so requests): |
| --- | --- |
| (i) | promptly<br> upon the making of such analysis or the obtaining of such advice, any analysis made or advice<br> obtained on whether any transaction contemplated by the Transaction Documents or any transaction<br> carried out (or to be carried out) in connection with any transaction contemplated by the<br> Transaction Documents contains a hallmark as set out in Annex IV of DAC6; and |
| --- | --- |
| (ii) | promptly<br> upon the making of such reporting and to the extent permitted by applicable law and regulation,<br> any reporting made to any governmental or taxation authority by or on behalf of any Obligor<br> or by any adviser to such Obligor in relation to DAC6 or any law or regulation which implements<br> DAC6 and any unique identification number issued by any governmental or taxation authority<br> to which any such report has been made (if available). |
| --- | --- |
| (c) | The<br> Borrower shall supply to the Senior Agent (in sufficient copies for all the Lenders, if the<br> Senior Agent so requests): |
| --- | --- |
| (i) | promptly<br> upon the making of such analysis or the obtaining of such advice, any analysis made or advice<br> obtained on whether any transaction contemplated by the Transaction Documents or any transaction<br> carried out (or to be carried out) in connection with any transaction contemplated by the<br> Transaction Documents contains a hallmark as set out in Annex IV of DAC6; and |
| --- | --- |
| (ii) | promptly<br> upon the making of such reporting and to the extent permitted by applicable law and regulation,<br> any reporting made to any governmental or taxation authority by or on behalf of any Obligor<br> or by any adviser to such Obligor in relation to DAC6 or any law or regulation which implements<br> DAC6 and any unique identification number issued by any governmental or taxation authority<br> to which any such report has been made (if available). |
| --- | --- |
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| 23. | FINANCIAL COVENANTS |
|---|---|
| 23.1 | Financial condition |
| --- | --- |
The Obligors shall ensure that:
| (a) | on<br> each Calculation Date; and |
|---|---|
| (b) | on<br> the date which falls ten (10) Business Days after any circumstance to the matters described<br> paragraph (b) of Clause 25.13 (Governmental Intervention) (excluding any de minimis book value set out therein), |
| --- | --- |
the LLCR is at least 1.20:1.
| 23.2 | Financial testing |
|---|
The financial covenants set out in Clause 23.1 (Financial condition) shall be tested by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause 22.2 (Compliance Certificate).
| 24. | GENERAL UNDERTAKINGS |
|---|
The undertakings in this Clause 24 remain in force from the Signing Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
Authorisations and compliance with laws
| 24.1 | Authorisations |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) promptly:
| (a) | obtain,<br> comply with and do all that is necessary to maintain in full force and effect; and |
|---|---|
| (b) | supply<br> certified copies to the Senior Agent of, |
any Required Authorisation.
| 24.2 | Compliance with laws |
|---|---|
| (a) | Subject<br> to paragraph (b) below, each Obligor shall (and the Borrower shall ensure that each<br> other member of the Group will) comply in all respects with the Compliance Standards. |
| --- | --- |
| (b) | Paragraph<br> (a) above shall not bind the Obligors in respect of a minor breach of a Compliance Standard<br> which does not prejudice the interests of any Finance Party. |
| --- | --- |
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| 24.3 | Project Implementation |
|---|---|
| (a) | Each<br> Obligor which is a ProjectCo shall (and the Borrower shall ensure that each ProjectCo which<br> is not an Obligor will) carry out its Warehouse Project in a safe and efficient manner and<br> in accordance with Good Industry Practice and all requirements of the relevant Project Documents. |
| --- | --- |
| (b) | Each<br> Obligor which is a ProjectCo shall (and the Borrower shall ensure that each ProjectCo which<br> is not an Obligor will) at all times maintain adequate supplies of spare parts and other<br> plant, materials and apparatus in accordance with Good Industry Practice. |
| --- | --- |
| 24.4 | Personnel |
| --- | --- |
No Obligor, ProjectCo, Project HoldCo and/or Country HoldCo shall have any employees.
| 24.5 | E&S Compliance |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply in all material respects with, and shall carry out the Warehouse Project in compliance with, all E&S Standards and E&S Authorisations and obtain and maintain any E&S Authorisations and take all reasonable steps in anticipation of known or expected future changes to or obligations under the same.
| 24.6 | Taxation |
|---|---|
| (a) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall duly<br> and punctually pay and discharge all Taxes imposed upon it or its assets within the time<br> period allowed without incurring penalties (except to the extent that (i) such payment<br> is being contested in good faith, (ii) adequate cash reserves are being maintained by<br> it for those Taxes and (iii) such payment can be lawfully withheld). |
| --- | --- |
| (b) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall ensure<br> that it is not a member of a group for VAT purposes. |
| --- | --- |
| (c) | No<br> Obligor may change its residence for Tax purposes. |
| --- | --- |
| 24.7 | Anti-Bribery and Anti-corruption |
| --- | --- |
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) directly<br> or indirectly use, lend or contribute the proceeds of the Facilities for any purpose which<br> would breach the Anti-Bribery and Corruption Laws or other similar legislation in other jurisdictions. |
| --- | --- |
| (b) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall conduct<br> its business and operations and carry out the Warehouse Project in compliance with applicable<br> Anti-Bribery and Corruption Laws, and maintain and enforce policies and procedures designed<br> to ensure compliance with such laws. |
| --- | --- |
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| 24.8 | Sanctions |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) (and shall ensure that any of its directors, officers or employees will) comply in all respects with any Sanctions applicable to it, whether directly or indirectly.
| 24.9 | Use of proceeds |
|---|
No Obligor shall directly or indirectly use the proceeds of the Facility hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity:
| (a) | to<br> fund or facilitate any activities of or business with any individual or entity (“Person”)<br> that, at the time of such funding or facilitation, is: |
|---|---|
| (i) | the<br> subject or the target of any Sanctions; |
| --- | --- |
| (ii) | owned<br> 50% or more by or otherwise controlled by, or acting on behalf of one or more Persons referenced<br> in clause (i) above; or |
| --- | --- |
| (iii) | located,<br> organized or resident in a Sanctioned Territory; or |
| --- | --- |
| (b) | to<br> fund or facilitate any activities of or business in any Sanctioned Territory; |
| --- | --- |
| (c) | in<br> any manner or for any purpose: |
| --- | --- |
| (i) | that<br> is prohibited by Sanctions: |
| --- | --- |
| (A) | applicable<br> to any Party or any of its Affiliates; or |
| --- | --- |
| (B) | under<br> the law governing any Transaction Document; or |
| --- | --- |
| (ii) | that<br> would result in a violation of Sanctions by any Party or any of its Affiliates; or |
| --- | --- |
| (d) | in<br> any other manner that will result in a violation by any Person (including any Person participating<br> in the transaction, whether as borrower, guarantor or otherwise) of Sanctions. |
| --- | --- |
| 24.10 | Non-AIF status |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) maintain<br> its status of an entity which is neither an AIF nor an AIFM. |
| --- | --- |
| (b) | None<br> of the Obligors will take (or omit to take) any action to the extent that doing so will,<br> or is reasonably likely to, result in it (and the Borrower shall ensure that none of the<br> members of the Group will take (or omit to take) any action to the extent that doing so will,<br> or is reasonably likely to, result in it) being an AIF or an AIFM. |
| --- | --- |
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| 24.11 | AML compliance |
|---|---|
| (a) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall conduct<br> its operations at all times in compliance with the Money Laundering Laws. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) maintain<br> and enforce policies and procedures designed to ensure compliance with Money Laundering Laws<br> and to prevent money laundering, bribery and corruption by that Obligor or, as applicable,<br> any other member of the Group and by persons associated with any of the Obligors and/or any<br> other member of the Group. |
| --- | --- |
| (c) | Each<br> Obligor shall not (and the Borrower shall ensure that none its Subsidiaries will), including<br> any of their respective existing or previous officers, directors, employees, agents, affiliates,<br> associated parties and persons acting on behalf of such Obligor and/or any of the Borrower’s<br> Subsidiaries, directly or indirectly use the proceeds of the Facility for any purpose that<br> would breach Money Laundering Laws. |
| --- | --- |
Restrictions on business
| 24.12 | Merger |
|---|---|
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter<br> into any amalgamation, demerger, merger or corporate reconstruction. |
| --- | --- |
| (b) | Paragraph<br> (a) above does not apply to any sale, lease, transfer or other disposal permitted pursuant<br> to Clause 24.25 (Disposals). |
| --- | --- |
| 24.13 | Change of business |
| --- | --- |
| (a) | The<br> Borrower shall procure that no substantial change is made to the general nature of the business<br> of the Borrower or the Group from that carried on at the Signing Date or planned by the Borrower<br> on the basis of the information provided by the Borrower to the Senior Agent as condition<br> precedent to Financial Close. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) do<br> all things necessary to maintain in full force and effect when necessary, all contracts or<br> rights necessary or desirable for the conduct of its business. |
| --- | --- |
| 24.14 | Acquisitions |
| --- | --- |
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) acquire or invest in any company, business, asset or undertaking unless:
| (a) | required<br> to carry out any Warehouse Project; and |
|---|
- 139 -
| (b) | such<br> acquisition constitutes the acquisition of further Warehouse Projects, provided that Financial<br> Close (ProjectCo) shall occur on or prior to the date of acquisition of such Warehouse Project. |
|---|---|
| 24.15 | Restricted changes |
| --- | --- |
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) change, or allow any change to, any of the following without the Senior Agent’s prior consent (acting reasonably):
| (a) | its<br> financial year end; |
|---|---|
| (b) | its<br> constitutive documents (other than in respect of minor administrative matters or as required<br> under applicable law) or that would not be prejudicial to the interests of the Finance Parties;<br> and |
| --- | --- |
| (c) | its<br> auditor (by way of replacement, dismissal or otherwise), except this paragraph (c) shall<br> not apply to the extent that such restriction on changing its auditor is prohibited by applicable<br> law. |
| --- | --- |
| 24.16 | Relationships with others |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) ensure<br> that all the material terms of the arrangements between any Obligor as well as any other<br> member of the Group and the Borrower, the Shareholders and/or any of their Affiliates are<br> contained only in its constitutional documents, each Shareholder Loan Agreement, each Intragroup<br> Loan Agreement and each Transaction Document to which an Obligor, a Shareholder and/or any<br> of its Affiliates is party. |
| --- | --- |
| (b) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) have<br> any material rights against, or obligations to, any person other than under: |
| --- | --- |
| (i) | the<br> Transaction Documents and any Enhancement PPAs in accordance with Clause 24.21 (Sale of Electricity); |
| --- | --- |
| (ii) | the<br> Shareholder Loan Agreements and the Intragroup Loan Agreements provided that: |
| --- | --- |
| (A) | Security,<br> in form and substance satisfactory to the Mezzanine Agent, has been granted to the Security<br> Agent (as defined in the Mezzanine Facility Agreement) and/or the Common Security Agent (as<br> applicable) over the Shareholder Loans and/or Intragroup Loans made available under such<br> agreements; and |
| --- | --- |
| (B) | such<br> Intragroup Loan Agreements and Shareholder Loan Agreements are fully subordinated to the<br> Secured Obligations in accordance with the Intercreditor and Subordination Deed; and |
| --- | --- |
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| (iii) | any<br> other contract or arrangement provided that the aggregate amount of payments under such contracts<br> or arrangements, across all Warehouse Projects, does not exceed EUR 250,000 (or equivalent<br> in any other currency) and, per Warehouse Project in any calendar year, EUR 50,000 (unless<br> otherwise approved in the Construction Budget or, as applicable, the Operating Budget), |
|---|
and, in each case, any transaction that they expressly contemplate.
| (c) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter<br> into any interest rate or currency swap, interest rate cap or collar, forward rate agreement<br> or other interest rate, currency or commodity hedge (including for the avoidance of doubt<br> any commodity hedge) or similar derivative transactions except under the Finance Documents. |
|---|---|
| (d) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) ensure<br> that each transaction or arrangement that it enters into or has entered into with any person<br> is on ordinary commercial terms and on an arm’s length basis. |
| --- | --- |
| 24.17 | Shares |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) ensure<br> that its shares are subject at all times to the Common Transaction Security, are fully paid<br> and are not subject to any option to purchase or similar rights. It shall ensure that its<br> constitutional documents do not and could not restrict or inhibit any transfer of those shares<br> on creation or on enforcement of the Common Transaction Security. |
| --- | --- |
| (b) | No<br> Obligor (other than the Borrower) shall (and the Borrower shall ensure that no other member<br> of the Group will) issue any (further) shares in its capital without the prior written consent<br> of the Senior Agent. |
| --- | --- |
| (c) | Each<br> Obligor shall ensure that no person has any rights (including voting and dividend rights),<br> benefits or interests in respect of or derived from its shares other than: |
| --- | --- |
| (i) | in<br> case of the ProjectCos, the Project HoldCos and/or the Country HoldCos: the Borrower; |
| --- | --- |
| (ii) | in<br> case of the Project HoldCos and/or the Country HoldCos: the Borrower; |
| --- | --- |
| (iii) | in<br> case of the Country HoldCos: the Borrower; and |
| --- | --- |
| (iv) | in<br> case of the Borrower: MidCo, |
| --- | --- |
or, in each case, a Secured Party under the Common Transaction Security.
| (d) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) grant<br> to any person any securities convertible into its share capital or granted any rights to<br> call for issuance of further shares in its capital. |
|---|
- 141 -
| (e) | The<br> Borrower shall not have at any time any Subsidiaries (other than the ProjectCos, the Project<br> HoldCos and the Country HoldCos) nor any security convertible into shares or other ownership<br> interests in any person. |
|---|---|
| (f) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) have<br> at any time any Subsidiaries (other than if applicable any ProjectCos, the Project HoldCos<br> and the Country HoldCos) nor any security convertible into shares or other ownership interests<br> in any person. |
| --- | --- |
| (g) | Each<br> Obligor shall procure that all Country HoldCos are the (direct and/or indirect) owners of<br> all ProjectCos in the Eligible Jurisdiction of that Country HoldCo. |
| --- | --- |
| 24.18 | Project Documents |
| --- | --- |
| (a) | No<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) enter<br> into any contract or arrangement to carry out the Warehouse Project in whole or part other<br> than: |
| --- | --- |
| (i) | the<br> Transaction Documents and any Enhancement PPAs in accordance with Clause 24.21 (Sale of Electricity); |
| --- | --- |
| (ii) | a<br> CPPA in connection with the sale of GoOs; and |
| --- | --- |
| (iii) | any<br> other contract or arrangement provided that the aggregate amount of payments to be made by<br> the ProjectCo under such contracts or arrangements, across all Warehouse Projects, does not<br> exceed EUR 250,000 (or equivalent in any other currency) and, per Warehouse Project in any<br> calendar year, EUR 50,000, unless otherwise approved in the Construction Budget or, as applicable,<br> the Operating Budget. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply<br> with its obligations under, and take all reasonable steps to preserve its rights and remedies<br> under, each Project Document in all material respects. |
| --- | --- |
| (c) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) take<br> all reasonable steps to mitigate the impact of any default or Force Majeure under any Project<br> Document. |
| --- | --- |
| (d) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) assign<br> any of its rights, or transfer any of its rights and obligations under any of the Project<br> Documents other than pursuant to the Common Security Documents. |
| --- | --- |
| (e) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) amend<br> (or agree to an amendment) of any of the Project Documents in case this might trigger a Funding<br> Shortfall, any delay to any Key Project Milestone and/or a Material Adverse Effect. |
| --- | --- |
| (f) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) maintain<br> internal capabilities for portfolio reconciliation requirements in accordance with Regulation<br> (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central<br> counterparties and trade repositories dated 4 July 2012 (European Market Infrastructure<br> Regulation), or appoint and maintain a third party service provider for such purposes. |
| --- | --- |
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| 24.19 | Abandonment |
|---|
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) abandon, mothball, decommission, cancel, suspend or withdraw from any Warehouse Project or any part thereof.
| 24.20 | Procurement |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) use procurement methods in compliance with applicable laws which ensure a sound selection of goods and services at fair market value and that any Obligor and, as applicable, any other member of the Group is making its capital investments in a cost effective manner.
| 24.21 | Sale of electricity |
|---|---|
| (a) | With<br> respect to the electricity generated by any Warehouse Project and other than in case any<br> feed-in tariffs or other subsidies apply, no Obligor shall (and the Borrower shall procure<br> that no other member of the Group will) enter into any other sale and purchase agreement<br> and/or derivative instrument (including any commodity swap or other hedge instrument) other<br> than a Power Purchase Agreement and Enhancement PPAs provided that, in the case of an Enhancement<br> PPA, an Obligor or other member of the Group may only execute an Enhancement PPA if: |
| --- | --- |
| (i) | the Borrower has updated the then current Base Case pursuant to Clause 22.5 (Updated Base Case)<br>in connection with the entry into such proposed Enhancement PPA; |
| --- | --- |
| (ii) | the<br> entry into such Enhancement PPA does not in any way derogate the feed-in tariff or other<br> subsidies that apply in connection with that Warehouse Project; and |
| --- | --- |
| (iii) | the<br> Debt Sizing Case (calculated by reference to a 20-year debt sizing period commencing on the<br> Commercial Operation Date) applicable to the relevant Warehouse Project to which such Enhancement<br> PPA relates continues to be complied with following the entry into any such Enhancement PPA. |
| --- | --- |
| (b) | Each<br> Obligor shall ensure that at least forty per cent. (40%) of all total aggregated Revenues<br> across all Warehouse Projects is generated from Non- Merchant Revenue, calculated by reference<br> to a twenty (20) year period commencing on the date on which each Warehouse Project achieves<br> its Commercial Operation Date. |
| --- | --- |
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| 24.22 | Sale of GoOs |
|---|
Each Obligor shall sell GoOs in accordance with any CPPA.
Assets and Security
| 24.23 | Negative pledge |
|---|
In this Clause 24.23, “Quasi-Security” means an arrangement or transaction described in paragraph (b) below.
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) create<br> or permit to subsist any Security over any of its assets. |
|---|---|
| (b) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will): |
| --- | --- |
| (i) | sell,<br> transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased<br> to or re-acquired by an Obligor or any other member of the Group; |
| --- | --- |
| (ii) | sell,<br> transfer or otherwise dispose of any of its receivables on recourse terms; |
| --- | --- |
| (iii) | enter<br> into any arrangement under which money or the benefit of a bank or other account may be applied,<br> set-off or made subject to a combination of accounts; or |
| --- | --- |
| (iv) | enter<br> into any other preferential arrangement having a similar effect, |
| --- | --- |
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
| (c) | Paragraphs<br> (a) and (b) above do not apply to any Security or (as the case may be) Quasi-Security,<br> listed below: |
|---|---|
| (i) | any<br> netting or set-off arrangement entered into by any member of the Group in the ordinary course<br> of its banking arrangements for the purpose of netting debit and credit balances (including<br> a Multi-account Overdraft); |
| --- | --- |
| (ii) | any<br> payment or close out netting or set-off arrangement pursuant to any Hedging Agreement; |
| --- | --- |
| (iii) | any<br> lien arising by operation of law and in the ordinary course of trading (and not arising as<br> a result of any default or omission by it) and which does not adversely affect the carrying<br> out of the relevant Warehouse Project; |
| --- | --- |
| (iv) | the<br> Common Transaction Security; |
| --- | --- |
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| (v) | any<br> Security or Quasi-Security arising under any retention of title, hire purchase or conditional<br> sale arrangement or arrangements having similar effect in respect of goods supplied to a<br> member of the Group in the ordinary course of trading and on the supplier’s standard<br> or usual terms and not arising as a result of any default or omission by any member of the<br> Group; |
|---|---|
| (vi) | any<br> other Security or Quasi-Security referred to for the purpose of this paragraph (c) in<br> any Guarantor Accession Letter; or |
| --- | --- |
| (vii) | any<br> other Security or Quasi-Security in relation to which the Senior Agent has given its prior<br> written consent. |
| --- | --- |
| 24.24 | Security |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) take<br> all steps necessary or desirable to preserve the enforceability, perfection, preservation<br> and ranking of the Common Transaction Security. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will), forthwith<br> upon the request of the Senior Agent, from time to time enter into such other assignments,<br> mortgages, charges, pledges or other security documents creating, confirming or evidencing<br> Security in favour of the Secured Parties over such assets of the Borrower, shares or agreements<br> as the Senior Agent may specify and take all such steps as may reasonably be required by<br> the Senior Agent to perfect such security interests. |
| --- | --- |
| 24.25 | Disposals |
| --- | --- |
| (a) | Subject<br> to paragraphs (b) and (c) below, no Obligor shall (and the Borrower shall ensure<br> that no other member of the Group will) enter into a single transaction or a series of transactions<br> (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or<br> otherwise dispose of any asset. |
| --- | --- |
| (b) | Paragraph<br> (a) does not apply to any sale, lease, transfer or other disposal of: |
| --- | --- |
| (i) | electricity<br> in accordance with any PPA; |
| --- | --- |
| (ii) | an<br> Excluded Permitted Disposal; |
| --- | --- |
| (iii) | the<br> GoOs in accordance with any CPPA; and |
| --- | --- |
| (iv) | a<br> Warehouse Project (as defined in the Mezzanine Facility Agreement) in accordance with the<br> terms of the Mezzanine Facility Agreement and paragraphs (c) and (d) below. |
| --- | --- |
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| (c) | A<br> ProjectCo may dispose of its Warehouse Project, and an Obligor may dispose of its shares<br> (whether directly or indirectly) in a ProjectCo, Project HoldCo or Country HoldCo if: |
|---|---|
| (i) | no<br> Default is continuing or would result from that disposal; |
| --- | --- |
| (ii) | that<br> disposal is on arm’s length and standard commercial terms; |
| --- | --- |
| (iii) | that<br> disposal would not result in the Non-Euro Ratio to exceed the Non- Euro Cap; |
| --- | --- |
| (iv) | following<br> the completion of that disposal, at least forty per cent. (40%) of all total aggregated Revenues<br> across all Warehouse Projects is generated from Non-Merchant Revenue, calculated by reference<br> to a twenty (20) year period commencing on the date on which each Warehouse Project achieves<br> its Commercial Operation Date, as set out in paragraph (b) of Clause 24.21 (Sale of electricity); |
| --- | --- |
| (v) | the<br> Obligors, by not less than fifteen (15) Business Days prior to the date of the proposed disposal,<br> notify the Senior Agent (on behalf of all Finance Parties) of the same; and |
| --- | --- |
| (vi) | the<br> net disposal proceeds are not less than the aggregate of: |
| --- | --- |
| (A) | the<br> minimum amount of disposal proceeds required to be achieved for that disposal to be permitted<br> under the Mezzanine Facility Agreement and the related “finance documents” (howsoever<br> defined under the Mezzanine Facility Agreement) as notified by the Mezzanine Agent to the<br> Senior Agent (on behalf of the other Finance Parties); |
| --- | --- |
| (B) | the<br> Allocated Senior Facility Amount of that Warehouse Project or the Warehouse Project(s) owned<br> by the relevant ProjectCo, Project HoldCo or, as applicable, Country HoldCo; |
| --- | --- |
| (C) | any<br> and all accrued interest, fees, costs and expenses owing to the Senior Agent, the Common<br> Security Agent and any other Finance Party which are due and remain unpaid, or will be due<br> and payable, under the Finance Documents as at the date of such disposal; and |
| --- | --- |
| (D) | an<br> amount determined by the Senior Agent (in connection with the Hedging Agreements only, in<br> consultation with the Hedge Counterparties), acting reasonably to provide for the anticipated<br> Hedging Termination Costs and any other amount that is or will become due and payable in<br> accordance with paragraph (b) of Clause 8.10 (Restrictions) as a result of the<br> application of the net disposal proceeds in prepayment of the Loans. |
| --- | --- |
For the avoidance of doubt, notwithstanding the amount determined by the Senior Agent for the purposes of sub-paragraph (c)(vi)(D) above (acting in consultation with the Hedge Counterparties) (such amount being the “Anticipated Hedging Amount”), the amount payable by the Obligors under this Agreement in connection with this Agreement shall include, in addition to the aggregate amount resulting from paragraph (c) above (including the Anticipated Hedging Amount), any difference between the Anticipated Hedging Amount to the actual Hedging Termination Costs that are actually incurred (such difference being the “Hedging Delta”).
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| (d) | The<br> Obligors must ensure that: |
|---|---|
| (i) | the<br> Prepayment Disposal Proceeds and Hedging Delta are immediately applied either: |
| --- | --- |
| (A) | in<br> accordance with Clause 8.3 (Disposal of a Warehouse Project); or |
| --- | --- |
| (B) | paid<br> into the Disposal Proceeds Account for application in accordance with Clause 19.4 (Disposal Proceeds Account); and |
| --- | --- |
| (ii) | an<br> amount of the Disposal Proceeds equal to the Disposal Equity Amount shall, unless such amount<br> is applied in prepayment in accordance with Clause 8.3 (Disposal of a Warehouse Project),<br> immediately be transferred to the Disposal Proceeds Account. |
| --- | --- |
| (e) | For<br> the purposes of this Clause 24.25 “net disposal proceeds” means the gross<br> proceeds of any disposal permitted under paragraph (c) above less an amount determined<br> by the Senior Agent as the reasonable costs and expenses incurred by any Finance Party with<br> respect to that disposal. |
| --- | --- |
| (f) | The<br> Senior Agent shall notify the Obligors and the Mezzanine Agent of: |
| --- | --- |
| (i) | prior<br> to the proposed date of disposal notified by the Obligors to the Senior Agent pursuant to<br> paragraph (c)(v) above: |
| --- | --- |
| (A) | obtain,<br> from the Mezzanine Agent, the amount that shall be due and payable on such date under the<br> Finance Documents (as such term is defined under the Mezzanine Facility Agreement); |
| --- | --- |
| (B) | the<br> anticipated amount of the Prepayment Disposal Proceeds required to be paid for the purposes<br> of this Clause 24.25; and |
| --- | --- |
| (ii) | promptly<br> thereafter, of any Hedging Delta. |
| --- | --- |
| (g) | A<br> Warehouse Project disposed of, or a Warehouse Project owned by a ProjectCo or (indirectly)<br> by a Project HoldCo or Country HoldCo (as applicable) the shares of which are disposed of,<br> in accordance with paragraph (c) above will cease to be a Warehouse Project as from<br> the date on which the Senior Agent delivers the notice set out in paragraph (b) of Clause<br> 28.5 (Resignation and release of security on disposal). |
| --- | --- |
| 24.26 | Preservation of Assets |
| --- | --- |
Each Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain and preserve all of its assets that are necessary, in the opinion of the Senior Agent, for the carrying out of each of the Warehouse Projects, in good working order and condition, ordinary wear and tear excepted.
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| 24.27 | Good title to assets |
|---|---|
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain<br> good, valid and marketable title to, or valid leases or licences of, and all appropriate<br> Authorisations to use, the assets necessary or desirable to carry out the Warehouse Project<br> owned by it. |
| --- | --- |
| (b) | No<br> Obligor shall (and the Borrower shall ensure that no member of the Group will) sell or grant<br> (or agree to sell or grant) any right of pre-emption over, or any lease or tenancy of or<br> otherwise disposed of any of its interests in any of the Charged Property (other than the<br> option to sublease a plot of land which is not used and/or required for purposes of the relevant<br> Warehouse Project). |
| --- | --- |
| 24.28 | Access |
| --- | --- |
Each Obligor shall (and the Borrower shall ensure that each member of the Group will):
| (a) | on<br> request of the Senior Agent, provide the Senior Agent with any information that Senior Agent<br> may reasonably require about that company’s business and affairs, the Charged Property<br> and its compliance with the terms of the Common Security Documents; and |
|---|---|
| (b) | permit<br> the Finance Parties as well as each of their respective representatives, delegates and professional<br> advisers, including the Lenders’ Technical Adviser, free access at all reasonable times<br> and on reasonable notice at the cost of the Borrower: |
| --- | --- |
| (i) | to<br> inspect and take copies and extracts from the books, accounts and records of the Obligors;<br> and |
| --- | --- |
| (ii) | to<br> view the Site and the Charged Property (without becoming liable as mortgagee in possession). |
| --- | --- |
| 24.29 | Real Property |
| --- | --- |
The Borrower shall ensure that each member of the Group will), in each case which is a ProjectCo:
| (a) | have<br> at all times rights to all Real Property required to carry out its Warehouse Project at the<br> relevant Site; |
|---|---|
| (b) | supply<br> to the Common Security Agent on demand any information in relation to its Real Property that<br> the Common Security Agent reasonably requires; |
| --- | --- |
| (c) | repair<br> and keep in good and substantial repair to the reasonable satisfaction of the Common Security<br> Agent all buildings, trade and other fixtures, plant, machinery and chattels at any time<br> forming part of the Charged Property and (prior to a Default, on reasonable notice) when<br> necessary replace such items with others of similar quality and value; |
| --- | --- |
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| (d) | not<br> at any time without the prior written consent of the Common Security Agent (i)<br> effect, carry out or permit any demolition, reconstruction or rebuilding of or any structural<br> alteration or material change in the use of the Real Property, or (ii)<br> sever or unfix or remove any of the fixtures, fittings, plant or machinery (other than its<br> stock in trade or work in progress) on or in the Real Property (except for the purpose and<br> in the course of making necessary repairs to that item or of replacing that item with new<br> or improved models or substitutes); |
|---|---|
| (e) | observe<br> and perform all restrictive and other covenants, stipulations and obligations now or at any<br> time affecting any of its Real Property to the extent that they are subsisting and capable<br> of being enforced; and |
| --- | --- |
| (f) | duly<br> and diligently enforce all restrictive or other covenants, stipulations and obligations benefiting<br> any of its Real Property and not waive, release or vary (or agree so to do) the obligations<br> of any other party thereto. |
| --- | --- |
| 24.30 | Further assurance |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall procure that each other member of the Group will) promptly<br> do all such acts or execute all such documents (including assignments, transfers, mortgages,<br> charges, notices and instructions) as the Common Security Agent may reasonably specify (and<br> in such form as the Common Security Agent may reasonably require in favour of the Common<br> Security Agent or its nominee(s)): |
| --- | --- |
| (i) | to<br> perfect the Security created or intended to be created under or evidenced by the Common Security<br> Documents (which may include the execution of a mortgage, charge, assignment or other Security<br> over all or any of the assets which are, or are intended to be, the subject of the Common<br> Transaction Security ) or for the exercise of any rights, powers and remedies of the Common<br> Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or<br> by law; |
| --- | --- |
| (ii) | to<br> confer on the Common Security Agent or confer on the Finance Parties Security over any property<br> and assets of that Obligor located in any jurisdiction equivalent or similar to the Security<br> intended to be conferred by or pursuant to the Common Security Documents; and/or |
| --- | --- |
| (iii) | to<br> facilitate the realisation of the assets which are, or are intended to be, the subject of<br> the Common Transaction Security. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall procure that each other member of the Group will) take<br> all such action as is available to it (including making all filings and registrations) as<br> may be necessary for the purpose of the creation, perfection, protection or maintenance of<br> any Security conferred or intended to be conferred on the Common Security Agent or the Finance<br> Parties by or pursuant to the Finance Documents. |
| --- | --- |
| (c) | Following<br> a Default that is continuing, each Obligor shall (and procure that each other member of the<br> Group will) promptly do all such acts or execute all such documents as the Common Security<br> Agent may specify (acting in its absolute discretion) to exercise, and fully benefit from,<br> the right conferred upon the Common Security Agent under any Power of Attorney. |
| --- | --- |
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| (d) | Each<br> Obligor must use, and must procure that any other member of the Group that is a potential<br> provider of Common Transaction Security uses, all reasonable endeavours lawfully available<br> to grant such Security. |
|---|
Accounts and financial obligations
| 24.31 | Project expenditure |
|---|---|
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no member of the Group will) with respect<br> to any Warehouse Project incur and/or pay for (in whatever form, including cash and non-cash<br> consideration) any Cost Overrun unless: |
| --- | --- |
| (i) | that<br> Cost Overrun is set out in the most recently delivered Construction Budget and Warehouse<br> Report under this Agreement and approved by the Senior Agent (acting in consultation with<br> the Lenders' Technical Adviser); |
| --- | --- |
| (ii) | no<br> more than an aggregate total of ten per cent. (10%) of Cost Overruns have been incurred by<br> the consolidated Group across all Warehouse Projects; |
| --- | --- |
| (iii) | Security,<br> in form and substance satisfactory to the Senior Agent, has been granted to the Common Security<br> Agent over the Contingent Equity to be applied in connection with such Cost Overrun and such<br> Contingent Equity (whether by way of Shareholder Loan or by issued share capital) is fully<br> subordinated to the Secured Obligations in accordance with the Intercreditor and Subordination<br> Deed; |
| --- | --- |
| (iv) | any<br> other Security requested by the Senior Agent has been granted to the Common Security Agent<br> in form and substance satisfactory to the Common Security Agent; and |
| --- | --- |
| (v) | other<br> than this condition being satisfied in connection with the incurrence and/or payment of such<br> Cost Overrun under this Agreement, the Mezzanine Agent has notified the Senior Agent that<br> it has otherwise approved such Cost Overrun under the Mezzanine Facility Agreement. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain<br> proper books, accounts, records and procedures in relation to its business and undertaking<br> sufficient to record and monitor the progress of the Warehouse Project and to identify the<br> assets, works and services financed by the Facilities, and retain all records evidencing<br> expenditure on the relevant Warehouse Project. |
| --- | --- |
| 24.32 | Distributions |
| --- | --- |
| (a) | The<br> Borrower shall not pay, make or declare any Distribution other than payment to MidCo of the<br> Permitted Mezzanine Distributions. |
| --- | --- |
| (b) | No<br> Obligor (other than the Borrower) shall (and the Borrower shall ensure that no member of<br> the Group will) pay, make or declare any Distribution other than by way of payments and/or<br> transfers to the Operating Account of the Borrower. |
| --- | --- |
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| 24.33 | Eligible Pre-RtB Costs Rebalance |
|---|
The Borrower shall procure that MidCo applies, in full, the proceeds of any Utilisation made for the purpose to achieve the Eligible Pre-RtB Costs Rebalance by repaying the principal under the Mezzanine Facility Agreement to which such Eligible Pre-RtB Costs were financed by.
| 24.34 | Loans and Guarantees |
|---|
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) make any loans, grant any credit (save in the ordinary course of business) or give any guarantee or indemnity (except as required under any of the Finance Documents) to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of any obligation of any person, other than under any Intragroup Loan Agreement and Shareholder Loan Agreement provided that:
| (a) | Security,<br> in form and substance satisfactory to the Mezzanine Agent, has been granted to the Security<br> Agent (as such term is defined in the Mezzanine Facility Agreement) and/or the Common Security<br> Agent (as applicable) over the Shareholder Loans and/or Intragroup Loans made available under<br> such agreements; |
|---|---|
| (b) | such<br> Intragroup Loan Agreements and Shareholder Loan Agreements are fully subordinated to the<br> Secured Obligations in accordance with the Intercreditor and Subordination Deed; |
| --- | --- |
| (c) | the<br> aggregate amount of Intragroup Loans made available to any Obligor may not exceed the aggregate<br> of: |
| --- | --- |
| (i) | to<br> the extent funded by the Lenders only, the Allocated Senior Facility Amount in connection<br> with a Warehouse Project to which that Intragroup Loan relates; |
| --- | --- |
| (ii) | to<br> the extent funded by the Mezzanine Lenders only, the Allocated Mezzanine Facility Amount;<br> and |
| --- | --- |
| (iii) | to<br> the extent funded by Contingent Equity, such Contingent Equity and such Contingent Equity<br> (whether by way of Shareholder Loan or by issued share capital) is fully subordinated to<br> the Secured Obligations in accordance with the Intercreditor and Subordination Deed. |
| --- | --- |
| 24.35 | Indebtedness |
| --- | --- |
| (a) | No<br> Obligor shall (and shall procure that no member of the Group will) incur, create or permit<br> to subsist or have outstanding any Financial Indebtedness or enter into any agreement or<br> arrangement whereby it is entitled to incur, create or permit to subsist any Financial Indebtedness. |
| --- | --- |
| (b) | Paragraph<br> (a) above does not apply to any Financial Indebtedness: |
| --- | --- |
| (i) | arising<br> under or permitted by the Finance Documents; |
| --- | --- |
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| (ii) | any<br> Financial Indebtedness under Shareholder Loans and/or Intragroup Loans made in accordance<br> with Clause 24.34 (Loans and Guarantees); or |
|---|---|
| (iii) | not<br> falling within paragraph (b)(i) above if the aggregate amount does not exceed EUR 250,000. |
| --- | --- |
| 24.36 | Pari passu ranking |
| --- | --- |
Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
Miscellaneous
| 24.37 | Insurance |
|---|---|
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain<br> Insurances on and in relation to its business and assets with reputable underwriters or insurance<br> companies against those risks and to the extent as is usual for companies carrying on the<br> same or substantially similar business, in accordance with the requirements set out in Schedule<br> 20 (Insurance). |
| --- | --- |
| (b) | The<br> Senior Agent shall have the right to request that the Lenders' Insurance Adviser reviews<br> the Insurances maintained by the Group, including without limitation as to whether or not<br> these meet the criteria for bankability for the purposes of a project financing on the basis<br> of Good Industry Practice as well as the requirements set out in Schedule 20 (Insurance).<br> If the Lenders' Insurance Adviser determines any shortfall, the Borrower shall ensure that<br> promptly, but at the latest within ten (10) Business Days upon a respective request<br> by the Senior Agent, Insurances are taken out so that the overall insurances meet such<br> standards and requirements. |
| --- | --- |
| 24.38 | Syndication |
| --- | --- |
The Borrower shall provide reasonable assistance to the Arranger in the preparation of the Information Memorandum and the primary syndication of the Facility (including, without limitation, by making senior management of its Holding Companies, including the Parent, the Sponsor available for the purpose of making presentations to, or meeting, potential lending institutions) and will comply with all reasonable requests for information from potential syndicate members prior to completion of syndication.
| 24.39 | Further documents |
|---|
Subject to, but without prejudice to, Clause 24.30 (Further assurance), each Obligor shall (and the Borrower shall ensure that each member of the Group will) execute all such other documents and instruments and do all such other acts as a Finance Party may reasonably determine are necessary to give effect to the provisions of the Transaction Documents and to cause the Transaction Documents to be duly registered, notarised and stamped in any applicable jurisdiction.
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| 24.40 | Centre of main interest and establishments |
|---|
In relation to each Obligor, for the purposes of the EU Insolvency Regulation, its centre of main interest (as that term is used in Article 3(1) of the EU Insolvency Regulation) is situated in its Original Jurisdiction and it has no "establishment" (as that term is used in Article 2(10) of the EU Insolvency Regulation) in any other jurisdiction.
| 25. | EVENTS OF DEFAULT |
|---|
Each of the events or circumstances set out in this Clause 25 is an Event of Default (save for Clause 25.25 (Acceleration).
| 25.1 | Non-payment |
|---|
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document or, in respect the Bad Boy Guarantee, the Sponsor does not pay on the due date thereunder, in each case, at the place and in the currency in which it is expressed to be payable unless:
| (a) | its<br> failure to pay is caused by: |
|---|---|
| (i) | administrative<br> or technical error; or |
| --- | --- |
| (ii) | a<br> Disruption Event; and |
| --- | --- |
| (b) | payment<br> is made within three (3) Business Days of its due date. |
| --- | --- |
| 25.2 | Specific undertakings |
| --- | --- |
| (a) | Any<br> requirement of Clause 23 (Financial covenants) is not satisfied or any Obligor does<br> not comply with any provision of Clause 4.5 (Conditions subsequent), Clause 24.23<br> (Negative Pledge), Clause 24.25 (Disposals), Clause 24.32<br> (Distributions), Clause 24.33 (Eligible Pre-RtB Costs Rebalance) and/or<br> Clause 24.35 (Indebtedness). |
| --- | --- |
| (b) | The<br> proceeds of any Utilisation are not applied in accordance with the terms of the Finance Documents. |
| --- | --- |
| 25.3 | Other obligations |
| --- | --- |
| (a) | An<br> Obligor does not comply with any provision of the Finance Documents (other than those referred<br> to in Clause 25.1 (Non-payment). |
| --- | --- |
| (b) | The<br> Sponsor does not comply with any provision of the Bad Boy Guarantee (other than those referred<br> to in Clause 25.1 (Non-payment). |
| --- | --- |
| (c) | No<br> Event of Default under paragraphs (a) and (b) above will occur if the failure to<br> comply is capable of remedy and is remedied within fifteen (15) Business Days of the earlier<br> of (i) the Senior Agent giving notice to the Borrower and (ii) any Obligor becoming<br> aware of the failure to comply. |
| --- | --- |
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| 25.4 | Misrepresentation |
|---|
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or, in the case of the Sponsor, the Bad Boy Guarantee, or any other document delivered by or on behalf of any Obligor or the Sponsor under or in connection with any Finance Document or the Bad Boy Guarantee is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
| 25.5 | Cross default |
|---|---|
| (a) | Any<br> Financial Indebtedness of any Major Project Party is not paid when due nor within any originally<br> applicable grace period. |
| --- | --- |
| (b) | Any<br> Financial Indebtedness of any Major Project Party is declared to be or otherwise becomes<br> due and payable prior to its specified maturity as a result of an event of default (however<br> described). |
| --- | --- |
| (c) | Any<br> commitment for any Financial Indebtedness of any Major Project Party is cancelled or suspended<br> by a creditor of any Major Project Party as a result of an event of default (however described). |
| --- | --- |
| (d) | Any<br> creditor of any Major Project Party becomes entitled to declare any Financial Indebtedness<br> of any member of the Group due and payable prior to its specified maturity as a result of<br> an event of default (however described). |
| --- | --- |
| (e) | No<br> Event of Default will occur under this Clause 25.5 if the aggregate amount of: |
| --- | --- |
| (i) | Financial<br> Indebtedness (other than Financial Indebtedness incurred in connection with grid deposits<br> and other Financial Indebtedness incurred under PPAs) or commitment for Financial Indebtedness<br> (other than Financial Indebtedness incurred in connection with grid deposits and other Financial<br> Indebtedness incurred under PPAs) falling within paragraphs (a) to (d) above is<br> less than EUR 50,000.00; and |
| --- | --- |
| (ii) | Financial<br> Indebtedness incurred (or committed) in connection with grid deposits and Financial Indebtedness<br> incurred (or committed) under PPAs falling within paragraphs (a) to (d) above is<br> less than EUR 500,000. |
| --- | --- |
For the avoidance of doubt, the limitations set out in this paragraph (f) shall in no way apply in connection with paragraph (e) above.
| 25.6 | Insolvency |
|---|---|
| (a) | A<br> Major Project Party: |
| --- | --- |
| (i) | is<br> unable or admits inability to pay its debts as they fall due; |
| --- | --- |
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| (ii) | suspends<br> making payments on any of its debts; or |
|---|---|
| (iii) | by<br> reason of actual or anticipated financial difficulties, commences negotiations with one or<br> more of its creditors (excluding any Finance Party in its capacity as such) with a view to<br> rescheduling any of its indebtedness. |
| --- | --- |
| (b) | The<br> value of the assets of any Major Project Party is less than its liabilities (taking into<br> account contingent and prospective liabilities). |
| --- | --- |
| (c) | A<br> moratorium is declared in respect of any indebtedness of any Major Project Party. |
| --- | --- |
| 25.7 | Insolvency proceedings |
| --- | --- |
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
| (a) | the<br> suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, examinership,<br> administration or reorganisation (by way of voluntary arrangement, scheme of arrangement<br> or otherwise) of any Major Project Party; |
|---|---|
| (b) | a<br> composition, compromise, assignment or arrangement with any creditor of any Major Project<br> Party; |
| --- | --- |
| (c) | the<br> appointment of a liquidator (other than in respect of a solvent liquidation of a Major Project<br> Party which is not an Obligor), examiner, receiver, administrative receiver, administrator,<br> compulsory manager or other similar officer in respect of any member of the Group or any<br> of its assets; or |
| --- | --- |
| (d) | enforcement<br> of any Security over any assets of any Major Project Party, |
| --- | --- |
or any analogous procedure or step is taken in any jurisdiction.
This Clause 25.7 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within fourteen (14) days of commencement.
| 25.8 | Creditors' process |
|---|
Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Major Project Party having an aggregate value of EUR 50,000 (unless such process is directly related to PPAs, in which case the aggregate value of EUR 500,000 shall apply) and which is not discharged within ten (10) Business Days of commencement of such expropriation, attachment, sequestration, distress or execution (as applicable).
| 25.9 | Litigation |
|---|
Any litigation, arbitration or administrative proceeding before any court, arbitral body or agency which, if adversely determined, might be reasonably expected to have a Material Adverse Effect has started or been threatened in writing against any member of the Group (or against the directors of any member of the Group) or in relation to any Warehouse Project.
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| 25.10 | Final judgment |
|---|---|
| (a) | Any<br> member of the Group fails to comply with any final judgment, final decree, final award or<br> final order made against it by any authority, other than where that judgment, decree, award<br> or order does not and is not reasonably likely to have a Material Adverse Effect. |
| --- | --- |
| (b) | For<br> the purposes of paragraph (a) above, a judgment, decree, award or order is taken to<br> be final even though an appeal may be pending against it, or it may still be subject to appeal. |
| --- | --- |
| 25.11 | Unlawfulness |
| --- | --- |
| (a) | It<br> is or becomes unlawful for a Major Project Party to perform any of its obligations under<br> the Transaction Documents, or any such obligations are not or cease to be (or are alleged<br> (unless such allegation is obviously frivolous or vexatious) by a member if the Group not<br> to be) legal, valid, binding and enforceable, or otherwise cease to be effective. |
| --- | --- |
| (b) | It<br> is or becomes unlawful for a Major Project Party to perform any of its obligations under<br> the Transaction Documents or any Common Transaction Security created or expressed to be created<br> or evidenced by the Common Security Documents ceases to be effective. |
| --- | --- |
| 25.12 | Termination or Repudiation |
| --- | --- |
| (a) | Any<br> Transaction Document is terminated, cancelled repudiated or rescinded prior to its originally<br> stated maturity or not renewed upon its expiry, in each case, however, only provided that<br> such event has a Portfolio Effect (whether on a stand-alone basis or in aggregate across<br> multiple Warehouse Projects). |
| --- | --- |
| (b) | An<br> Obligor repudiates any of the Common Transaction Security or evidences an intention to repudiate<br> any of the Common Transaction Security. |
| --- | --- |
| (c) | No<br> Event of Default under paragraph (a) will occur if, to the extent such termination,<br> cancellation or rescission (as applicable) is in respect of a Project Document, the Obligors<br> have, prior to such termination, cancellation or rescission (as applicable), replaced that<br> Project Document by a document or written arrangement in form and substance satisfactory<br> to the Senior Agent: |
| --- | --- |
| (i) | under<br> which the material unperformed obligations owed to the Obligors under the replaced Project<br> Document are assumed or replaced on substantially equivalent terms (or on terms more favourable<br> to the Obligors); and |
| --- | --- |
| (ii) | with<br> the same counterparties as those parties under the replaced Project Document or with any<br> new counterparties in respect of whom the Senior Agent has provided its prior written consent. |
| --- | --- |
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| 25.13 | Governmental Intervention |
|---|
By or under the authority of any government:
| (a) | the<br> management of any member of the Group is wholly or partially displaced or the authority of<br> any member of the Group in the conduct of its business is wholly or partially curtailed;<br> or |
|---|---|
| (b) | all<br> or a majority of the issued shares of any member of the Group or the whole or any part (the<br> book value of which is ten per cent. (10%) or more of the book value of the whole) of its<br> revenues or assets is seized, nationalised, expropriated or compulsorily acquired; or |
| --- | --- |
| (c) | any<br> restriction is placed on: |
| --- | --- |
| (i) | the<br> conversion of any currency in which the Warehouse Project revenues are denominated into the<br> currency in which any amount due to a Finance Party under the Finance Documents is denominated;<br> or |
| --- | --- |
| (ii) | the<br> payment or transfer to a Finance Party (or to a Senior Agent or other Finance Party on its<br> behalf in accordance with the Finance Documents) of any amount due to it under the Finance<br> Documents. |
| --- | --- |
| 25.14 | Common Transaction Security |
| --- | --- |
| (a) | Any<br> Obligor fails to perform or comply with any of the obligations assumed by it in the Common<br> Security Documents to which it is a party. |
| --- | --- |
| (b) | At<br> any time any of the Common Transaction Security is or becomes unlawful or is not, or ceases<br> to be legal, valid, binding or enforceable or otherwise ceases to be effective. |
| --- | --- |
| (c) | At<br> any time, any of the Common Transaction Security fails to have first ranking priority or<br> is subject to any prior ranking or pari passu ranking Security. |
| --- | --- |
| 25.15 | Ownership of the Obligors |
| --- | --- |
Any Obligor (other than the Borrower) and/or any ProjectCo, Project HoldCo and/or Country HoldCo ceases to be a wholly owned Subsidiary of the Borrower unless this is the result of a disposal in accordance with the express terms of this Agreement.
| 25.16 | Force Majeure or shutdowns |
|---|---|
| (a) | Any<br> Force Majeure or shutdown of any Warehouse Project (in whole or in any material part): |
| --- | --- |
| (i) | for<br> a period lasting at least: |
| --- | --- |
| (A) | whilst<br> such Warehouse Project is in construction, one hundred twenty (120) days (in each case, whether<br> or not consecutive); and |
| --- | --- |
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| (B) | whilst<br> such Warehouse Project is operational, one hundred fifty (150) days (in each case, whether<br> or not consecutive); or |
|---|---|
| (ii) | results<br> in a delay of the respective completion by 90 days or a Material Adverse Effect. |
| --- | --- |
| (b) | Any<br> Warehouse Project is destroyed (in whole or in any material part) and is not reasonably likely,<br> in the opinion of the Senior Agent (acting in consultation with the Lenders' Technical Adviser)<br> to be reinstated under a Reinstatement Plan so as to satisfy the matters set out in the Project<br> Close Confirmation. |
| --- | --- |
| 25.17 | Authorisations |
| --- | --- |
Any Required Authorisation:
| (a) | is<br> not in full force and effect (whether through failure to obtain, revocation, cancellation,<br> termination or otherwise) at any time when required; or |
|---|---|
| (b) | is<br> modified in any way that is reasonably likely to have a Material Adverse Effect. |
| --- | --- |
| 25.18 | E&S matters |
| --- | --- |
Any E&S Claim is commenced against any Obligor, any ProjectCo, any Project HoldCo, any Country HoldCo or a Warehouse Project that is reasonably likely to result in a Material Adverse Effect.
| 25.19 | Sanctions |
|---|
Any representation or undertaking in relation to the Sanctions made or deemed to be made by any member of the Group in the Transaction Documents or any other document delivered by or on behalf of any member of the Group under or in connection with any Transaction Document is or proves to have been incorrect or misleading when made or deemed to be made.
| 25.20 | Non-AIF status |
|---|
Any representation or undertaking in relation to the AIF status made or deemed to be made by any of the Obligors in this Agreement is or proves to have been incorrect or misleading when made or deemed to be made.
| 25.21 | Funding Shortfall |
|---|
A Funding Shortfall occurs which has (whether on a stand-alone basis or in aggregate across multiple Warehouse Projects) a Portfolio Effect.
| 25.22 | Material adverse change |
|---|
Any event or circumstance occurs which the Majority Lenders reasonably believe is likely to have a Material Adverse Effect.
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| 25.23 | Government subsidy |
|---|
Any electricity generation subsidy and/or tariff has been terminated or is no longer available for any Warehouse Project which has (whether on a stand-alone basis or in aggregate across multiple Warehouse Projects) a Portfolio Effect.
| 25.24 | Key Project Milestones |
|---|
Any Key Project Milestone has not been achieved and such non-achievement has (whether on a stand-alone basis or in aggregate across multiple Warehouse Projects) a Portfolio Effect.
| 25.25 | Equity Cure |
|---|---|
| (a) | No<br> Event of Default shall occur under Clause 25.2 (Specific undertakings) solely in relation<br> to a failure to comply with any requirement of Clause 23 (Financial covenants) if<br> any Holding Company of the Borrower makes available to the Borrower additional amounts to<br> be applied as provided for in this Clause 25.25 (each, an "Equity Cure"). |
| --- | --- |
| (b) | The<br> Equity Cure shall be made as follows: |
| --- | --- |
| (i) | within<br> five (5) Business Days after the respective Calculation Date as of which the Borrower<br> does not comply with Clause 23 (Financial covenants), the Borrower notifies the Senior<br> Agent that it intends to make an Equity Cure; |
| --- | --- |
| (ii) | within<br> five (5) Business Days after the notification referred to in paragraph (i) above,<br> the amount of the Equity Cure: |
| --- | --- |
| (A) | is<br> made available to the Borrower; and |
| --- | --- |
| (B) | is<br> sufficient to immediately restore the requirements set out in Clause 23 (Financial covenants)<br> following application of such Equity Cure in accordance with Clause 8.6 (Mandatory Prepayment – Equity Cure). |
| --- | --- |
| (c) | An<br> Equity Cure may not be made: |
| --- | --- |
| (i) | on<br> two (2) or more consecutive Calculation Dates; and |
| --- | --- |
| (ii) | more<br> than three (3) times up until the Termination Date. |
| --- | --- |
| 25.26 | Acceleration |
| --- | --- |
On and at any time after the occurrence of an Event of Default which is continuing the Senior Agent may, and shall if so directed by the Majority Lenders:
| (a) | by<br> notice to the Borrower: |
|---|---|
| (i) | cancel<br> the Total Commitments and/or Ancillary Commitments, whereupon they shall immediately be cancelled; |
| --- | --- |
- 159 -
| (ii) | declare<br> that all or part of the Loans, together with accrued interest, and all other amounts accrued<br> or outstanding under the Finance Documents be immediately due and payable, whereupon they<br> shall become immediately due and payable; |
|---|---|
| (iii) | declare<br> that all or part of the Loans be payable on demand, whereupon they shall immediately become<br> payable on demand by the Senior Agent on the instructions of the Majority Lenders; |
| --- | --- |
| (iv) | declare<br> that all or any part of the amounts (or cash cover in relation to those amounts) outstanding<br> under the Ancillary Facilities be immediately due and payable whereupon they shall become<br> immediately due and payable; and/or |
| --- | --- |
| (v) | declare<br> that all or any part of the amounts (or cash cover in relation to those amounts) outstanding<br> under the Ancillary Facilities be payable on demand, whereupon they shall immediately become<br> payable on demand by the Senior Agent on the instructions of the Majority Lenders; and/or |
| --- | --- |
| (b) | exercise,<br> or direct the Common Security Agent to exercise, any or all of its rights, remedies, powers<br> or discretions under any of the Finance Documents. |
| --- | --- |
- 160 -
SECTION 10
CHANGES TO PARTIES
| 26. | CHANGES TO THE LENDERS AND HEDGE COUNTERPARTIES |
|---|---|
| 26.1 | Assignments and transfers by the Lenders |
| --- | --- |
Subject to this Clause 26, a Lender (the "Existing Lender") may:
| (a) | assign<br> any of its rights; or |
|---|---|
| (b) | transfer<br> by novation any of its rights and obligations, |
| --- | --- |
to another bank or financial institution or to a trust, fund 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 (the "New Lender").
| 26.2 | Consultation |
|---|
An Existing Lender must consult with the Borrower (whether directly or through the Senior Agent) for no more than ten (10) Business Days before it may make an assignment or transfer in accordance with Clause 26.1 (Assignments and transfers by the Lenders) unless the assignment or transfer is:
| (a) | to<br> another Lender or an Affiliate of any Lender; |
|---|---|
| (b) | to<br> a fund which is a Related Fund of that Existing Lender; |
| --- | --- |
| (c) | without<br> prejudice to paragraph (a) above, to an Arranger or an Affiliate of an Arranger and<br> made in connection with the facilitation of either the primary syndication of any Facility<br> or first utilisation under this Agreement; or |
| --- | --- |
| (d) | made<br> at a time when an Event of Default is continuing. |
| --- | --- |
Such consultation shall be conclusively evidenced by the notification the Senior Agent sends to the Borrower about the intended assignment or, as the case may be, transfer and asking the Borrower to give its view.
| 26.3 | Other conditions of assignment or transfer |
|---|---|
| (a) | An<br> assignment will only be effective on: |
| --- | --- |
| (i) | receipt<br> by the Senior Agent (whether in the Assignment Agreement or otherwise) of written confirmation<br> from the New Lender (in form and substance satisfactory to the Senior Agent) that the New<br> Lender will assume the same obligations to the other Finance Parties and the other Secured<br> Parties as it would have been under if it had been an Original Lender; and |
| --- | --- |
| (ii) | performance<br> by the Senior Agent of all necessary "know your customer" or other similar<br> checks under all applicable laws and regulations in relation to such assignment to a New<br> Lender, the completion of which the Senior Agent shall promptly notify to the Existing Lender<br> and the New Lender. |
| --- | --- |
- 161 -
| (b) | A<br> transfer will only be effective if the procedure set out in Clause 26.6 (Procedure for transfer) is complied with. |
|---|---|
| (c) | If: |
| --- | --- |
| (i) | a<br> Lender assigns or transfers any of its rights or obligations under the Finance Documents<br> or changes its Facility Office; and |
| --- | --- |
| (ii) | as<br> a result of circumstances existing at the date the assignment, transfer or change occurs,<br> an Obligor would be obliged to make a payment to the New Lender or Lender acting through<br> its new Facility Office under Clause 13 (Tax gross-up and indemnities) or Clause 14<br> (Increased costs), |
| --- | --- |
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This paragraph (c) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.
| (d) | Each<br> New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms,<br> for the avoidance of doubt, that the Senior Agent has authority to execute on its behalf<br> any amendment or waiver that has been approved by or on behalf of the requisite Lender or<br> Lenders in accordance with this Agreement on or prior to the date on which the transfer or<br> assignment becomes effective in accordance with this Agreement and that it is bound by that<br> decision to the same extent as the Existing Lender would have been had it remained a Lender. |
|---|---|
| 26.4 | Assignment or transfer fee |
| --- | --- |
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Senior Agent (for its own account) a fee of EUR 2,000.
| 26.5 | Limitation of responsibility of Existing Lenders |
|---|---|
| (a) | Unless<br> expressly agreed to the contrary, an Existing Lender makes no representation or warranty<br> and assumes no responsibility to a New Lender for: |
| --- | --- |
| (i) | the<br> legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the<br> Common Transaction Security or any other documents; |
| --- | --- |
| (ii) | the<br> financial condition of any Obligor; |
| --- | --- |
| (iii) | the<br> performance and observance by any Obligor of its obligations under the Finance Documents<br> or any other documents; or |
| --- | --- |
- 162 -
| (iv) | the<br> accuracy of any statements (whether written or oral) made in or in connection with any Finance<br> Document or any other document, |
|---|
and any representations or warranties implied by law are excluded.
| (b) | Each<br> New Lender confirms to the Existing Lender and the other Finance Parties that it: |
|---|---|
| (i) | has<br> made (and shall continue to make) its own independent investigation and assessment of the<br> financial condition and affairs of each Obligor and its related entities in connection with<br> its participation in this Agreement and has not relied exclusively on any information provided<br> to it by the Existing Lender in connection with any Finance Document; and |
| --- | --- |
| (ii) | will<br> continue to make its own independent appraisal of the creditworthiness of each Obligor and<br> its related entities whilst any amount is or may be outstanding under the Finance Documents<br> or any Commitment is in force. |
| --- | --- |
| (c) | Nothing<br> in any Finance Document obliges an Existing Lender to: |
| --- | --- |
| (i) | accept<br> a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned<br> or transferred under this Clause 26; or |
| --- | --- |
| (ii) | support<br> any losses directly or indirectly incurred by the New Lender by reason of the non-performance<br> by any Obligor of its obligations under the Finance Documents or otherwise. |
| --- | --- |
| 26.6 | Procedure for transfer |
| --- | --- |
| (a) | Subject<br> to the conditions set out in Clause 26.2 (Consultation) and Clause 26.3 (Other conditions of assignment or transfer) a transfer is effected in accordance with paragraph<br> (c) below when the Senior Agent executes an otherwise duly completed Transfer Certificate<br> delivered to it by the Existing Lender and the New Lender. The Senior Agent shall, subject<br> to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly<br> completed Transfer Certificate appearing on its face to comply with the terms of this Agreement<br> and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. |
| --- | --- |
| (b) | The<br> Senior Agent shall only be obliged to execute a Transfer Certificate delivered to it by the<br> Existing Lender and the New Lender once it is satisfied it has complied with all necessary<br> "know your customer" or other similar checks under all applicable laws and regulations<br> in relation to the transfer to such New Lender. |
| --- | --- |
| (c) | Subject<br> to Clause 26.11 (Pro rata interest settlement), on the Transfer Date: |
| --- | --- |
| (i) | to<br> the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation<br> its rights and obligations under the Finance Documents and in respect of the Common Transaction<br> Security each of the Obligors and the Existing Lender shall be released from further obligations<br> towards one another under the Finance Documents and in respect of the Common Transaction<br> Security and their respective rights against one another shall be cancelled (being the "Discharged Rights and Obligations"); |
| --- | --- |
- 163 -
| (ii) | each<br> of the Obligors and the New Lender shall assume obligations towards one another and/or acquire<br> rights against one another which differ from the Discharged Rights and Obligations only insofar<br> as that Obligor and the New Lender have assumed and/or acquired the same in place of that<br> Obligor and the Existing Lender; |
|---|---|
| (iii) | the<br> Senior Agent, the Arranger, the Common Security Agent, the New Lender, the other Lenders<br> and any relevant Ancillary Lender shall acquire the same rights and assume the same obligations<br> between themselves and in respect of the Common Transaction Security as they would have acquired<br> and assumed had the New Lender been an Original Lender with the rights and/or obligations<br> acquired or assumed by it as a result of the transfer and to that extent the Senior Agent,<br> the Arranger, the Common Security Agent, the Existing Lender and any relevant Ancillary Lender<br> shall each be released from further obligations to each other under the Finance Documents;<br> and |
| --- | --- |
| (iv) | the<br> New Lender shall become a Party as a "Lender". |
| --- | --- |
| 26.7 | Procedure for assignment |
| --- | --- |
| (a) | Subject<br> to the conditions set out in Clause 26.2 (Consultation) and Clause 26.3 (Other conditions of assignment or transfer) an assignment may be effected in accordance with<br> paragraph (c) below when the Senior Agent executes an otherwise duly completed Assignment<br> Agreement delivered to it by the Existing Lender and the New Lender. The Senior Agent shall,<br> subject to paragraph (b) below, as soon as reasonably practicable after receipt by it<br> of a duly completed Assignment Agreement appearing on its face to comply with the terms of<br> this Agreement and delivered in accordance with the terms of this Agreement, execute that<br> Assignment Agreement. |
| --- | --- |
| (b) | The<br> Senior Agent shall only be obliged to execute an Assignment Agreement delivered to it by<br> the Existing Lender and the New Lender once it is satisfied it has complied with all necessary<br> "know your customer" or other similar checks under all applicable laws and regulations<br> in relation to the assignment to such New Lender. |
| --- | --- |
| (c) | Subject<br> to Clause 26.11 (Pro rata interest settlement), on the Transfer Date: |
| --- | --- |
| (i) | the<br> Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents<br> expressed to be the subject of the assignment in the Assignment Agreement; |
| --- | --- |
| (ii) | the<br> Existing Lender will be released by each Obligor and the other Finance Parties from the obligations<br> owed by it (the "Relevant Obligations")<br> and expressed to be the subject of the release in the Assignment Agreement; and |
| --- | --- |
- 164 -
| (iii) | the<br> New Lender shall become a Party as a "Lender" and will be bound by obligations<br> equivalent to the Relevant Obligations. |
|---|---|
| (d) | Lenders<br> may utilise procedures other than those set out in this Clause 26.7 to assign their rights<br> under the Finance Documents (but not, without the consent of the relevant Obligor or unless<br> in accordance with Clause 26.6 (Procedure for transfer), to obtain a release by that<br> Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent<br> obligations by a New Lender) provided that they comply with the conditions set out<br> in Clause 26.2 (Consultation) and Clause 26.3 (Other conditions of assignment or transfer). |
| --- | --- |
| 26.8 | Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower |
| --- | --- |
The Senior Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, an Assignment Agreement or an Increase Confirmation send to the Borrower a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation.
| 26.9 | Additional Hedge Counterparties |
|---|---|
| (a) | The<br> Borrower or a Lender may request that a Lender or an Affiliate of a Lender becomes an Additional<br> Hedge Counterparty, with the prior approval of the Majority Lenders and (in the case of a<br> request by a Lender) the Borrower, by delivering to the Senior Agent a duly executed Hedge<br> Counterparty Accession Letter. |
| --- | --- |
| (b) | The<br> relevant Lender or its Affiliate will become an Additional Hedge Counterparty when the Senior<br> Agent enters into the relevant Hedge Counterparty Accession Letter. |
| --- | --- |
| 26.10 | Security over Lenders' rights |
| --- | --- |
In addition to the other rights provided to Lenders under this Clause 26, each Lender may following a ten (10) Business Day consultation period with the relevant Obligors, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
| (a) | any<br> charge, assignment or other Security to secure obligations to a federal reserve or central<br> bank; and |
|---|---|
| (b) | any<br> charge, assignment or other Security granted to any holders (or trustee or representatives<br> of holders) of obligations owed, or securities issued, by that Lender as security for those<br> obligations or securities, |
| --- | --- |
| except that no such charge, assignment or Security<br> shall: | |
| (i) | release<br> a Lender from any of its obligations under the Finance Documents or substitute the beneficiary<br> of the relevant charge, assignment or Security for the Lender as a party to any of the Finance<br> Documents; or |
| --- | --- |
- 165 -
| (ii) | require<br> any payments to be made by an Obligor other than or in excess of, or grant to any person<br> any more extensive rights than, those required to be made or granted to the relevant Lender<br> under the Finance Documents. |
|---|---|
| 26.11 | Pro rata interest settlement |
| --- | --- |
| (a) | If<br> the Senior Agent has notified the Lenders that it is able to distribute interest payments<br> on a "pro rata basis" to Existing Lenders and New Lenders then (in respect<br> of any transfer pursuant to Clause 26.6 (Procedure for transfer) or any assignment<br> pursuant to Clause 26.7 (Procedure for assignment) the Transfer Date of which, in<br> each case, is after the date of such notification and is not on the last day of an Interest<br> Period): |
| --- | --- |
| (i) | any<br> interest or fees in respect of the relevant participation which are expressed to accrue by<br> reference to the lapse of time shall continue to accrue in favour of the Existing Lender<br> up to but excluding the Transfer Date ("Accrued Amounts") and shall become<br> due and payable to the Existing Lender (without further interest accruing on them) on the<br> last day of the current Interest Period (or, if the Interest Period is longer than six Months,<br> on the next of the dates which falls at six Monthly intervals after the first day of that<br> Interest Period); and |
| --- | --- |
| (ii) | the<br> rights assigned or transferred by the Existing Lender will not include the right to the Accrued<br> Amounts, so that, for the avoidance of doubt: |
| --- | --- |
| (A) | when<br> the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing<br> Lender; and |
| --- | --- |
| (B) | the<br> amount payable to the New Lender on that date will be the amount which would, but for the<br> application of this Clause 26.11, have been payable to it on that date, but after deduction<br> of the Accrued Amounts. |
| --- | --- |
| (b) | In<br> this Clause 26.11, references to "Interest Period" shall be construed to include<br> a reference to any other period for accrual of fees. |
| --- | --- |
| (c) | An<br> Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 26.11<br> but which does not have a Commitment shall be deemed not to be a Lender for the purposes<br> of ascertaining whether the agreement of any specified group of Lenders has been obtained<br> to approve any request for a consent, waiver, amendment or other vote of Lenders under the<br> Finance Documents. |
| --- | --- |
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| 27. | RESTRICTIONS ON DEBT PURCHASE TRANSACTIONS |
|---|---|
| 27.1 | Prohibition on Debt Purchase Transactions by the Group |
| --- | --- |
The Obligors may not, and must procure that each other member of the Group does not, enter into any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company that is or will be a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs (b) or (c) of the definition of Debt Purchase Transaction.
| 28. | CHANGES TO THE OBLIGORS |
|---|---|
| 28.1 | Assignments and transfer by Obligors |
| --- | --- |
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
| 28.2 | Guarantors |
|---|---|
| (a) | Subject<br> to compliance with the provisions of paragraphs (c) and (d) of Clause 22.18 ("Know your customer" checks) and this Clause 28.2, the Borrower shall procure that: |
| --- | --- |
| (i) | with<br> respect to each Eligible Jurisdiction and prior to the first ProjectCo being acquired in<br> such Eligible Jurisdiction, the relevant Country HoldCo is incorporated in Ireland, with<br> 100% of its share capital owned by the Borrower and which shall hold (indirectly via the<br> relevant Project HoldCo) all ProjectCos in that Eligible Jurisdiction accedes to this Agreement<br> as a Guarantor on the Acquisition Date; and |
| --- | --- |
| (ii) | with<br> respect to each Acquisition, each ProjectCo and the relevant Project HoldCo being the direct<br> 100% owner of the share capital in such ProjectCo, becomes a Guarantor on the Acquisition<br> Date relating to such ProjectCo, and |
| --- | --- |
in each case, grants the Security identified in Part D (Conditions precedent for a Guarantor) of Schedule 2 (ConditionsPrecedent and Subsequent) by no later than the respective Acquisition Date.
| (b) | A<br> ProjectCo and, if applicable a Project HoldCo owning (whether directly or indirectly) a Warehouse<br> Project which is not yet in RtB Status, but which may be funded by utilisations under the<br> Mezzanine Facility Agreement, is not required to accede as a Guarantor until the Borrower<br> requires a Utilisation under and in accordance with this Agreement. |
|---|---|
| (c) | Each<br> relevant entity set out in paragraph (a) above shall become a Guarantor on the date<br> on which: |
| --- | --- |
| (i) | the<br> Senior Agent has received all of the documents and other evidence listed in Part D (Conditions precedent for a Guarantor) of Schedule 2 (Conditions Precedent and Subsequent)<br> in relation to that Guarantor, each in form and substance satisfactory to the Senior Agent;<br> and |
| --- | --- |
- 167 -
| (ii) | the<br> Borrower and the proposed Guarantor deliver to the Senior Agent a duly completed and executed<br> Guarantor Accession Letter. |
|---|---|
| (d) | The<br> Senior Agent shall notify the Borrower and the Lenders promptly upon being satisfied that<br> it has received (in form and substance satisfactory to it) all the documents and other evidence<br> listed in Part D (Conditions precedent for a Guarantor) of Schedule 2 (Conditions Precedent and Subsequent). |
| --- | --- |
| (e) | Other<br> than to the extent that the Majority Lenders notify the Senior Agent in writing to the contrary<br> before the Senior Agent gives the notification described in paragraph (d) above, the<br> Lenders authorise (but do not require) the Senior Agent to give that notification. The Senior<br> Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving<br> any such notification. |
| --- | --- |
| 28.3 | Resignation of a Guarantor |
| --- | --- |
| (a) | The<br> Borrower may request that a Guarantor ceases to be a Guarantor by delivering to the Senior<br> Agent a Resignation Letter if: |
| --- | --- |
| (i) | that<br> Guarantor is being disposed of by way of a Permitted Disposal and the Borrower has confirmed<br> this is the case; or |
| --- | --- |
| (ii) | all<br> the Lenders have consented to the resignation of that Guarantor. |
| --- | --- |
| (b) | The<br> Senior Agent shall accept a Resignation Letter and notify the Borrower and the Lenders of<br> its acceptance if: |
| --- | --- |
| (i) | the<br> Borrower has confirmed that no Default is continuing or would result from the acceptance<br> of the Resignation Letter; |
| --- | --- |
| (ii) | no<br> payment is due from the Guarantor under Clause 20.1 (Guarantee and indemnity); and |
| --- | --- |
| (iii) | the<br> Borrower has confirmed that it shall ensure that the Disposal Proceeds will be applied in<br> accordance with Clause 8.3 (Disposal of a Warehouse Project) or paid into the Disposal<br> Proceeds Account for application in accordance with Clause 19.3 (Disposal Proceeds Account). |
| --- | --- |
| (c) | The<br> resignation of that Guarantor shall not be effective until the date of the relevant Permitted<br> Disposal at which time that company shall cease to be a Guarantor and shall have no further<br> rights or obligations under the Finance Documents as a Guarantor. |
| --- | --- |
| 28.4 | Repetition of Representations |
| --- | --- |
Delivery of a Guarantor Accession Letter constitutes confirmation by the relevant Guarantor that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
- 168 -
| 28.5 | Resignation and release of security on disposal |
|---|
If a Guarantor is or is proposed to be the subject of a Permitted Disposal then:
| (a) | where<br> that Guarantor created Common Transaction Security over any of its assets or business in<br> favour of the Common Security Agent, or Common Transaction Security in favour of the Common<br> Security Agent was created over the shares (or equivalent) of that Guarantor, the Common<br> Security Agent may, at the cost and request of the Borrower, release those assets, business<br> or shares (or equivalent) and issue certificates of non-crystallisation; and |
|---|---|
| (b) | any<br> resignation of that Guarantor and related release of Common Transaction Security referred<br> to in paragraph (a) above shall become effective only on the making of that disposal<br> and on the date on which the Senior Agent (acting on the instructions of all Lenders) notifies<br> the Obligors that all other obligations under the Finance Documents relating to such disposal<br> are discharged in full by the Obligors in form and substance satisfactory to the Senior Agent. |
| --- | --- |
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SECTION 11
THE FINANCE PARTIES
| 29. | ROLE OF THE SENIOR AGENT AND, THE ARRANGER AND THE REFERENCE BANKS |
|---|---|
| 29.1 | Appointment of the Senior Agent |
| --- | --- |
| (a) | Each<br> of the Arranger, the Lenders and the Hedge Counterparties appoints the Senior Agent to act<br> as its agent under and in connection with the Finance Documents. |
| --- | --- |
| (b) | Each<br> of the Arranger and the Lenders authorises the Senior Agent to perform the duties, obligations<br> and responsibilities and to exercise the rights, powers, authorities and discretions specifically<br> given to the Senior Agent under or in connection with the Finance Documents together with<br> any other incidental rights, powers, authorities and discretions. |
| --- | --- |
| 29.2 | Instructions |
| --- | --- |
| (a) | The<br> Senior Agent shall: |
| --- | --- |
| (i) | unless<br> a contrary indication appears in a Finance Document, exercise or refrain from exercising<br> any right, power, authority or discretion vested in it as Senior Agent in accordance with<br> any instructions given to it by: |
| --- | --- |
| (A) | all<br> Lenders if the relevant Finance Document stipulates the matter is an all Lender decision;<br> and |
| --- | --- |
| (B) | in<br> all other cases, the Majority Lenders; and |
| --- | --- |
| (ii) | not<br> be liable for any act (or omission) if it acts (or refrains from acting) in accordance with<br> paragraph (i) above. |
| --- | --- |
| (b) | The<br> Senior Agent shall be entitled to request instructions, or clarification of any instruction,<br> from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is<br> a decision for any other Lender or group of Lenders, from that Lender or group of Lenders)<br> as to whether, and in what manner, it should exercise or refrain from exercising any right,<br> power, authority or discretion. The Senior Agent may refrain from acting unless and until<br> it receives any such instructions or clarification that it has requested. |
| --- | --- |
| (c) | Save<br> in the case of decisions stipulated to be a matter for any other Lender or group of Lenders<br> under the relevant Finance Document and unless a contrary indication appears in a Finance<br> Document, any instructions given to the Senior Agent by the Majority Lenders shall override<br> any conflicting instructions given by any other Parties and will be binding on all Finance<br> Parties save for the Common Security Agent. |
| --- | --- |
| (d) | The<br> Senior Agent may refrain from acting in accordance with any instructions of any Lender or<br> group of Lenders until it has received any indemnification and/or security that it may in<br> its discretion require (which may be greater in extent than that contained in the Finance<br> Documents and which may include payment in advance) for any cost, loss or liability which<br> it may incur in complying with those instructions. |
| --- | --- |
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| (e) | In<br> the absence of instructions, the Senior Agent may act (or refrain from acting) as it considers<br> to be in the best interest of the Lenders. |
|---|---|
| (f) | The<br> Senior Agent is not authorised to act on behalf of a Lender (without first obtaining that<br> Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.<br> This paragraph (f) shall not apply to any legal or arbitration proceeding relating to<br> the perfection, preservation or protection of rights under the Common Security Documents<br> or enforcement of the Common Transaction Security or Common Security Documents. |
| --- | --- |
| 29.3 | Duties of the Senior Agent |
| --- | --- |
| (a) | The<br> Senior Agent's duties under the Finance Documents are solely mechanical and administrative<br> in nature. |
| --- | --- |
| (b) | Subject<br> to paragraph (c) below, the Senior Agent shall promptly forward to a Party the original<br> or a copy of any document which is delivered to the Senior Agent for that Party by any other<br> Party. |
| --- | --- |
| (c) | Without<br> prejudice to Clause 26.8 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower), paragraph (b) above shall not apply to any Transfer Certificate,<br> any Assignment Agreement or any Increase Confirmation. |
| --- | --- |
| (d) | Except<br> where a Finance Document specifically provides otherwise, the Senior Agent is not obliged<br> to review or check the adequacy, accuracy or completeness of any document it forwards to<br> another Party. |
| --- | --- |
| (e) | If<br> the Senior Agent receives notice from a Party referring to this Agreement, describing a Default<br> and stating that the circumstance described is a Default, it shall promptly notify the other<br> Finance Parties. |
| --- | --- |
| (f) | If<br> the Senior Agent is aware of the non-payment of any principal, interest, commitment fee or<br> other fee payable to a Finance Party (other than the Senior Agent, the Arranger or the Common<br> Security Agent) under this Agreement, it shall promptly notify the other Finance Parties. |
| --- | --- |
| (g) | The<br> Senior Agent shall provide to the Borrower, within one (1) Business Day of a request<br> by the Borrower (but no more frequently than once per calendar month), a list (which may<br> be in electronic form) setting out the names of the Lenders as at the date of that request,<br> their respective Commitments, the address and (if applicable) fax number (and the department<br> or officer, if any, for whose attention any communication is to be made) of each Lender for<br> any communication to be made or document to be delivered under or in connection with the<br> Finance Documents, the electronic mail address and/or any other information required to enable<br> the transmission of information by electronic mail or other electronic means to and by each<br> Lender to whom any communication under or in connection with the Finance Documents may be<br> made by that means and the account details of each Lender for any payment to be distributed<br> by the Senior Agent to that Lender under the Finance Documents. |
| --- | --- |
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| (h) | The<br> Senior Agent shall promptly forward to the Common Security Agent a copy of all notices issued<br> pursuant to Clause 25.25 (Acceleration). |
|---|---|
| (i) | The<br> Senior Agent shall have only those duties, obligations and responsibilities expressly specified<br> in the Finance Documents to which it is expressed to be a party (and no others shall be implied). |
| --- | --- |
| 29.4 | Role of the Arranger |
| --- | --- |
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
| 29.5 | No fiduciary duties |
|---|---|
| (a) | Nothing<br> in any Finance Document constitutes the Senior Agent or the Arranger as a trustee or fiduciary<br> of any other person. |
| --- | --- |
| (b) | None<br> of the Senior Agent, the Arranger or any Ancillary Lender shall be bound to account to any<br> Lender for any sum or the profit element of any sum received by it for its own account. |
| --- | --- |
| 29.6 | Business with the Group |
| --- | --- |
The Senior Agent, the Arranger and each Ancillary Lender may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
| 29.7 | Rights and discretions |
|---|---|
| (a) | The<br> Senior Agent may: |
| --- | --- |
| (i) | rely<br> on any representation, communication, notice or document believed by it to be genuine, correct<br> and appropriately authorised; |
| --- | --- |
| (ii) | assume<br> that: |
| --- | --- |
| (A) | any<br> instructions received by it from the Majority Lenders, any Lenders or any group of Lenders<br> are duly given in accordance with the terms of the Finance Documents; and |
| --- | --- |
| (B) | unless<br> it has received notice of revocation, that those instructions have not been revoked; and |
| --- | --- |
| (iii) | rely<br> on a certificate from any person: |
| --- | --- |
| (A) | as<br> to any matter of fact or circumstance which might reasonably be expected to be within the<br> knowledge of that person; or |
| --- | --- |
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| (B) | to<br> the effect that such person approves of any particular dealing, transaction, step, action<br> or thing, as sufficient evidence that that is the case and, in the case of paragraph (A) above,<br> may assume the truth and accuracy of that certificate. |
|---|---|
| (b) | The<br> Senior Agent may assume (unless it has received notice to the contrary in its capacity as<br> agent for the Lenders) that: |
| --- | --- |
| (i) | no<br> Default has occurred (unless it has actual knowledge of a Default arising under Clause 25.1<br> (Non-payment)); |
| --- | --- |
| (ii) | any<br> right, power, authority or discretion vested in any Party or any group of Lenders has not<br> been exercised; and |
| --- | --- |
| (iii) | any<br> notice or request made by the Borrower (other than a Utilisation Request) is made on behalf<br> of and with the consent and knowledge of all the Obligors. |
| --- | --- |
| (c) | The<br> Senior Agent may engage and pay for the advice or services of any lawyers, accountants, tax<br> advisers, surveyors or other professional advisers or experts. |
| --- | --- |
| (d) | Without<br> prejudice to the generality of paragraph (c) above or paragraph (e) below, the<br> Senior Agent may at any time engage and pay for the services of any lawyers to act as independent<br> counsel to the Senior Agent (and so separate from any lawyers instructed by the Lenders)<br> if the Senior Agent in its reasonable opinion deems this to be desirable. |
| --- | --- |
| (e) | The<br> Senior Agent may rely on the advice or services of any lawyers, accountants, tax advisers,<br> surveyors or other professional advisers or experts (whether obtained by the Senior Agent<br> or by any other Party) and shall not be liable for any damages, costs or losses to any person,<br> any diminution in value or any liability whatsoever arising as a result of its so relying. |
| --- | --- |
| (f) | The<br> Senior Agent may act in relation to the Finance Documents through its officers, employees<br> and agents and the Senior Agent shall not: |
| --- | --- |
| (i) | be<br> liable for any error of judgment made by any such person; or |
| --- | --- |
| (ii) | be<br> bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct,<br> omission or default on the part of any such person, |
| --- | --- |
unless such error or such loss was directly caused by the Senior Agent's gross negligence or wilful misconduct.
| (g) | Unless<br> a Finance Document expressly provides otherwise, the Senior Agent may disclose to any other<br> Party any information it reasonably believes it has received as agent under this Agreement. |
|---|---|
| (h) | Without<br> prejudice to the generality of paragraph (g) above, the Senior Agent: |
| --- | --- |
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| (i) | may<br> disclose; and |
|---|---|
| (ii) | on<br> the written request of the Borrower, or the Majority Lenders shall, as soon as reasonably<br> practicable, disclose, |
| --- | --- |
the identity of a Defaulting Lender to the Borrower and to the other Finance Parties.
| (i) | Notwithstanding<br> any other provision of any Finance Document to the contrary, neither the Senior Agent nor<br> the Arranger is obliged to do or omit to do anything if it would, or might in its reasonable<br> opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or<br> duty of confidentiality. |
|---|---|
| (j) | Notwithstanding<br> any provision of any Finance Document to the contrary, the Senior Agent is not obliged to<br> expend or risk its own funds or otherwise incur any financial liability in the performance<br> of its duties, obligations or responsibilities or the exercise of any right, power, authority<br> or discretion if it has grounds for believing the repayment of such funds or adequate indemnity<br> against, or security for, such risk or liability is not reasonably assured to it. |
| --- | --- |
| 29.8 | Responsibility for documentation |
| --- | --- |
None of the Senior Agent, the Arranger or any Ancillary Lender is responsible or liable for:
| (a) | the<br> adequacy, accuracy or completeness of any information (whether oral or written) supplied<br> by the Senior Agent, the Arranger, an Ancillary Lender, an Obligor or any other person in<br> or in connection with any Finance Document or the Information Memorandum or the transactions<br> contemplated in the Finance Documents or any other agreement, arrangement or document entered<br> into, made or executed in anticipation of, under or in connection with any Finance Document; |
|---|---|
| (b) | the<br> legality, validity, effectiveness, adequacy or enforceability of any Finance Document or<br> the Common Transaction Security or any other agreement, arrangement or document entered into,<br> made or executed in anticipation of, under or in connection with any Finance Document or<br> the Common Transaction Security; or |
| --- | --- |
| (c) | any<br> determination as to whether any information provided or to be provided to any Finance Party<br> is non-public information the use of which may be regulated or prohibited by applicable law<br> or regulation relating to insider dealing or otherwise. |
| --- | --- |
| 29.9 | No duty to monitor |
| --- | --- |
The Senior Agent shall not be bound to enquire:
| (a) | whether<br> or not any Default has occurred; |
|---|---|
| (b) | as<br> to the performance, default or any breach by any Party of its obligations under any Finance<br> Document; or |
| --- | --- |
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| (c) | whether<br> any other event specified in any Finance Document has occurred. |
|---|---|
| 29.10 | Exclusion of liability |
| --- | --- |
| (a) | Without<br> limiting paragraph (b) below (and without prejudice to any other provision of any Finance<br> Document excluding or limiting the liability of the Senior Agent or any Ancillary Lender),<br> neither the Senior Agent nor any Ancillary Lender will be liable (including, without limitation,<br> for negligence or any other category of liability whatsoever) for: |
| --- | --- |
| (i) | any<br> damages, costs or losses to any person, any diminution in value, or any liability whatsoever<br> arising as a result of taking or not taking any action under or in connection with any Finance<br> Document or the Common Transaction Security, unless directly caused by its gross negligence<br> or wilful misconduct; |
| --- | --- |
| (ii) | exercising,<br> or not exercising, any right, power, authority or discretion given to it by, or in connection<br> with, any Finance Document, the Common Transaction Security or any other agreement, arrangement<br> or document entered into, made or executed in anticipation of, under or in connection with,<br> any Finance Document or the Common Transaction Security other than by reason of its gross<br> negligence or wilful misconduct; or |
| --- | --- |
| (iii) | without<br> prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs<br> or losses to any person, any diminution in value or any liability whatsoever arising as a<br> result of: |
| --- | --- |
| (A) | any<br> act, event or circumstance not reasonably within its control; or |
| --- | --- |
| (B) | the<br> general risks of investment in, or the holding of assets in, any jurisdiction, |
| --- | --- |
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
| (b) | No<br> Party (other than the Senior Agent or any Ancillary Lender (as applicable)) may take any<br> proceedings against any officer, employee or agent of the Senior Agent or any Ancillary Lender<br> in respect of any claim it might have against the Senior Agent or any Ancillary Lender or<br> in respect of any act or omission of any kind by that officer, employee or agent in relation<br> to any Finance Document or any Transaction Document and any officer, employee or agent of<br> the Senior Agent or any Ancillary Lender may rely on this paragraph (b) subject to Clause<br> 1.4 (Third party rights) and the provisions of the Third Parties Act. |
|---|
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| (c) | The<br> Senior Agent will not be liable for any delay (or any related consequences) in crediting<br> an account with an amount required under the Finance Documents to be paid by the Senior Agent<br> if the Senior Agent has taken all necessary steps as soon as reasonably practicable to comply<br> with the regulations or operating procedures of any recognised clearing or settlement system<br> used by the Senior Agent for that purpose. |
|---|---|
| (d) | Nothing<br> in this Agreement shall oblige the Senior Agent or the Arranger to carry out: |
| --- | --- |
| (i) | any<br> "know your customer" or other checks in relation to any person; or |
| --- | --- |
| (ii) | any<br> check on the extent to which any transaction contemplated by this Agreement might be unlawful<br> for any Lender or for any Affiliate of any Lender, |
| --- | --- |
on behalf of any Lender and each Lender confirms to the Senior Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Senior Agent or the Arranger.
| (e) | Without<br> prejudice to any provision of any Finance Document excluding or limiting the Senior Agent's<br> liability, any liability of the Senior Agent arising under or in connection with any Finance<br> Document or the Common Transaction Security shall be limited to the amount of actual loss<br> which has been finally judicially determined to have been suffered (as determined by reference<br> to the date of default of the Senior Agent or, if later, the date on which the loss arises<br> as a result of such default) but without reference to any special conditions or circumstances<br> known to the Senior Agent at any time which increase the amount of that loss. In no event<br> shall the Senior Agent be liable for any loss of profits, goodwill, reputation, business<br> opportunity or anticipated saving, or for special, punitive, indirect or consequential damages,<br> whether or not the Senior Agent has been advised of the possibility of such loss or damages. |
|---|---|
| 29.11 | Lenders' indemnity to the Senior Agent |
| --- | --- |
| (a) | Each<br> Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments<br> are then zero, to its share of the Total Commitments immediately prior to their reduction<br> to zero) indemnify the Senior Agent, within three (3) Business Days of demand, against<br> any cost, loss or liability (including, without limitation, for negligence or any other category<br> of liability whatsoever) incurred by the Senior Agent (otherwise than by reason of the Senior<br> Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability<br> pursuant to Clause 32.11 (Disruption to payment systems etc.), notwithstanding the<br> Senior Agent's negligence, gross negligence or any other category of liability whatsoever<br> but not including any claim based on the fraud of the Senior Agent) in acting as Senior Agent<br> under the Finance Documents (unless the Senior Agent has been reimbursed by an Obligor pursuant<br> to a Finance Document). |
| --- | --- |
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| (b) | Subject<br> to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender<br> for any payment that Lender makes to the Senior Agent pursuant to paragraph (a) above. |
|---|---|
| (c) | Paragraph<br> (b) above shall not apply to the extent that the indemnity payment in respect of which<br> the Lender claims reimbursement relates to a liability of the Senior Agent to an Obligor. |
| --- | --- |
| 29.12 | Resignation of the Senior Agent |
| --- | --- |
| (a) | The<br> Senior Agent may resign and appoint one of its Affiliates acting through an office in the<br> United Kingdom as successor by giving notice to the Lenders and the Borrower. |
| --- | --- |
| (b) | Alternatively,<br> the Senior Agent may resign by giving thirty (30) days' notice to the Lenders and the Borrower,<br> in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor<br> Senior Agent. |
| --- | --- |
| (c) | If<br> the Majority Lenders have not appointed a successor Senior Agent in accordance with paragraph<br> (b) above within twenty (20) days after notice of resignation was given, the retiring<br> Senior Agent (after consultation with the Borrower) may appoint a successor Senior Agent<br> (acting through an office in the United Kingdom). |
| --- | --- |
| (d) | If<br> the Senior Agent wishes to resign because (acting reasonably) it has concluded that it is<br> no longer appropriate for it to remain as agent and the Senior Agent is entitled to appoint<br> a successor Senior Agent under paragraph (c) above, the Senior Agent may (if it concludes<br> (acting reasonably) that it is necessary to do so in order to persuade the proposed successor<br> Senior Agent to become a party to this Agreement as Senior Agent) agree with the proposed<br> successor Senior Agent amendments to this Clause 29 and any other term of this Agreement<br> dealing with the rights or obligations of the Senior Agent consistent with then current market<br> practice for the appointment and protection of corporate trustees together with any reasonable<br> amendments to the agency fee payable under this Agreement which are consistent with the successor<br> Senior Agent's normal fee rates and those amendments will bind the Parties. |
| --- | --- |
| (e) | The<br> retiring Senior Agent shall, make available to the successor Senior Agent such documents<br> and records and provide such assistance as the successor Senior Agent may reasonably request<br> for the purposes of performing its functions as Senior Agent under the Finance Documents.<br> The Borrower shall, within three Business Days of demand, reimburse the retiring Senior Agent<br> for the amount of all costs and expenses (including legal fees) properly incurred by it in<br> making available such documents and records and providing such assistance. |
| --- | --- |
| (f) | The<br> Senior Agent's resignation notice shall only take effect upon the appointment of a successor. |
| --- | --- |
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| (g) | Upon<br> the appointment of a successor, the retiring Senior Agent shall be discharged from any further<br> obligation in respect of the Finance Documents (other than its obligations under paragraph<br> (e) above), but shall remain entitled to the benefit of Clause 15.3 (Indemnity to the Senior Agent) and this Clause 29 (and any agency fees for the account of the retiring<br> Senior Agent shall cease to accrue from (and shall be payable on) that date). Any successor<br> and each of the other Parties shall have the same rights and obligations amongst themselves<br> as they would have had if such successor had been an original Party. |
|---|---|
| (h) | The<br> Senior Agent shall resign in accordance with paragraph (b) above (and, to the extent<br> applicable, shall use reasonable endeavours to appoint a successor Senior Agent pursuant<br> to paragraph (c) above) if on or after the date which is three months before the earliest<br> FATCA Application Date relating to any payment to the Senior Agent under the Finance Documents,<br> either: |
| --- | --- |
| (i) | the<br> Senior Agent fails to respond to a request under Clause 13.8 (FATCA Information) and<br> a Lender reasonably believes that the Senior Agent will not be (or will have ceased to be)<br> a FATCA Exempt Party on or after that FATCA Application Date; |
| --- | --- |
| (ii) | the<br> information supplied by the Senior Agent pursuant to Clause 13.8 (FATCA Information)<br> indicates that the Senior Agent will not be (or will have ceased to be) a FATCA Exempt Party<br> on or after that FATCA Application Date; or |
| --- | --- |
| (iii) | the<br> Senior Agent notifies the Borrower and the Lenders that the Senior Agent will not be (or<br> will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
| --- | --- |
and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Senior Agent were a FATCA Exempt Party, and that Lender, by notice to the Senior Agent, requires it to resign.
| 29.13 | Replacement of the Senior Agent |
|---|---|
| (a) | After<br> consultation with the Borrower, the Majority Lenders may, by giving thirty (30) days' notice<br> to the Senior Agent (or, at any time the Senior Agent is an Impaired Senior Agent, by giving<br> any shorter notice determined by the Majority Lenders) replace the Senior Agent by appointing<br> a successor Senior Agent (acting through an office in the United Kingdom). |
| --- | --- |
| (b) | The<br> retiring Senior Agent shall (at its own cost if it is an Impaired Senior Agent and otherwise<br> at the expense of the Lenders) make available to the successor Senior Agent such documents<br> and records and provide such assistance as the successor Senior Agent may reasonably request<br> for the purposes of performing its functions as Senior Agent under the Finance Documents. |
| --- | --- |
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| (c) | The<br> appointment of the successor Senior Agent shall take effect on the date specified in the<br> notice from the Majority Lenders to the retiring Senior Agent. As from this date, the retiring<br> Senior Agent shall be discharged from any further obligation in respect of the Finance Documents<br> (other than its obligations under paragraph (b) above) but shall remain entitled to<br> the benefit of Clause 15.3 (Indemnity to the Senior Agent) and this Clause 29 (and<br> any agency fees for the account of the retiring Senior Agent shall cease to accrue from (and<br> shall be payable on) that date). |
|---|---|
| (d) | Any<br> successor Senior Agent and each of the other Parties shall have the same rights and obligations<br> amongst themselves as they would have had if such successor had been an original Party. |
| --- | --- |
| 29.14 | Confidentiality |
| --- | --- |
| (a) | In<br> acting as agent for the Finance Parties, the Senior Agent shall be regarded as acting through<br> its agency division which shall be treated as a separate entity from any other of its divisions<br> or departments. |
| --- | --- |
| (b) | If<br> information is received by another division or department of the Senior Agent, it may be<br> treated as confidential to that division or department and the Senior Agent shall not be<br> deemed to have notice of it. |
| --- | --- |
| 29.15 | Relationship with the Lenders |
| --- | --- |
| (a) | Subject<br> to Clause 26.11 (Pro rata interest settlement), the Senior Agent may treat the person<br> shown in its records as Lender or Hedge Counterparty at the opening of business (in the place<br> of the Senior Agent's principal office as notified to the Finance Parties from time to time)<br> as the Lender acting through its Facility Office or, as the case may be, Hedge Counterparty: |
| --- | --- |
| (i) | entitled<br> to or liable for any payment due under any Finance Document on that day; and |
| --- | --- |
| (ii) | entitled<br> to receive and act upon any notice, request, document or communication or make any decision<br> or determination under any Finance Document made or delivered on that day, |
| --- | --- |
unless it has received not less than five (5) Business Days' prior notice from that Lender or Hedge Counterparty to the contrary in accordance with the terms of this Agreement.
| (b) | Any<br> Lender or Hedge Counterparty may by notice to the Senior Agent appoint a person to receive<br> on its behalf all notices, communications, information and documents to be made or despatched<br> to that Lender or Hedge Counterparty under the Finance Documents. Such notice shall contain<br> the address, (if applicable) fax number and (where communication by electronic mail or other<br> electronic means is permitted under Clause 34.6 (Electronic communication)) electronic<br> mail address and/or any other information required to enable the transmission of information<br> by that means (and, in each case, the department or officer, if any, for whose attention<br> communication is to be made) and be treated as a notification of a substitute address, (if<br> applicable) fax number, electronic mail address (or such other information), department and<br> officer by that Lender for the purposes of Clause 34.2 (Addresses) and paragraph (a)(ii) of<br> Clause 34.6 (Electronic communication) and the Senior Agent shall be entitled to treat<br> such person as the person entitled to receive all such notices, communications, information<br> and documents as though that person were that Lender or Hedge Counterparty. |
|---|
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| 29.16 | Credit appraisal by the Lenders, Ancillary Lenders and Hedge Counterparties |
|---|
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender, Ancillary Lender and Hedge Counterparty confirms to the Senior Agent, the Common Security Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
| (a) | the<br> financial condition, status and nature of each member of the Group; |
|---|---|
| (b) | the<br> legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the<br> Common Transaction Security and any other agreement, arrangement or document entered into,<br> made or executed in anticipation of, under or in connection with any Finance Document or<br> the Common Transaction Security; |
| --- | --- |
| (c) | whether<br> that Lender or Ancillary Lender has recourse, and the nature and extent of that recourse,<br> against any Party or any of its respective assets under or in connection with any Finance<br> Document, the Common Transaction Security, the transactions contemplated by the Finance Documents<br> or any other agreement, arrangement or document entered into, made or executed in anticipation<br> of, under or in connection with any Finance Document or the Common Transaction Security; |
| --- | --- |
| (d) | the<br> adequacy, accuracy or completeness of the Information Memorandum and any other information<br> provided by the Senior Agent, the Common Security Agent, any Party or by any other person<br> under or in connection with any Finance Document, the transactions contemplated by any Finance<br> Document or any other agreement, arrangement or document entered into, made or executed in<br> anticipation of, under or in connection with any Finance Document; and |
| --- | --- |
| (e) | the<br> right or title of any person in or to, or the value or sufficiency of any part of the Charged<br> Property, the priority of any of the Common Transaction Security or the existence of any<br> Security affecting the Charged Property. |
| --- | --- |
| 29.17 | Senior Agent's management time |
| --- | --- |
Any amount payable to the Senior Agent under Clause 15.3 (Indemnity to the Senior Agent), Clause 17 (Costs and expenses) and Clause 29.11 (Lenders' indemnity to the Senior Agent) shall include the cost of utilising the Senior Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Senior Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Senior Agent under Clause 12 (Fees).
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| 29.18 | Deduction from amounts payable by the Senior Agent |
|---|
If any Party owes an amount to the Senior Agent under the Finance Documents the Senior Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Senior Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
| 29.19 | Amounts paid in error |
|---|---|
| (a) | If<br> the Senior Agent pays an amount to another Party and within five (5) Business Days of<br> the date of payment the Senior Agent notifies that Party that such payment was an Erroneous<br> Payment then the Party to whom that amount was paid by the Senior Agent shall on demand refund<br> the same to the Senior Agent. |
| --- | --- |
| (b) | Neither: |
| --- | --- |
| (i) | the<br> obligations of any Party to the Senior Agent; nor |
| --- | --- |
| (ii) | the<br> remedies of a Senior Agent, |
| --- | --- |
(whether arising under this Clause 29.19 or otherwise) which relate to an Erroneous Payment will be affected by any act, omission, matter or thing which, but for this paragraph (b), would reduce, release or prejudice any such obligation or remedy (whether or not known by the Senior Agent or any other Party).
| (c) | In<br> this Agreement, "Erroneous Payment" means a payment of an amount by the<br> Senior Agent to another Party which the Senior Agent determines (acting reasonably) was made<br> in error. |
|---|---|
| 29.20 | Role of Reference Banks |
| --- | --- |
| (a) | No<br> Reference Bank is under any obligation to provide a quotation or any other information to<br> the Senior Agent. |
| --- | --- |
| (b) | No<br> Reference Bank will be liable for any action taken by it under or in connection with any<br> Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross<br> negligence or wilful misconduct. |
| --- | --- |
| (c) | No<br> Party (other than the relevant Reference Bank) may take any proceedings against any officer,<br> employee or agent of any Reference Bank in respect of any claim it might have against that<br> Reference Bank or in respect of any act or omission of any kind by that officer, employee<br> or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any<br> officer, employee or agent of each Reference Bank may rely on this Clause 29.19 subject to<br> Clause 1.4 (Third party rights) and the provisions of the Third Parties Act. |
| --- | --- |
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| 29.21 | Third party Reference Banks |
|---|
A Reference Bank which is not a Party may rely on Clause 29.19 (Role of Reference Banks), Clause 38.3 (Other exceptions) and Clause 40 (Confidentiality of Funding Rates and Reference Bank Quotations), subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.
| 30. | CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
|---|
No provision of this Agreement will:
| (a) | interfere<br> with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever<br> manner it thinks fit; |
|---|---|
| (b) | oblige<br> any Finance Party to investigate or claim any credit, relief, remission or repayment available<br> to it or the extent, order and manner of any claim; or |
| --- | --- |
| (c) | oblige<br> any Finance Party to disclose any information relating to its affairs (tax or otherwise)<br> or any computations in respect of Tax. |
| --- | --- |
| 31. | SHARING AMONG THE FINANCE PARTIES |
| --- | --- |
| 31.1 | Payments to Finance Parties |
| --- | --- |
| (a) | If<br> a Finance Party (a "Recovering Finance Party") receives or recovers any<br> amount from an Obligor other than in accordance with Clause 32 (Payment mechanics)<br> (a "Recovered Amount") and applies that amount to a payment due under the<br> Finance Documents then: |
| --- | --- |
| (i) | the<br> Recovering Finance Party shall, within three Business Days, notify details of the receipt<br> or recovery to the Senior Agent; |
| --- | --- |
| (ii) | the<br> Senior Agent shall determine whether the receipt or recovery is in excess of the amount the<br> Recovering Finance Party would have been paid had the receipt or recovery been received or<br> made by the Senior Agent and distributed in accordance with Clause 32 (Payment mechanics),<br> without taking account of any Tax which would be imposed on the Senior Agent in relation<br> to the receipt, recovery or distribution; and |
| --- | --- |
| (iii) | the<br> Recovering Finance Party shall, within three Business Days of demand by the Senior Agent,<br> pay to the Senior Agent an amount (the "Sharing Payment") equal to such<br> receipt or recovery less any amount which the Senior Agent determines may be retained by<br> the Recovering Finance Party as its share of any payment to be made, in accordance with Clause<br> 32.6 (Partial payments). |
| --- | --- |
| (b) | Paragraph<br> (a) above shall not apply to any amount received or recovered by an Ancillary Lender<br> in respect of any cash cover provided for the benefit of that Ancillary Lender. |
| --- | --- |
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| 31.2 | Redistribution of payments |
|---|
The Senior Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 32.6 (Partialpayments) towards the obligations of that Obligor to the Sharing Finance Parties.
| 31.3 | Recovering Finance Party's rights |
|---|
On a distribution by the Senior Agent under Clause 31.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
| 31.4 | Reversal of redistribution |
|---|
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
| (a) | each<br> Sharing Finance Party shall, upon request of the Senior Agent, pay to the Senior Agent for<br> the account of that Recovering Finance Party an amount equal to the appropriate part of its<br> share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering<br> Finance Party for its proportion of any interest on the Sharing Payment which that Recovering<br> Finance Party is required to pay) (the "Redistributed Amount"); and |
|---|---|
| (b) | as<br> between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to<br> the relevant Redistributed Amount will be treated as not having been paid by that Obligor. |
| --- | --- |
| 31.5 | Exceptions |
| --- | --- |
| (a) | This<br> Clause 31 shall not apply to the extent that the Recovering Finance Party would not, after<br> making any payment pursuant to this Clause, have a valid and enforceable claim against the<br> relevant Obligor. |
| --- | --- |
| (b) | A<br> Recovering Finance Party is not obliged to share with any other Finance Party any amount<br> which the Recovering Finance Party has received or recovered as a result of taking legal<br> or arbitration proceedings, if: |
| --- | --- |
| (i) | it<br> notified that other Finance Party of the legal or arbitration proceedings; and |
| --- | --- |
| (ii) | that<br> other Finance Party had an opportunity to participate in those legal or arbitration proceedings<br> but did not do so as soon as reasonably practicable having received notice and did not take<br> separate legal or arbitration proceedings. |
| --- | --- |
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| 31.6 | Ancillary Lenders |
|---|---|
| (a) | This<br> Clause 31 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary<br> Lender at any time prior to the Senior Agent exercising any of its rights under Clause 25.25<br> (Acceleration). |
| --- | --- |
| (b) | Following<br> the exercise by the Senior Agent of any of its rights under Clause 25.25 (Acceleration),<br> this Clause 31 shall apply to all receipts or recoveries by Ancillary Lenders except to the<br> extent that the receipt or recovery represents a reduction of the Gross Outstandings of a<br> Multi-account Overdraft to or towards an amount equal to its Net Outstandings. |
| --- | --- |
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SECTION 12
ADMINISTRATION
| 32. | PAYMENT MECHANICS |
|---|---|
| 32.1 | Payments to the Senior Agent |
| --- | --- |
| (a) | On<br> each date on which an Obligor or a Lender is required to make a payment under a Finance Document,<br> excluding a payment under the terms of an Ancillary Document, that Obligor or Lender shall<br> make the same available to the Senior Agent (unless a contrary indication appears in a Finance<br> Document) for value on the due date at the time and in such funds specified by the Senior<br> Agent as being customary at the time for settlement of transactions in the relevant currency<br> in the place of payment. |
| --- | --- |
| (b) | Payment<br> shall be made to such account in the principal financial centre of the country of that currency<br> (or, in relation to euro, in a principal financial centre in such Participating Member State<br> or London, as specified by the Senior Agent) and with such bank as the Senior Agent, in each<br> case, specifies. |
| --- | --- |
| 32.2 | Distributions by the Senior Agent |
| --- | --- |
Each payment received by the Senior Agent under the Finance Documents for another Party shall, subject to Clause 32.3 (Distributionsto an Obligor), Clause 32.4 (Clawback and pre-funding) and Clause 29.18 (Deduction from amounts payable by the Senior Agent) be made available by the Senior Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Senior Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London, as specified by that Party).
| 32.3 | Distributions to an Obligor |
|---|
The Senior Agent may (with the consent of the Obligor or in accordance with Clause 33 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
| 32.4 | Clawback and pre-funding |
|---|---|
| (a) | Where<br> a sum is to be paid to the Senior Agent under the Finance Documents for another Party, the<br> Senior Agent is not obliged to pay that sum to that other Party (or to enter into or perform<br> any related exchange contract) until it has been able to establish to its satisfaction that<br> it has actually received that sum. |
| --- | --- |
| (b) | Unless<br> paragraph (c) below applies, if the Senior Agent pays an amount to another Party and<br> it proves to be the case that the Senior Agent had not actually received that amount, then<br> the Party to whom that amount (or the proceeds of any related exchange contract) was paid<br> by the Senior Agent shall on demand refund the same to the Senior Agent together with interest<br> on that amount from the date of payment to the date of receipt by the Senior Agent, calculated<br> by the Senior Agent to reflect its cost of funds. |
| --- | --- |
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| (c) | If<br> the Senior Agent has notified the Lenders that it is willing to make available amounts for<br> the account of the Borrower before receiving funds from the Lenders then if and to the extent<br> that the Senior Agent does so but it proves to be the case that it does not then receive<br> funds from a Lender in respect of a sum which it paid to the Borrower: |
|---|---|
| (i) | the<br> Senior Agent shall notify the Borrower of that Lender's identity and the Borrower to whom<br> that sum was made available shall on demand refund it to the Senior Agent; and |
| --- | --- |
| (ii) | the<br> Lender by whom those funds should have been made available or, if that Lender fails to do<br> so, the Borrower to whom that sum was made available, shall on demand pay to the Senior Agent<br> the amount (as certified by the Senior Agent) which will indemnify the Senior Agent against<br> any funding cost incurred by it as a result of paying out that sum before receiving those<br> funds from that Lender. |
| --- | --- |
| 32.5 | Impaired Senior Agent |
| --- | --- |
| (a) | If,<br> at any time, the Senior Agent becomes an Impaired Senior Agent, an Obligor or a Lender which<br> is required to make a payment under the Finance Documents to the Senior Agent in accordance<br> with Clause 32.1 (Payments to the Senior Agent) may instead either: |
| --- | --- |
| (i) | pay<br> that amount direct to the required recipient(s); or |
| --- | --- |
| (ii) | if<br> in its absolute discretion it considers that it is not reasonably practicable to pay that<br> amount direct to the required recipient(s), pay that amount or the relevant part of that<br> amount to an interest-bearing account held with an Acceptable Bank and in relation to which<br> no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender<br> making the payment (the "Paying Party") and designated as a trust account<br> for the benefit of the Party or Parties beneficially entitled to that payment under the Finance<br> Documents (the "Recipient Party" or "Recipient Parties"). |
| --- | --- |
In each case such payments must be made on the due date for payment under the Finance Documents.
| (b) | All<br> interest accrued on the amount standing to the credit of the trust account shall be for the<br> benefit of the Recipient Party or the Recipient Parties pro rata to their respective<br> entitlements. |
|---|---|
| (c) | A<br> Party which has made a payment in accordance with this Clause 32.5 shall be discharged of<br> the relevant payment obligation under the Finance Documents and shall not take any credit<br> risk with respect to the amounts standing to the credit of the trust account. |
| --- | --- |
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| (d) | Promptly<br> upon the appointment of a successor Senior Agent in accordance with Clause 29.13 (Replacement of the Senior Agent), each Paying Party shall (other than to the extent that that Party<br> has given an instruction pursuant to paragraph (e)<br> below) give all requisite instructions to the bank with whom the trust account is<br> held to transfer the amount (together with any accrued interest) to the successor Senior<br> Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance<br> with Clause 32.2 (Distributions by the Senior Agent). |
|---|---|
| (e) | A<br> Paying Party shall, promptly upon request by a Recipient Party and to the extent: |
| --- | --- |
| (i) | that<br> it has not given an instruction pursuant to paragraph (d) above; and |
| --- | --- |
| (ii) | that<br> it has been provided with the necessary information by that Recipient Party, |
| --- | --- |
give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.
| 32.6 | Partial payments |
|---|---|
| (a) | If<br> the Senior Agent receives a payment that is insufficient to discharge all the amounts then<br> due and payable by an Obligor under the Finance Documents, the Senior Agent shall apply that<br> payment towards the obligations of that Obligor under the Finance Documents in the following<br> order: |
| --- | --- |
| (i) | first,<br> in or towards payment pro rata of any unpaid amount owing to the Senior Agent or the<br> Common Security Agent (including any Receiver or Delegate) under the Finance Documents; |
| --- | --- |
| (ii) | secondly,<br> in or towards payment pro rata of any unpaid amount owing to the Arranger and any<br> accrued interest, fee or commission due to any Finance Party but unpaid under this Agreement; |
| --- | --- |
| (iii) | thirdly,<br> in or towards payment pro rata of: |
| --- | --- |
| (A) | any<br> principal due but unpaid under this Agreement; and |
| --- | --- |
| (B) | any<br> payments as a result of termination or closing out due but unpaid under the Hedging Agreements;<br> and |
| --- | --- |
| (iv) | fourthly,<br> in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
| --- | --- |
| (b) | The<br> Senior Agent shall, if so directed by the Majority Lenders and the Hedge Counterparties,<br> vary the order set out in paragraphs (a)(ii) to (a)(iv) above. |
| --- | --- |
| (c) | Paragraphs<br> (a) and (b) above will override any appropriation made by an Obligor. |
| --- | --- |
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| 32.7 | No set-off by Obligors |
|---|---|
| (a) | All<br> payments to be made by an Obligor under the Finance Documents shall be calculated and be<br> made without (and free and clear of any deduction for) set-off or counterclaim. |
| --- | --- |
| (b) | Paragraph<br> (a) above shall not affect the operation of any payment or close–out netting in<br> respect of any amounts owing under any Hedging Agreement. |
| --- | --- |
| 32.8 | Business Days |
| --- | --- |
| (a) | Any<br> payment under any Finance Document which is due to be made on a day that is not a Business<br> Day shall be made on the next Business Day in the same calendar month (if there is one) or<br> the preceding Business Day (if there is not). |
| --- | --- |
| (b) | During<br> any extension of the due date for payment of any principal or Unpaid Sum under this Agreement<br> interest is payable on the principal or Unpaid Sum at the rate payable on the original due<br> date. |
| --- | --- |
| 32.9 | Currency of account |
| --- | --- |
| (a) | Subject<br> to paragraphs (b) and (c) below, euro is the currency of account and payment for<br> any sum due from an Obligor under any Finance Document. |
| --- | --- |
| (b) | Each<br> payment in respect of costs, expenses or Taxes shall be made in the currency in which the<br> costs, expenses or Taxes are incurred. |
| --- | --- |
| (c) | Any<br> amount expressed to be payable in a currency other than euro shall be paid in that other<br> currency. |
| --- | --- |
| 32.10 | Change of currency |
| --- | --- |
| (a) | Unless<br> otherwise prohibited by law, if more than one currency or currency unit are at the same time<br> recognised by the central bank of any country as the lawful currency of that country, then: |
| --- | --- |
| (i) | any<br> reference in the Finance Documents to, and any obligations arising under the Finance Documents<br> in, the currency of that country shall be translated into, or paid in, the currency or currency<br> unit of that country designated by the Senior Agent (after consultation with the Borrower);<br> and |
| --- | --- |
| (ii) | any<br> translation from one currency or currency unit to another shall be at the official rate of<br> exchange recognised by the central bank for the conversion of that currency or currency unit<br> into the other, rounded up or down by the Senior Agent (acting reasonably). |
| --- | --- |
| (b) | If<br> a change in any currency of a country occurs, this Agreement will, to the extent the Senior<br> Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary,<br> be amended to comply with any generally accepted conventions and market practice in the Relevant<br> Market and otherwise to reflect the change in currency. |
| --- | --- |
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| 32.11 | Disruption to payment systems etc. |
|---|
If either the Senior Agent determines (in its discretion) that a Disruption Event has occurred or the Senior Agent is notified by the Borrower that a Disruption Event has occurred:
| (a) | the<br> Senior Agent may, and shall if requested to do so by the Borrower, consult with the Borrower<br> with a view to agreeing with the Borrower such changes to the operation or administration<br> of the Facility as the Senior Agent may deem necessary in the circumstances; |
|---|---|
| (b) | the<br> Senior Agent shall not be obliged to consult with the Borrower in relation to any changes<br> mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so<br> in the circumstances and, in any event, shall have no obligation to agree to such changes; |
| --- | --- |
| (c) | the<br> Senior Agent may consult with the Finance Parties in relation to any changes mentioned in<br> paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not<br> practicable to do so in the circumstances; |
| --- | --- |
| (d) | any<br> such changes agreed upon by the Senior Agent and the Borrower shall (whether or not it is<br> finally determined that a Disruption Event has occurred) be binding upon the Parties as an<br> amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding<br> the provisions of Clause 38 (Amendments and Waivers); |
| --- | --- |
| (e) | the<br> Senior Agent shall not be liable for any damages, costs or losses to any person, any diminution<br> in value or any liability whatsoever (including, without limitation for negligence, gross<br> negligence or any other category of liability whatsoever but not including any claim based<br> on the fraud of the Senior Agent) arising as a result of its taking, or failing to take,<br> any actions pursuant to or in connection with this Clause 32.11; and |
| --- | --- |
| (f) | the<br> Senior Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph<br> (d) above. |
| --- | --- |
| 33. | SET-OFF |
| --- | --- |
| (a) | A<br> Finance Party may set off any matured obligation due from an Obligor under the Finance Documents<br> (to the extent beneficially owned by that Finance Party) against any matured obligation owed<br> by that Finance Party to that Obligor, regardless of the place of payment, booking branch<br> or currency of either obligation. If the obligations are in different currencies, the Finance<br> Party may convert either obligation at a market rate of exchange in its usual course of business<br> for the purpose of the set-off. |
| --- | --- |
| (b) | Any<br> credit balances taken into account by an Ancillary Lender when operating a net limit in respect<br> of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents<br> be applied first in reduction of the overdraft provided under that Ancillary Facility in<br> accordance with its terms. |
| --- | --- |
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| 34. | NOTICES |
|---|---|
| 34.1 | Communications in writing |
| --- | --- |
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by letter or (if applicable) fax.
| 34.2 | Addresses |
|---|
The address and (if applicable) 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 or in connection with the Finance Documents is:
| (a) | in<br> the case of the Borrower, that identified with its name below; |
|---|---|
| (b) | in<br> the case of each Lender, each Ancillary Lender, each Hedge Counterparty, or any other Obligor,<br> that notified in writing to the Senior Agent on or prior to the date on which it becomes<br> a Party; and |
| --- | --- |
| (c) | in<br> the case of the Senior Agent and Common Security Agent, that identified with its name below, |
| --- | --- |
or any substitute address or (if applicable) fax number or department or officer as the Party may notify to the Senior Agent (or the Senior Agent may notify to the other Parties, if a change is made by the Senior Agent) by not less than five Business Days' notice.
| 34.3 | Delivery |
|---|---|
| (a) | Any<br> communication or document made or delivered by one person to another under or in connection<br> with the Finance Documents will only be effective: |
| --- | --- |
| (i) | if<br> by way of fax, when received in legible form; or |
| --- | --- |
| (ii) | if<br> by way of letter, when it has been left at the relevant address or five (5) Business<br> Days after being deposited in the post postage prepaid in an envelope addressed to it at<br> 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.
| (b) | Any<br> communication or document to be made or delivered to the Senior Agent or to the Common Security<br> Agent will be effective only when actually received by the Senior Agent or the Common Security<br> Agent and then only if it is expressly marked for the attention of the department or officer<br> identified with the Senior Agent's or the Common Security Agent's signature below (or any<br> substitute department or officer as the Senior Agent shall specify for this purpose). |
|---|
- 190 -
| (c) | All<br> notices from or to an Obligor shall be sent through the Senior Agent. |
|---|---|
| (d) | Any<br> communication or document made or delivered to the Borrower in accordance with this Clause<br> will be deemed to have been made or delivered to each of the Obligors. |
| --- | --- |
| (e) | All<br> notices to a Lender from the Common Security Agent shall be sent through the Senior Agent. |
| --- | --- |
| (f) | Any<br> communication or document which becomes effective, in accordance with paragraphs (a) to<br> (e) above, after 5:00 p.m. in the place of receipt shall be deemed only to become<br> effective on the following day. |
| --- | --- |
| 34.4 | Notification of address and fax number |
| --- | --- |
Promptly upon changing its address or fax number, the Senior Agent shall notify the other Parties.
| 34.5 | Communication when Senior Agent is Impaired Senior Agent |
|---|
If the Senior Agent is an Impaired Senior Agent the Parties may, instead of communicating with each other through the Senior Agent, communicate with each other directly and (while the Senior Agent is an Impaired Senior Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Senior Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Senior Agent has been appointed.
| 34.6 | Electronic communication |
|---|---|
| (a) | Any<br> communication or document to be made or delivered by one Party to another under or in connection<br> with the Finance Documents may be made by electronic mail or other electronic means (including,<br> without limitation, by way of posting to a secure website) if those two Parties: |
| --- | --- |
| (i) | notify<br> each other in writing of their electronic mail address and/or any other information required<br> to enable the transmission of information by that means; and |
| --- | --- |
| (ii) | notify<br> each other of any change to their address or any other such information supplied by them<br> by not less than five Business Days' notice. |
| --- | --- |
| (b) | Any<br> such electronic communication or delivery as specified in paragraph (a) above to be<br> made between an Obligor and a Finance Party may only be made in that way to the extent that<br> those two Parties agree that, unless and until notified to the contrary, this is to be an<br> accepted form of communication or delivery. |
| --- | --- |
| (c) | Any<br> such electronic communication or document as specified in paragraph (a) above made or<br> delivered by one Party to another will be effective only when actually received (or made<br> available) in readable form and in the case of any electronic communication or document made<br> or delivered by a Party to the Senior Agent only if it is addressed in such a manner as the<br> Senior Agent shall specify for this purpose. |
| --- | --- |
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| (d) | Any<br> electronic communication or document which becomes effective, in accordance with paragraph<br> I above, after 5:00 p.m. in the place in which the Party to whom the relevant communication<br> or document is sent or made available has its address for the purpose of this Agreement shall<br> be deemed only to become effective on the following day. |
|---|---|
| (e) | Any<br> reference in a Finance Document to a communication being sent or received or a document being<br> delivered shall be construed to include that communication or document being made available<br> in accordance with this Clause 34.6. |
| --- | --- |
| 34.7 | English language |
| --- | --- |
| (a) | Any<br> notice given under or in connection with any Finance Document must be in English. |
| --- | --- |
| (b) | All<br> other documents provided under or in connection with any Finance Document must be: |
| --- | --- |
| (i) | in<br> English; or |
| --- | --- |
| (ii) | if<br> not in English, and if so required by the Senior Agent, accompanied by a certified English<br> translation and, in this case, the English translation will prevail unless the document is<br> a constitutional, statutory or other official document. |
| --- | --- |
| 35. | CALCULATIONS AND CERTIFICATES |
| --- | --- |
| 35.1 | Accounts |
| --- | --- |
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are primafacie evidence of the matters to which they relate.
| 35.2 | Certificates and determinations |
|---|
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
| 35.3 | Day count convention |
|---|
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice.
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| 36. | PARTIAL INVALIDITY |
|---|
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
| 37. | REMEDIES AND WAIVERS |
|---|
No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
| 38. | AMENDMENTS AND WAIVERS |
|---|---|
| 38.1 | Required consents |
| --- | --- |
| (a) | Subject<br> to Clause 38.2 (All Lender matters) and Clause 38.3 (Other exceptions) and<br> the Intercreditor and Subordination Deed, any term of the Finance Documents may be amended<br> or waived only with the consent of the Majority Lenders and the Obligors and any such amendment<br> or waiver will be binding on all Parties. |
| --- | --- |
| (b) | The<br> Senior Agent, or in respect of the Common Security Documents the Common Security Agent, may<br> effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause<br> 38. |
| --- | --- |
| (c) | Paragraph<br> (c) of Clause 26.11 (Pro rata interest settlement) shall apply to this Clause<br> 38. |
| --- | --- |
| 38.2 | All Lender matters |
| --- | --- |
Subject to the Intercreditor and Subordination Deed, an amendment or waiver of any term of any Finance Document that has the effect of changing or which relates to:
| (a) | the<br> definitions of "Termination Date", "Majority Lenders", "Sanction<br> Provisions", "Sanctioned Territory", "Sanctions", "Sanctions<br> Authority", "Sanctions Mandatory Prepayment Event", "AIF", "AIFM",<br> "AIFMD", "AIFMD Law" and "Anti-Bribery and Corruption Laws"<br> in Clause 1.1 (Definitions); |
|---|---|
| (b) | an<br> extension to the date of payment of any amount under the Finance Documents; |
| --- | --- |
| (c) | a<br> reduction in the Margin or a reduction in the amount of any payment of principal, interest,<br> fees or commission payable; |
| --- | --- |
- 193 -
| (d) | a<br> change in currency of payment of any amount under the Finance Documents; |
|---|---|
| (e) | an<br> increase in any Commitment, an extension of the Availability Period or any requirement that<br> a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility; |
| --- | --- |
| (f) | a<br> change to the Borrower or Guarantors (other than in accordance Clause 27 (Changes to the Obligors)); |
| --- | --- |
| (g) | any<br> provision which expressly requires the consent of all the Lenders; |
| --- | --- |
| (h) | Clause<br> 2.4 (Finance Parties' rights and obligations), Clause 5.1 (Delivery of a Utilisation Request), Clause 8.1 (Illegality), Clause 8.2 (Change of control), Clause<br> 8.4 (Mandatory prepayment - Sanctions), Clause 8.11 (Application of prepayments),<br> Clause 21.24 (Anti-Bribery and Anti-Corruption), Clause 21.25 (Sanctions),<br> Clause 21.26 (Non-AIF status), Clause 21.43 (Dealings with SRCs and SDNs),<br> Clause 24.7 (Anti-Bribery and Anti-Corruption), Clause 24.8 (Sanctions), Clause<br> 24.9 (Use of proceeds), Clause 24.10 (Non-AIF status), Clause 25.19 (Sanctions),<br> Clause 25.20 (Non-AIF status), Clause 26 (Changes to the Lenders and Hedge Counterparties),<br> Clause 27 (Changes to the Obligors), Clause 31 (Sharing among the Finance Parties),<br> this Clause 38, Clause 43 (Governing law) or Clause 44 (Jurisdiction); |
| --- | --- |
| (i) | the<br> nature or scope of the guarantee and indemnity granted under Clause 20 (Guarantee and indemnity); or |
| --- | --- |
| (j) | the<br> nature or scope of the Charged Property or the manner in which the proceeds of enforcement<br> of the Common Transaction Security are distributed; |
| --- | --- |
shall not be made without the prior consent of all the Lenders.
| 38.3 | Other exceptions |
|---|
Subject to the Intercreditor and Subordination Deed:
| (a) | an<br> amendment or waiver which relates to the rights or obligations of the Senior Agent, the Common<br> Security Agent, the Arranger, any Ancillary Lender or a Reference Bank (each in their capacity<br> as such) may not be effected without the consent of the Senior Agent, the Common Security<br> Agent, the Arranger, that Ancillary Lender or that Reference Bank, as the case may be; and |
|---|---|
| (b) | an<br> amendment or waiver which relates to the rights or obligations of a Hedge Counterparty (in<br> its capacity as such) may not be effected without the consent of that Hedge Counterparty. |
| --- | --- |
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| 38.4 | Replacement of Screen Rate |
|---|
Subject to Clause 38.3 (Other exceptions), if a Screen Rate Replacement Event has occurred in relation to any Screen Rate for a currency which can be selected for a Loan, any amendment or waiver which relates to:
| (a) | providing<br> for the use of a Replacement Benchmark in relation to that currency in place of that Screen<br> Rate; and |
|---|---|
| (b) | |
| --- | |
| (i) | aligning<br> any provision of any Finance Document to the use of that Replacement Benchmark; |
| --- | --- |
| (ii) | enabling<br> that Replacement Benchmark to be used for the calculation of interest under this Agreement<br> (including, without limitation, any consequential changes required to enable that Replacement<br> Benchmark to be used for the purposes of this Agreement); |
| --- | --- |
| (iii) | implementing<br> market conventions applicable to that Replacement Benchmark; |
| --- | --- |
| (iv) | providing<br> for appropriate fallback (and market disruption) provisions for that Replacement Benchmark;<br> or |
| --- | --- |
| (v) | adjusting<br> the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of<br> economic value from one Party to another as a result of the application of that Replacement<br> Benchmark (and if any adjustment or method for calculating any adjustment has been formally<br> designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall<br> be determined on the basis of that designation, nomination or recommendation), |
| --- | --- |
may be made with the consent of the Senior Agent (acting on the instructions of the Majority Lenders) and the Obligors.
| (c) | In<br> this Clause 38.4: |
|---|
"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.
- 195 -
"Replacement Benchmark" means a benchmark rate which is:
| (a) | formally<br> designated, nominated or recommended as the replacement for a Screen Rate by: |
|---|---|
| (i) | the<br> administrator of that Screen Rate (provided that the market or economic reality that<br> such benchmark rate measures is the same as that measured by that Screen Rate); or |
| --- | --- |
| (ii) | any<br> Relevant Nominating Body, |
| --- | --- |
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Benchmark" will be the replacement under paragraph (ii) above;
| (b) | in<br> the opinion of the Majority Lenders and the Obligors, generally accepted in the international<br> or any relevant domestic syndicated loan markets as the appropriate successor to a Screen<br> Rate; or |
|---|---|
| (c) | in<br> the opinion of the Majority Lenders and the Obligors, an appropriate successor to a Screen<br> Rate. |
| --- | --- |
"Screen Rate Replacement Event" means, in relation to a Screen Rate:
| (a) | the<br> methodology, formula or other means of determining that Screen Rate has, in the opinion of<br> the Majority Lenders, and the Obligors materially changed; |
|---|---|
| (b) | |
| --- | |
| (i) | |
| --- | |
| (A) | the<br> administrator of that Screen Rate or its supervisor publicly announces that such administrator<br> is insolvent; or |
| --- | --- |
| (B) | information<br> is published in any order, decree, notice, petition or filing, however described, of or filed<br> with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory<br> or judicial body which reasonably confirms that the administrator of that Screen Rate is<br> insolvent, |
| --- | --- |
providedthat, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;
| (ii) | the<br> administrator of that Screen Rate publicly announces that it has ceased or will cease, to<br> provide that Screen Rate permanently or indefinitely and, at that time, there is no successor<br> administrator to continue to provide that Screen Rate; |
|---|---|
| (iii) | the<br> supervisor of the administrator of that Screen Rate publicly announces that that Screen Rate<br> has been or will be permanently or indefinitely discontinued; or |
| --- | --- |
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| (iv) | the<br> administrator of that Screen Rate or its supervisor announces that that Screen Rate may no<br> longer be used; or |
|---|---|
| (c) | the<br> administrator of that Screen Rate determines that that Screen Rate should be calculated in<br> accordance with its reduced submissions or other contingency or fallback policies or arrangements<br> and either: |
| --- | --- |
| (i) | the<br> circumstance(s) or event(s) leading to such determination are not (in the opinion<br> of the Majority Lenders and the Obligors) temporary; or |
| --- | --- |
| (ii) | that<br> Screen Rate is calculated in accordance with any such policy or arrangement for a period<br> no less than three (3) months; or |
| --- | --- |
| (d) | in<br> the opinion of the Majority Lenders and the Obligors, that Screen Rate is otherwise no longer<br> appropriate for the purposes of calculating interest under this Agreement. |
| --- | --- |
| 38.5 | Disenfranchisement of Defaulting Lenders |
| --- | --- |
| (a) | For<br> so long as a Defaulting Lender has any Available Commitment, in ascertaining: |
| --- | --- |
| (i) | the<br> Majority Lenders; or |
| --- | --- |
| (ii) | whether: |
| --- | --- |
| (A) | any<br> given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments<br> under the Facility; or |
| --- | --- |
| (B) | the<br> agreement of any specified group of Lenders, |
| --- | --- |
has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents,
that Defaulting Lender's Commitment under the Facility will be reduced by the amount of its Available Commitment under the Facility and to the extent that that reduction results in that Defaulting Lender's Commitment being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of paragraphs (i) and (ii) above.
| (b) | For<br> the purposes of this Clause 38.5, the Senior Agent may assume that the following Lenders<br> are Defaulting Lenders: |
|---|---|
| (i) | any<br> Lender which has notified the Senior Agent that it has become a Defaulting Lender; |
| --- | --- |
| (ii) | any<br> Lender in relation to which it is aware that any of the events or circumstances referred<br> to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender"<br> has occurred, |
| --- | --- |
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unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Senior Agent) or the Senior Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
| 38.6 | Excluded Commitments |
|---|
If any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within fifteen (15) Business Days (unless the Borrower and the Senior Agent agree to a longer time period in relation to any request) of that request being made:
| (a) | its<br> Commitment shall not be included for the purpose of calculating the Total Commitments under<br> the Facility when ascertaining whether any relevant percentage (including, for the avoidance<br> of doubt, unanimity) of Total Commitments has been obtained to approve that request; and |
|---|---|
| (b) | its<br> status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement<br> of any specified group of Lenders has been obtained to approve that request. |
| --- | --- |
| 38.7 | Replacement of a Defaulting Lender |
| --- | --- |
| (a) | The<br> Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by<br> giving fifteen (15) Business Days' prior written notice to the Senior Agent and such Lender: |
| --- | --- |
| (i) | replace<br> such Lender by requiring such Lender to (and to the extent permitted by law, such Lender<br> shall) transfer pursuant to Clause 26 (Changes to the Lenders) all (and not part only)<br> of its rights and obligations under this Agreement; or |
| --- | --- |
| (ii) | require<br> such Lender to (and to the extent permitted by law, such Lender shall) transfer pursuant<br> to Clause 26 (Changes to the Lenders) all (and not part only) of the undrawn Commitment<br> of the Lender, |
| --- | --- |
to an Eligible Institution (a "Replacement Lender") which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender in accordance with Clause 26 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer which is either:
| (A) | in<br> an amount equal to the outstanding principal amount of such Lender's participation in the<br> outstanding Loans and all accrued interest (to the extent that the Senior Agent has not given<br> a notification under Clause 26.11 (Pro rata interest settlement)), Break Costs and<br> other amounts payable in relation thereto under the Finance Documents; or |
|---|
- 198 -
| (B) | in<br> an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrower<br> and which does not exceed the amount described in paragraph (A) above. |
|---|---|
| (b) | Any<br> transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be<br> subject to the following conditions: |
| --- | --- |
| (i) | the<br> Borrower shall have no right to replace the Senior Agent; |
| --- | --- |
| (ii) | neither<br> the Senior Agent nor the Defaulting Lender shall have any obligation to the Borrower to find<br> a Replacement Lender; |
| --- | --- |
| (iii) | the<br> transfer must take place no later than five (5) Business Days after the notice referred<br> to in paragraph (a) above; |
| --- | --- |
| (iv) | in<br> no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender<br> any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and |
| --- | --- |
| (v) | the<br> Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to<br> paragraph (a) above once it is satisfied that it has complied with all necessary "know<br> your customer" or other similar checks under all applicable laws and regulations in<br> relation to that transfer to the Replacement Lender. |
| --- | --- |
| (c) | The<br> Defaulting Lender shall perform the checks described in paragraph (b)(v) above as soon<br> as reasonably practicable following delivery of a notice referred to in paragraph (a) above<br> and shall notify the Senior Agent and the Borrower when it is satisfied that it has complied<br> with those checks. |
| --- | --- |
| 38.8 | Sanction Provisions |
| --- | --- |
In relation to the Original Lender and each other Lender that notifies the Senior Agent to this effect (each a "Restricted Lender"), the Sanction Provisions shall only apply for the benefit of that Restricted Lender to the extent that the Sanction Provisions would not result in any violation of, conflict with or liability under any Blocking Regulation or a similar anti-boycott statute. In connection with any amendment, waiver, determination or direction relating to any part of the Sanction Provisions of which a Restricted Lender does not have the benefit, the Commitments of that Restricted Lender will be excluded for the purpose of determining whether the consent of the Majority Lenders has been obtained or whether the determination or direction by the Majority Lenders has been made.
| 39. | CONFIDENTIAL INFORMATION |
|---|---|
| 39.1 | Confidentiality |
| --- | --- |
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 39.2 (Disclosure of Confidential Information) and Clause 39.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
- 199 -
| 39.2 | Disclosure of Confidential Information |
|---|
Any Finance Party may disclose:
| (a) | to<br> any of its Affiliates and Related Funds and any of its or their officers, directors, employees,<br> professional advisers, auditors, partners and Representatives such Confidential Information<br> as that Finance Party shall consider appropriate if any person to whom the Confidential Information<br> is to be given pursuant to this paragraph (a) is informed in writing of its confidential<br> nature and that some or all of such Confidential Information may be price- sensitive information<br> except that there shall be no such requirement to so inform if the recipient is subject to<br> professional obligations to maintain the confidentiality of the information or is otherwise<br> bound by requirements of confidentiality in relation to the Confidential Information; |
|---|---|
| (b) | to<br> any person: |
| --- | --- |
| (i) | to<br> (or through) whom it assigns or transfers (or may potentially assign or transfer) all or<br> any of its rights and/or obligations under one or more Finance Documents or which succeeds<br> (or which may potentially succeed) it as Senior Agent and, in each case, to any of that person's<br> Affiliates, Related Funds, Representatives and professional advisers; |
| --- | --- |
| (ii) | with<br> (or through) whom it enters into (or may potentially enter into), whether directly or indirectly,<br> any sub-participation in relation to, or any other transaction under which payments are to<br> be made or may be made by reference to, one or more Finance Documents and/or one or more<br> Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional<br> advisers; |
| --- | --- |
| (iii) | appointed<br> by any Finance Party or by a person to whom paragraph (b)(i) or (ii) above applies<br> to receive communications, notices, information or documents delivered pursuant to the Finance<br> Documents on its behalf (including, without limitation, any person appointed under paragraph<br> (b) of Clause 29.15 (Relationship with the Lenders)); |
| --- | --- |
| (iv) | who<br> invests in or otherwise finances (or may potentially invest in or otherwise finance), directly<br> or indirectly, any transaction referred to in paragraph (b)(i) or (b)(ii) above; |
| --- | --- |
| (v) | to<br> whom information is required or requested to be disclosed by any court of competent jurisdiction<br> or any governmental, banking, taxation or other regulatory authority or similar body, the<br> rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
| --- | --- |
| (vi) | to<br> whom information is required to be disclosed in connection with, and for the purposes of,<br> any litigation, arbitration, administrative or other investigations, proceedings or disputes; |
| --- | --- |
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| (vii) | to<br> whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security<br> (or may do so) pursuant to Clause 26.9 (Security over Lenders' rights); |
|---|---|
| (viii) | who<br> is a Party; or |
| --- | --- |
| (ix) | with<br> the consent of the Borrower; |
| --- | --- |
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
| (A) | in<br> relation to paragraphs (b)(i), (b)(ii) and (b)(iii) above, the person to whom the<br> Confidential Information is to be given has entered into a Confidentiality Undertaking except<br> that there shall be no requirement for a Confidentiality Undertaking if the recipient is<br> a professional adviser and is subject to professional obligations to maintain the confidentiality<br> of the Confidential Information; |
|---|---|
| (B) | in<br> relation to paragraph (b)(iv) above, the person to whom the Confidential Information<br> is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements<br> of confidentiality in relation to the Confidential Information they receive and is informed<br> that some or all of such Confidential Information may be price-sensitive information; |
| --- | --- |
| (C) | in<br> relation to paragraphs (b)(v), (b)(vi) and (b)(vii) above, the person to whom the<br> Confidential Information is to be given is informed of its confidential nature and that some<br> or all of such Confidential Information may be price-sensitive information except that there<br> shall be no requirement to so inform if, in the opinion of that Finance Party, it is not<br> practicable so to do in the circumstances; and |
| --- | --- |
| (c) | to<br> any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or<br> (b)(ii) above applies to provide administration or settlement services in respect of<br> one or more of the Finance Documents including without limitation, in relation to the trading<br> of participations in respect of the Finance Documents, such Confidential Information as may<br> be required to be disclosed to enable such service provider to provide any of the services<br> referred to in this paragraph (c) if the service provider to whom the Confidential Information<br> is to be given has entered into a confidentiality agreement substantially in the form of<br> the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service<br> Providers or such other form of confidentiality undertaking agreed between the Borrower and<br> the relevant Finance Party; and |
| --- | --- |
| (d) | to<br> any insurer or reinsurer; |
| --- | --- |
| (e) | to<br> consultants or service providers (including second party opinion provider, if applicable)<br> for the purpose of assessing the sustainability features of the transaction under this Agreement,<br> including, where applicable, the alignment of this Agreement with the current industry market<br> standards for green, social and sustainability-linked loans issued by the Loan Market Association,<br> or, as the case may be, other international sustainability standards or benchmarks such as<br> the UN Social Development Goals; |
| --- | --- |
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| (f) | to<br> any rating agency (including its professional advisers) such Confidential Information as<br> may be required to be disclosed to enable such rating agency to carry out its normal rating<br> activities in relation to the Finance Documents and/or the Obligors if the rating agency<br> to whom the Confidential Information is to be given is informed of its confidential nature<br> and that some or all of such Confidential Information may be price-sensitive information. |
|---|
Nothing in any Finance Document shall prevent disclosure of any Confidential Information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A 1 of Annex IV of Directive 2011/16/EU.
| 39.3 | Disclosure to numbering service providers |
|---|---|
| (a) | Any<br> Finance Party may disclose to any national or international numbering service provider appointed<br> by that Finance Party to provide identification numbering services in respect of this Agreement,<br> the Facility and/or one or more Obligors the following information: |
| --- | --- |
| (i) | names<br> of Obligors; |
| --- | --- |
| (ii) | country<br> of domicile of Obligors; |
| --- | --- |
| (iii) | place<br> of incorporation of Obligors; |
| --- | --- |
| (iv) | date<br> of this Agreement; |
| --- | --- |
| (v) | Clause<br> 43 (Governing law); |
| --- | --- |
| (vi) | the<br> names of the Senior Agent and the Arranger; |
| --- | --- |
| (vii) | date<br> of each amendment and restatement of this Agreement; |
| --- | --- |
| (viii) | amounts<br> of, and names of, the Facility (and any tranches); |
| --- | --- |
| (ix) | amount<br> of Total Commitments; |
| --- | --- |
| (x) | currencies<br> of the Facility; |
| --- | --- |
| (xi) | type<br> of Facility; |
| --- | --- |
| (xii) | ranking<br> of Facility; |
| --- | --- |
| (xiii) | Termination<br> Date for the Facility; |
| --- | --- |
- 202 -
| (xiv) | changes<br> to any of the information previously supplied pursuant to paragraphs (i) to (xiii) above;<br> and |
|---|---|
| (xv) | such<br> other information agreed between such Finance Party and the Borrower, |
| --- | --- |
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
| (b) | The<br> Parties acknowledge and agree that each identification number assigned to this Agreement,<br> the Facility and/or one or more Obligors by a numbering service provider and the information<br> associated with each such number may be disclosed to users of its services in accordance<br> with the standard terms and conditions of that numbering service provider. |
|---|---|
| (c) | Each<br> Obligor represents that none of the information set out in paragraphs (i) to (xv) of<br> paragraph (a) above is, nor will at any time be, unpublished price- sensitive information. |
| --- | --- |
| (d) | The<br> Senior Agent shall notify the Borrower and the other Finance Parties of: |
| --- | --- |
| (i) | the<br> name of any numbering service provider appointed by the Senior Agent in respect of this Agreement,<br> the Facility and/or one or more Obligors; and |
| --- | --- |
| (ii) | the<br> number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one<br> or more Obligors by such numbering service provider. |
| --- | --- |
| 39.4 | Entire agreement |
| --- | --- |
This Clause 39 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
| 39.5 | Inside information |
|---|
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
| 39.6 | Notification of disclosure |
|---|
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
| (a) | of<br> the circumstances of any disclosure of Confidential Information made pursuant to paragraph<br> (b)(v) of Clause 39.2 (Disclosure of Confidential Information) except where such<br> disclosure is made to any of the persons referred to in that paragraph during the ordinary<br> course of its supervisory or regulatory function; and |
|---|
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| (b) | upon<br> becoming aware that Confidential Information has been disclosed in breach of this Clause<br> 39. |
|---|---|
| 39.7 | Continuing obligations |
| --- | --- |
The obligations in this Clause 39 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve (12) months from the earlier of:
| (a) | the<br> date on which all amounts payable by the Obligors under or in connection with this Agreement<br> have been paid in full and all Commitments have been cancelled or otherwise cease to be available;<br> and |
|---|---|
| (b) | the<br> date on which such Finance Party otherwise ceases to be a Finance Party. |
| --- | --- |
| 40. | CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS |
| --- | --- |
| 40.1 | Confidentiality and disclosure |
| --- | --- |
| (a) | The<br> Senior Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Senior<br> Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save<br> to the extent permitted by paragraphs (b), (c) and (d) below. |
| --- | --- |
| (b) | The<br> Senior Agent may disclose: |
| --- | --- |
| (i) | any<br> Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the relevant<br> Borrower pursuant to Clause 9.4 (Notification of rates of interest); and |
| --- | --- |
| (ii) | any<br> Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration<br> services in respect of one or more of the Finance Documents to the extent necessary to enable<br> such service provider to provide those services if the service provider to whom that information<br> is to be given has entered into a confidentiality agreement substantially in the form of<br> the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service<br> Providers or such other form of confidentiality undertaking agreed between the Senior Agent<br> and the relevant Lender or Reference Bank, as the case may be. |
| --- | --- |
| (c) | The<br> Senior Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor<br> may disclose any Funding Rate, to: |
| --- | --- |
| (i) | any<br> of its Affiliates and any of its or their officers, directors, employees, professional advisers,<br> auditors, partners and Representatives if any person to whom that Funding Rate or Reference<br> Bank Quotation is to be given pursuant to this paragraph (i) is informed in writing<br> of its confidential nature and that it may be price-sensitive information except that there<br> shall be no such requirement to so inform if the recipient is subject to professional obligations<br> to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise<br> bound by requirements of confidentiality in relation to it; |
| --- | --- |
- 204 -
| (ii) | any<br> person to whom information is required or requested to be disclosed by any court of competent<br> jurisdiction or any governmental, banking, taxation or other regulatory authority or similar<br> body, the rules of any relevant stock exchange or pursuant to any applicable law or<br> regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given<br> is informed in writing of its confidential nature and that it may be price-sensitive information<br> except that there shall be no requirement to so inform if, in the opinion of the Senior Agent<br> or relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; |
|---|---|
| (iii) | any<br> person to whom information is required to be disclosed in connection with, and for the purposes<br> of, any litigation, arbitration, administrative or other investigations, proceedings or disputes<br> if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed<br> in writing of its confidential nature and that it may be price-sensitive information except<br> that there shall be no requirement to so inform if, in the opinion of the Senior Agent or<br> the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;<br> and |
| --- | --- |
| (iv) | any<br> person with the consent of the relevant Lender or Reference Bank, as the case may be. |
| --- | --- |
| (d) | The<br> Senior Agent's obligations in this Clause 40 relating to Reference Bank Quotations are without<br> prejudice to its obligations to make notifications under Clause 9.4 (Notification of rates of interest) provided that (other than pursuant to paragraph (b)(i) above)<br> the Senior Agent shall not include the details of any individual Reference Bank Quotation<br> as part of any such notification. |
| --- | --- |
| 40.2 | Related obligations |
| --- | --- |
| (a) | The<br> Senior Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the<br> Senior Agent, each Reference Bank Quotation) is or may be price-sensitive information and<br> that its use may be regulated or prohibited by applicable legislation including securities<br> law relating to insider dealing and market abuse and the Senior Agent and each Obligor undertake<br> not to use any Funding Rate or, in the case of the Senior Agent, any Reference Bank Quotation<br> for any unlawful purpose. |
| --- | --- |
- 205 -
| (b) | The<br> Senior Agent and each Obligor agree (to the extent permitted by law and regulation) to inform<br> the relevant Lender or Reference Bank, as the case may be: |
|---|---|
| (i) | of<br> the circumstances of any disclosure made pursuant to paragraph I(ii) of Clause 40.1<br> (Confidentiality and disclosure) except where such disclosure is made to any of the<br> persons referred to in that paragraph during the ordinary course of its supervisory or regulatory<br> function; and |
| --- | --- |
| (ii) | upon<br> becoming aware that any information has been disclosed in breach of this Clause 40. |
| --- | --- |
| 40.3 | No Event of Default |
| --- | --- |
No Event of Default will occur under Clause 25.3 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 40.
| 40.4 | Tax Disclosure |
|---|
Notwithstanding any of the provisions of the Finance Documents, the Obligors and the Finance Parties hereby agree that each Party and each employee, representative or other agent of each Party may disclose to any and all persons, without limitation of any kind, the "tax structure" and "taxtreatment" (in each case within the meaning of the U.S. Treasury Regulation Section 1.6011-4) of the Facility and any materials of any kind (including opinions or other tax analyses) that are provided to any of the foregoing relating to such tax structure and tax treatment.
| 41. | BAIL-IN |
|---|---|
| 41.1 | Contractual recognition of bail-in |
| --- | --- |
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
| (a) | any<br> Bail-In Action in relation to any such liability, including (without limitation): |
|---|---|
| (i) | a<br> reduction, in full or in part, in the principal amount, or outstanding amount due (including<br> any accrued but unpaid interest) in respect of any such liability; |
| --- | --- |
| (ii) | a<br> conversion of all, or part of, any such liability into shares or other instruments of ownership<br> that may be issued to, or conferred on, it; and |
| --- | --- |
| (iii) | a<br> cancellation of any such liability; and |
| --- | --- |
| (b) | a<br> variation of any term of any Finance Document to the extent necessary to give effect to any<br> Bail-In Action in relation to any such liability. |
| --- | --- |
- 206 -
| 41.2 | Bail-In definitions |
|---|
In this Clause 41:
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
"Bail-InAction" means the exercise of any Write-down and Conversion Powers.
"Bail-In Legislation" means:
| (a) | in<br> relation to an EEA Member Country which has implemented, or which at any time implements,<br> Article 55 BRRD, the relevant implementing law or regulation as described in the EU<br> Bail-In Legislation Schedule from time to time; |
|---|---|
| (b) | in<br> relation to the United Kingdom, the UK Bail-In Legislation; and |
| --- | --- |
| (c) | in<br> relation to any state other than such an EEA Member Country and the United Kingdom, any analogous<br> law or regulation from time to time which requires contractual recognition of any Write-down<br> and Conversion Powers contained in that law or regulation. |
| --- | --- |
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time.
"Resolution Authority" means any body which has authority to exercise any Write- down and Conversion Powers.
"UK Bail-In Legislation" means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
"Write-down and ConversionPowers" means:
| (a) | in<br> relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from<br> time to time, the powers described as such in relation to that Bail-In Legislation in the<br> EU Bail-In Legislation Schedule; |
|---|---|
| (b) | in<br> relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel,<br> transfer or dilute shares issued by a person that is a bank or investment firm or other financial<br> institution or affiliate of a bank, investment firm or other financial institution, to cancel,<br> reduce, modify or change the form of a liability of such a person or any contract or instrument<br> under which that liability arises, to convert all or part of that liability into shares,<br> securities or obligations of that person or any other person, to provide that any such contract<br> or instrument is to have effect as if a right had been exercised under it or to suspend any<br> obligation in respect of that liability or any of the powers under that UK Bail-In Legislation<br> that are related to or ancillary to any of those powers; and |
| --- | --- |
- 207 -
| (c) | in<br> relation to any other applicable Bail-In Legislation: |
|---|---|
| (i) | any<br> powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person<br> that is a bank or investment firm or other financial institution or affiliate of a bank,<br> investment firm or other financial institution, to cancel, reduce, modify or change the form<br> of a liability of such a person or any contract or instrument under which that liability<br> arises, to convert all or part of that liability into shares, securities or obligations of<br> that person or any other person, to provide that any such contract or instrument is to have<br> effect as if a right had been exercised under it or to suspend any obligation in respect<br> of that liability or any of the powers under that Bail-In Legislation that are related to<br> or ancillary to any of those powers; and |
| --- | --- |
| (ii) | any<br> similar or analogous powers under that Bail-In Legislation. |
| --- | --- |
| 42. | COUNTERPARTS |
| --- | --- |
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
- 208 -
SECTION 13
GOVERNING LAW AND ENFORCEMENT
| 43. | GOVERNING LAW |
|---|
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
| 44. | JURISDICTION |
|---|---|
| 44.1 | English courts |
| --- | --- |
| (a) | The<br> courts of England have exclusive jurisdiction to settle any dispute arising out of or in<br> connection with this Agreement (including a dispute relating to non- contractual obligations<br> arising from or in connection with this Agreement, or a dispute regarding the existence,<br> validity or termination of this Agreement or the consequences of its nullity) (a "Dispute"). |
| --- | --- |
| (b) | Each<br> Obligor agrees that the courts of England are the most appropriate and convenient courts<br> to settle Disputes and accordingly no Obligor shall argue to the contrary. |
| --- | --- |
| 44.2 | Service of process |
| --- | --- |
Each Obligor agrees that the documents which start any proceedings in relation to any Finance Document, and any other documents required to be served in connection with those proceedings, may be served on it by being delivered to Law Debenture Corporate Services Limited at 8th Floor, 100 Bishopsgate, London EC2N 4AG, or to such other address in England and Wales as each such Obligor may specify by notice in writing to the Senior Agent. Nothing in this paragraph shall affect the right of any Finance Party to serve process in any other manner permitted by law. This Clause applies to proceedings in England and proceedings elsewhere.
| 44.3 | Resolution Procedure |
|---|
If any matter is referred to the Resolution Procedure under the Finance Documents, the following procedure shall apply to resolve the matter, and such procedure shall not constitute a Dispute for so long as it is continuing in accordance with this Clause:
| (a) | the<br> Borrower and the Senior Agent shall discuss the challenged matter in good faith for a period<br> not exceeding ten (10) Business Days with a view to agreeing the challenged matter.<br> If at the end of that period (or such longer period as the Borrower and the Senior Agent<br> may agree) the Borrower and the Senior Agent have: |
|---|---|
| (i) | agreed<br> the challenged matter, the Senior Agent shall notify the Borrower of such agreement and such<br> notification shall (absent manifest error) be final and conclusive with respect to the challenged<br> matter; or |
| --- | --- |
| (ii) | not<br> agreed the challenged matter, the challenged matter shall be referred to a person appointed<br> in accordance with paragraph (b) below (an "Expert") for determination<br> in accordance with the remainder of this Clause. |
| --- | --- |
- 209 -
| (b) | The<br> Expert shall be: |
|---|---|
| (i) | a<br> person having appropriate expertise with respect to, but no interest in the outcome of, the<br> challenged matter referred to it and shall be appointed by the Senior Agent with the consent<br> of the Borrower (such consent not to be unreasonably withheld or delayed). If the Borrower<br> and the Senior Agent are unable to agree on the identity of the Expert within five (5) Business<br> Days, either of them may request the President for the time being of the International Centre<br> for Expertise (the International Chamber of Commerce) or an equivalent independent and internationally<br> recognised body to appoint an Expert, provided that such person has, prior to the date of<br> such appointment, confirmed in writing to the Borrower and the Senior Agent that it has no<br> conflict in acting as an Expert, has no interest in the outcome of the challenged matter<br> and will remain neutral and impartial at all times when considering such referral; and |
| --- | --- |
| (ii) | given<br> terms of reference determined by the Senior Agent (acting in consultation with the Borrower)<br> stating the reason for which the relevant referral is being made to him. The Borrower and<br> the Senior Agent may each provide such Expert with whatever supporting evidence they think<br> appropriate and shall provide such Expert with such supporting evidence as is requested by<br> such Expert. |
| --- | --- |
| (c) | An<br> Expert shall: |
| --- | --- |
| (i) | not<br> be bound to choose either the proposal made by the Borrower or that made by the Senior Agent<br> but shall be free to make his own reasonable determination of the point referred to it; |
| --- | --- |
| (ii) | act<br> as an expert in determining the matter referred to it and not as an arbitrator; and |
| --- | --- |
| (iii) | give<br> its decision as soon as practicable and, in any event, no later than fifteen (15) Business<br> Days after the date of receipt of the terms of reference from the Senior Agent. |
| --- | --- |
| (d) | At<br> all times during a dispute but prior to the decision of an Expert pursuant to this Clause<br> 44.3, the Assumptions, calculations or other determinations made by the Senior Agent shall<br> prevail for the purposes of any calculations to be made under the Finance Documents, provided<br> that any Default that is continuing solely due to a calculation based on the Assumptions<br> that are the subject of a challenge under this Clause (and which would not have occurred<br> or be continuing if the relevant calculation had been based on the Assumptions determined<br> by the Borrower) shall be deemed not to be continuing until such time as the dispute relating<br> to the Assumptions is resolved in accordance with this Clause. The Expert's decision (when<br> received) shall apply retrospectively to the relevant date to the extent that such decision<br> was not available on that date. |
| --- | --- |
- 210 -
| (e) | An<br> Expert's determination shall (absent manifest error) be final and binding on all the Parties<br> in respect of the subject matter referred to it. |
|---|---|
| (f) | Once<br> an Expert has reached a decision on the challenged matters, the Borrower shall update any<br> documents or information previously delivered by it to the Senior Agent to reflect the outcome<br> of that determination. |
| --- | --- |
| (g) | The<br> costs of any reference to an Expert will be borne by the Borrower, subject to the terms of<br> reference agreed pursuant to this Clause. |
| --- | --- |
This Agreement has been entered into on thedate stated at the beginning of this Agreement.
- DABOG -
Signature Page tothe Senior Facility Agreement -
SIGNATURES
| THE BORROWER | |
|---|---|
| For<br> and on behalf of | |
| AEG JD 01 LIMITED | |
| By: | /s/ Vincent Browne |
| Name: | Vincent<br> Browne |
| Title: | CEO |
| Address:<br> Suite 9/10, Blanchardstown Corporate Park 2 Dublin D15 | |
| Attention:<br> Vincent Browne |
- DABOG -
Signature Page tothe Senior Facility Agreement -
| THE ARRANGER | ||
|---|---|---|
| For<br> and on behalf of | ||
| DEUTSCHE BANK AG | ||
| By: | /s/ Pierre Kahn | /s/ Paul Batttelle |
| Name: | Pierre<br> Kahn | Paul Battelle |
| Title: | Authorised<br> Signatory | |
| Address:<br> Mainzer Landstrabe 11-17, Frankfurt am Main, Germany | ||
| Attention:<br> tie.pm@db.com | ||
| THE ORIGINAL LENDER | ||
| --- | --- | --- |
| For<br> and on behalf of | ||
| DEUTSCHE BANK AG | ||
| By: | /s/ Pierre Kahn | /s/ Paul Batttelle |
| Name: | Pierre<br> Kahn | Paul Battelle |
| Title: | Authorised<br> Signatory | |
| Address:<br> Mainzer Landstrabe 11-17, Frankfurt am Main, Germany | ||
| Attention:<br> tie.pm@db.com |
- DABOG -
Signature Page tothe Senior Facility Agreement -
| THE ORIGINAL HEDGE COUNTERPARTY | ||
|---|---|---|
| For<br> and on behalf of | ||
| DEUTSCHE BANK AG | ||
| By: | /s/ Pierre Kahn | /s/ Paul Batttelle |
| Name: | Pierre<br> Kahn | Paul Battelle |
| Title: | Authorised<br> Signatory | |
| Address:<br> Mainzer Landstrabe 11-17, Frankfurt am Main, Germany | ||
| Attention:<br> tie.pm@db.com |
- DABOG -
Signature Page tothe Senior Facility Agreement -
| THE SENIOR AGENT | |
|---|---|
| For<br> and on behalf of | |
| LAW DEBENTURE CORPORATE SERVICES LIMITED | |
| By: | /s/ Rich Lynn |
| Name: | Rich Lynn |
| Title: | Authorized<br> Signatory |
| Address:<br> 8^th^Floor, 100 Bishopsgate, London EC2N 4AG | |
| Fax:<br> +44 (0) 7606 -0643 | |
| Attention:<br> Loan Agency – Rich Lynn | |
| THE COMMON SECURITY AGENT | |
| For<br> and on behalf of | |
| THE LAW DEBENTURE TRUST CORPORATION P.L.C. | |
| By: | /s/ Laura Watson |
| Name: | Laura<br> Watson |
| Title: | Authorized<br> Signatory |
| Address:<br> 8^th^Floor, 100 Bishopsgate, London EC2N 4AG | |
| Fax:<br> +44 (0) 7606 -0643 | |
| Attention:<br> Trust Management: 204832 |
- DABOG -
Signature Page tothe Senior Facility Agreement -
Exhibit 10.7
| CLIFFORD CHANCE <br> PARTNERSCHAFT<br> MIT <br> BESCHRÄNKTER BERUFSHAFTUNG |
|---|
| Execution<br> version |
| --- |
| EUR 16,000,000<br><br> <br><br><br> <br>SECURED MEZANNINE FACILITY AGREEMENT<br><br> <br><br><br> <br>dated 21 December 2022<br><br> <br><br><br> <br>for<br><br> <br><br><br> <br>AEG MH 03 LTD<br><br> <br><br><br> <br>arranged by<br><br> <br><br><br> <br>DEUTSCHE BANK AG<br><br> <br><br><br> <br>with<br><br> <br><br><br> <br>LAW DEBENTURE CORPORATE SERVICES LIMITED<br><br> <br><br><br> <br>acting as Mezzanine Agent<br><br> <br><br><br> <br>and<br><br> <br><br><br> <br>THE LAW DEBENTURE TRUST CORPORATION P.L.C.<br><br> <br><br><br> <br>acting as Security Agent |
| MEZZANINE<br> REVOLVING FACILITY <br><br> AGREEMENT |
| Notice:<br> Under the Credit Reporting Act 2013 lenders are required to provide personal and credit information for credit applications and credit<br> agreements of €500 and above to the Central Credit Register. This information will be held on the Central Credit Register and<br> may be used by other lenders when making decisions on your credit applications and credit agreements. |
| --- |
CLIFFORD CHANCE PARTNERSCHAFT MIT BESCHRÄNKTER BERUFSHAFTUNG VON RECHTSANWÄLTEN,
STEUERBERATERN UND SOLICITORS · SITZ: FRANKFURT AM MAIN · AG FRANKFURT AM MAIN PR 2669
CONTENTS
| Clause | Page | |
|---|---|---|
| 1. | Definitions<br> and Interpretation | 2 |
| --- | --- | --- |
| 2. | The<br> Facility | 49 |
| 3. | Purpose | 56 |
| 4. | Conditions<br> of Utilisation | 56 |
| 5. | Utilisation | 61 |
| 6. | Repayment | 63 |
| 7. | Prepayment<br> and Cancellation | 64 |
| 8. | Interest | 71 |
| 9. | Interest<br> Periods | 72 |
| 10. | Changes<br> to the Calculation of Interest | 73 |
| 11. | Fees | 74 |
| 12. | Tax<br> Gross Up and Indemnities | 76 |
| 13. | Increased<br> Costs | 83 |
| 14. | Other<br> Indemnities | 85 |
| 15. | Mitigation<br> by the Lenders | 88 |
| 16. | Costs<br> and Expenses | 88 |
| 17. | Bank<br> Accounts | 91 |
| 18. | Deposits<br> into and Withdrawals from Accounts | 94 |
| 19. | Senior<br> ACcounts | 97 |
| 20. | Guarantee<br> and Indemnity | 98 |
| 21. | Representations | 102 |
| 22. | Information<br> Undertakings | 113 |
| 23. | Financial<br> Covenants | 126 |
| 24. | General<br> Undertakings | 127 |
| 25. | Events<br> of Default | 143 |
| 26. | Changes<br> to the Lenders | 151 |
| 27. | Restrictions<br> on Debt Purchase Transactions | 156 |
| 28. | Changes<br> to the Obligors | 156 |
| 29. | Role<br> of the Mezzanine Agent and, the Arranger and the Reference Banks | 159 |
| 30. | The<br> Security Agent | 171 |
| 31. | Conduct<br> of business by the Finance Parties | 183 |
| 32. | Sharing<br> among the Finance Parties | 183 |
| 33. | Payment<br> Mechanics | 186 |
| 34. | Set-off | 190 |
| 35. | Application<br> of Proceeds | 190 |
| 36. | Notices | 192 |
- i -
| 37. | Calculations<br> and Certificates | 195 |
|---|---|---|
| 38. | Partial<br> Invalidity | 195 |
| 39. | Remedies<br> and Waivers | 195 |
| 40. | Amendments<br> and Waivers | 195 |
| 41. | Confidential<br> Information | 201 |
| 42. | Confidentiality<br> of Funding Rates and Reference Bank Quotations | 206 |
| 43. | Bail-In | 208 |
| 44. | Counterparts | 210 |
| 45. | Governing<br> Law | 211 |
| 46. | Jurisdiction | 211 |
| Schedule<br> 1 The Original Lender | 215 | |
| --- | --- | |
| Schedule<br> 2 Conditions Precedent and Subsequent | 216 | |
| Part A<br> Initial Conditions Precedent | 216 | |
| Part B<br> Conditions Precedent to Pay Eligible Pre-RtB Costs | 220 | |
| Part C<br> Conditions Precedent for Project Close (ProjectCo) | 222 | |
| Part D<br> Conditions precedent for each Utilisation to Pay Eligible Project Costs | 227 | |
| Part E<br> Conditions precedent for an Additional Guarantor | 228 | |
| Part F<br> Conditions Subsequent | 230 | |
| Schedule<br> 3 Eligibility Criteria | 231 | |
| Schedule<br> 4 Mezzanine Only Security Documents | 234 | |
| Schedule<br> 5 Utilisation Request | 235 | |
| Schedule<br> 6 Form of Transfer Certificate | 236 | |
| Schedule<br> 7 Form of Assignment Agreement | 239 | |
| Schedule<br> 8 Form of Guarantor Accession Letter | 242 | |
| Schedule<br> 9 Form of Resignation Letter | 243 | |
| Schedule<br> 10 Form of Compliance Certificate | 244 | |
| Schedule<br> 11 LMA Form of Confidentiality Undertaking | 245 | |
| Schedule<br> 12 Timetables | 246 | |
| Schedule<br> 13 Form of Warehouse Report | 247 | |
| Schedule<br> 14 Form of Increase Confirmation | 250 | |
| Schedule<br> 15 Insurance | 254 | |
| Schedule<br> 16 Form of Financial Summary | 262 |
- ii -
THISAGREEMENT is dated December 2022 and made between:
| (1) | AEG MH 03 LIMITED, a private limited company incorporated and existing under the laws of<br> Ireland having its registered office at Suite 9/10, Plaza 212, Blanchardstown Corporate<br> Park 2, Dublin 15, Dublin, D15R504, Ireland with registration number 720886, as borrower<br> (the "Borrower"); |
|---|---|
| (2) | AEG MH 01 LIMITED, a private limited company incorporated and existing under the laws of<br> Ireland having its registered office at Suite 9/10, Plaza 212, Blanchardstown Corporate<br> Park 2, Dublin 15, Dublin, D15R504, Ireland with registration number 714976, as parent<br> of the Borrower and as original guarantor (the "Parent" or the "Original Guarantor", together with the Borrower, the "Original Obligors"); |
| --- | --- |
| (3) | DEUTSCHE BANK AG as mandated lead arranger (the "Arranger"); |
| --- | --- |
| (4) | THE FINANCIAL INSTITUTION listed in Schedule 1 (The Original Lender) as lender (the<br> "Original Lender"); |
| --- | --- |
| (5) | LAW DEBENTURE CORPORATE SERVICES LIMITED, as agent of the other Finance Parties (the "Mezzanine Agent"); and |
| --- | --- |
| (6) | THE LAW DEBENTURE TRUST CORPORATION P.L.C., as security trustee for the Secured Parties (as<br> defined herein) (the "Security Agent"). |
| --- | --- |
IT ISAGREED as follows:
| - 1 - |
| --- |
SECTION 1 INTERPRETATION
| 1. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 1.1 | Definitions |
| --- | --- |
In this Agreement:
"Acceptable Bank" means a bank or financial institution which has the Requisite Rating.
"AcceptingLender" has the meaning given to that term in paragraph (k) of Clause 2.3 (Increase – Accordion Option).
"AccordionAvailability Period" has the meaning given to that term in paragraph (a) of Clause 2.3 (Increase – AccordionOption).
"AccordionIncrease Amount" means the amount of the proposed increase of the Total Commitments pursuant to Clause 2.3 (Increase – Accordion Option) as set out in the Accordion Increase Request.
"AccordionIncrease Date" has the meaning given to that term in paragraph (e) of Clause 2.3 (Increase – AccordionOption).
"Accordion Increase Request" means a request by the Borrower to increase the Total Commitments delivered in accordance with paragraphs (a) and (b) of Clause 2.3 (Increase – Accordion Option).
"Accordion Increase SupplementalSecurity" means, in relation to an Accordion Increase Amount, such documents (if any) as are reasonably necessary to provide the Accordion Increase Lenders with the benefit of Security, guarantees, indemnities and other assurance against loss equivalent to the Security, guarantees, indemnities and other assurance against loss provided to the Lenders under the Facility pursuant to the Finance Documents (other than any lack of equivalence directly consequent to:
| (a) | being<br> provided later in time; or |
|---|---|
| (b) | constituting<br> new / an increase of the respective Secured Obligations under the relevant Security Documents). |
| --- | --- |
"Account" means the Disbursement Account, the Debt Service Account, the Disposal Proceeds Account and the Distribution Account.
"Account Bank" means JP Morgan, Dublin and each other bank in which an Account is opened and maintained to effect the replacement referenced pursuant to paragraph (b) of Clause 17.3 (Account Bank).
"Accounting Principles" means, in respect of any Obligor and each of its respective Subsidiaries, generally accepted accounting principles in the Original Jurisdiction of that Obligor or, as applicable, its respective Subsidiaries, in each case including IFRS.
| - 2 - |
| --- |
"Acquisition" means the acquisition (whether direct or indirect) of an Eligible Project or, as the case may be, of a ProjectCo owning an Eligible Project, by an Obligor.
"Acquisition Agreement" means any sale and purchase agreement for the acquisition of a ProjectCo or several ProjectCos (or any other entity with the intention that such entity becomes a Subsidiary) made between the Senior Borrower or any Country HoldCo and/or and Project HoldCo (as applicable) and the respective vendor.
"Acquisition Costs" means all fees, costs and expenses, stamp, registration and other Taxes incurred by the Borrower, the Sponsor or any other member of the Group in connection with an Acquisition or the Transaction Documents relating to such Acquisition and/or the relevant ProjectCo, in each and every case, as set out in the Financial Model (as the same has been updated in connection with approving a solar PV project as a Warehouse Project under this Agreement and the Senior Facility Agreement).
"Acquisition Date" means, with respect to each ProjectCo or, as applicable, Eligible Project, the date of the completion of the acquisition of it by a member of the Group (being a Subsidiary of the Senior Borrower).
"Acquisition Document" means:
| (a) | each<br> Acquisition Agreement; and |
|---|---|
| (b) | each<br> Eligible Letter of Credit. |
| --- | --- |
"AdditionalGuarantor" means a company which becomes an Additional Guarantor in accordance with Clause 28.2 (Additional Guarantors).
"Advisers" means each of the Lenders' Technical Adviser, the Lenders' Tax and Accounting Adviser, the Lenders' Insurance Adviser, the Lenders' Legal Advisers and the Model Auditor.
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"AIF" has the meaning given to that term under AIFMD Law.
"AIFM" has the meaning given to that term under AIFMD Law.
"AIFMD" means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (in each case as incorporated into English law under the European Union (Withdrawal) Act 2018 (as amended), as the same may be amended, supplemented, superseded or re-adopted from time to time (whether with or without qualifications).
"AIFMD Law" means
| (a) | the<br> AIFMD, and |
|---|
| - 3 - |
| --- | | (b) | any<br> applicable law of a member state of the European Union implementing the AIFMD. | | --- | --- |
"Allocated Loan Amount" means, with respect to any Warehouse Project, the aggregate of:
| (a) | the<br> Allocated Senior Facility Amount; and |
|---|---|
| (b) | the Allocated Mezzanine Facility Amount, for such Warehouse Project. |
| --- | --- |
"Allocated Mezzanine FacilityAmount" means the amount of the Loan(s) which shall be allocated to each Warehouse Project as determined on the basis of the Financial Model by applying the Mezzanine Debt Sizing Assumptions.
"Allocated Senior FacilityAmount" means the amount confirmed as such with respect to a Warehouse Project by the Senior Agent.
"Anti-Bribery and CorruptionLaws" means:
| (a) | the<br> OECD Convention on Combating Bribery of Foreign Public Officials in International Business<br> Transactions, 1997, |
|---|---|
| (b) | the<br> Foreign Corrupt Practices Act of 1977 of the United States of America, as amended by the<br> Foreign Corrupt Practices Act Amendments of 1988 and 1998; and as may be further amended<br> and supplemented from time to time, |
| --- | --- |
| (c) | the<br> Bribery Act 2010; |
| --- | --- |
| (d) | the<br> Irish Prevention of Corruption Acts 1889 to 2012, the Irish Criminal Justice (Corruption<br> Offences) Act 2018, the Irish Protected Disclosures Act 2014; or |
| --- | --- |
| (e) | any<br> similar applicable law or regulation. |
| --- | --- |
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
"AssetManagement Agreement " means each asset management agreement delivered by the Original Obligors for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"AssetManager" means each person proposed to act as the asset manager in connection with an Eligible Project as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent.
"AssignmentAgreement" means an agreement substantially in the form set out in Schedule 7 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.
| - 4 - |
| --- |
"Assignment of AcquisitionReceivables Agreement" means each assignment agreement governed by the laws of the relevant Eligible Jurisdiction pursuant to which the receivables of the purchaser under the relevant Acquisition Agreement and related Eligible Letter of Credit are assigned to the Security Agent.
"Assignmentof Parent Shareholder Loans" has the meaning given to it in Schedule 4 (Mezzanine Only Security Documents).
"Assumptions" means the assumptions set out in the Original Base Case (including technical, economic (including merchant price forecasts based on the relevant most recent Market Study), accounting, timing and tax assumptions) on which the projections of Revenue, Operating Costs, Debt Service and other amounts in the Original Base Case are based, as updated from time to time in accordance with Clause 22.6 (Assumptions).
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
"Availability Period" means the period commencing on the Signing Date to and including the date falling thirty (30) months thereafter.
"Available Cashflow" means, in relation to any period, the sum (without double counting) of:
| (a) | Revenue<br> for such period, |
|---|
minus
| (b) | the<br> aggregate amounts of: |
|---|---|
| (i) | Operating<br> Costs and Project Costs, in each case to the extent not funded by way of the Loans paid or<br> payable during such period; and |
| --- | --- |
| (ii) | Fees,<br> Costs paid or payable during such period; and |
| --- | --- |
providedthat, for the purpose of determining Available Cashflow for any period, with respect to any amount received (or projected to be received) by the Group in a currency other than the currency of the Loans:
| (A) | if<br> such amount or part thereof is converted or expected to be converted into the currency of<br> the Loans, only the amount received or expected to be received upon such conversion shall<br> be taken into account; and |
|---|---|
| (B) | otherwise,<br> such amount shall not be taken into account. |
| --- | --- |
"Available Commitment" means a Lender's Commitment minus (subject as set out below):
| (a) | the<br> amount of its participation in any outstanding Loans; and |
|---|
| - 5 - |
| --- | | (b) | in<br> relation to any proposed Utilisation, the amount of its participation in any other Loans<br> that are due to be made on or before the proposed Utilisation Date. | | --- | --- |
For the purposes of calculating a Lender's Available Commitment in relation to any proposed Utilisation that Lender's participation in any Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date shall not be deducted from that Lender's Commitment.
"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.
"Bad Boy Guarantee" means the guarantee issued by the Sponsor in connection with this Agreement and the Senior Facility Agreement.
"Bail-In Action" means the exercise of any Write-down and Conversion Powers.
"Bail-In Legislation" means:
| (a) | in<br> relation to an EEA Member Country which has implemented, or which at any time implements,<br> Article 55 BRRD, the relevant implementing law or regulation as described in the EU<br> Bail-In Legislation Schedule from time to time; |
|---|---|
| (b) | in<br> relation to the United Kingdom, the UK Bail-In Legislation; and |
| --- | --- |
| (c) | in<br> relation to any state other than such an EEA Member Country and the United Kingdom, any analogous<br> law or regulation from time to time which requires contractual recognition of any Write-down<br> and Conversion Powers contained in that law or regulation. |
| --- | --- |
"Base Case" means:
| (a) | the<br> Original Base Case; or |
|---|---|
| (b) | if<br> produced in accordance with Clause 22.5 (Updated Base Case), the most recently agreed<br> Updated Base Case. |
| --- | --- |
"Base Equity" means, in respect of any Warehouse Project or, if applicable, several Warehouse Projects being subject to the same Acquisition, the amount specified in the Original Project Close Confirmation, being the difference between:
| (a) | the<br> aggregate total amount of (i) Project Costs, (ii) the purchase price in respect<br> of each Eligible Project and (iii) the Acquisition Costs for each relevant Eligible<br> Project (as applicable); minus |
|---|---|
| (b) | the<br> Allocated Loan Amount |
| --- | --- |
in each case, specified in the Project Close Confirmation for that Warehouse Project. For the avoidance of doubt, any amount made available pursuant to Clause 25.25 (Equity Cure) shall not constitute Base Equity for the purposes of this Agreement.
| - 6 - |
| --- |
"Base Equity Contribution" means a contribution of Base Equity, whether in the form of share capital or Shareholder Loans, made available by a Holding Company (including the Parent) to the Borrower.
"Blocking Regulation" means the UK Blocking Regulation, the German Blocking Regulation, the EU Blocking Regulation and any similar anti-boycott or similar laws or regulations.
"Break Costs" means the amount (if any) by which:
| (a) | the<br> interest (excluding the Margin) which a Lender should have received for the period from the<br> date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last<br> day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal<br> amount or Unpaid Sum received been paid on the last day of that Interest Period; |
|---|
exceeds:
| (b) | the<br> amount which that Lender would be able to obtain by placing an amount equal to the principal<br> amount or Unpaid Sum received by it on deposit with a leading bank for a period starting<br> on the Business Day following receipt or recovery and ending on the last day of the current<br> Interest Period. |
|---|
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Dublin, London, Frankfurt am Main, Luxembourg and which is a Target Day.
"BusinessPlan" means the Original Business Plan, as updated by the Obligors from time to time for the purposes of Clause 4.4 (Conditionsprecedent for each Utilisation to pay other Eligible Project Costs).
"Calculation Date" means 31 December 2022 and each 31 March, 30 June, 30 September and 31 December in each calendar year thereafter and falling on or before the Termination Date.
"Calculation Period" means, in relation to any Calculation Date, the period starting on the day following such Calculation Date and ending twelve (12) Months thereafter.
"Certain Funds Period" means the period commencing on the date the Mezzanine Agent confirms (in its sole discretion acting on the instructions of each Lender) that the certain funds concept shall apply with respect to a particular Acquisition and ending on the earlier of:
| (a) | ten<br> (10) days after that confirmation or such later date as agreed by the Mezzanine Agent<br> (acting on the instructions of each Lender); and |
|---|---|
| (b) | the<br> date on which the Certain Funds Utilisation occurs. |
| --- | --- |
| - 7 - |
| --- |
"Certain Funds Utilisation" means a Loan made or to be made under the Facility during the Certain Funds Period, with its predominant purpose to finance any Acquisition.
"Change of Control" means the Sponsor ceases to control (whether directly or indirectly) at least fifty-one per cent. (51%) of the Group.
For the purposes herein, "control" means the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
| (a) | cast,<br> or control the casting of, more than one-half of the maximum number of votes that might be<br> cast at a general meeting of any member of the Group; |
|---|---|
| (b) | appoint<br> or remove all, or the majority, of the directors or other equivalent officers of any member<br> of the Group; or |
| --- | --- |
| (c) | give<br> directions with respect to the operating and financial policies of any member of the Group<br> which the directors or other equivalent officers of any member of the Group are obliged to<br> comply with. |
| --- | --- |
"Charged Property" means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
"Code" means the US Internal Revenue Code of 1986.
"Commercial Operation Date" means, with regard to a Warehouse Project, either:
| (a) | the<br> date of the Mezzanine Agent's notification (acting in consultation with the Lenders' Technical<br> Adviser) to the Borrower and each other Obligor that owns (whether directly or indirectly)<br> the relevant Warehouse Project that the following tests have been met: |
|---|---|
| (i) | all<br> acceptance certificates under the EPC Contract and (if applicable) other construction contracts<br> relevant to the Warehouse Project have been issued by the EPC Contractor and (if applicable)<br> other sub- contractors (as confirmed by the Lenders' Technical Adviser); |
| --- | --- |
| (ii) | no<br> litigation, arbitration or administrative proceeding has commenced, or been threatened in<br> writing to commence, in connection with the relevant Warehouse Project, including in connection<br> with any Authorisations or Project Documents or other agreement; |
| --- | --- |
| (iii) | all<br> Authorisations required to commence operations have been obtained and are in full force and<br> effect for the relevant Warehouse Project; |
| --- | --- |
| (iv) | an<br> executed O&M Contract and PPA, in each case, in form and substance satisfactory to the<br> Mezzanine Agent; and |
| --- | --- |
| (v) | the<br> relevant Warehouse Project has commenced commercial operations (as confirmed by the Lenders'<br> Technical Adviser); or |
| --- | --- |
| - 8 - |
| --- | | (b) | the<br> date of any determination pursuant to the Resolution Procedure that the tests in paragraph<br> (a) above have been met. | | --- | --- |
"Commitment" means
| (a) | in<br> relation to an Original Lender, the amount set opposite its name under the heading "Commitment"<br> in Schedule 1 (The Original Lender) and the amount of any other Commitment transferred<br> to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase);<br> and |
|---|---|
| (b) | in<br> relation to any other Lender, the amount of any Commitment transferred to it under this Agreement<br> or assumed by it in accordance with Clause 2.2 (Increase) or Clause 2.3 (Increase – Accordion Option), |
| --- | --- |
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Common Secured Parties" has the meaning given to it in the Intercreditor and Subordination Deed.
"Common Security Documents" has the meaning given to it in the Intercreditor and Subordination Deed.
"Common Transaction Security" means the Security created or expressed to be created in favour of Common Security Agent (on behalf of the Common Secured Parties) under the Common Security Documents.
"Compensation Proceeds" means:
| (a) | any<br> compensation payment (however described) received by the Obligors (or any of them) for damage<br> or loss or by way of liquidated damages, purchase price reductions or penalties or otherwise<br> in respect of any defect, failure to meet any specification or standard, any delay or for<br> any other reason under or in connection with any Project Documents including any amount received<br> as a result of the termination, cancellation, revocation, withdrawal or anticipated or natural<br> expiry, in whole or in part, of a Project Document and any money received pursuant to any<br> guarantee, bond or other security or the proceeds of any arbitral awards or court orders<br> in respect thereof, however excluding Revenue Replacing Compensation; |
|---|---|
| (b) | all<br> consideration received by any Obligor in respect of the partial or total nationalisation,<br> expropriation, compulsory purchase or requisition of any of the assets or interests of a<br> Warehouse Project and/or of any shares or interests in the ProjectCos; or |
| --- | --- |
| (c) | any<br> sum received by any Obligor in respect of the termination, withdrawal, refusal, revocation,<br> suspension or modification of any Authorisation or any other official order or notice restricting<br> the construction or operation of any Warehouse Project. |
| --- | --- |
"ComplianceCertificate" means a certificate substantially in the form set out in Schedule 10 (Form of Compliance Certificate).
| - 9 - |
| --- |
"Compliance Standards" means all applicable laws and regulations, the E&S Standards and Good Industry Practice.
"Confidential Information" means all information relating to the Borrower, any Obligor, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
| (a) | any<br> member of the Group or any of its advisers; or |
|---|---|
| (b) | another<br> Finance Party, if the information was obtained by that Finance Party directly or indirectly<br> from any member of the Group or any of its advisers, |
| --- | --- |
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
| (i) | information<br> that: |
|---|---|
| (A) | is<br> or becomes public information other than as a direct or indirect result of any breach by<br> that Finance Party of Clause 41 (Confidential Information); or |
| --- | --- |
| (B) | is<br> identified in writing at the time of delivery as non-confidential by any member of the Group<br> or any of its advisers; or |
| --- | --- |
| (C) | is<br> known by that Finance Party before the date the information is disclosed to it in accordance<br> with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party<br> after that date, from a source which is, as far as that Finance Party is aware, unconnected<br> with the Group and which, in either case, as far as that Finance Party is aware, has not<br> been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;<br> and |
| --- | --- |
| (ii) | any<br> Funding Rate or Reference Bank Quotation. |
| --- | --- |
"ConfidentialityUndertaking" means a confidentiality undertaking substantially in a recommended form of the LMA as set out in Schedule 11 (LMA Form of Confidentiality Undertaking) or in any other form agreed between the Borrower and the Mezzanine Agent.
"Construction Budget" means:
| (a) | Original<br> Construction Budget; and |
|---|---|
| (b) | any<br> update to the Original Construction Budget, and any additional updates thereto, in each case,<br> pursuant to Clause 22.7 (Construction Budget and Project Close Confirmation). |
| --- | --- |
| - 10 - |
| --- |
"Contingent Equity" means a share capital contribution and/or a Shareholder Loan made available (whether directly or indirectly) by a Holding Company of any member of the Group to a ProjectCo. For the avoidance of doubt, no Equity Cure shall constitute Contingent Equity for the purposes of this Agreement.
"Cost Overrun" means, in respect of a Warehouse Project, the circumstance where the aggregate Project Costs required to achieve the Commercial Operation Date is greater than an amount equal to the aggregate of (i) the Allocated Loan Amount plus (ii) the Base Equity, in each case, in respect of that Warehouse Project.
"CPPA" means any contract of sale of GoOs generated by a Warehouse Project, if any, and entered into by an Obligor.
"CTA" means the Corporation Tax Act 2009.
"CountryHoldCo" means each entity described as such in paragraph 2 of Schedule 3 (Eligibility Criteria) in connection with the relevant Eligible Project.
"Debt Purchase Transaction" means, in relation to a person, a transaction where such person:
| (a) | purchases<br> by way of assignment or transfer; |
|---|---|
| (b) | enters<br> into any sub–participation in respect of; or |
| --- | --- |
| (c) | enters<br> into any other agreement or arrangement having an economic effect substantially similar to<br> a sub–participation in respect of, |
| --- | --- |
any Commitment or amount outstanding under this Agreement.
"DebtService Account" has the meaning given to it in Clause 17.1 (Designation of Accounts).
"DebtSizing Case" means the debt sizing case incorporated in the Financial Model based on the debt sizing assumptions which will be used to determine for the purposes of this Agreement and the Mezzanine Facility Agreement the Allocated Senior Facility Amount, the Allocated Mezzanine Facility Amount and the Allocated Loan Amount in respect to a particular Eligible Project. "Declining Lender" has the meaning given to that term in paragraph (k) of Clause 2.3 (Increase – Accordion Option).
"Deed of Guarantee Confirmation" means written confirmation by the Original Guarantor and each Additional Guarantor confirming for the benefit of the Finance Parties that all guarantee obligations owed by it under the Finance Documents remain in full force and effect and extend to any new obligations assumed by any Obligor under the Finance Documents (including, but not limited to, any Guarantor Accession Letter).
"Default" means an Event of Default or any event or circumstance specified in Clause 25 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
| - 11 - |
| --- |
"Defaulting Lender" means any Lender:
| (a) | which<br> has failed to make its participation in a Loan available (or has notified the Mezzanine Agent<br> or the Borrower (which has notified the Mezzanine Agent) that it will not make its participation<br> in a Loan available) by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders' participation); |
|---|---|
| (b) | which<br> has otherwise rescinded or repudiated a Finance Document; or |
| --- | --- |
| (c) | with<br> respect to which an Insolvency Event has occurred and is continuing,; or |
| --- | --- |
| (d) | an Affiliate of which is a Defaulting Lender, |
| --- | --- |
| unless, in the case of paragraph (a) above: | |
| (i) | its<br> failure to pay is caused by: |
| --- | --- |
| (A) | administrative<br> or technical error; or |
| --- | --- |
| (B) | a<br> Disruption Event; and |
| --- | --- |
| (C) | payment<br> is made within three (3) Business Days of its due date; or |
| --- | --- |
| (ii) | the<br> Lender is disputing in good faith whether it is contractually obliged to make the payment<br> in question. |
| --- | --- |
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Agent.
"DisbursementAccount" has the meaning given to it in Clause 17.1 (Designation of Accounts).
"Discounted Aggregate AvailableCashflow" means, in relation to any Calculation Date and with respect to all Warehouse Projects, the Available Cashflow projected in the then current Base Case:
| (a) | for<br> the Calculation Period ending on such Calculation Date; and |
|---|---|
| (b) | for<br> each subsequent Calculation Period discounted back to such Calculation Date on the basis<br> that: |
| --- | --- |
| (i) | the<br> discount rate to be applied shall be the weighted average (calculated by the Mezzanine Agent<br> by reference to the amount outstanding under the Facility) of the rates assumed in the then<br> current Financial Model to be the rates at which interest will accrue under the Facility<br> from such Calculation Date until the final date of the 25-year amortising profile of the<br> Loans as determined under the Mezzanine Debt Sizing Assumptions, in each case, taking into<br> account any interest rate hedging applicable under the Senior Hedging Agreements; and |
| --- | --- |
| - 12 - |
| --- | | (ii) | the<br> discounting shall be made on a monthly basis and on the assumption that cashflow for a monthly<br> period occurs at the end of that period. | | --- | --- |
"Disposal Equity Amount" means the amount of the Disposal Proceeds generated by a disposal minus the aggregate of:
| (a) | the<br> amount of the Senior Prepayment Disposal Proceeds; and |
|---|---|
| (b) | the<br> amount of the Prepayment Disposal Proceeds. |
| --- | --- |
"Disposal Proceeds" means the net disposal proceeds derived from a Permitted Disposal (other than the proceeds incurred from an Excluded Permitted Disposal).
"DisposalProceeds Account" has the meaning given to it in Clause 17.1 (Designation of Accounts).
"Disruption Event" means either or both of:
| (a) | a<br> material disruption to those payment or communications systems or to those financial markets<br> which are, in each case, required to operate in order for payments to be made in connection<br> with the Facility (or otherwise in order for the transactions contemplated by the Finance<br> Documents to be carried out) which disruption is not caused by, and is beyond the control<br> of, any of the Parties; or |
|---|---|
| (b) | the<br> occurrence of any other event which results in a disruption (of a technical or systems-related<br> nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
| --- | --- |
| (i) | from<br> performing its payment obligations under the Finance Documents; or |
| --- | --- |
| (ii) | from<br> communicating with other Parties in accordance with the terms of the Finance Documents, |
| --- | --- |
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
"Distribution" means, with respect to an Obligor and any other member of the Group:
| (a) | any<br> dividend, charge, fee, cash distribution or other distribution (or interest on any unpaid<br> dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect<br> of the shares of that member of the Group (or any part or class thereof); |
|---|---|
| (b) | any<br> redemption, reduction, repurchase, defeasance, retirement or repayment of share capital,<br> share premium or other capital reserves; |
| --- | --- |
| - 13 - |
| --- | | (c) | repayment<br> of principal, payment of interest or payment of other amounts in respect of: | | --- | --- | | (i) | in<br> case of the Borrower, Shareholder Loans, except for the Permitted Distribution; and | | --- | --- | | (ii) | in<br> case of any ProjectCos, Intragroup Loans, except for the Permitted Intragroup Repayments;<br> and | | --- | --- | | (d) | any<br> other payment of management, advisory or other fee or distribution of any kind by: | | --- | --- | | (i) | any<br> of the Obligors to any other member of the Group or to any of the Shareholders and any of<br> their Affiliates; and | | --- | --- | | (ii) | any<br> of the ProjectCos, to any of the Shareholders and any of their Affiliates. | | --- | --- |
"DistributionAccount" has the meaning given to it in Clause 17.1 (Designation of Accounts).
"E&S Authorisation" means any Authorisation and the filing of any notification, report or assessment required under any E&S Law to carry out any of the Warehouse Project(s).
"E&S Claim" means any claim, proceeding or investigation by any person in respect of any E&S Law.
"E&S Laws" means any applicable laws relating to E&S Matters.
"E&S Matters" means matters relating to the Environment (including the pollution or protection of any part thereof) or Social Fabric, including those environmental and social aspects identified by the Technical Adviser as relevant to any of the Warehouse Project(s).
"E&S Standards" means, as applicable to the Borrower and the Project, the Equator Principles and all E&S Laws.
"EligibilityCriteria" has the meaning given to it in Schedule 3 (Eligibility Criteria).
"Eligible Institution" means any Lender or other bank, financial institution, trust, fund or other entity selected by the Borrower and which, in each case, is not a member of the Group.
"Eligible Jurisdiction" means each of Ireland, Italy, Poland, Portugal, Spain, the Netherlands and the United Kingdom.
"Eligible Letters of Credit" means each letter of credit issued by the seller under an Acquisition Agreement in connection with securing the refunding of any advance payment made available to the seller under that Acquisition Agreement approved by the Mezzanine Agent.
| - 14 - |
| --- |
"Eligible Pre-RtB Costs" for the purpose of an Eligible Project, means:
| (a) | refundable<br> grid deposits, by way of letter of credit or cash deposits, required to be paid under relevant<br> Project Documents and / or Acquisition Agreements; and |
|---|---|
| (b) | advance payments backed by Eligible Letters of Credit, |
| --- | --- |
in each case:
| (i) | approved<br> by the Mezzanine Agent (acting on the instructions of the Majority Lenders, in consultation<br> with the Lenders' Technical Adviser and based on the Due Diligence Reports) in the Financial<br> Model as an "Eligible Pre-RtB Cost"; and |
|---|---|
| (ii) | |
| --- |
provided that:
| (A) | the<br> aggregate amount of Eligible Pre-RtB Costs may not exceed ten (10) per cent of the aggregate<br> of the Total Commitments and the Senior Total Commitments; and |
|---|---|
| (B) | in<br> case of Eligible Pre-RtB Costs with respect to refundable grid deposits, the terms of the<br> refundable grid deposits must have been approved by the Mezzanine Agent. |
| --- | --- |
"Eligible Pre-RtB Costs Rebalance" means, in connection with a Warehouse Project that has achieved RtB Status, the amount required under the Senior Facility Agreement to refinance all Eligible Pre-RtB Costs financed to the Borrower under this Agreement such that, following all relevant amounts disbursed under the Senior Facility Agreement, the Eligible Pre-RtB Costs financed hereunder shall amount to the pro rata financing of such total costs across under both the Senior Facility Agreement and this Agreement.
"Eligible Pre-RtB Project" means a solar PV project that is in an Eligible Jurisdiction and at Pre-RtB Stage and that is yet to become an Eligible Project in accordance with this Agreement and the Senior Facility Agreement and is approved by all Lenders (each acting in its sole discretion) as an "Eligible Pre-RtB Project".
"Eligible Project" means a solar PV project which:
| (a) | satisfies<br> the Eligibility Criteria; and |
|---|---|
| (b) | whether<br> or not the Eligibility Criteria having been satisfied, the Majority Lenders have agreed to<br> finance under this Agreement. |
| --- | --- |
"Eligible Project Costs" means, in connection with an Eligible Project:
| - 15 - |
| --- | | (a) | means<br> development, planning, incorporation and start-up costs incurred prior to RtB Status; and | | --- | --- | | (b) | means<br> all costs, expenses and fees properly incurred by the ProjectCo in connection with the construction<br> and commissioning of the Eligible Project in accordance with the EPC Contract, and | | --- | --- |
in each case, approved by the Senior Agent (acting on the instructions of the Majority Lenders (as defined under the Senior Facility Agreement), in consultation with the Senior Lenders' Technical Adviser and based on the Due Diligence Reports) in the Financial Model as an "Eligible Project Cost".
"Eligible Status" means each of:
| (a) | a<br> solar PV project that is an Eligible Pre-RtB Project; |
|---|---|
| (b) | the<br> RtB Status; or |
| --- | --- |
| (c) | Commercial<br> Operation Date has been achieved. |
| --- | --- |
"Enhancement PPAs" means a power purchase agreement for such period and for such amount as the relevant ProjectCo considers to be advantageous to be entered into from time to time or such other arrangement from time to time entered into by the relevant ProjectCo to hedge power price risks, in each case (a) where such arrangement or agreement does not undermine, impact or result in termination of any relevant feed-in tariff, subsidized arrangement or existing power purchase arrangements that formed part of the Eligibility Criteria for the relevant Warehouse Project and (b) the Debt Sizing Case for the relevant Warehouse Project would not be prejudiced, nor deteriorate in any way, if such agreement and/or arrangement were entered into.
"Environment" means the environment including the air (including, the air within buildings and the air within other natural or man-made structures above or below ground), water (including, territorial, coastal and inland waters, ground and surface water and water in drains and sewers), land (including, surface and sub-surface soil), animals, plants, natural habitats and human health.
"EPCContract" means each EPC contract delivered by the Original Obligors for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"EPC Contractor" means:
| (a) | Unisun<br> Energy BV with registered address Westblaak 35, 3012 KD Rotterdam, The Netherlands; or |
|---|---|
| (b) | any<br> other person proposed to act as EPC contractor in connection with an Eligible Project as<br> identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and<br> approved as such by the Mezzanine Agent. |
| --- | --- |
| - 16 - |
| --- |
"Equator Principles" means the set of principles set out in the paper entitled "A financial industry benchmark for determining, assessing and managing environmental and social risk in projects" dated June 2013 and adopted by certain financial institutions.
"EU Blocking Regulation" means Regulation (EU) No 2271/96 of the European Parliament and of the Council of 22 November 1996 as amended by Commission Delegated Regulation (EU) 2018/1100 of 6 June 2018 (including as it forms part of domestic law for the purposes of the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal Agreement) Act 2020) as amended, varied, superseded or substituted from time to time), protecting against the effects of the extraterritorial application of legislation adopted by a third country, and actions based on or resulting therefrom.
"EU Insolvency Regulation" means Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast).
"EURIBOR" means, in relation to any Loan in euro:
| (a) | the<br> applicable Screen Rate as of the Specified Time for euro and for a period equal in length<br> to the Interest Period of that Loan; or |
|---|---|
| (b) | as<br> otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate), |
| --- | --- |
and if, in either case, that rate is less than zero, EURIBOR shall be deemed to be zero.
"Eventof Default" means any event or circumstance specified as such in Clause 25 (Events of Default).
"Excluded Permitted Disposal" means any solar PV project owned by a Subsidiary of the Borrower but not a project that is financed by any Finance Document or Senior Facility Agreement and not a Warehouse Project for the purposes of the Finance Documents.
"Facility" means the revolving loan facility made available under this Agreement as described in Clause 2.1 (The Facility).
"Facility Office" means the office or offices notified by a Lender to the Mezzanine Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement
"FATCA" means:
| (a) | sections<br> 1471 to 1474 of the Code or any associated regulations; |
|---|---|
| (b) | any<br> treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental<br> agreement between the US and any other jurisdiction, which (in either case) facilitates the<br> implementation of any law or regulation referred to in paragraph (a) above; or |
| --- | --- |
| - 17 - |
| --- | | (c) | any<br> agreement pursuant to the implementation of any treaty, law or regulation referred to in<br> paragraphs (a) or (b) above with the US Internal Revenue Service, the US government<br> or any governmental or taxation authority in any other jurisdiction. | | --- | --- |
"FATCA Application Date" means:
| (a) | in<br> relation to a "withholdable payment" described in section 1473(1)(A)(i) of<br> the Code (which relates to payments of interest and certain other payments from sources within<br> the US), 1 July 2014; or |
|---|---|
| (b) | in<br> relation to a "passthru payment" described in section 1471(d)(7) of the Code<br> not falling within paragraph (a) above, the first date from which such payment may become<br> subject to a deduction or withholding required by FATCA. |
| --- | --- |
"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.
"Fee Letter" means
| (a) | any<br> letter or letters dated on or about the Signing Date between the Arranger and the Borrower<br> (or the Mezzanine Agent and the Borrower or the Security Agent and the Borrower) setting<br> out any of the fees referred to in Clause 11 (Fees); and |
|---|---|
| (b) | any<br> other letter or letters dated on or about the Signing Date and entered into in connection<br> with this Agreement. |
| --- | --- |
"Finance Document" means this Agreement, the Intercreditor and Subordination Deed, each Security Document, the Bad Boy Guarantee, any Fee Letter, any Guarantor Accession Letter, any Resignation Letter and any other document designated as such by the Mezzanine Agent and the Borrower.
"Finance Party" means the Mezzanine Agent, the Arranger, the Security Agent or a Lender.
"FinancialClose" means the date on which the Mezzanine Agent delivers the notification set out in Clause 4.1 (Initial conditionsprecedent).
"Financial Close (ProjectCo)" means, with respect to a ProjectCo, the date on which the Mezzanine Agent delivers the Original Project Close Confirmation under Clause 4.3 (Conditions precedent for Eligible Project to become WarehouseProject) in relation to the Warehouse Project to which such ProjectCo owns.
"Financial Indebtedness" means any indebtedness for or in respect of:
| (a) | moneys<br> borrowed; |
|---|
| - 18 - |
| --- | | (b) | any<br> amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; | | --- | --- | | (c) | any<br> amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures,<br> loan stock or any similar instrument; | | --- | --- | | (d) | the<br> amount of any liability in respect of any lease or hire purchase contract which would, in<br> accordance with IFRS, be treated as a balance sheet liability (other than any liability in<br> respect of a lease or hire purchase contract which would, in accordance with IFRS in force<br> prior to 1 January 2019 have been treated as an operating lease); | | --- | --- | | (e) | receivables<br> sold or discounted (other than any receivables to the extent they are sold on a non-recourse<br> basis); | | --- | --- | | (f) | any<br> amount raised under any other transaction (including any forward sale or purchase agreement)<br> of a type not referred to in any other paragraph of this definition having the commercial<br> effect of a borrowing; | | --- | --- | | (g) | any<br> derivative transaction entered into in connection with protection against or benefit from<br> fluctuation in any rate or price (and, when calculating the value of any derivative transaction,<br> only the marked to market value (or, if any actual amount is due as a result of the termination<br> or close-out of that derivative transaction, that amount) shall be taken into account); | | --- | --- | | (h) | any<br> counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary<br> letter of credit or any other instrument issued by a bank or financial institution; | | --- | --- | | (i) | any<br> amount raised by the issue of redeemable shares; | | --- | --- | | (j) | any<br> amount of any liability under an advance or deferred purchase agreement if one of the primary<br> reasons behind the entry into this agreement is to raise finance; and | | --- | --- | | (k) | (without<br> double counting) the amount of any liability in respect of any guarantee or indemnity for<br> any of the items referred to in paragraphs (a) to (j) above. | | --- | --- |
"Financial Model" means the Original Financial Model and the Updated Financial Model.
"Force Majeure" means, in respect of a Project Document, any event or circumstance (or series of events of circumstances) beyond the reasonable control of a party to the Project Document having the effect of suspending, excusing or limiting the performance of the obligations of a party to the Project Document, including any event or circumstance described as a force majeure in that Project Document.
"FundingRate" means any individual rate notified by a Lender to the Mezzanine Agent pursuant to paragraph (a)(ii) of Clause 10.4 (Cost of funds).
"Funding Shortfall" means, with respect to a Warehouse Project, at any time up to (and including) the Commercial Operation Date, the then remaining aggregate amount of (i) Project Costs, (ii) purchase price in respect of the relevant Acquisition and (iii) Acquisition Costs required to be payable by the relevant ProjectCo until and including the Commercial Operation Date exceed the aggregate sum of:
| - 19 - |
| --- | | (a) | the<br> Allocated Loan Amount minus the amount of the Loans and Rollover Loans that have been drawn<br> for that Warehouse Project; and | | --- | --- | | (b) | any<br> other amounts (including the Base Equity Contributions) that the Mezzanine Agent is satisfied<br> have been unconditionally committed to an Obligor to pay Project Costs payable by the relevant<br> ProjectCo with respect the relevant Warehouse Project on or, as applicable, prior to the<br> respective Commercial Operation Date, | | --- | --- |
in each case, at the relevant time. For the avoidance of doubt, Contingent Equity shall not form a part of the calculation expressed in paragraph (b) of the definition of "Funding Shortfall" unless such Contingent Equity is committed in accordance with this Agreement and the Senior Facility Agreement.
"FundsFlow Statement" means, in connection with the acquisition of any Eligible Project, the proposed funds flow statement set out in paragraph 7(c) of Part C (Conditions Precedent for Project Close (ProjectCo)) of Schedule 2 (ConditionsPrecedent and Subsequent) and approved by the Senior Agent in connection with Financial Close (ProjectCo).
"German Blocking Regulation" means section 7 foreign trade rules (AWV) (Außenwirtschaftsverordnung) (in connection with section 4 paragraph 1 a no. 3 foreign trade law (AWG) (Außenwirtschaftsgesetz))
"Good Industry Practice" means the exercise of that degree of skill, diligence, prudence, foresight and operating practice which would reasonably and ordinarily be expected from a reasonable and prudent operator of the same type of undertaking as any Project.
"GoOs" means the guarantees of origin issued by the competent authority in any Relevant Jurisdiction in accordance with the Circular 1/2018 together with any other legislation implementing Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources.
"GridConnection Agreement" means each grid connection agreement delivered by the Borrower for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"GridOperator" means each person proposed to act as a grid operator in connection with an Eligible Project as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent.
"Group" means the Borrower and each of its Subsidiaries for the time being.
"Group Structure Chart" means:
| - 20 - |
| --- | | (a) | the<br> Original Group Structure Chart; and | | --- | --- | | (b) | the<br> Original Group Structure Chart as updated by the Sponsor from time to time for the purposes<br> of Clause 4.4 (Conditions precedent for each Utilisation to pay other Eligible Project Costs). | | --- | --- |
"Guarantor" means:
| (c) | the<br> Original Guarantor; and |
|---|---|
| (d) | each<br> Additional Guarantor, |
| --- | --- |
unless, in any case, it has ceased to be a Guarantor in accordance with Clause 28 (Changes to the Obligors).
"Guarantor Accession Date" means the date on which each Additional Guarantor accedes to this Agreement and/or the Intercreditor and Subordination Deed
"Guarantor Accession Letter" means a document substantially in the form set out in (Form of Guarantor Accession Letter).
"Holding Company" means, in relation to a person, any other person in respect of which it is a Subsidiary.
"IFRS" means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
"Impaired Mezzanine Agent" means the Mezzanine Agent at any time when:
| (a) | it<br> has failed to make (or has notified a Party that it will not make) a payment required to<br> be made by it under the Finance Documents by the due date for payment; |
|---|---|
| (b) | the<br> Mezzanine Agent otherwise rescinds or repudiates a Finance Document; |
| --- | --- |
| (c) | (if<br> the Mezzanine Agent is also a Lender) it is a Defaulting Lender under paragraph (a)or (b) of<br> the definition of "Defaulting Lender"; or |
| --- | --- |
| (d) | an<br> Insolvency Event has occurred and is continuing with respect to the Mezzanine Agent; |
| --- | --- |
| (e) | unless,<br> in the case of paragraph (a) above: |
| --- | --- |
| (i) | its<br> failure to pay is caused by: |
| --- | --- |
| (A) | administrative<br> or technical error; or |
| --- | --- |
| (B) | a<br> Disruption Event; and |
| --- | --- |
| (C) | payment<br> is made within three (3)Business Days of its due date; or |
| --- | --- |
| - 21 - |
| --- | | (ii) | the<br> Mezzanine Agent is disputing in good faith whether it is contractually obliged to make the<br> payment in question. | | --- | --- |
"IncreaseConfirmation" means a confirmation substantially in the form set out in Schedule 14 (Form of Increase Confirmation).
"IncreaseLender" has the meaning given to that term in Clause 2.2 (Increase).
"Insolvency Event" in relation to an entity means that the entity:
| (a) | is<br> dissolved (other than pursuant to a consolidation, amalgamation or merger); |
|---|---|
| (b) | becomes<br> insolvent or is unable to pay its debts or fails or admits in writing its inability generally<br> to pay its debts as they become due; |
| --- | --- |
| (c) | makes<br> a general assignment, arrangement or composition with or for the benefit of its creditors; |
| --- | --- |
| (d) | institutes<br> or has instituted against it, by a regulator, supervisor or any similar official with primary<br> insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its<br> incorporation or organisation or the jurisdiction of its head or home office, a proceeding<br> seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or<br> insolvency law or other similar law affecting creditors' rights, or a petition is presented<br> for its winding- up, examinership or liquidation by it or such regulator, supervisor or similar<br> official; |
| --- | --- |
| (e) | has<br> instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any<br> other relief under any bankruptcy or insolvency law or other similar law affecting creditors'<br> rights, or a petition is presented for its winding- up, examinership or liquidation, and,<br> in the case of any such proceeding or petition instituted or presented against it, such proceeding<br> or petition is instituted or presented by a person or entity not described in paragraph (d) above<br> and: |
| --- | --- |
| (i) | results<br> in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making<br> of an order for its winding-up, examinership or liquidation; or |
| --- | --- |
| (ii) | is<br> not dismissed, discharged, stayed or restrained in each case within 30 days of the institution<br> or presentation thereof; |
| --- | --- |
| (f) | has<br> a resolution passed for its winding-up, official management, examinership or liquidation<br> (other than pursuant to a consolidation, amalgamation or merger); |
| --- | --- |
| (g) | seeks<br> or becomes subject to the appointment of an administrator, provisional liquidator, examiner,<br> conservator, receiver, trustee, custodian or other similar official for it or for all or<br> substantially all its assets (other than for so long as it is required by law or regulation<br> not to be publicly disclosed, any such appointment which is to be made, or is made, by a<br> person or entity described in paragraph (d) above); |
| --- | --- |
| - 22 - |
| --- | | (h) | has<br> a secured party take possession of all or substantially all its assets or has a distress,<br> execution, attachment, sequestration or other legal process levied, enforced or sued on or<br> against all or substantially all its assets and such secured party maintains possession,<br> or any such process is not dismissed, discharged, stayed or restrained, in each case within<br> thirty (30) days thereafter; | | --- | --- | | (i) | causes<br> or is subject to any event with respect to it which, under the applicable laws of any jurisdiction,<br> has an analogous effect to any of the events specified in paragraphs (a) to (h) above; | | --- | --- | | (j) | takes<br> any action in furtherance of, or indicating its consent to, approval of, or acquiescence<br> in, any of the foregoing acts; or | | --- | --- | | (k) | any<br> other similar process or proceeding in any Relevant Jurisdiction. | | --- | --- |
"Insurances" means each of the contracts of insurance or reinsurance taken out or maintained (or required to be taken out or maintained) in accordance with Schedule 15 (Insurance).
"Intellectual Property" means any patents, trademarks, service marks, designs, business and trade names, copyrights, database rights, design rights, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered, and the benefit of all applications and rights to use such assets in which each Obligor may from time to time have an interest.
"Intercreditor and SubordinationDeed" means the intercreditor and subordination agreement dated on or about the Signing Date between, amongst others, the Senior Agent, the Mezzanine Agent, the Lenders, the Senior Lenders and the Obligors.
"InterestPeriod" means, in relation to a Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.4 (Default interest).
"Interpolated Screen Rate" means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
| (a) | the<br> applicable Screen Rate for the longest period (for which that Screen Rate is available) which<br> is less than the Interest Period of that Loan; and |
|---|---|
| (b) | the<br> applicable Screen Rate for the shortest period (for which that Screen Rate is available)<br> which exceeds the Interest Period of that Loan, |
| --- | --- |
each as of the Specified Time for euro.
"Intragroup Loan" means the outstanding principal amount of each loan that the Borrower or any other member of the "group" (howsoever defined under the Senior Facility Agreement) makes to another member of the "group" (howsoever defined under the Senior Facility Agreement) under an Intragroup Loan Agreement.
| - 23 - |
| --- |
"Intragroup Loan Agreement" means each Shareholder Loan Agreement entered into between the Senior Borrower and as lender with any other member of the "group" (howsoever defined under the Senior Facility Agreement) as borrower.
"Ireland" means Ireland excluding, for the avoidance of doubt, Northern Ireland.
"Irish Companies Act 2014" means the Companies Act 2014 of Ireland, as amended from time to time.
"Key Project Milestones" means with respect to a Warehouse Project:
| (a) | the<br> Warehouse Project Construction Longstop Date; |
|---|---|
| (b) | the<br> Warehouse Project COD Longstop Date; and |
| --- | --- |
| (c) | the<br> Warehouse Guaranteed Revenue Commencement Date. |
| --- | --- |
"LegalReservation" means:
| (a) | the<br> principle that equitable remedies may be granted or refused at the discretion of a court<br> and the limitation of enforcement by laws relating to insolvency, examinership, reorganisation<br> and other laws generally affecting the rights of creditors; |
|---|---|
| (b) | the<br> time barring of claims under the Limitation Acts, the possibility that an undertaking to<br> assume liability for or indemnify a person against non-payment of UK stamp duty may be void<br> and defences of set-off or counterclaim; |
| --- | --- |
| (c) | the<br> limitation of the enforcement of the terms of leases of real property by laws of general<br> application to those leases; |
| --- | --- |
| (d) | similar<br> principles, defences of set-off or counterclaim, rights and remedies under the laws of any<br> Relevant Jurisdiction; and |
| --- | --- |
| (e) | any<br> other matters which are set out as qualifications or reservations as to matters of law of<br> general application in any legal opinions supplied to the Mezzanine Agent as a condition<br> precedent under this Agreement on or before the first Utilisation Date or (in case of a ProjectCo<br> in a jurisdiction other than England), on or before the first Utilisation Date relating to<br> an Obligor in such jurisdiction. |
| --- | --- |
"Lender" means:
| (a) | any<br> Original Lender; and |
|---|---|
| (b) | any<br> bank, financial institution, trust, fund or other entity which has become a Party as a "Lender"<br> in accordance with Clause 2.2 (Increase), Clause 2.3 (Increase – Accordion Option) or Clause 26 (Changes to the Lenders), |
| --- | --- |
which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.
| - 24 - |
| --- |
"Lenders' Insurance Adviser" means Marsh, S.A. Paseo de la Castellana, 216 28046 Madrid or such other reputable insurance adviser as the Mezzanine Agent may appoint.
"Lenders' Legal Advisers" means:
| (a) | in<br> respect of English law, Clifford Chance Partnerschaft mbB; |
|---|---|
| (b) | in<br> respect of Irish law, Arthur Cox LLP; and |
| --- | --- |
| (c) | in<br> respect of any other Eligible Jurisdiction, such reputable legal counsel as appointed by<br> the Mezzanine Agent. |
| --- | --- |
"Lenders' Tax and AccountingAdviser" means KPMG or such other reputable tax and accounting adviser as the Mezzanine Agent may appoint.
"Lenders' Technical Adviser" means Evergy Engineering GmbH, Malsenstrasse 84, 80638 Munich, Germany or such other reputable technical adviser as the Mezzanine Agent may appoint.
"Limitation Acts" means the Limitation Act 1980, the Foreign Limitation Periods Act 1984 and the Irish Statute of Limitations 1957.
"LLCR" (Loan LifeCover Ratio) means, in relation to any Calculation Date and with respect to all Warehouse Projects:
| (a) | the<br> aggregate of the Discounted Aggregate Available Cashflow projected to be received by such<br> Warehouse Projects from the respective Calculation Date until, with respect to all such Warehouse<br> Projects, twenty-five (25) years from the Commercial Operation Date of each such Warehouse<br> Project; |
|---|
to
| (b) | the<br> aggregate of the Allocated Loan Amount of all such Warehouse Projects on such Calculation<br> Date (minus any amount credited, on such Calculation Date, to the "cash trap account"<br> (howsoever such term is defined) under the Senior Facility Agreement), |
|---|
in each case, having taken into account all repayments to be made on such Calculation Date.
"LMA" means the Loan Market Association.
"Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan, which, for the avoidance of doubt, shall include Rollover Interest.
"Loan-to-Cost Ratio" means the ratio of, expressed as a percentage:
| (a) | with<br> respect to a Warehouse Project, at any time, the Allocated Loan Amount for that Warehouse<br> Project to the aggregate total amount of: |
|---|---|
| (i) | Project<br> Costs; |
| --- | --- |
| - 25 - |
| --- | | (ii) | purchase<br> price in respect of that Eligible Project; | | --- | --- | | (iii) | the<br> Acquisition Costs, | | --- | --- |
then spent on that Warehouse Project at such time; and
| (b) | with<br> respect to all Warehouse Projects, at any time, the aggregate of the Allocated Loan Amounts<br> across all Warehouse Projects to the aggregate amount of: |
|---|---|
| (i) | Project<br> Costs; |
| --- | --- |
| (ii) | purchase<br> price in respect of all Eligible Projects; and |
| --- | --- |
| (iii) | Acquisition<br> Costs, |
| --- | --- |
then spent on all such Warehouse Projects at such time.
"Loan-to-Value Ratio" means, at any time, the ratio, expressed as a percentage, of the aggregate amount of the Loans to the aggregate market value of the Warehouse Projects taken as a whole (determined in accordance with the most recent Valuation Report of the Warehouse Projects at that time).
"Loss of Revenue Insurance" means Insurance against loss of income or revenue resulting from delays in start-up or business interruption.
"LTAReport" means the report referenced as such in Schedule 3 (Eligibility Criteria) in connection with a proposed Eligible Project as updated (if required) as a condition precedent to Utilisation pursuant to Clause 4.4 (Conditions precedent foreach Utilisation to pay other Eligible Project Costs).
"Major Event of Default" means, with respect to the Original Obligors, any event or circumstance constituting a Default under any of:
| (a) | Clause<br> 25.1 (Non-payment); |
|---|---|
| (b) | Clause<br> 25.2 (Specific undertakings); |
| --- | --- |
| (c) | Clause<br> 25.3 (Other obligations) insofar as such Default relates to a breach of any of Clause<br> 24.5 (E&S Compliance), Clause 24.7 (Anti-Bribery and Anti- corruption),<br> Clause 24.8 (Sanctions), Clause 24.9 (Use of proceeds), Clause 24.10<br> (Non-AIF status), Clause 24.11 (AML compliance), Clause 24.22 (Sale of electricity), Clause 24.26 (Disposals), Clause 24.33 (Distributions)<br> or the Intercreditor and Subordination Deed; |
| --- | --- |
| (d) | Clause<br> 25.4 (Misrepresentation) insofar as such Default relates to a Major Representation; |
| --- | --- |
| (e) | Clause<br> 25.5 (Cross default); |
| --- | --- |
| (f) | Clause<br> 25.6 (Insolvency); |
| --- | --- |
| - 26 - |
| --- | | (g) | Clause<br> 25.7 (Insolvency proceedings); | | --- | --- | | (h) | Clause<br> 25.8 (Creditors' process); | | --- | --- | | (i) | Clause<br> 25.11 (Unlawfulness) | | --- | --- | | (j) | Clause<br> 25.19 (Sanctions); and | | --- | --- | | (k) | Clause<br> 25.20 (Non-AIF status). | | --- | --- |
"MajorMisrepresentation" means each of the following representations set out in Clauses 21.1 (Status), 21.2 (Bindingobligations), 21.3 (Non-conflict with other obligations), 21.5 (Power and authority), 21.6 (Validity and admissibilityin evidence) 21.8 (Insolvency), Clause 21.24 (Anti-Briberyand anti-corruption), Clause 21.8 (Sanctions), Clause 21.26 (Non-AIF status), Clause 21.27 (AML compliance) and Clause 21.43 (Dealings with SRCs and SDNs).
"Major Project Party" means:
| (a) | each<br> Obligor; |
|---|---|
| (b) | each<br> ProjectCo owning a Warehouse Project, if not an Obligor; |
| --- | --- |
| (c) | each<br> EPC Contractor; |
| --- | --- |
| (d) | the<br> O&M Contractor |
| --- | --- |
| (e) | each<br> Asset Manager; |
| --- | --- |
| (f) | each<br> Grid Operator; and |
| --- | --- |
| (g) | each<br> PPA Offtaker. |
| --- | --- |
"MajorityLenders" means a Lender or Lenders whose Commitments aggregate more than 66^2^/3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66^2^/3 per cent. of the Total Commitments immediately prior to the reduction).
"MandatoryPrepayment Account" has the meaning given to it in Clause 17.1 (Designation of Accounts).
"Margin" means such percentage rate per annum as is determined by the Mezzanine Agent in accordance with, and pursuant to Clause 8.3 (Determinationof Margin).
"Market Study" means each power price study delivered:
| (a) | pursuant<br> to Clause 22.11 (Market Study); and |
|---|---|
| (b) | as<br> a condition precedent to Financial Close (ProjectCo). |
| --- | --- |
"Material Adverse Effect" means any event or circumstance which could or could reasonably be expected to have a material adverse effect on:
| - 27 - |
| --- | | (a) | the<br> business, operations, property or condition (financial or otherwise) of any Obligor and/or<br> any Warehouse Project; | | --- | --- | | (b) | the<br> ability of an Obligor to perform its obligations under the Finance Documents; or | | --- | --- | | (c) | the<br> legality, validity or enforceability of the Finance Documents or the rights or remedies of<br> any Finance Party under the Finance Documents. | | --- | --- |
"Mezzanine Agent's Spot Rateof Exchange" means:
| (a) | the<br> Mezzanine Agent's spot rate of exchange; or |
|---|---|
| (b) | (if<br> the Mezzanine Agent does not have an available spot rate of exchange) any other publicly<br> available spot rate of exchange selected by the Mezzanine Agent (acting reasonably), |
| --- | --- |
for the purchase of euro in the London foreign exchange market at or about 11:00 a.m. on a particular day.
"Mezzanine Blocked Debt ServiceAmount" has the meaning given to it in the Senior Facility Agreement.
"Mezzanine Debt Sizing Assumptions" means the financial, economic, technical and other assumptions contained in the Original Financial Model and Updated Financial Model (as applicable), including (but not limited to):
| (a) | Cap: capped at the lower of: |
|---|---|
| (i) | in<br> respect of an Eligible Project located in Poland, a Loan-to-Cost Ratio of 80%; |
| --- | --- |
| (ii) | in<br> respect of an Eligible Project not located in Poland 85%; and |
| --- | --- |
| (iii) | a<br> Loan-to-Value Ratio of 80% (valuation methodology on the basis of P50 Central Solar Capture<br> plus related PPA(s)); |
| --- | --- |
| (b) | Production:<br> P90 – 10-year average yield estimation (based on Lenders' Technical Adviser's yield<br> assessment, as set out in the relevant LTA Report); |
| --- | --- |
| (c) | Minimum DSCR: (i) 1.20x merchant; and (ii) 1.05x contracted (based on IG PPA and feed-in-tariff<br> auction revenues); |
| --- | --- |
| (d) | Tenor: Up to a 25-year amortising profile starting six (6) months after the Warehouse Project<br> COD Completion Date; |
| --- | --- |
| (e) | DSRA and MRA, if recommended by Lenders' Technical Adviser: only for debt sizing, i.e. timing<br> impact on cash flows; |
| --- | --- |
| (f) | Long-term inflation and all-in interest rate: each at such rate as shall be decided at the time<br> an Eligible Project is brought forward for approval and that is approved by the Majority<br> Lenders; and |
| --- | --- |
| - 28 - |
| --- | | (g) | Power price: Power price based on blend of low curve and average price based on the most recently<br> available Market Study. | | --- | --- |
"Mezzanine Hedging Receipts" has the meaning given to "Mezzanine Hedging Receipts" under the Senior Facility Agreement.
"Mezzanine Only Charged Property" means the Charged Property in so far as it relates to the Mezzanine Only Transaction Security.
"Mezzanine Only Security Documents" means:
| (a) | the<br> MidCo Share Pledge; |
|---|---|
| (b) | the<br> Assignment of Parent Shareholder Loans; |
| --- | --- |
| (c) | the<br> MidCo Account Charge; |
| --- | --- |
| (d) | each<br> Assignment of Acquisition Receivables Agreement; and |
| --- | --- |
| (e) | any<br> other document entered into by any Obligor creating or expressing to create any Mezzanine<br> Only Transaction Security over all or any part of its assets in respect of the obligations<br> of any of the Obligors under any of the Finance Documents. |
| --- | --- |
"Mezzanine Only TransactionSecurity" means the Security created or expressed to be created in favour of Security Agent (on behalf of the Secured Parties) under the Mezzanine Only Security Documents.
"MidCoAccount Charge" has the meaning given to it in Schedule 4 (Mezzanine Only Security Documents).
"MidCoShare Pledge" has the meaning given to it in Schedule 4 (Mezzanine Only Security Documents).
"Model Auditor" means Ernst & Young LLP .
"Money Laundering Laws" means applicable financial record keeping and reporting requirements and money laundering laws in its Original Jurisdiction and any other jurisdiction in which an Obligor conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency.
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
| (a) | (subject<br> to paragraph (c) below) if the numerically corresponding day is not a Business Day,<br> that period shall end on the next Business Day in that calendar month in which that period<br> is to end if there is one, or if there is not, on the immediately preceding Business Day; |
|---|
| - 29 - |
| --- | | (b) | if<br> there is no numerically corresponding day in the calendar month in which that period is to<br> end, that period shall end on the last Business Day in that calendar month; and | | --- | --- | | (c) | if<br> an Interest Period begins on the last Business Day of a calendar month, that Interest Period<br> shall end on the last Business Day in the calendar month in which that Interest Period is<br> to end. | | --- | --- |
The above rules will only apply to the last Month of any period.
"NewLender" has the meaning given to that term in Clause 26 (Changes to the Lenders).
"Non-Euro Cap" means thirty-three per cent. (33%).
"Non-Euro Ratio" means, at any time, the ratio, expressed as a percentage, of:
| (a) | the<br> aggregate of the Eligible Pre-RtB Costs and Eligible Project Costs which has been spent and<br> applied by the Obligors at that time and which is denominated in a currency other than EUR<br> or is incurred in a Warehouse Project which does not use EUR as its only currency or the<br> Warehouse Project does not or will not generate Revenues in EUR; |
|---|
to
| (b) | the<br> aggregate of the Eligible Pre-RtB Costs and Eligible Project Costs which has been spent in<br> any currency and, to the extent denominated in a currency other than EUR, converted into<br> EUR at the Mezzanine Agent's Spot Rate of Exchange at that time. |
|---|
"Non-Merchant Revenue" means, in respect of a Warehouse Project, Revenue generated by that Warehouse Project from either:
| (a) | feed-in<br> tariffs; |
|---|---|
| (b) | other<br> subsidies; and/or |
| --- | --- |
| (c) | a<br> Power Purchase Agreement. |
| --- | --- |
"O&MContract" means each O&M Contract delivered by the Original Obligors for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"O&M Contractor" means:
| (d) | UPER<br> Energy Europe B.V.; or |
|---|---|
| (e) | any<br> other person proposed to act as O&M contractor in connection with an Eligible Project<br> as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria)<br> and approved as such by the Mezzanine Agent. |
| --- | --- |
| - 30 - |
| --- |
"Obligor" means the Borrower and each Guarantor.
"Obligors' Agent" means the Borrower.
"OperatingAccount" has the meaning given to it in Clause 17.1 (Designation of Accounts).
"Operating Budget" means:
| (a) | the<br> Original Operating Budget; and |
|---|---|
| (b) | any<br> update thereafter pursuant to paragraph 22.9(b) of Clause 22.9 (Operating Budget). |
| --- | --- |
"Operating Costs" means, in respect of a Warehouse Project and for any period as from the Commercial Operation Date for that Warehouse Project, the following costs and expenses paid or payable by any Obligor during such period (without double counting):
| (a) | payments<br> under or in relation to the O&M Contract and any PPA (including Enhancement PPAs); |
|---|---|
| (b) | Tax<br> and any Tax Deductions required by law related to that Warehouse Project and the Borrower; |
| --- | --- |
| (c) | insurance<br> premia in respect of the Insurances; |
| --- | --- |
| (d) | costs<br> of maintenance and/or repair of that Warehouse Project or replacement of any part of the<br> same (including major maintenance and/or repair); |
| --- | --- |
| (e) | administrative,<br> accounting and professional costs; |
| --- | --- |
| (f) | fees<br> payable in respect of, including the costs of renewing, any Required Authorisation; |
| --- | --- |
| (g) | other<br> fees, expenses and payments necessary for the continued operation and maintenance of that<br> Warehouse Project and which have been disclosed to Lenders as part of the Base Case for that<br> Warehouse Project; and |
| --- | --- |
| (h) | any<br> other amounts which the Mezzanine Agent agrees shall be "Operating Costs". |
| --- | --- |
"Operating Period" means, in respect of a Warehouse Project:
| (a) | commencing<br> on the Commercial Operation Date for that Warehouse Project up until (and including) the<br> Business Day immediately prior to the next Calculation Date to immediately occur after the<br> Commercial Operation Date; and |
|---|---|
| (b) | thereafter,<br> the period commencing on the Calculation Date referred to in paragraph (a) above and<br> ending on the Business Day immediately prior to the next Calculation Date and, thereafter,<br> so continuing for each quarterly period between each Calculation Date. |
| --- | --- |
| - 31 - |
| --- |
"Original Base Case" means the financial projections produced by the Original Financial Model and the Assumptions used to prepare those financial projections.
"OriginalBusiness Plan" means the business plan delivered by the Original Obligors in connection with Clause 4.1 (Initial conditionsprecedent), in form and substance satisfactory to the Mezzanine Agent.
"Original Construction Budget" means, in respect of any Warehouse Project, the month-by-month construction timeline and budget, up until the Warehouse Project COD Longstop Date, as set out in the Original Project Close Confirmation that the Mezzanine Agent has issued in respect of that Warehouse Project.
"OriginalFinancial Model" means the financial model delivered by the Original Obligors in connection with Clause 4.1 (Initialconditions precedent), in form and substance satisfactory to the Mezzanine Agent, including the Mezzanine Debt Sizing Assumptions.
"Original Financial Statements" means:
| (a) | in<br> relation to the Borrower, the audited consolidated financial statements of the Group for<br> the financial year ended 31 December 2021; |
|---|---|
| (b) | in<br> relation to the Original Guarantor, its audited financial statements for its financial year<br> ended 31 December 2021; |
| --- | --- |
| (c) | in<br> relation to an Additional Guarantor, the most recent audited financial statements available<br> at the respective Guarantor Accession Date and delivered to the Mezzanine Agent as a condition<br> precedent for the Accession of such Additional Guarantor; and |
| --- | --- |
| (d) | in<br> relation to a ProjectCo which is not an Additional Guarantor, the most recent audited financial<br> statements available at the respective Acquisition Date and delivered to the Mezzanine Agent<br> as a condition precedent for the Utilisation relation to such Acquisition. |
| --- | --- |
"Original Group Structure Chart" means the group structure chart showing:
| (a) | all<br> members of the Group, including current name and company registration number, its Original<br> Jurisdiction (in the case of an Obligor), its jurisdiction of incorporation (in the case<br> of a member of the Group which is not an Obligor) and/or its jurisdiction of establishment<br> and a list of shareholders; |
|---|---|
| (b) | any<br> person in which any member of the Group holds shares in its issued share capital or equivalent<br> ownership interest of such person. |
| --- | --- |
"Original Jurisdiction" means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the Signing Date or, in the case of an Additional Guarantor, as at the date on which that Additional Guarantor accedes to this Agreement.
"Original Operating Budget" means, in respect of a Warehouse Project, the budget the Borrower is required to deliver to the Mezzanine Agent (in form and substance satisfactory to the Mezzanine Agent) pursuant to paragraph (a) of Clause 22.9 (Operating Budget).
| - 32 - |
| --- |
"OriginalProject Close Confirmation" means, in respect of a Warehouse Project, the confirmation issued by the Mezzanine Agent pursuant to Clause 4.4 (Conditions precedent for each Utilisation to pay other Eligible Project Costs) setting out:
| (a) | in<br> consultation with the Lenders' Technical Adviser : |
|---|---|
| (i) | the<br> then agreed total Project Costs required to reach the Commercial Operation Date; |
| --- | --- |
| (ii) | the<br> Key Project Milestones; and |
| --- | --- |
| (iii) | the<br> Original Construction Budget required to achieve the Commercial Operation Date; |
| --- | --- |
| (b) | the<br> applicable Allocated Loan Amount for that Warehouse Project, including the applicable Allocated<br> Mezzanine Facility Amount; |
| --- | --- |
| (c) | the<br> required Base Equity (excluding the Allocated Mezzanine Facility Amount and any additional<br> equity required in connection with any cost exceeding the agreed total Project Costs referenced<br> in paragraph (a) above); |
| --- | --- |
| (d) | the<br> projected Available Cashflow with respect to that Warehouse Project; and |
| --- | --- |
| (e) | the<br> additional security requirements of the Lenders (if any) in agreeing to that Warehouse Project. |
| --- | --- |
"OriginalValuation Report" means, with respect to any Warehouse Project, the value of that Warehouse Project as set out in the valuation report Mezzanine Agent referenced in Part C (Conditions Precedent for Project Close (ProjectCo)) of Schedule 2 (ConditionsPrecedent and Subsequent).
"Parallel Obligations" has the meaning given to that term in clause 19.2 (Parallel debt) of the Intercreditor and Subordination Deed.
"Parallel Senior UtilisationRequest" means the "utilisation request" (howsoever described) delivered under the Senior Facility Agreement that relates to the equivalent Utilisation Request delivered for the purposes of a Utilisation under this Agreement.
"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
"Party" means a party to this Agreement.
"Performance Liquidated Damages" means any damages and/or penalty (including delay and/or defect) payments required to be paid by any Major Project Party (other than an Obligor) to an Obligor under any Project Document or otherwise.
| - 33 - |
| --- |
"Permitted Disposal" means the disposal of a Warehouse Project or the shares in a ProjectCo, Project HoldCo and/or in a Country Holdco in accordance with paragraph (c) of Clause 24.26 (Disposals).
"Permitted Intragroup Repayments" means repayments of the Intragroup Loans. For the avoidance of doubt, a payment from the Senior Borrower to the Borrower and/or any (whether direct or indirect) Holding Company of the Borrower is not a Permitted Intragroup Repayment for the purposes of this Agreement and any other Finance Document.
"Portfolio Effect" means, with respect to an event or circumstance, or a series of events or circumstances (including without limitation an effect or circumstance of whatever nature affecting one or more Finance Documents), that it affects either:
| (a) | Warehouse<br> Projects; or, as the case may be, |
|---|---|
| (b) | ProjectCos<br> owning Warehouse Projects, |
| --- | --- |
in each case having an aggregate value of five per cent. (5%) or more of the Total Commitments.
"Power of Attorney" means an irrevocable power of attorney issued by a ProjectCo or Project HoldCo authorising the Common Security Agent to take full asset level security when a Default has occurred and is continuing.
"PowerPurchase Agreement" or "PPA" means each power purchase agreement delivered by the Original Obligors for the purposes of paragraph 1(e) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent in determining whether a solar PV project, or portfolio of solar PV projects, is an Eligible Project for the purposes of the Finance Documents.
"PPAOfftaker" means each person proposed to act as a PPA offtaker in connection with an Eligible Project as identified pursuant to paragraph 1(f) of Schedule 3 (Eligibility Criteria) and approved as such by the Mezzanine Agent.
"Pre-RtB Stage" means a solar PV project or portfolio of projects (as applicable) that has not yet achieved the RtB Status.
"Prepayment Disposal Proceeds" means, with respect to a disposal of a Warehouse Project or, as the case may be, a ProjectCo, Project HoldCo or a Country HoldCo:
| (a) | if<br> no Default is continuing at the time of the disposal, an amount determined pursuant to paragraph<br> (c)(iv) of Clause 24.26 (Disposals); and |
|---|---|
| (b) | if<br> a Default is continuing at the time of the disposal, the aggregate amount of the net disposal<br> proceeds generated by the relevant disposal. |
| --- | --- |
"Prepayment Insurance Proceeds" means the amount of all Insurance Proceeds other than Insurance Proceeds constituting Revenue Replacing Compensation:
| - 34 - |
| --- | | (a) | which<br> fall below the threshold, or in relation to which the Borrower has not given notice in accordance<br> with paragraph (b) of Clause 7.5 (Mandatory prepayment – Insurance Proceeds and Compensation Proceeds); | | --- | --- | | (b) | in<br> relation to which the Borrower has failed to deliver a Reinstatement Plan within the timeline<br> set forth, or the Reinstatement Plan which has been delivered has not been in form and substance<br> satisfactory to the Mezzanine Agent; | | --- | --- | | (c) | which<br> have not been spent in reinstatement in accordance with a Reinstatement Plan within twelve<br> (12) months after the respective insured event; or | | --- | --- | | (d) | which<br> are not required to implement the Reinstatement Plan in full (as determined by the Mezzanine<br> Agent on or after completion of the relevant works). | | --- | --- |
"Prepayment Refinancing Proceeds" means, with respect to a refinancing of a Warehouse Project or, as the case may be, ProjectCo, Project HoldCo or a Country HoldCo:
| (a) | if<br> no Default is continuing at the time of the disposal, an amount determined pursuant to paragraph<br> (c)(iv) of Clause 24.26 (Disposals); and |
|---|---|
| (b) | if<br> a Default is continuing at the time of the disposal, the aggregate amount of the net disposal<br> proceeds generated by the relevant disposal. |
| --- | --- |
"Project Close Confirmation" means:
| (a) | the<br> Original Project Close Confirmation; and |
|---|---|
| (b) | any<br> update to the Original Project Close Confirmation, and any additional updates thereto, in<br> each case, pursuant to Clause 22.7 (Construction Budget and Project Close Confirmation). |
| --- | --- |
"ProjectCo" means each entity described as such in paragraph 2 of Schedule 3 (Eligibility Criteria) in connection with the relevant Eligible Project.
"Project Costs" means, in respect of any Warehouse Project, all Eligible Pre-RtB Costs and all Eligible Project Costs in connection with that Warehouse Project.
"Project Document" means each of:
| (a) | each<br> EPC Contract; |
|---|---|
| (b) | each<br> O&M Contract; |
| --- | --- |
| (c) | each<br> Asset Management Agreement; |
| --- | --- |
| (d) | each<br> Grid Connection Agreement; and |
| --- | --- |
| (e) | each<br> PPA. |
| --- | --- |
| - 35 - |
| --- |
"ProjectHoldCo" means each entity described as such in paragraph 2 of Schedule 3 (Eligibility Criteria) in connection with the relevant Eligible Project.
"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
"QualifyingLender" has the meaning given to it in Clause 12 (Tax gross-up and indemnities).
"Quotation Day" means, in relation to any period for which an interest rate is to be determined two (2) TARGET Days before the first day of that period.
"Real Estate Agreement" means any agreement, however described, under which a ProjectCo derives its interest in the Real Property required for its respective Project.
"Real Property" means:
| (a) | any<br> freehold, leasehold, easement rights or immovable property in respect of the Site; and |
|---|---|
| (b) | any<br> buildings, fixtures, fittings, fixed plant or machinery from time to time situated on or<br> forming part of that leasehold property. |
| --- | --- |
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Mezzanine Only Charged Property.
"Reference Bank Quotation" means any quotation supplied to the Mezzanine Agent by a Reference Bank.
"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Mezzanine Agent at its request by the Reference Banks:
| (a) | (other<br> than where paragraph (b) below applies) as the rate at which the relevant Reference<br> Bank believes one prime bank is quoting to another prime bank for interbank term deposits<br> in euro within the Participating Member States for the relevant period; or |
|---|---|
| (b) | if<br> different, as the rate (if any and applied to the relevant Reference Bank and the relevant<br> period) which contributors to the applicable Screen Rate are asked to submit to the relevant<br> administrator. |
| --- | --- |
"Reference Banks" means the principal London offices of or such entities as may be appointed by the Mezzanine Agent or the Majority Lenders in consultation with the Borrower.
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
| - 36 - |
| --- |
"Relevant Insurances" means any of the Insurances covering all risks relating to the physical loss of, or damage to, any asset of each Warehouse Project.
"Relevant Jurisdiction" means:
| (a) | the<br> Original Jurisdiction of each Obligor and the jurisdiction of incorporation of each other<br> member of the Group; and |
|---|---|
| (b) | the<br> jurisdiction where any asset subject to or intended to be subject to the Transaction Security<br> is situated; |
| --- | --- |
| (c) | the<br> jurisdiction whose laws govern the perfection of any of the Security Documents; and |
| --- | --- |
| (d) | the<br> jurisdiction in which any Eligible Project is situated. |
| --- | --- |
"Relevant Market" means the European interbank market.
"RepeatingRepresentations" means each of the representations set out in Clause 21 (Representations) other than those set out in Clause 21.10 (Deduction of Tax), paragraph (c) of Clause 21.12 (Taxation), Clause 21.13 (Relationships withothers), paragraph (e) of Clause 21.19 (Financial statements) and Clause 21.20 (No proceedings) .
"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
"Required Authorisation" means any Authorisation required under any law or regulation of the Relevant Jurisdictions to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in each Relevant Jurisdiction of any Finance Document.
"Requisite Rating" means, with respect to the Account Bank, a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB+ or higher by S&P Global Ratings, a division of S&P Global Inc. or Fitch Ratings Ltd or Baa1 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.
"ResignationLetter" means a letter substantially in the form set out in Schedule 9 (Form of Resignation Letter).
| - 37 - |
| --- |
"ResolutionProcedure" means the procedure set out in Clause 46.3 (Resolution Procedure).
"RestrictedLender" has the meaning given to it in Clause 40.8 (Sanction Provisions).
"Revenue" means, in relation to any period, all amounts received (or, in the case of a projection, projected to be received) by the Group during such period (without double counting), comprising:
| (a) | revenues<br> received from or in connection with the Warehouse Projects (including any subsidy and/or<br> tariff related payments); |
|---|---|
| (b) | Revenue<br> Replacing Compensation; |
| --- | --- |
| (c) | any<br> penalty payment (including related to delay and/or defects) received from a Major Project<br> Party in connection with any Project Document (including penalty payments related to any<br> non-achievement of the guaranteed performance ratio under any EPC Contract); |
| --- | --- |
| (d) | insurance<br> proceeds received under Loss of Revenue Insurance; |
| --- | --- |
| (e) | interest<br> earned on the Accounts; |
| --- | --- |
| (f) | refunds<br> of Tax of any kind; |
| --- | --- |
| (g) | any<br> amounts paid by the Senior Borrower under the Senior Facility Agreement to the Borrower comprising<br> Mezzanine Hedging Receipts; and |
| --- | --- |
| (h) | other<br> amounts which the Mezzanine Agent agrees shall be Revenue, |
| --- | --- |
but Revenue shall not include the proceeds of any Financial Indebtedness, Base Equity, Contingent Equity nor any Equity Cure (or amounts received or projected to be received pursuant to any guarantee or other insurance in respect of any Financial Indebtedness), Compensation Proceeds (other than, for the avoidance of doubt, Revenue Replacing Compensation or Performance Liquidated Damages).
"Revenue Commissioners" means the Revenue Commissioners of Ireland.
"Revenue Replacing Compensation" means any proceeds referred to under paragraph (a) of the definition of Compensation Proceeds which compensate for any loss of income or revenue, however only if and to the extent such proceeds are not paid in one lump sum.
"Rollover Loan" means one or more Loans:
| (a) | made<br> or to be made on the same day that a maturing Loan is due to be repaid and, so long as such<br> day is prior to the Commercial Operation Date, interest that is due to be paid in respect<br> of such maturing Loan; |
|---|---|
| (b) | the<br> aggregate amount of which is equal to or less than the amount of the maturing Loan and the<br> interest that is due to be paid in respect of such maturing Loan; and |
| --- | --- |
| - 38 - |
| --- | | (c) | made<br> or to be made to the Borrower for the purpose of refinancing that maturing Loan or paying<br> the interest due and payable in respect of such maturing Loan. | | --- | --- |
"RtB Status" means that the relevant Warehouse Project has obtained all Authorisations, secured all rights (in particular any Real Property) and:
| (a) | with<br> respect to an Eligible Project located in Poland, the RtB Status Tests (Poland) have been<br> satisfied (in form and substance satisfactory to the Mezzanine Agent, acting in consultation<br> with the Lenders' Technical Adviser); and |
|---|---|
| (b) | with<br> respect to an Eligible Project located outside of Poland, the RtB Status Tests (Eligible<br> Project) have been satisfied (in form and substance satisfactory to the Mezzanine Agent,<br> acting in consultation with the Lenders' Technical Adviser). |
| --- | --- |
"RtBStatus Tests (Eligible Project)" means, with respect to the first Eligible Project in an Eligible Jurisdiction other than in Poland, the deliverables and tests agreed with the Mezzanine Agent (in consultation with the Lenders' Technical Adviser) in satisfying the condition set out in paragraph 1(b) of Part B (Conditions precedent to pay Eligible Pre-RtB Costs) or, as applicable, paragraph 5(g) of Part C (Conditions precedent for Project Close (ProjectCo)), in each case, of Schedule 2 (Conditionsprecedent and subsequent).
"RtB Status Tests (Poland)" means, with respect to an Eligible Project in Poland, the following deliverables and tests:
| (a) | legal<br> title to land under the PV panels has been secured by agreements in a form with signatures<br> certified by notary; |
|---|---|
| (b) | an<br> administrative decision on environmental conditions (decyzja o środowiskowych uwarunkowaniach przedsięwzięcia) for the development of the Eligible Project, or a decision<br> that no decision on environmental conditions is required for the Eligible Project, in each<br> case issued by the competent authority, has been obtained by the relevant ProjectCo, such<br> decision being stamped as final and non-appealable; |
| --- | --- |
| (c) | an<br> administrative decision on the zoning conditions (decyzja o warunkach zabudowy i zagospodarowania terenu) for the development of an Eligible Project, issued by the competent authority,<br> has been obtained by the relevant ProjectCo, such decision being stamped as final and non-appealable,<br> unless the Eligible Project is developed based on local master plan (miejscowy plan zagospodarowania przestrzennego); |
| --- | --- |
| (d) | the<br> ProjectCo has received grid connection conditions in respect of the Project it is carrying<br> out; |
| --- | --- |
| (e) | a<br> Grid Connection Agreement has been signed with the relevant ProjectCo; and |
| --- | --- |
| (f) | an<br> administrative decision on approval of the building design and issuing authorization to conduct<br> construction works for the Eligible Project, issued by the competent authority, has been<br> obtained by the relevant ProjectCo, such decision being stamped as final and non-appealable. |
| --- | --- |
| - 39 - |
| --- |
"Sanction Provisions" means Clause 7.4 (Mandatory prepayment - Sanctions), Clause 21.25 (Sanctions), Clause 21.43 (Dealings with SRCs andSDNs), Clause 24.8 (Sanctions), Clause 24.9 (Use of proceeds) and Clause 25.19 (Sanctions).
"Sanctioned Territory" means any country or other territory subject to a general export, import, financial or (investment) trade embargo under the Sanctions, including, as of the date of this Agreement, Afghanistan, Crimea, Cuba, Iran, North Korea, the occupied territories in the so-called "Donetsk People’s Republic", the "Luhansk People’s Republic", Kherson region, Zaporizhzhia region of Ukraine, Sudan and Syria.
"Sanctions" means the economic or financial sanctions laws, regulations, trade embargoes or other restrictive measures enacted, administered, implemented and/or enforced from time to time by any relevant Sanctions Authority.
"Sanctions Authority" means any of:
| (a) | the<br> government of the United States of America; |
|---|---|
| (b) | the<br> United Nations; |
| --- | --- |
| (c) | the<br> European Union (including any of its member states); |
| --- | --- |
| (d) | the<br> government of the United Kingdom; |
| --- | --- |
| (e) | the<br> government of the Federal Republic of Germany; |
| --- | --- |
| (f) | the<br> government of any Eligible Jurisdiction; |
| --- | --- |
| (g) | any<br> governmental institution or agency of any Relevant Jurisdiction; and |
| --- | --- |
| (h) | the<br> respective governmental institutions and agencies of any of the foregoing, including, without<br> limitation, the Department of the Treasury's Office of Foreign Assets Control of the United<br> States of America (OFAC), the United States Department of State or the United States Department<br> of Commerce, the United Nations Security Council ("UNSC"), the European<br> Union ("EU"), the United Kingdom ("UK") and His Majesty's<br> Treasury or any other relevant sanctions authority. |
| --- | --- |
"Sanctions Mandatory PrepaymentEvent" means:
| (a) | any<br> of the representations set out in Clause 21.25 (Sanctions) are or were untrue when<br> made or repeated; or |
|---|---|
| (b) | an<br> Obligor does not perform or is in breach of an undertaking as set out in Clause 24.8 (Sanctions). |
| --- | --- |
"Screen Rate" means the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate), or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Mezzanine Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.
| - 40 - |
| --- |
"Secured Obligations" means all present and future obligations and liabilities at any time due, owing or incurred by any Obligor to any Secured Party under the Finance Documents (including, but not limited to, the Parallel Obligations), whether actual or contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.
"Secured Parties" means the Security Agent, any Receiver or Delegate, the Mezzanine Agent, each Lender and the Arranger , as may be the case from time-to-time, party to this Agreement.
"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
"Security Documents" means:
| (a) | the<br> Common Security Documents; |
|---|---|
| (b) | the<br> Mezzanine Only Security Documents; and |
| --- | --- |
| (c) | any<br> security document entered into by any Additional Guarantor pursuant to Clause 28.2 (Additional Guarantors). |
| --- | --- |
"Senior Agent" means Law Debenture Corporate Services Limited, in its capacity as Senior Agent under the Senior Facility Agreement.
"Senior Available Facility" means the amount confirmed as such by the Senior Agent.
"Senior Borrower" means AEG JD 01 Limited.
"Senior Facility Agreement" means the English law governed senior facility agreement dated on or about the Signing Date between, amongst others, the Senior Borrower, as borrower, Deutsche Bank AG as arranger, and the lenders specified therein as the original lenders in connection with the Warehouse Projects.
"Senior Guarantor AccessionLetter" means, with respect to any ProjectCo, the guarantor accession letter delivered by such ProjectCo to the Senior Agent with respect to its accession to the Senior Facility Agreement as guarantor.
"Senior Hedging Agreement" has the meaning given to "Hedging Agreement" under the Senior Facility Agreement.
"Senior Lenders" means the lenders under the Senior Facility Agreement.
"Senior Obligor" means each person which is an "Obligor" under and as defined in the Senior Facility Agreement.
| - 41 - |
| --- |
"Senior Prepayment DisposalProceeds" means, with respect to a disposal of a Warehouse Project, a ProjectCo, a Project HoldCo and/or a Country HoldCo, the amount which has been notified by the Senior Agent to the Mezzanine Agent to be the amount which is required to be prepaid in relation to such disposal under and pursuant to the Senior Facility Agreement.
"Senior Total Commitments" means EUR 64,000,000.
"Senior/Mezz Ratio" means the ratio, expressed as a percentage, of:
| (a) | the<br> Total Commitments; and |
|---|---|
| (b) | the<br> Senior Total Commitments. |
| --- | --- |
"Shareholder" means the Holding Company directly owning share capital in the relevant entity. For the avoidance of doubt, no indirect owner of any share capital in the relevant entity shall constitute a Shareholder for the purposes of this Agreement and any other Finance Document.
"Shareholder Loan Agreement" means any agreement setting out the terms of a Shareholder Loan made or to be made to the Borrower, the Senior Borrower, any Country HoldCo Project HoldCo or ProjectCo from any direct Shareholder of any such entity.
"Shareholder Loans" means a loan made or to be made by the Borrower under a Shareholder Loan Agreement or the principal amount outstanding for the time being of that loan.
"Signing Date" means the date of this Agreement.
"Site" means the area of land on which a Warehouse Project including all ancillary facilities forming part of such Warehouse Project are located.
"Social Fabric" means the social fabric including labour, social security, the regulation of industrial relations (between government, employers and employees), the protection of occupational as well as public health and safety, the regulation of public participation, the protection and regulation of ownership of land rights (both formal and traditional), land use planning and development, immovable goods and intellectual and cultural property rights, the protection and empowerment of indigenous peoples or ethnic groups, the protection, restoration and promotion of cultural heritage or archaeological artefacts, health, safety, quality of life and legal rights of the community and the protection of employees and citizens.
"SpecifiedTime" means a day or time determined in accordance with Schedule 12 (Timetables).
"Sponsor" means Alternus Energy Group PLC.
| - 42 - |
| --- |
"Subsidiary" means any person (referred to as the "first person") in respect of which another person (referred to as the "secondperson"):
| (a) | holds<br> a majority of the voting rights in that first person or has the right under the constitution<br> of the first person to direct the overall policy of the first person or alter the terms of<br> its constitution; or |
|---|---|
| (b) | is<br> a member of that first person and has the right to appoint or remove a majority of its board<br> of directors or equivalent administration, management or supervisory body; or |
| --- | --- |
| (c) | has<br> the right to exercise a dominant influence (which must include the right to give directions<br> with respect to operating and financial policies of the first person which its directors<br> are obliged to comply with whether or not for its benefit) over the first person by virtue<br> of provisions contained in the articles (or equivalent) of the first person or by virtue<br> of a control contract which is in writing and is authorised by the articles (or equivalent)<br> of the first person and is permitted by the law under which such first person is established;<br> or |
| --- | --- |
| (d) | is<br> a member of that first person and controls alone, pursuant to an agreement with other shareholders<br> or members, a majority of the voting rights in the first person or the rights under its constitution<br> to direct the overall policy of the first person or alter the terms of its constitution;<br> or |
| --- | --- |
| (e) | has<br> the power to exercise, or actually exercises dominant influence or control over the first<br> person; or |
| --- | --- |
| (f) | together<br> with the first person are managed on a unified basis. |
| --- | --- |
For the purposes of this definition: (i) a person shall be treated as a member of another person if any of that person's Subsidiaries is a member of that other person or if any shares in that other person are held by a person acting on behalf of it or any of its Subsidiaries; (ii) a second person shall be treated as satisfying any one of conditions (a) to (f) above in respect of any person in relation to which any of its Subsidiaries are, or are to be treated as, satisfying any of conditions (a) to (f) above; and (iii) a first person shall include any person the shares or ownership interests in which are subject to Security and where the legal title to the shares or ownership interests so secured are registered in the name of the secured party or its nominee pursuant to such Security.
"TARGET Day" means any day on which TARGET2 is open for the settlement of payments in euro.
"TARGET2" means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007 or any successor/replacement system.
"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).
"TCA" means the Taxes Consolidation Act 1997 of Ireland (as amended).
| - 43 - |
| --- |
"Termination Date" means the date falling thirty-six (36) months from the first Utilisation Date.
"Total Commitments" means the aggregate of the Commitments, being EUR 16,000,000 at the Signing Date.
"Transaction Documents" means the Finance Documents and the Project Documents.
"Transaction Security" means:
| (a) | the<br> Mezzanine Only Transaction Security; and |
|---|---|
| (b) | the<br> Common Transaction Security. |
| --- | --- |
"Transfer" means any withdrawal, payment, transfer or other disposition of monies from an Account.
"Transfer Certificate" means a certificate substantially in the form set out in Schedule 7 (Form of Transfer Certificate) or any other form agreed between the Mezzanine Agent and the Borrower.
"Transfer Date" means, in relation to an assignment or a transfer, the later of:
| (c) | the<br> proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate;<br> and |
|---|---|
| (d) | the<br> date on which the Mezzanine Agent executes the relevant Assignment Agreement or Transfer<br> Certificate. |
| --- | --- |
"UK Blocking Regulation" means Regulation (EU) No 2271/96 of the European Parliament and of the Council of 22 November 1996 protecting against the effects of the extraterritorial application of legislation adopted by a third country, and actions based on or resulting therefrom as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018.
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.
"Updated Financial Model" means:
| (a) | the<br> Original Financial Model and any amendment, update or replacement made thereto from time<br> to time in accordance with Clause 22.4 (Financial Model); and |
|---|---|
| (b) | the<br> Original Financial Model (as such form has been amended, updated or replaced from time to<br> time in accordance with Clause 22.4 (Financial Model)) as amended and/or updated or<br> replace for the purpose of satisfying paragraph 7(b)(i) of Part C (Conditions Precedent for Project Close (ProjectCo)) of Schedule 2 (Conditions Precedent and Subsequent)<br> in connection with approving an Eligible Project as a Warehouse Project. |
| --- | --- |
"US" means the United States of America.
| - 44 - |
| --- |
"US Tax Obligor" means:
| (a) | the<br> Borrower which is resident for tax purposes in the US; or |
|---|---|
| (b) | an<br> Obligor some or all of whose payments under the Finance Documents are from sources within<br> the US for US federal income tax purposes. |
| --- | --- |
"Utilisation" means a utilisation of the Facility.
"Utilisation Date" means the date of a Utilisation, being the date on which the relevant Loan is to be made.
"Utilisation Request" means a notice substantially in the form set out in (Requests).
"Valuation Report" means, with respect to any Warehouse Project:
| (a) | the<br> Original Valuation Report in respect of that Warehouse Project; and |
|---|---|
| (b) | any<br> update that may occur in respect of the same pursuant to Clause 22.7 (Valuation Report). |
| --- | --- |
"VAT" means:
| (a) | value<br> added tax imposed by the Value Added Tax Act 1994 as provided for in VATCA; |
|---|---|
| (b) | any<br> tax imposed in compliance with the Council Directive of 28 November 2006 on the common<br> system of value added tax (EC Directive 2006/112); and |
| --- | --- |
| (c) | any<br> other tax of a similar nature, whether imposed in the United Kingdom or in a member state<br> of the European Union in substitution for, or levied in addition to, such tax referred to<br> in paragraphs (a) above, or imposed elsewhere. |
| --- | --- |
"VAT Group" means a group or unity or fiscal unity for VAT purposes within the meaning of section 15 VATCA, and otherwise as applicable to a group or unity or fiscal unity for VAT purposes under any applicable law implementing Article 11 of Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112).
"VATCA" means the Value-Added Tax Consolidation Act 2010 of Ireland (as amended).
"Warehouse Guaranteed RevenueCommencement Date" means, in respect of any Warehouse Project, the date by which the relevant ProjectCo is scheduled to generate Revenues from either:
| (a) | any<br> applicable feed-in-tariff or subsidy; or |
|---|---|
| (b) | the<br> relevant Power Purchase Agreement. |
| --- | --- |
| - 45 - |
| --- |
"WarehouseProject" means each Eligible Projects in relation to which the Mezzanine Agent has delivered the Original Project Close Confirmation under Clause 4.3 (Conditions precedent for Eligible Project to become Warehouse Project).
"Warehouse Project COD LongstopDate" means in respect of any Warehouse Project, the date by which that Warehouse Project is expected to achieve the Commercial Operation Date as set out in Project Close Confirmation that the Mezzanine Agent has issued and approved in respect of that Warehouse Project.
"Warehouse Project CompletionLongstop Date" means, in respect of any Warehouse Project, the date by which the relevant ProjectCo is expected to receive all acceptance certificates under the EPC Contract and (if applicable) other construction contracts relevant to that Warehouse Project, such date as set out in the Project Close Confirmation that the Mezzanine Agent has issued and approved in respect of that Warehouse Project.
"WarehouseReport" means a report relating to, inter alia, the revenue projection, construction progress, operation, market price, off-taker arrangements and other matters in connection with the Warehouse Projects in substantially the form set out in Schedule 13 (Form of Warehouse Report).
| 1.2 | Construction |
|---|---|
| (a) | Unless<br> a contrary indication appears any reference in this Agreement to: |
| --- | --- |
| (i) | the<br> "Mezzanine Agent", the "Arranger", the "Security Agent", any "Finance Party", any "Secured Party",<br> any "Lender", any "Obligor" or any "Party"<br> shall be construed so as to include its successors in title, permitted assigns and permitted<br> transferees to, or of, its rights and/or obligations under the Finance Documents and, in<br> the case of the Security Agent, any person for the time being appointed as Security Agent<br> or Security Agents in accordance with this Agreement; |
| --- | --- |
| (ii) | "assets"<br> includes present and future properties, revenues and rights of every description; |
| --- | --- |
| (iii) | "carry out a WarehouseProject", "carrying out the respective Warehouse Project"<br> or "carried out the Individual Project" (or similar references) means to<br> carry out all aspects of the relevant Warehouse Project of the respective ProjectCo; |
| --- | --- |
| (iv) | a<br> "Transaction Document", a "Finance Document", a "Project Document" or any other agreement or instrument is a reference to that Transaction<br> Document, Finance Document, Project Document or other agreement or instrument as amended,<br> novated, supplemented, extended, replaced or restated; |
| --- | --- |
| (v) | a<br> "group of Lenders" includes all the Lenders; |
| --- | --- |
| (vi) | "including"<br> means including without limitation; |
| --- | --- |
| - 46 - |
| --- | | (vii) | "indebtedness"<br> includes any obligation (whether incurred as principal or as surety) for the payment or repayment<br> of money, whether present or future, actual or contingent; | | --- | --- | | (viii) | a<br> "law" includes any law (including statutory and common law), statute, constitution,<br> decree, judgment, treaty, regulation, rule, by-law, order, official directive, request or<br> guideline (whether or not having the force of law) of any Authority; | | --- | --- | | (ix) | a<br> "person", "party" or "entity" includes<br> any individual, firm, company, corporation, government, state or agency of a state or any<br> association, trust, joint venture, consortium, partnership or other entity (whether or not<br> having separate legal personality); | | --- | --- | | (x) | a<br> "regulation" includes any regulation, rule, official directive, request,<br> regulatory technical standard, code of practice or guideline (whether or not having the force<br> of law) of any governmental, intergovernmental or supranational body, agency, department<br> or of any regulatory, self- regulatory or other authority or organisation; | | --- | --- | | (xi) | a<br> provision of law is a reference to that provision as amended or re- enacted from time to<br> time; and | | --- | --- | | (xii) | a<br> time of day is a reference to London time. | | --- | --- | | (b) | The<br> determination of the extent to which a rate is "for a period equal in length"<br> to an Interest Period shall disregard any inconsistency arising from the last day of that<br> Interest Period being determined pursuant to the terms of this Agreement. | | --- | --- | | (c) | A<br> reference to "determines" or "determined" means a determination made<br> in the absolute discretion of the person making the determination. | | --- | --- | | (d) | Section,<br> Clause and Schedule headings are for ease of reference only. | | --- | --- | | (e) | Unless<br> a contrary indication appears, a term used in any other Finance Document or in any notice<br> given under or in connection with any Finance Document has the same meaning in that Finance<br> Document or notice as in this Agreement. | | --- | --- | | (f) | A<br> Default (other than an Event of Default) is "continuing" if it has not been<br> remedied or waived and an Event of Default is "continuing" if it has not<br> been waived. | | --- | --- | | 1.3 | Currency symbols and definitions | | --- | --- |
"€", "EUR" and "euro" denote the single currency of the Participating Member States.
| 1.4 | Third party rights |
|---|---|
| (a) | Unless<br> expressly provided to the contrary in a Finance Document, a person who is not a Party has<br> no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement. |
| --- | --- |
| - 47 - |
| --- | | (b) | Subject<br> to Clause 40.3 (Other exceptions) but otherwise notwithstanding, any term of any Finance<br> Document, the consent of any person who is not a Party is not required to rescind or vary<br> this Agreement at any time. | | --- | --- | | 1.5 | Irish Terms | | --- | --- | | (a) | In<br> this Agreement, a reference to "examiner" and "examinership"<br> shall have the meaning ascribed to such terms in Part 10 of the Irish Companies Act<br> 2014; and | | --- | --- | | (b) | an<br> entity being "unable to pay its debts or fails or admits in writing its inability generally to pay its debts" includes that entity being unable to pay its debts within<br> the meaning of section 509(3) or section 570 of the Irish Companies Act 2014. | | --- | --- | | 1.6 | Actions of Mezzanine Agent and Security Agent | | --- | --- |
Notwithstanding any provision in any Finance Document to the contrary, any provision in this Agreement or any other Finance Document (in relation to a matter not affecting the personal interests of the Mezzanine Agent or the Security Agent, as applicable) which refers to:
| (a) | consent<br> or approval being required to be given by the Mezzanine Agent or the Security Agent; |
|---|---|
| (b) | matter<br> being to the satisfaction of the Mezzanine Agent or the Security Agent; |
| --- | --- |
| (c) | the<br> Mezzanine Agent or the Security Agent acting reasonably or in a reasonable manner or coming<br> to any determination (including determination that is reasonable (or any similar or analogous<br> wording is used)); |
| --- | --- |
| (d) | the<br> Mezzanine Agent or the Security Agent acting, exercising any discretion (or refraining from<br> acting or exercising any discretion) or coming to an opinion; or |
| --- | --- |
| (e) | any<br> consent of the Mezzanine Agent or the Security Agent not to be unreasonably withheld or delayed, |
| --- | --- |
in each case shall be construed as requiring the relevant instructing persons (as determined in accordance with the Intercreditor and Subordination Deed and this Agreement) of the Mezzanine Agent or the Security Agent, when providing their instructions to the Mezzanine Agent or the Security Agent, as applicable (i) as being required to give such consent or approval, (ii) to be satisfied with such matter,(iii) to act reasonably or in a reasonable manner or to come to such determination, (iv) to act, to exercise such discretion (or refrain from acting or exercising such discretion) or to come to such opinion or (v) not to unreasonably withhold or delay their consent, but shall neither fetter the ability of the Mezzanine Agent or the Security Agent to act in accordance with the instructions of such instructing persons nor to be construed as requiring the Mezzanine Agent or the Security Agent to give such consent or approval, to be satisfied with such matter, to act reasonably or in a reasonable manner to come to such determination, to act, to exercise such discretion (or to refrain from acting or exercising such discretion) or to come to such opinion or not to unreasonably withhold or delay its consent, in each case in its independent capacity in the absence of corresponding instructions from such instructing persons.
If there is any inconsistency between any term of the Intercreditor and Subordination Deed and any term of this Agreement, the Intercreditor and Subordination Deed shall prevail.
| - 48 - |
| --- |
SECTION 2
THE FACILITY
| 2. | THE FACILITY |
|---|---|
| 2.1 | The Facility |
| --- | --- |
Subject to the terms of this Agreement, the Lenders make available to the Borrower a euro revolving loan facility in an aggregate amount equal to the Total Commitments.
| 2.2 | Increase |
|---|---|
| (a) | The<br> Borrower may by giving prior notice to the Mezzanine Agent by no later than the date falling<br> ten (10) Business Days after the effective date of a cancellation of: |
| --- | --- |
| (i) | the<br> Available Commitment of a Defaulting Lender in accordance with paragraph (g) of Clause<br> 7.9 (Right of replacement or repayment and cancellation in relation to a single Lender);<br> or |
| --- | --- |
| (ii) | the<br> Commitment of a Lender in accordance with: |
| --- | --- |
| (A) | Clause<br> 7.1 (Illegality); or |
| --- | --- |
| (B) | paragraph<br> (a) of Clause 7.9 (Right of replacement or repayment and cancellation in relation to a single Lender), |
| --- | --- |
request that the Commitments be increased (and the Commitments shall be so increased) in an aggregate amount of up to the amount of the Available Commitments or Commitments so cancelled as follows:
| (iii) | the<br> increased Commitments will be assumed by one or more Eligible Institutions (each an "Increase Lender") each of which confirms in writing (whether in the relevant Increase Confirmation<br> or otherwise) its willingness to assume and does assume all the obligations of a Lender corresponding<br> to that part of the increased Commitments which it is to assume, as if it had been an Original<br> Lender in respect of those Commitments; |
|---|---|
| (iv) | each<br> of the Obligors and any Increase Lender shall assume obligations towards one another and/or<br> acquire rights against one another as the Obligors and the Increase Lender would have assumed<br> and/or acquired had the Increase Lender been an Original Lender in respect of that part of<br> the increased Commitments which it is to assume; |
| --- | --- |
| (v) | each<br> Increase Lender shall become a Party as a "Lender" and any Increase Lender and<br> each of the other Finance Parties shall assume obligations towards one another and acquire<br> rights against one another as that Increase Lender and those Finance Parties would have assumed<br> and/or acquired had the Increase Lender been an Original Lender in respect of that part of<br> the increased Commitments which it is to assume; |
| --- | --- |
| - 49 - |
| --- | | (vi) | the<br> Commitments of the other Lenders shall continue in full force and effect; and | | --- | --- | | (vii) | any<br> increase in the Commitments shall take effect on the date specified by the Borrower in the<br> notice referred to above or any later date on which the Mezzanine Agent executes an otherwise<br> duly completed Increase Confirmation delivered to it by the relevant Increase Lender. | | --- | --- | | (b) | The<br> Mezzanine Agent shall, subject to paragraph (c) below, as soon as reasonably practicable<br> after receipt by it of a duly completed Increase Confirmation appearing on its face to comply<br> with the terms of this Agreement and delivered in accordance with the terms of this Agreement,<br> execute that Increase Confirmation. | | --- | --- | | (c) | The<br> Mezzanine Agent shall only be obliged to execute an Increase Confirmation delivered to it<br> by an Increase Lender once it is satisfied it has complied with all necessary "know<br> your customer" or other similar checks under all applicable laws and regulations in<br> relation to the assumption of the increased Commitments by that Increase Lender. | | --- | --- | | (d) | Each<br> Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt)<br> that the Mezzanine Agent has authority to execute on its behalf any amendment or waiver that<br> has been approved by or on behalf of the requisite Lender or Lenders in accordance with this<br> Agreement on or prior to the date on which the increase becomes effective in accordance with<br> this Agreement and that it is bound by that decision to the same extent as it would have<br> been had it been an Original Lender. | | --- | --- | | (e) | The<br> Borrower shall, promptly on demand, pay the Mezzanine Agent and the Security Agent the amount<br> of all costs and expenses (including legal fees) properly incurred by either of them and,<br> in the case of the Security Agent, by any Receiver or Delegate in connection with any increase<br> in Commitments under this Clause 2.2. | | --- | --- | | (f) | The<br> Increase Lender shall, on the date upon which the increase takes effect, pay to the Mezzanine<br> Agent (for its own account) a fee in an amount equal to the fee which would be payable under<br> Clause 26.4 (Assignment or transfer fee) if the increase was a transfer pursuant to<br> Clause 26.6 (Procedure for transfer) and if the Increase Lender was a New Lender. | | --- | --- | | (g) | The<br> Borrower may pay to the Increase Lender a fee in the amount and at the times agreed between<br> the Borrower and the Increase Lender in a letter between the Borrower and the Increase Lender<br> setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter<br> referred to in this paragraph (g). | | --- | --- | | (h) | The<br> Borrower must apply the Prepayment Disposal Proceeds and the Prepayment Refinancing Proceeds<br> in prepayment of the Loans and payment of the other amounts referred to in paragraph (b) of<br> Clause 7.10 (Restrictions) at the time and in the order of application contemplated<br> by Clause 7.11 (Application of prepayments). | | --- | --- |
| - 50 - |
| --- | | (i) | In<br> case an Event of Default has occurred and is continuing at the time of a disposal, an amount<br> of Commitments equal to the amount of the Disposal Equity Amount shall be cancelled immediately<br> upon completion of the relevant disposal. | | --- | --- | | (j) | Neither<br> the Mezzanine Agent nor any Lender shall have any obligation to find an Increase Lender and<br> in no event shall any Lender whose Commitment is replaced by an Increase Lender be required<br> to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents. | | --- | --- | | (k) | Clause<br> 26.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis<br> in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to: | | --- | --- | | (i) | an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; | | --- | --- | | (ii) | the<br> "New Lender" were references to that "Increase Lender";<br> and | | --- | --- | | (iii) | a<br> "re-transfer" and "re-assignment" were references to respectively<br> a "transfer" and "assignment". | | --- | --- | | 2.3 | Increase – Accordion Option | | --- | --- | | (a) | The<br> Borrower may at any time, but not later than the last day of the Availability Period (the<br> "Accordion Availability Period") by delivery to the Mezzanine Agent of a<br> duly completed Accordion Increase Request, request that the Total Commitments be increased<br> (and the Total Commitments shall be so increased) as described in, and in accordance with,<br> this Clause 2.3. | | --- | --- | | (b) | Each<br> Accordion Increase Request shall be irrevocable and will not be regarded as being duly completed<br> unless it specifies the following matters: | | --- | --- | | (i) | a proposed<br> Accordion Increase Amount; | | --- | --- | | (ii) | a proposed<br> Accordion Increase Date; and | | --- | --- | | (iii) | the<br> fee (if any) payable to any Accordion Increase Lender pursuant to paragraph (j) below;<br> and | | --- | --- | | (iv) | such<br> other information that the Mezzanine Agent may reasonably require in relation to such Accordion<br> Facility. | | --- | --- | | (c) | Upon<br> receipt of an Accordion Increase Request, the Mezzanine Agent shall promptly notify the Lenders. | | --- | --- |
| - 51 - |
| --- | | (d) | The<br> increase in the Total Commitments requested in an Accordion Increase Request is subject to<br> the following conditions: | | --- | --- | | (i) | the<br> increased Commitments will be assumed by one or more existing Lenders willing to provide<br> such increase and/or, subject to paragraph (k) below, by other banks, financial institutions,<br> trusts, funds or other entities which are regularly engaged in or established for the purpose<br> of making, purchasing or investing in loans, securities or other financial assets (each an<br> "Accordion Increase Lender") selected by the Borrower and acceptable to<br> the Mezzanine Agent (acting reasonably), which shall become a Party as a Lender; | | --- | --- | | (ii) | the<br> Accordion Increase Amount is a minimum amount of EUR 15,000,000 or such lower amount as agreed<br> to by the Mezzanine Agent; | | --- | --- | | (iii) | no<br> more than four (4) Accordion Increase Requests are delivered; | | --- | --- | | (iv) | the<br> Accordion Increase Request is delivered no later than the date following twenty (20) Business<br> Days prior to the last day of the Accordion Availability Period. The proposed Accordion Increase<br> Date must be a date within the Accordion Availability Period; | | --- | --- | | (v) | the<br> Total Commitments, after the increase, will not exceed EUR 84,000,000 or any other amount<br> agreed to by all the Lenders; | | --- | --- | | (vi) | any<br> Accordion Increase Amount is matched pro rata by an increase under the Senior Facility<br> Agreement; | | --- | --- | | (vii) | any<br> Loan made available from any Accordion Increase Amount shall not be prepaid nor mature at<br> a time earlier than any other Loan made available to that Loan; | | --- | --- | | (viii) | the<br> Repeating Representation to be made by each Obligor are true and correct in all material<br> respects on the date of the on which the Accordion Increase Request is delivered; | | --- | --- | | (ix) | no<br> Default is continuing or would result from the proposed increase in the Facility, in each<br> case on the date of the Accordion Increase Request or the Accordion Increase Date; | | --- | --- | | (x) | such<br> documents (if any) as are reasonably necessary as a result of the establishment of that Accordion<br> Increase Amount to maintain the effectiveness of the Security, guarantees, indemnities and<br> other assurance against loss provided to the Finance Parties pursuant to the Finance Documents;<br> and | | --- | --- | | (xi) | any<br> applicable Accordion Increase Supplemental Security; and | | --- | --- | | (xii) | in<br> respect of each proposed Accordion Increase Lender: | | --- | --- | | (A) | the<br> Mezzanine Agent has received and executed a duly completed Accordion Increase Confirmation<br> from that Accordion Increase Lender; and | | --- | --- | | (B) | which<br> is not already a Lender on the date of the Accordion Increase Confirmation, the Mezzanine<br> Agent has performed all necessary "know your customer" or other similar checks<br> under all applicable laws and regulations in relation to the assumption of the additional<br> Commitments by that Accordion Increase Lender, the completion of which the Mezzanine Agent<br> shall promptly notify to the Borrower and the Accordion Increase Lender; and | | --- | --- |
| - 52 - |
| --- | | (xiii) | each<br> Accordion Increase Lender agrees to assume all the obligations of a Lender corresponding<br> to the relevant additional Commitments in an aggregate amount equal to the respective portion<br> of the Accordion Increase Amount, as if it had been an Original Lender in respect of those<br> Commitments. | | --- | --- | | (e) | The<br> increase in the Total Commitments and the assumption of the additional Commitments by the<br> Accordion Increase Lenders will take effect on the date within the Accordion Availability<br> Period (the "Accordion Increase Date") which is the later of: | | --- | --- | | (i) | the<br> date specified by the Borrower in the Accordion Increase Request; and | | --- | --- | | (ii) | the<br> date on which all of the conditions described in paragraph 2.3(b)(iii) above have been<br> met in form and substance satisfactory to the Mezzanine Agent. | | --- | --- | | (f) | On<br> and from the Accordion Increase Date: | | --- | --- | | (i) | the<br> Total Commitments will be increased by the Accordion Increase Amount; | | --- | --- | | (ii) | each<br> Accordion Increase Lender will assume all the obligations of a Lender in respect of the additional<br> Commitments specified in the Accordion Increase Confirmation of that Accordion Increase Lender; | | --- | --- | | (iii) | each<br> of the Obligors and each Accordion Increase Lender which is not a Lender immediately prior<br> to the Accordion Increase Date shall assume obligations towards one another and/or acquire<br> rights against one another as the Obligors and the Accordion Increase Lender would have assumed<br> and/or acquired had the Accordion Increase Lender been an Original Lender in respect of that<br> part of the additional Commitments which it is to assume; | | --- | --- | | (iv) | each<br> Accordion Increase Lender which is not a Lender immediately prior to the Accordion Increase<br> Date shall become a Party as a "Lender" and any such Accordion Increase Lender<br> and each of the other Finance Parties shall assume obligations towards one another and acquire<br> rights against one another as that Accordion Increase Lender and those Finance Parties would<br> have assumed and/or acquired had the Accordion Increase Lender been an Original Lender in<br> respect of that part of the additional Commitments which it is to assume; and | | --- | --- | | (v) | the<br> Commitments of the other Lenders shall continue in full force and effect. | | --- | --- |
| - 53 - |
| --- | | (g) | Each<br> Accordion Increase Lender, by executing the Accordion Increase Confirmation, confirms (for<br> the avoidance of doubt) that the Mezzanine Agent has authority to execute on its behalf any<br> amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders<br> in accordance with this Agreement on or prior to the date on which the increase becomes effective. | | --- | --- | | (h) | The<br> Mezzanine Agent shall, subject to paragraph 2.3(d)(xii)(B) above, as soon as reasonably<br> practicable after receipt by it of a duly completed Accordion Increase Confirmation appearing<br> on its face to comply with the terms of this Agreement and delivered in accordance with the<br> terms of this Agreement, execute that Accordion Increase Confirmation. | | --- | --- | | (i) | The<br> Accordion Increase Lender shall, on the Accordion Increase Date, pay to the Mezzanine Agent<br> (for its own account) a fee in an amount equal to the fee which would be payable under Clause<br> 26.4 (Assignment or transfer fee) if the increase was a transfer pursuant to Clause<br> 26.6 (Procedure for transfer). | | --- | --- | | (j) | The<br> Borrower may pay to an Accordion Increase Lender a fee in the amount and at the times agreed<br> between the Borrower and the Accordion Increase Lender in a letter between the Borrower and<br> the Accordion Increase Lender setting out that fee, provided that the amount of any such<br> fee paid to a person who was not already a Lender prior to the relevant Accordion Increase<br> Date shall not exceed the amount of the fee offered to the Lenders under paragraph (k)<br> below. A reference in this Agreement to a Fee Letter shall include any letter referred to<br> in this paragraph (j). | | --- | --- | | (k) | The<br> increased Accordion Increase Amount may be assumed by an Eligible Institution provided that each Lender has been offered the opportunity by the Borrower to become an Accordion<br> Increase Lender by assuming a proportion of the requested Accordion Increase Amount equal<br> to its pro rata share of the then current Commitments and has been offered the respective<br> fees it is prepared to pay in the context of such increase. Any Lender that accepts such<br> offer within ten (10) Business Days (an "Accepting Lender") shall be<br> allocated the relevant portion of the Accordion Increase Amount. Any Lender that declines<br> the offer, or fails to respond within ten (10) Business Days (in each case a "Declining Lender"), shall not participate in the Accordion Increase Amount. Any portion of<br> the Accordion Increase Amount that otherwise would have been allocated to the Declining Lenders<br> shall be allocated as between any Accepting Lenders who are willing to accept an increase<br> in their allocation of the Accordion Increase Amount and/or any Eligible Institution at the<br> sole and absolute discretion of the Lender. | | --- | --- | | (l) | No<br> Lender shall be under any obligation to execute any Accordion Increase Confirmation. | | --- | --- | | (m) | The<br> Borrower may, subject to the overall limit set out in paragraph (iv) above, request<br> an increase in the Total Commitments pursuant to this Clause 2.3. | | --- | --- |
| - 54 - |
| --- | | (n) | Clause<br> 26.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis<br> in this Clause 2.3 in relation to an Increase Lender as if references in that Clause to: | | --- | --- | | (i) | an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase; | | --- | --- | | (ii) | the<br> "New Lender" were references to that "Increase Lender";<br> and | | --- | --- | | (iii) | a<br> "re-transfer" and "re-assignment" were references to respectively<br> a "transfer" and "assignment". | | --- | --- | | 2.4 | Finance Parties' rights and obligations | | --- | --- | | (a) | The<br> obligations of each Finance Party under the Finance Documents are several. Failure by a Finance<br> Party to perform its obligations under the Finance Documents does not affect the obligations<br> of any other Party under the Finance Documents. No Finance Party is responsible for the obligations<br> of any other Finance Party under the Finance Documents. | | --- | --- | | (b) | The<br> rights of each Finance Party under or in connection with the Finance Documents are separate<br> and independent rights and any debt arising under the Finance Documents to a Finance Party<br> from an Obligor is a separate and independent debt in respect of which a Finance Party shall<br> be entitled to enforce its rights in accordance with paragraph (c) below. The rights<br> of each Finance Party include any debt owing to that Finance Party under the Finance Documents<br> and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor<br> which relates to a Finance Party's participation in the Facility or its role under a Finance<br> Document (including any such amount payable to the Mezzanine Agent on its behalf) is a debt<br> owing to that Finance Party by that Obligor. | | --- | --- | | (c) | A<br> Finance Party may, except as specifically provided in the Finance Documents, separately enforce<br> its rights under or in connection with the Finance Documents. | | --- | --- | | 2.5 | Obligors' Agent | | --- | --- | | (a) | Each<br> Obligor by its execution of this Agreement irrevocably appoints the Borrower (acting through<br> one or more authorised signatories) to act on its behalf as its Mezzanine Agent in relation<br> to the Finance Documents (and, in the case of any Additional Obligor incorporated in Ireland,<br> also irrevocably appoints the Obligors' Agent to act on its behalf as its attorney in relation<br> to any deeds of confirmation or other deeds in relation to any Finance Documents) and irrevocably<br> authorises: | | --- | --- | | (i) | the<br> Borrower on its behalf to supply all information concerning itself contemplated by this Agreement<br> to the Finance Parties and to give all notices and instructions, to execute such deeds of<br> confirmation or other deeds, make such agreements and to effect the relevant amendments,<br> supplements and variations capable of being given, made or effected by any Obligor notwithstanding<br> that they may affect the Obligor, without further reference to or the consent of that Obligor;<br> and | | --- | --- |
| - 55 - |
| --- | | (ii) | each<br> Finance Party to give any notice, demand or other communication to that Obligor pursuant<br> to the Finance Documents to the Borrower, | | --- | --- |
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
| (b) | Every<br> act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation,<br> notice or other communication given or made by the Obligors' Agent or given to the Obligors'<br> Agent under any Finance Document on behalf of another Obligor or in connection with any Finance<br> Document (whether or not known to any other Obligor and whether occurring before or after<br> such other Obligor became an Obligor under any Finance Document) shall be binding for all<br> purposes on that Obligor as if that Obligor had expressly made, given or concurred with it.<br> In the event of any conflict between any notices or other communications of the Obligors'<br> Agent and any other Obligor, those of the Obligors' Agent shall prevail. |
|---|---|
| 3. | PURPOSE |
| --- | --- |
| 3.1 | Purpose |
| --- | --- |
The Borrower shall apply all amounts borrowed by it under the Facility towards the payment of:
| (a) | Eligible<br> Pre-RtB Costs in respect of an Eligible Pre-RtB Project; |
|---|---|
| (b) | the<br> purchase price under the relevant Acquisition Agreement for any Eligible Project; |
| --- | --- |
| (c) | Acquisition<br> Costs related to the relevant Acquisition Agreement; |
| --- | --- |
| (d) | Eligible<br> Project Costs to develop the Eligible Projects; and |
| --- | --- |
| (e) | accrued<br> interest and other financing costs, in each case, due and payable in connection with any<br> Loan up until the date upon which the relevant Warehouse Project in respect of the same achieves<br> the Commercial Operation Date. |
| --- | --- |
| 3.2 | Monitoring |
| --- | --- |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
| 4. | CONDITIONS OF UTILISATION |
|---|---|
| 4.1 | Initial conditions precedent |
| --- | --- |
Subject to Clause 4.2 (Conditions precedent for each Utilisation to pay Eligible Pre- RtB Costs), Clause 4.4 (Conditions precedentfor each Utilisation to pay Eligible Project Costs) and Clause 4.5 (Further conditions precedent to each Utilisation), the Borrower may not deliver a Utilisation Request unless the Mezzanine Agent has received all of the documents and other evidence listed in Part A (Initial Conditions Precedent) of Schedule 2 (ConditionsPrecedent and Subsequent) in form and substance satisfactory to the Mezzanine Agent. The Mezzanine Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.
| - 56 - |
| --- | | 4.2 | Conditions precedent for each Utilisation to pay Eligible Pre-RtB Costs | | --- | --- |
The Borrower may not deliver a Utilisation Request for the purpose of application towards payment of Eligible Pre-RtB Costs to develop the Eligible Project up to RtB Status unless the Mezzanine Agent has received all of the documents and other evidence listed in Part B (Conditions Precedent to Pay Eligible Pre-RtB Costs) of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Mezzanine Agent. The Mezzanine Agent shall notify the Borrower and the Lenders in writing promptly upon being so satisfied.
| 4.3 | Conditions precedent for Eligible Project to become Warehouse Project |
|---|---|
| (a) | The<br> Borrower may not deliver a Utilisation Request for the purpose of payment of an amount with<br> respect to an Eligible Project which is not a Warehouse Project unless the Mezzanine Agent<br> has received all of the documents and other evidence listed in Part C (Conditions precedent to pay Eligible Pre-RtB Costs) of Schedule 2 (Conditions Precedent)<br> in form and substance satisfactory to the Mezzanine Agent. |
| --- | --- |
| (b) | The<br> Mezzanine Agent shall notify the Borrower and the Lenders promptly upon being so satisfied<br> with the matters set out in paragraph (a) above by delivering the dated and executed<br> version of the agreed form Original Project Close Confirmation relevant to that Warehouse<br> Project. |
| --- | --- |
| 4.4 | Conditions precedent for each Utilisation to pay Eligible Project Costs |
| --- | --- |
Subject to Clause 4.3 (Conditions precedent for Eligible Project to become Warehouse Project), the Borrower may not deliver a Utilisation Request for the purpose of application towards payment of Eligible Project Costs to develop a Warehouse Project unless the Mezzanine Agent has received all of the documents and other evidence listed in Part D (Conditions precedent for each Utilisation to payEligible Project Costs) of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Mezzanine Agent. The Mezzanine Agent shall notify the Borrower and the Lenders in writing promptly upon being so satisfied.
| - 57 - |
| --- | | 4.5 | Further conditions precedent for each Utilisation | | --- | --- |
Subject to Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent for each Utilisation to pay EligiblePre-RtB Costs), Clause 4.3 (Conditions precedent for Eligible Project to become Warehouse Project) and Clause 4.4 (Conditionsprecedent for each Utilisation to pay Eligible Project Costs), the Lenders will only be obliged to comply with Clause 5.4 (Lenders'participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:
| (a) | all<br> Base Equity Contributions have been made available to the Borrower such that the Loan-to-Cost<br> Ratio and Loan-to-Value Ratio are complied with; |
|---|---|
| (b) | in<br> the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed<br> Loan; |
| --- | --- |
| (c) | in<br> the case of any Loan (other than a Rollover Loan and the Loan to which Clause 4.9 (Utilisations during Certain Funds Period) applies), no Default is continuing or would result from<br> the proposed Loan; |
| --- | --- |
| (d) | (other<br> than the Loan to which Clause 4.9 (Utilisations during Certain Funds Period) applies),<br> the Repeating Representations to be made by each Obligor are true in all material respects; |
| --- | --- |
| (e) | in<br> connection with a Utilisation to be applied towards a Warehouse Project (including any Rollover<br> Loan relating to that individual Warehouse Project): |
| --- | --- |
| (i) | certification<br> from the Lenders' Technical Adviser that: |
| --- | --- |
| (A) | no<br> Funding Shortfall applies in connection with that Warehouse Project; or |
| --- | --- |
| (B) | no<br> delay applies, or is reasonably foreseeable to apply, in connection with any Key Project<br> Milestone applicable to that Warehouse Project (as applicable); or |
| --- | --- |
| (ii) | any<br> Transaction Document relevant to that individual Warehouse Project is terminated, cancelled,<br> repudiated, terminated or rescinded prior to its originally stated maturity or not renewed<br> upon its expiry unless replaced in the manner described in paragraph (c) of Clause 25.12<br> (Termination or Repudiation); |
| --- | --- |
| (f) | no<br> Funding Shortfall which has (whether on a stand-alone basis or in aggregate across multiple<br> Warehouse Projects) a Portfolio Effect applies; |
| --- | --- |
| (g) | no<br> Key Project Milestones have been missed having a Portfolio Effect (whether on a stand-alone<br> basis or in aggregate across multiple Warehouse Projects); and |
| --- | --- |
| (h) | other<br> than in connection with a Utilisation to finance Eligible Pre-RtB Costs, evidence that the<br> Parallel Senior Utilisation Request has been delivered and that all conditions precedent<br> (howsoever defined under the Senior Facility Agreement) for a utilisation (howsoever defined<br> under the Senior Facility Agreement) (other than the equivalent condition therein) are satisfied<br> under the Senior Facility Agreement. |
| --- | --- |
| 4.6 | Conditions subsequent |
| --- | --- |
| (a) | The<br> Borrower and the other Obligors shall procure that the Mezzanine Agent has received each<br> document and other items listed in Part F (Conditions Subsequent) of Schedule<br> 2 (Conditions precedent and conditions subsequent) by not later than the date specified<br> in that Schedule in form and substance satisfactory to the Mezzanine Agent. |
| --- | --- |
| - 58 - |
| --- | | (b) | The<br> Mezzanine Agent shall notify the Borrower, the other Obligors and the Lenders in writing<br> promptly upon being so satisfied. | | --- | --- | | 4.7 | Mezzanine Agent notification | | --- | --- |
Other than to the extent that the Majority Lenders notify the Mezzanine Agent in writing to the contrary before the Mezzanine Agent gives any of the notifications described in Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent to payEligible Pre-RtB Costs), Clause 4.4 (Conditions precedent for each Utilisation to pay other Eligible Project Costs), the Lenders authorise (but do not require) the Mezzanine Agent to give that notification. The Mezzanine Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
| 4.8 | Maximum number of Loans |
|---|---|
| (a) | A<br> Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation: |
| --- | --- |
| (i) | two<br> (2) or more Utilisations would be made in any calendar month; or |
| --- | --- |
| (ii) | twenty-five<br> (25) or more Loans would be outstanding. |
| --- | --- |
| 4.9 | Utilisations during Certain Funds Period |
| --- | --- |
| (a) | Subject<br> to Clause 4.1 (Initial conditions precedent), Clause 4.2 (Conditions precedent for each Utilisation to pay Eligible Pre-RtB Costs), Clause 4.4 (Conditions precedent for each Utilisation to pay Eligible Project Costs) and Clause 4.5 (Further conditions precedent for each Utilisation), and only during the Certain Funds Period, each Lender<br> will only be obliged to comply with Clause 5.4 (Lenders' participation) in relation<br> to a Certain Funds Utilisation if, on the date of the Utilisation Request and on the proposed<br> Utilisation Date: |
| --- | --- |
| (i) | no Major<br> Event of Default is continuing or would result from the proposed Certain Funds Utilisation; |
| --- | --- |
| (ii) | no<br> Change of Control has occurred and is continuing; and |
| --- | --- |
| (iii) | all<br> the Major Representations are true and correct. |
| --- | --- |
| (b) | During<br> the Certain Funds Period (save in circumstances where, pursuant to paragraph (a) above,<br> a Lender is not obliged to comply with Clause 5.4 (Lenders' participation) and subject<br> as provided in Clause 7.1 (Illegality) and Clause 7.2 (Change of Control) none<br> of the Finance Parties shall be entitled to: |
| --- | --- |
| (i) | cancel<br> any of its Commitments to the extent that to do so would prevent or limit the making of a<br> Certain Funds Utilisation; |
| --- | --- |
| (ii) | rescind,<br> terminate or cancel this Agreement or the Facility or exercise any similar right or remedy<br> or make or enforce any claim under the Finance Documents it may have, to the extent that<br> to do so would prevent or limit the making of a Certain Funds Utilisation; |
| --- | --- |
| - 59 - |
| --- | | (iii) | exercise<br> any right of set-off or counterclaim in respect of a Utilisation to the extent to do so would<br> prevent or limit the making of a Certain Funds Utilisation; or | | --- | --- | | (iv) | cancel,<br> accelerate or cause repayment or prepayment of any amounts owing under this Agreement or<br> under any other Finance Document to the extent to do so would prevent or limit the making<br> of a Certain Funds Utilisation, | | --- | --- |
provided that immediately upon the expiry of the Certain Funds Period all such rights, remedies and entitlements shall be available to the Finance Parties notwithstanding that they may not have been used or been available for use during the Certain Funds Period.
| - 60 - |
| --- |
SECTION 3
UTILISATION
| 5. | UTILISATION |
|---|---|
| 5.1 | Delivery of a Utilisation Request |
| --- | --- |
A Borrower may utilise the Facility by delivery to the Mezzanine Agent of a duly completed Utilisation Request not later than the Specified Time.
| 5.2 | Completion of a Utilisation Request |
|---|---|
| (a) | Each<br> Utilisation Request is irrevocable and will not be regarded as having been duly completed<br> unless: |
| --- | --- |
| (i) | the<br> proposed Utilisation Date is a Business Day within the Availability Period; |
| --- | --- |
| (ii) | the<br> proposed Loan is confirmed to comply with Clause 3.1 (Purpose); |
| --- | --- |
| (iii) | the<br> currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); |
| --- | --- |
| (iv) | the<br> proposed Interest Period complies with Clause 9 (Interest Periods); and |
| --- | --- |
| (v) | it specifies<br> the Eligible Project it relates to. |
| --- | --- |
| (b) | Only<br> one (1) Loan may be requested in each Utilisation Request. |
| --- | --- |
| 5.3 | Currency and amount |
| --- | --- |
| (a) | The<br> currency specified in a Utilisation Request must be euro. |
| --- | --- |
| (b) | The<br> amount of the proposed Loan must be an amount which is not more than the Available Facility<br> and which is a minimum of EUR 2,000,000 or, if less, the Available Facility. |
| --- | --- |
| (c) | The<br> amount of the proposed Loan, when aggregated with the amount of all Loans utilised with respect<br> to the same Eligible Project, must be an amount which does not exceed the Allocated Mezzanine<br> Facility Amount for such Eligible Project. |
| --- | --- |
| (d) | In<br> connection with a Utilisation for a Warehouse Project that has either achieved RtB Status<br> or the Commercial Operation Date, the amount of the proposed Loan must be an amount which<br> reflects the Senior/Mezz Ratio of the aggregate amount of the proposed Loan and the Senior<br> Loan proposed in the Parallel Senior Utilisation Request. |
| --- | --- |
| - 61 - |
| --- | | 5.4 | Lenders' participation | | --- | --- | | (a) | If<br> the conditions set out in this Agreement have been met, and subject to Clause 6.1 (Repayment of Loans)) each Lender shall make its participation in each Loan available by the Utilisation<br> Date through its Facility Office. | | --- | --- | | (b) | The<br> amount of each Lender's participation in each Loan will be equal to the proportion borne<br> by its Available Commitment to the Available Facility immediately prior to making the Loan. | | --- | --- | | 5.5 | Cancellation of Commitment | | --- | --- | | (a) | The<br> Original Lender may, in its full, absolute and unfettered discretion, cancel any and all<br> Commitments six (6) months following the Signing Date if no Eligible Project has become<br> a Warehouse Project under this Agreement and has not been financed by any such Commitments. | | --- | --- | | (b) | Subject<br> to paragraph (a) above, the Commitments which, at that time, are unutilised shall be<br> immediately cancelled at the end of the Availability Period. | | --- | --- |
| - 62 - |
| --- |
SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
| 6. | REPAYMENT |
|---|---|
| 6.1 | Repayment of Loans |
| --- | --- |
| (a) | The<br> Borrower shall repay each Loan on the last day of its Interest Period. |
| --- | --- |
| (b) | Without<br> prejudice to the Borrower's obligation under paragraph (a) above, if: |
| --- | --- |
| (i) | one<br> or more Loans are to be made available to the Borrower: |
| --- | --- |
| (A) | on<br> the same day that a maturing Loan is due to be repaid by that Borrower; and |
| --- | --- |
| (B) | in<br> whole or in part for the purpose of refinancing the maturing Loan; and |
| --- | --- |
| (ii) | the<br> proportion borne by each Lender's participation in the maturing Loan to the amount of that<br> maturing Loan is the same as the proportion borne by that Lender's participation in the new<br> Loans to the aggregate amount of those new Loans, |
| --- | --- |
the aggregate amount of the new Loans shall, unless the Borrower notifies the Mezzanine Agent to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Loan so that:
| (A) | if<br> the amount of the maturing Loan exceeds the aggregate amount of the new Loans: |
|---|---|
| (1) | the<br> relevant Borrower will only be required to make a payment under Clause 33.1 (Payments to the Mezzanine Agent) in an amount in the relevant currency equal to that excess; and |
| --- | --- |
| (2) | each<br> Lender's participation in the new Loans shall be treated as having been made available and<br> applied by the Borrower in or towards repayment of that Lender's participation in the maturing<br> Loan and that Lender will not be required to make a payment under Clause 33.1 (Payments to the Mezzanine Agent) in respect of its participation in the new Loans; and |
| --- | --- |
| (B) | if<br> the amount of the maturing Loan is equal to or less than the aggregate amount of the new<br> Loans: |
| --- | --- |
| (1) | the<br> relevant Borrower will not be required to make a payment under Clause 33.1 (Payments to the Mezzanine Agent); and |
| --- | --- |
| - 63 - |
| --- | | (2) | each<br> Lender will be required to make a payment under Clause 33.1 (Payments to the Mezzanine Agent) in respect of its participation in the new Loans only to the extent that its participation<br> in the new Loans exceeds that Lender's participation in the maturing Loan and the remainder<br> of that Lender's participation in the new Loans shall be treated as having been made available<br> and applied by the Borrower in or towards repayment of that Lender's participation in the<br> maturing Loan. | | --- | --- | | 7. | PREPAYMENT AND CANCELLATION | | --- | --- | | 7.1 | Illegality | | --- | --- |
If, in any applicable jurisdiction, it is or becomes unlawful for any Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Loan or it is or becomes unlawful for any Affiliate of a Lender for that Lender to do so:
| (a) | that<br> Lender shall promptly notify the Mezzanine Agent upon becoming aware of that event; |
|---|---|
| (b) | upon<br> the Mezzanine Agent notifying the Borrower, the Available Commitment of that Lender will<br> be immediately cancelled; and |
| --- | --- |
| (c) | to<br> the extent that the Lender's participation has not been transferred pursuant to paragraph<br> (a) of Clause 7.9 (Right of replacement or repayment and cancellation in relation to a single Lender), the Borrower shall repay that Lender's participation in the Loans<br> made to that Borrower on the last day of the Interest Period for each Loan occurring after<br> the Mezzanine Agent has notified the Borrower or, if earlier, the date specified by the Lender<br> in the notice delivered to the Mezzanine Agent and that Lender's corresponding Commitment(s) shall<br> be immediately cancelled in the amount of the participations repaid. |
| --- | --- |
| 7.2 | Change of Control |
| --- | --- |
Upon the occurrence of a Change of Control:
| (a) | the<br> Borrower shall promptly notify the Mezzanine Agent upon becoming aware of that event; |
|---|---|
| (b) | a<br> Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan); and |
| --- | --- |
| (c) | if<br> a Lender so requires, and notifies the Mezzanine Agent within thirty (30) Business Days of<br> the Borrower notifying the Mezzanine Agent of the event, the Mezzanine Agent shall, by not<br> less than five (5) days' notice to the Borrower, cancel the Available Commitments of<br> that Lender and declare the participation of that Lender in all outstanding Loans of that<br> Lender, together with accrued interest, and all other amounts accrued or outstanding under<br> the Finance Documents towards that Lender immediately due and payable, whereupon each such<br> Available Commitment will be immediately cancelled, the Facility shall immediately cease<br> to be available for further utilisation and all such Loans accrued interest and other amounts<br> will become immediately due and payable. |
| --- | --- |
| - 64 - |
| --- | | 7.3 | Mandatory prepayment – Disposal of a Warehouse Project | | --- | --- | | (a) | The<br> Borrower must apply the Prepayment Disposal Proceeds and the Prepayment Refinancing Proceeds<br> in prepayment of the Loans and payment of the other amounts referred to in paragraph (b) of<br> Clause 7.10 (Restrictions) at the time and in the order of application contemplated<br> by Clause 7.11 (Application of prepayments). | | --- | --- | | (b) | In<br> case an Event of Default has occurred and is continuing at the time of a disposal, an amount<br> of Commitments equal to the amount of the Disposal Equity Amount shall be cancelled immediately<br> upon completion of the relevant disposal. | | --- | --- | | 7.4 | Mandatory prepayment – Sanctions | | --- | --- |
Upon the occurrence of a Sanctions Mandatory Prepayment Event:
| (a) | the<br> Borrower shall promptly notify the Mezzanine Agent upon becoming aware of that event; |
|---|---|
| (b) | a<br> Lender shall not be obliged to fund a Utilisation (except for a Rollover Loan); and |
| --- | --- |
| (c) | if<br> a Lender so requires, and notifies the Mezzanine Agent within thirty (30) Business Days of<br> the Borrower notifying the Mezzanine Agent of the event, the Mezzanine Agent shall, by not<br> less than five (5) days' notice to the Borrower, cancel the Available Commitments of<br> that Lender and declare the participation of that Lender in all outstanding Loans of that<br> Lender, together with accrued interest, and all other amounts accrued or outstanding under<br> the Finance Documents towards that Lender immediately due and payable, whereupon each such<br> Available Commitment will be immediately cancelled, the Facility shall immediately cease<br> to be available for further utilisation and all such Loans accrued interest and other amounts<br> will become immediately due and payable. |
| --- | --- |
| 7.5 | Mandatory prepayment – Insurance Proceeds and Compensation Proceeds |
| --- | --- |
| (a) | Subject<br> to paragraphs (b) to (d) below, the Borrower shall apply the Prepayment Insurance<br> Proceeds and any Compensation Proceeds in prepayment of the Loans and payment of the other<br> amounts referred to in paragraph (b) of Clause 7.10 (Restrictions) at the time<br> and in the order of application contemplated by Clause 7.11 (Application of prepayments). |
| --- | --- |
| (b) | No<br> prepayment of an amount shall be required under paragraph (a) above where the Borrower<br> has satisfied each of the following conditions: |
| --- | --- |
| (i) | the<br> aggregate amount of the Insurance Proceeds or (as applicable) Compensation Proceeds) is not<br> more than EUR 1,000,000 (or its equivalent in the currency or currencies of the Eligible<br> Jurisdiction in which the relevant Warehouse Project is situated) for occurrence and not<br> more than EUR 2,000,000 in aggregate on any calendar year; |
| --- | --- |
| - 65 - |
| --- | | (ii) | within<br> forty-five (45) days of the receipt of the Insurance Proceeds or (as applicable) Compensation<br> Proceeds, the Borrower has delivered to the Mezzanine Agent a reinstatement plan, and such<br> plan is approved by the Mezzanine Agent acting on the advice of the Lenders' Technical Adviser<br> (such approved plan, the "Reinstatement Plan"); | | --- | --- | | (iii) | in<br> the reasonable opinion of the Mezzanine Agent (following consultation with the Lenders' Insurance<br> Adviser and the Lenders' Technical Adviser), the damaged facilities or property can be repaired,<br> reinstated or replaced in accordance with the Reinstatement Plan within time limits imposed<br> under the Project Documents and such Insurance Proceeds or (as applicable) Compensation Proceeds<br> are sufficient to do so; and | | --- | --- | | (iv) | the<br> contractual arrangements to effect such repair, reinstatement or replacement are satisfactory<br> to the Mezzanine Agent; and | | --- | --- |
following such repair, and based on a pro forma calculation on the basis of the relevant Project Close Confirmation, the Mezzanine Debt Sizing Assumptions in connection with the Allocated Mezzanine Facility Amount applicable to that Warehouse Project continues to apply in all respects, provided that any such amount received by the Borrower in excess of the amount required to repair, reinstate or replace all or part of the relevant Warehouse Project pursuant to the Reinstatement Plan shall be applied in prepayment in accordance with paragraphs (a) above upon completion of the reinstatement works.
| (c) | The<br> Borrower shall procure that each Reinstatement Plan is promptly and diligently implemented<br> and, on a monthly basis, report on the progress made against such plan to the Mezzanine Agent<br> and Lenders' Technical Adviser. |
|---|---|
| (d) | If<br> (i) the Borrower fails to deliver a Reinstatement Plan in accordance with paragraph<br> (b)(ii) above or (ii) the Reinstatement Plan delivered by the Borrower to the Mezzanine<br> Agent is not approved by the Mezzanine Agent, the Prepayment Insurance Proceeds or (as applicable)<br> Compensation Proceeds shall be applied in prepayment in accordance with paragraph (a) above. |
| --- | --- |
| 7.6 | Mandatory Prepayment – Equity Cure |
| --- | --- |
The Borrower shall apply any Equity Cure, within one (1) Business Day of receipt of such Equity Cure, in prepayment of the whole or any part of the Facility.
| 7.7 | Voluntary cancellation |
|---|---|
| (a) | The<br> Borrower may, if it gives the Mezzanine Agent not less than ten (10) Business Days'<br> (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole<br> or any part (being a minimum amount of EUR 1,000,000) of the Available Facility. |
| --- | --- |
| - 66 - |
| --- | | (b) | Any<br> cancellation under this Clause 7.3 shall reduce the Commitments of the Lenders rateably. | | --- | --- | | (c) | The<br> Borrower may not cancel any part of the Available Facility: | | --- | --- | | (i) | prior<br> to the date falling twelve (12) Months after the date of Financial Close; and | | --- | --- | | (ii) | if,<br> as a consequence of the cancellation, the aggregate of the Available Facility and the Senior<br> Available Facility would be lower than the aggregate of the Allocated Loan Amount. | | --- | --- | | 7.8 | Voluntary prepayment of Loans | | --- | --- | | (a) | The<br> Borrower, if it gives the Mezzanine Agent not less than ten (10) Business Days' (or<br> such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or<br> any part of a Loan (but if in part, being an amount that reduces the amount of the Loan by<br> a minimum amount of EUR 200,000). | | --- | --- | | (b) | A<br> Loan shall only be prepaid if all Loan which relate to the same Warehouse Project, are prepaid<br> at the same time. | | --- | --- | | (c) | A<br> Loan shall only be prepaid at a date falling no earlier than the date falling twelve (12)<br> Months after the date of Financial Close. | | --- | --- | | 7.9 | Right of replacement or repayment and cancellation in relation to a single Lender | | --- | --- | | (a) | If: | | --- | --- | | (i) | any<br> sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of<br> Clause 12.2 (Tax gross-up); or | | --- | --- | | (ii) | any<br> Lender or Issuing Bank claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased Costs), | | --- | --- |
the Borrower may, whilst (in the case of paragraphs (i) and (ii) above) the circumstance giving rise to the requirement for that increase or indemnification continues or (in the case of paragraph (ii) above) that additional cost rate is greater than zero, give the Mezzanine Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender's participation in the Loans or give the Mezzanine Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.
| (b) | On<br> receipt of a notice of cancellation referred to in paragraph (a) above, the Available<br> Commitment(s) of that Lender shall be immediately reduced to zero. |
|---|---|
| (c) | On<br> the last day of each Interest Period which ends after the Borrower has given notice of cancellation<br> under paragraph (a) above (or, if earlier, the date specified by the Borrower in that<br> notice), the Borrower to which a Loan is outstanding shall repay that Lender's participation<br> in that Loan and that Lender's corresponding Commitment(s) shall be immediately cancelled<br> in the amount of the participations repaid. |
| --- | --- |
| - 67 - |
| --- | | (d) | If: | | --- | --- | | (i) | any<br> of the circumstances set out in paragraph (a) above apply to a Lender; or | | --- | --- | | (ii) | an<br> Obligor becomes obliged to pay any amount in accordance with Clause 7.1 (Illegality)<br> to any Lender, | | --- | --- |
the Borrower may, on twenty (20) Business Days' prior notice to the Mezzanine Agent and that Lender, replace that Lender by requiring that Lender to (and to the extent permitted by law, that Lender shall) transfer pursuant to Clause 26 (Changes to the Lenders andHedge Counterparties) all (and not part only) of its rights and obligations under this Agreement to an Eligible Institution which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 26 (Changesto the Lenders and Hedge Counterparties) for a purchase price in cash payable at the time of the transfer in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and all accrued interest (to the extent that the Mezzanine Agent has not given a notification under Clause 26.10 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents.
| (e) | The<br> replacement of a Lender pursuant to paragraph (d) above shall be subject to the following<br> conditions: |
|---|---|
| (i) | the<br> Borrower shall have no right to replace the Mezzanine Agent; |
| --- | --- |
| (ii) | neither<br> the Mezzanine Agent nor any Lender shall have any obligation to find a replacement Lender; |
| --- | --- |
| (iii) | in<br> no event shall the Lender replaced under paragraph (d) above be required to pay or surrender<br> any of the fees received by such Lender pursuant to the Finance Documents; and |
| --- | --- |
| (iv) | the<br> Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph<br> (d) above once it is satisfied that it has complied with all necessary "know your<br> customer" or other similar checks under all applicable laws and regulations in relation<br> to that transfer. |
| --- | --- |
| (f) | A<br> Lender shall perform the checks described in paragraph (e)(iv) above as soon as reasonably<br> practicable following delivery of a notice referred to in paragraph (d) above<br> and shall notify the Mezzanine Agent and the Borrower when it is satisfied that it has complied<br> with those checks. |
| --- | --- |
| (g) | |
| --- | |
| (i) | If<br> any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues<br> to be a Defaulting Lender, give the Mezzanine Agent fifteen (15) Business Days' notice of<br> cancellation of the Available Commitment of that Lender. |
| --- | --- |
| - 68 - |
| --- | | (ii) | On<br> the notice referred to in limb (i) above becoming effective, the Available Commitment<br> of the Defaulting Lender shall immediately be reduced to zero. | | --- | --- | | (iii) | The<br> Mezzanine Agent shall as soon as practicable after receipt of a notice referred to in limb<br> (i) above, notify all the Lenders. | | --- | --- | | 7.10 | Restrictions | | --- | --- | | (a) | Any<br> notice of cancellation or prepayment given by any Party under this Clause 7 shall be irrevocable<br> and, unless a contrary indication appears in this Agreement, shall specify the date or dates<br> upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation<br> or prepayment. | | --- | --- | | (b) | Any<br> prepayment under this Agreement shall be made together with accrued interest on the amount<br> prepaid and, subject to any Break Costs, without premium or penalty. | | --- | --- | | (c) | Unless<br> a contrary indication appears in this Agreement, any part of the Facility which is prepaid<br> or repaid may be reborrowed during the Availability Period in accordance with the terms of<br> this Agreement. | | --- | --- | | (d) | The<br> Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part<br> of the Commitments except at the times and in the manner expressly provided for in this Agreement<br> (including as set out in paragraph (d)(vii) of Clause 2.3 (Increase – Accordion Option)). | | --- | --- | | (e) | Subject<br> to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this<br> Agreement may be subsequently reinstated. | | --- | --- | | (f) | If<br> the Mezzanine Agent receives a notice under this Clause 7 it shall promptly forward a copy<br> of that notice to either the Borrower or the affected Lender, as appropriate. | | --- | --- | | (g) | If<br> all or part of any Lender's participation in a Loan is repaid or prepaid and is not available<br> for redrawing (other than by operation of Clause 4.5 (Further conditions precedent for each Utilisation), an amount of that Lender's Commitment (equal to the amount of the<br> participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment<br> or prepayment. | | --- | --- | | 7.11 | Application of prepayments | | --- | --- | | (a) | Any<br> prepayment of a Loan pursuant to this Clause 7 shall be applied pro rata to each Lender's<br> participation in that Loan. | | --- | --- | | (b) | Any<br> prepayment pursuant to Clause 7.1 (Illegality), Clause 7.2 (Change of Control),<br> Clause 7.4 (Sanctions) and Clause 7.6 (Mandatory prepayment – Equity Cure)<br> shall be applied across all Loans on a pro rata basis. | | --- | --- |
| - 69 - |
| --- | | (c) | Any<br> prepayment pursuant to Clause 7.3 (Mandatory prepayment – Disposal of a Warehouse Project) shall be applied only towards the Loans relating to the disposed Warehouse Project. | | --- | --- | | (d) | Any<br> prepayment pursuant to Clause 7.5 (Mandatory prepayment – Insurance Proceeds and Compensation Proceeds) shall be applied only towards the Loans relating to the relevant<br> Warehouse Project | | --- | --- | | (e) | Any<br> prepayment of a Loan pursuant to this Clause 7.3 (Mandatory prepayment – Disposal of a Warehouse Project) and Clause 7.5 (Mandatory prepayment – Insurance Proceeds and Compensation Proceeds) shall be made on the last day of the Interest Periods of the<br> relevant Loans relating to the affected Warehouse Projects, in each case which fall after<br> the date of closing of the relevant disposal (or, if earlier, the receipt of the relevant<br> disposal proceeds) provided that, in the case of a prepayment of a Loan pursuant to Clause<br> 7.3 (Mandatory prepayment – Disposal of a Warehouse Project), such prepayment<br> may be made on an earlier date with the prior written consent of the Mezzanine Agent. | | --- | --- | | (f) | Any<br> prepayment of a Loan pursuant to Clause 7.6 (Mandatory prepayment - Equity Cure) shall<br> be made within one (1) Business Day of receipt of the Equity Cure received by the Borrower<br> pursuant to Clause 25.25 (Equity Cure). | | --- | --- |
| - 70 - |
| --- |
SECTION 5
COSTS OF UTILISATION
| 8. | INTEREST |
|---|---|
| 8.1 | Calculation of interest |
| --- | --- |
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
| (a) | Margin;<br> and |
|---|---|
| (b) | EURIBOR. |
| --- | --- |
| 8.2 | Payment of interest |
| --- | --- |
The Borrower shall pay accrued interest on a Loan on the last day of each Interest Period (and, if the Interest Period is longer than six (6) Months, on the dates falling at six (6) Monthly intervals after the first day of the Interest Period)..
| 8.3 | Determination of Margin |
|---|---|
| (a) | Subject<br> to paragraphs (b) to (d) below, the Margin shall be eight per cent (8%) per annum<br> (the "Base Margin"). |
| --- | --- |
| (b) | As<br> of the date of this Agreement until the date of determination in accordance with paragraph<br> (c) below, the Margin applicable to the Loans shall be the Margin. |
| --- | --- |
| (c) | The<br> Borrower shall pay an additional margin to the Base Margin as set out and in accordance with<br> the relevant Fee Letters |
| --- | --- |
| (d) | If,<br> at any time, and as long as, the Non-Euro Ratio is lower than the Non-Euro Cap, the applicable<br> Margin (such margin being the Base Margin plus the additional margin referenced in paragraph<br> (c) above and set out in the relevant Fee Letters) shall be reduced (pro rata between<br> the Base Margin and the additional margin) by two per cent (2%) (and if as a result the Margin<br> is less than zero (0), the Margin shall be deemed to be zero (0)). |
| --- | --- |
| 8.4 | Default interest |
| --- | --- |
| (a) | If<br> an Obligor fails to pay any amount payable by it under a Finance Document on its due date,<br> interest shall accrue on the overdue amount from the due date up to the date of actual payment<br> (both before and after judgment) at a rate which, subject to paragraph (b) below, is<br> one per cent. (1%) per annum higher than the rate which would have been payable if the overdue<br> amount had, during the period of non-payment, constituted a Loan in the currency of the overdue<br> amount for successive Interest Periods, each of a duration selected by the Mezzanine Agent<br> (acting reasonably). Any interest accruing under this Clause 8.4 shall be immediately payable<br> by the Obligor on demand by the Mezzanine Agent. |
| --- | --- |
| - 71 - |
| --- | | (b) | If<br> any overdue amount consists of all or part of a Loan which became due on a day which was<br> not the last day of an Interest Period relating to that Loan: | | --- | --- | | (i) | the<br> first Interest Period for that overdue amount shall have a duration equal to the unexpired<br> portion of the current Interest Period relating to that Loan; and | | --- | --- | | (ii) | the<br> rate of interest applying to the overdue amount during that first Interest Period shall be<br> one per cent. per annum higher than the rate which would have applied if the overdue amount<br> had not become due. | | --- | --- | | (c) | Default<br> interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount<br> at the end of each Interest Period applicable to that overdue amount but will remain immediately<br> due and payable. | | --- | --- | | 8.5 | Notification of rates of interest | | --- | --- | | (a) | The<br> Mezzanine Agent shall promptly notify the Lenders and the relevant Borrower of the determination<br> of a rate of interest under this Agreement. | | --- | --- | | (b) | The<br> Mezzanine Agent shall promptly notify the relevant Borrower of each Funding Rate relating<br> to a Loan. | | --- | --- | | 9. | INTEREST PERIODS | | --- | --- | | 9.1 | Selection of Interest Periods | | --- | --- | | (a) | The<br> Borrower may select an Interest Period for a Loan in the Utilisation Request for that Loan. | | --- | --- | | (b) | Subject<br> to this Clause 9, the Borrower may select an Interest Period of three (3) Months or<br> of any other period agreed between the Borrower and the Mezzanine Agent (acting on the instructions<br> of all the Lenders). | | --- | --- | | (c) | An<br> Interest Period for a Loan shall not extend beyond the Termination Date. | | --- | --- | | (d) | Each<br> Interest Period for a Loan shall start on the Utilisation Date. | | --- | --- | | (e) | A<br> Loan has one (1) Interest Period only. | | --- | --- | | 9.2 | Non-Business Days | | --- | --- |
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
| - 72 - |
| --- | | 10. | CHANGES TO THE CALCULATION OF INTEREST | | --- | --- | | 10.1 | Unavailability of Screen Rate | | --- | --- | | (a) | Interpolated Screen Rate: If no Screen Rate is available for EURIBOR for the Interest Period of a<br> Loan, the applicable or EURIBOR shall be the Interpolated Screen Rate for a period equal<br> in length to the Interest Period of that Loan. | | --- | --- | | (b) | Reference Bank Rate: If no Screen Rate is available for EURIBOR for: | | --- | --- | | (i) | the<br> currency of a Loan; or | | --- | --- | | (ii) | the<br> Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate, | | --- | --- |
the applicable EURIBOR shall be the Reference Bank Rate as of the Specified Time for the currency of that Loan and for a period equal in length to the Interest Period of that Loan.
| 10.2 | Calculation of Reference Bank Rate |
|---|---|
| (a) | Subject<br> to paragraph (b) below, if EURIBOR is to be determined on the basis of a Reference Bank<br> Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference<br> Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks. |
| --- | --- |
| (b) | If<br> at or about noon on the Quotation Day none, or only one, of the Reference Banks supplies<br> a quotation, there shall be no Reference Bank Rate for the relevant Interest Period. |
| --- | --- |
| 10.3 | Market disruption |
| --- | --- |
If before close of business in London on the Quotation Day for the relevant Interest Period the Mezzanine Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed thirty-five (35) per cent. of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of EURIBOR then Clause 10.4 (Costof funds) shall apply to that Loan for the relevant Interest Period.
| 10.4 | Cost of funds |
|---|---|
| (a) | If<br> this Clause 10.4 applies, the rate of interest on each Lender's share of the relevant Loan<br> for the relevant Interest Period shall be the percentage rate per annum which is the sum<br> of: |
| --- | --- |
| (i) | the<br> Margin; and |
| --- | --- |
| (ii) | the<br> weighted average of the rates notified to the Mezzanine Agent by each Lender as soon as practicable<br> and in any event by close of business on the date falling five (5) Business Days before<br> the date on which interest is due to be paid in respect of that Interest Period), to be that<br> which expresses as a percentage rate per annum the cost to the relevant Lender of funding<br> its participation in that Loan from whatever source it may reasonably select. |
| --- | --- |
| - 73 - |
| --- | | (b) | If<br> this Clause 10.4 applies and the Mezzanine Agent or the Borrower so requires, the Mezzanine<br> Agent and the Borrower shall enter into negotiations (for a period of not more than thirty<br> days) with a view to agreeing a substitute basis for determining the rate of interest. | | --- | --- | | (c) | Any<br> alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent<br> of all the Lenders and the Borrower, be binding on all Parties. | | --- | --- | | (d) | If<br> this Clause 10.4 applies pursuant to Clause 10.3 (Market disruption) and: | | --- | --- | | (i) | a Lender's<br> Funding Rate is less than EURIBOR; or | | --- | --- | | (ii) | a Lender<br> does not supply a quotation by the time specified in paragraph (a)(ii) above, | | --- | --- |
the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be EURIBOR.
| 10.5 | Notification to Borrower |
|---|
If Clause 10.4 (Cost of funds) applies, the Mezzanine Agent shall, as soon as is practicable, notify the Borrower.
| 10.6 | Break Costs |
|---|---|
| (a) | The<br> Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to<br> that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum<br> being paid by that Borrower on a day other than the last day of an Interest Period for that<br> Loan or Unpaid Sum. |
| --- | --- |
| (b) | Each<br> Lender shall, as soon as reasonably practicable after a demand by the Mezzanine Agent, provide<br> a certificate confirming the amount of its Break Costs for any Interest Period in which they<br> accrue. |
| --- | --- |
| 11. | FEES |
| --- | --- |
| 11.1 | Commitment fee |
| --- | --- |
| (a) | The<br> Borrower shall pay to the Mezzanine Agent (for the account of each Lender) a fee computed<br> at the rate of thirty-five per cent. 35% of the applicable Margin per annum on that Lender's<br> Available Commitment for the Availability Period. |
| --- | --- |
| (b) | The<br> accrued commitment fee is payable on the last day of each successive period of three (3) Months<br> which ends during the Availability Period, on the last day of the Availability Period and,<br> if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the<br> time the cancellation is effective. |
| --- | --- |
| - 74 - |
| --- | | 11.2 | Arrangement fee | | --- | --- |
The Borrower shall pay to the Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter.
| 11.3 | Agency fee |
|---|
The Borrower shall pay to the Mezzanine Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
| 11.4 | Security Agent fee |
|---|
The Borrower shall pay to the Security Agent (for its own account) a security agent fee in the amount and at the times agreed in a Fee Letter.
| 11.5 | Drawdown fee |
|---|---|
| (a) | On<br> the first Utilisation Date relating to a Warehouse Project, the Borrower shall pay to the<br> Mezzanine Agent (for the account of each Lender) a fee in an amount equal to 0.35% of the<br> Allocated Mezzanine Facility Amount applicable to that Warehouse Project (the "Drawdown Fee"). |
| --- | --- |
| (b) | All<br> payments will be made in euro in immediately available funds without set- off or counterclaim. |
| --- | --- |
| (c) | The<br> Drawdown Fee will be withheld and deducted from the proceeds of the relevant Loan on the<br> relevant Utilisation Date in full and final payment of the Drawdown Fee due on that date. |
| --- | --- |
| (d) | The<br> Drawdown Fee is non-refundable. |
| --- | --- |
| - 75 - |
| --- |
SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
| 12. | TAX GROSS UP AND INDEMNITIES |
|---|---|
| 12.1 | Definitions |
| --- | --- |
In this Agreement:
"Qualifying Lender" means a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:
| (a) | a<br> bank, within the meaning of section 246(1) TCA which is carrying on a bona fide banking<br> business in Ireland for the purposes of section 246(3)(a) TCA; or |
|---|---|
| (b) | a<br> body corporate: |
| --- | --- |
| (i) | which<br> is resident for the purposes of tax in a Relevant Territory (residence for these purposes<br> is to be determined in accordance with the laws of the Relevant Territory of which the Lender<br> claims to be resident) where that Relevant Territory imposes a tax that generally applies<br> to interest receivable in that Relevant Territory or where that Relevant Territory provides<br> for a remittance basis of taxation and interest payable under this Agreement is payable into<br> an account located in that Relevant Territory by bodies corporate from sources outside that<br> Relevant Territory; or |
| --- | --- |
| (ii) | where<br> interest is payable under this Agreement: |
| --- | --- |
| (A) | is<br> exempted from the charge to income tax under a Treaty in force between Ireland and the country<br> in which the Lender is resident for tax purposes; or |
| --- | --- |
| (B) | would<br> be exempted from the charge to income tax under a Treaty signed between Ireland and the country<br> in which the Lender is resident for tax purposes if such Treaty had the force of law by virtue<br> of section 826(1) TCA; |
| --- | --- |
except where interest is paid under this Agreement to the body corporate in connection with a trade or business which is carried on by it in Ireland through a branch or agency; or
| (c) | a<br> company that is incorporated in the US and taxed in the US on its worldwide income except<br> where interest is paid under this Agreement to the US company in connection with a trade<br> or business which is carried on by it in Ireland through a branch or agency; or |
|---|---|
| (d) | a<br> US limited liability company (“LLC”), where the ultimate recipients of<br> the interest payable under this Agreement are Qualifying Lenders within paragraphs (ii) ,<br> (iii) or (v) of this definition and the business conducted through the LLC is so<br> structured for market reasons and not for tax avoidance purposes except where interest is<br> paid under this Agreement to the LLC in connection with a trade or business which is carried<br> on by it or them in Ireland through a branch or agency; or |
| --- | --- |
| - 76 - |
| --- | | (e) | a<br> qualifying company within the meaning of section 110 TCA; | | --- | --- | | (f) | an<br> exempt approved scheme within the meaning of section 774 TCA; | | --- | --- | | (g) | an<br> investment undertaking within the meaning of section 739B TCA; or | | --- | --- | | (h) | a<br> body corporate: | | --- | --- | | (i) | which<br> advances money in the ordinary course of a trade which includes the lending of money; | | --- | --- | | (ii) | where<br> interest on an advance under this Agreement is taken into account in computing the trading<br> income of such body corporate; and | | --- | --- | | (iii) | which<br> has made the appropriate notifications under section 246(5)(a) TCA to the Revenue Commissioners<br> and the Borrower; or | | --- | --- | | (iv) | a<br> Treaty Lender. | | --- | --- |
"Relevant Territory" means:
| (a) | a<br> member state of the European Union (other than Ireland); |
|---|---|
| (b) | not<br> being such a member state, a country with which Ireland has a Treaty in force by virtue of<br> section 826(1) TCA; or |
| --- | --- |
| (c) | not<br> being a territory referred to in (i) or (ii) above, a country with which Ireland<br> has signed such a Treaty which will come into force once the procedures set out in section<br> 826(1) TCA have been completed. |
| --- | --- |
"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.
"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.
"TaxPayment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause 12.3 (Tax indemnity).
"Treaty Lender" means a Lender which:
| (a) | is<br> treated as a resident of a Treaty State for the purposes of the Treaty; |
|---|---|
| (b) | does<br> not carry on a business in Ireland through a permanent establishment with which that Lender's<br> participation in the Loan is effectively connected, |
| --- | --- |
provided that a Lender shall not be a Treaty Lender if it falls within sub-paragraph (ii), (iii) or (iv) of the definition of "Qualifying Lender".
| - 77 - |
| --- |
"Treaty State" means a jurisdiction having a double taxation agreement (a "Treaty") with Ireland which makes provision for full exemption from tax imposed by Ireland on interest.
| 12.2 | Tax gross-up |
|---|---|
| (a) | Each<br> Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax<br> Deduction is required by law. |
| --- | --- |
| (b) | The<br> Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or<br> that there is any change in the rate or the basis of a Tax Deduction) notify the Mezzanine<br> Agent accordingly. Similarly, a Lender shall notify the Mezzanine Agent on becoming so aware<br> in respect of a payment payable to that Lender. If the Mezzanine Agent receives such notification<br> from a Lender it shall notify the Borrower and that Obligor. |
| --- | --- |
| (c) | If<br> a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due<br> from that Obligor shall be increased to an amount which (after making any Tax Deduction)<br> leaves an amount equal to the payment which would have been due if no Tax Deduction had been<br> required. |
| --- | --- |
| (d) | If<br> an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction<br> and any payment required in connection with that Tax Deduction within the time allowed and<br> in the minimum amount required by law. |
| --- | --- |
| (e) | Within<br> thirty (30) days of making either a Tax Deduction or any payment required in connection with<br> that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Mezzanine<br> Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that<br> Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment<br> paid to the relevant taxing authority. |
| --- | --- |
| 12.3 | Tax Indemnity |
| --- | --- |
| (a) | The<br> Borrower shall (within three Business Days of demand by the Mezzanine Agent) pay to a Protected<br> Party an amount equal to the loss, liability or cost which that Protected Party determines<br> will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected<br> Party in respect of a Finance Document. |
| --- | --- |
| (b) | Paragraph<br> (a) above shall not apply: |
| --- | --- |
| (i) | with<br> respect to any Tax assessed on a Finance Party: |
| --- | --- |
| (A) | under<br> the law of the jurisdiction in which that Finance Party is incorporated or, if different,<br> the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for<br> tax purposes; or |
| --- | --- |
| (B) | under<br> the law of the jurisdiction in which that Finance Party's Facility Office is located in respect<br> of amounts received or receivable in that jurisdiction, if that Tax is imposed on or calculated<br> by reference to the net income received or receivable (but not any sum deemed to be received<br> or receivable) by that Finance Party; or |
| --- | --- |
| - 78 - |
| --- | | (ii) | to<br> the extent a loss, liability or cost: | | --- | --- | | (A) | is<br> compensated for by an increased payment under Clause 12.2 (Tax gross-up); or | | --- | --- | | (B) | relates<br> to a FATCA Deduction required to be made by a Party. | | --- | --- | | (c) | A<br> Protected Party making, or intending to make a claim under paragraph (a) above shall<br> promptly notify the Mezzanine Agent of the event which will give, or has given, rise to the<br> claim, following which the Mezzanine Agent shall notify the Borrower. | | --- | --- | | (d) | A<br> Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3, notify<br> the Mezzanine Agent. | | --- | --- | | 12.4 | Tax Credit | | --- | --- |
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
| (a) | a<br> Tax Credit is attributable to an increased payment of which that Tax Payment forms part,<br> to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required;<br> and |
|---|---|
| (b) | that<br> Finance Party has obtained and utilised that Tax Credit, |
| --- | --- |
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
| 12.5 | Lender status confirmation |
|---|
Each Lender which is not an Original Lender shall indicate, in the documentation which it executes on becoming a Party as a Lender, and for the benefit of the Mezzanine Agent and without liability to any Obligor, which of the following categories it falls in:
| (a) | not<br> a Qualifying Lender; |
|---|---|
| (b) | a<br> Qualifying Lender (other than a Treaty Lender); or |
| --- | --- |
| (c) | a<br> Treaty Lender. |
| --- | --- |
If such a Lender fails to indicate its status in accordance with this Clause 12.5 then that Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Mezzanine Agent which category applies (and the Mezzanine Agent, upon receipt of such notification, shall inform the Borrower). For the avoidance of doubt, the documentation which a Lender executes on becoming a Party as a Lender shall not be invalidated by any failure of a Lender to comply with this Clause 12.5.
| - 79 - |
| --- | | 12.6 | Stamp taxes | | --- | --- |
The Borrower shall pay and, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability that Secured Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
| 12.7 | VAT |
|---|---|
| (a) | All<br> amounts expressed to be payable under a Finance Document by any Party to a Finance Party<br> which (in whole or in part) constitute the consideration for any supply for VAT purposes<br> are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly,<br> subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by<br> any Finance Party to any Party under a Finance Document and such Finance Party is required<br> to account to the relevant tax authority for the VAT, that Party must pay to such Finance<br> Party (in addition to and at the same time as paying any other consideration for such supply)<br> an amount equal to the amount of the VAT (and such Finance Party must promptly provide an<br> appropriate VAT invoice to that Party). |
| --- | --- |
| (b) | If<br> VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier")<br> to any other Finance Party (the "Recipient") under a Finance Document, and<br> any Party other than the Recipient (the "Relevant Party") is required by<br> the terms of any Finance Document to pay an amount equal to the consideration for that supply<br> to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect<br> of that consideration): |
| --- | --- |
| (i) | (where<br> the Supplier is the person required to account to the relevant tax authority for the VAT)<br> the Relevant Party must also pay to the Supplier (at the same time as paying that amount)<br> an additional amount equal to the amount of the VAT. The Recipient must (where this limb<br> (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment<br> the Recipient receives from the relevant tax authority which the Recipient reasonably determines<br> relates to the VAT chargeable on that supply; and |
| --- | --- |
| (ii) | (where<br> the Recipient is the person required to account to the relevant tax authority for the VAT)<br> the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient<br> an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient<br> reasonably determines that it is not entitled to credit or repayment from the relevant tax<br> authority in respect of that VAT. |
| --- | --- |
| (c) | Where<br> a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost<br> or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party<br> for the full amount of such cost or expense, including such part thereof as represents VAT,<br> save to the extent that such Finance Party reasonably determines that it is entitled to credit<br> or repayment in respect of such VAT from the relevant tax authority. |
| --- | --- |
| - 80 - |
| --- | | (d) | Any<br> reference in this Clause 12.7 to any Party shall, at any time when such Party is treated<br> as a member of a VAT Group, include (where appropriate and unless the context otherwise requires)<br> a reference to the person who is treated at that time as making the supply, or (as appropriate)<br> receiving the supply, under the grouping rules (provided for in Article 11 of Council<br> Directive 2006/112/EC (or as implemented by the relevant member state of the European Union)<br> or any other similar provision in any jurisdiction which is not a member state of the European<br> Union) so that a reference to a Party shall be construed as a reference to that Party or<br> the relevant VAT Group of which that Party is a member at the relevant time or the relevant<br> representative member (or head) of that VAT Group at the relevant time. | | --- | --- | | (e) | In<br> relation to any supply made by a Finance Party to any Party under a Finance Document, if<br> reasonably requested by such Finance Party, that Party must promptly provide such Finance<br> Party with details of that Party's VAT registration and such other information as is reasonably<br> requested in connection with such Finance Party's VAT reporting requirements in relation<br> to such supply. | | --- | --- | | 12.8 | FATCA information | | --- | --- | | (a) | Subject<br> to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request<br> by another Party: | | --- | --- | | (i) | confirm<br> to that other Party whether it is: | | --- | --- | | (A) | a<br> FATCA Exempt Party; or | | --- | --- | | (B) | not<br> a FATCA Exempt Party; | | --- | --- | | (ii) | supply<br> to that other Party such forms, documentation and other information relating to its status<br> under FATCA as that other Party reasonably requests for the purposes of that other Party's<br> compliance with FATCA; and | | --- | --- | | (iii) | supply<br> to that other Party such forms, documentation and other information relating to its status<br> as that other Party reasonably requests for the purposes of that other Party's compliance<br> with any other law, regulation, or exchange of information regime. | | --- | --- | | (b) | If<br> a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA<br> Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA<br> Exempt Party, that Party shall notify that other Party reasonably promptly. | | --- | --- | | (c) | Paragraph<br> (a) above shall not oblige any Finance Party to do anything, and paragraph (a)(iii) above<br> shall not oblige any other Party to do anything, which would or might in its reasonable opinion<br> constitute a breach of: | | --- | --- | | (i) | any<br> law or regulation; | | --- | --- | | (ii) | any<br> fiduciary duty; or | | --- | --- |
| - 81 - |
| --- | | (iii) | any<br> duty of confidentiality. | | --- | --- | | (d) | If<br> a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation<br> or other information requested in accordance with paragraph (a)(i) or (ii) above<br> (including, for the avoidance of doubt, where paragraph (c) above applies), then such<br> Party shall be treated for the purposes of the Finance Documents (and payments under them)<br> as if it is not a FATCA Exempt Party until such time as the Party in question provides the<br> requested confirmation, forms, documentation or other information. | | --- | --- | | (e) | If<br> the Borrower is a US Tax Obligor or the Mezzanine Agent reasonably believes that its obligations<br> under FATCA or any other applicable law or regulation require it, each Lender shall, within<br> ten (10) Business Days of: | | --- | --- | | (i) | where<br> the Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the Signing<br> Date; | | --- | --- | | (ii) | where<br> the Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a<br> Lender, that date; | | --- | --- | | (iii) | the<br> date a new US Tax Obligor accedes as the Borrower; or | | --- | --- | | (iv) | where<br> the Borrower is not a US Tax Obligor, the date of a request from the Mezzanine Agent, | | --- | --- |
supply to the Mezzanine Agent:
| (A) | a<br> withholding certificate on Form W-8, Form W-9 or any other relevant form; or |
|---|---|
| (B) | any<br> withholding statement or other document, authorisation or waiver as the Mezzanine Agent may<br> require to certify or establish the status of such Lender under FATCA or that other law or<br> regulation. |
| --- | --- |
| (f) | The<br> Mezzanine Agent shall provide any withholding certificate, withholding statement, document,<br> authorisation or waiver it receives from a Lender pursuant to paragraph (e) above to<br> the relevant Borrower. |
| --- | --- |
| (g) | If<br> any withholding certificate, withholding statement, document, authorisation or waiver provided<br> to the Mezzanine Agent by a Lender pursuant to paragraph (e) above<br> is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and<br> provide such updated withholding certificate, withholding statement, document, authorisation<br> or waiver to the Mezzanine Agent unless it is unlawful for the Lender to do so (in which<br> case the Lender shall promptly notify the Mezzanine Agent). The Mezzanine Agent shall provide<br> any such updated withholding certificate, withholding statement, document, authorisation<br> or waiver to the relevant Borrower. |
| --- | --- |
| (h) | The<br> Mezzanine Agent may rely on any withholding certificate, withholding statement, document,<br> authorisation or waiver it receives from a Lender pursuant to paragraph (e) or (g) above<br> without further verification. The Mezzanine Agent shall<br> not be liable for any action taken by it under or in connection with paragraphs (e),<br> (f) or (g) above. |
| --- | --- |
| - 82 - |
| --- | | 12.9 | FATCA Deduction | | --- | --- | | (a) | Each<br> Party may make any FATCA Deduction it is required to make by FATCA, and any payment required<br> in connection with that FATCA Deduction, and no Party shall be required to increase any payment<br> in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient<br> of the payment for that FATCA Deduction. | | --- | --- | | (b) | Each<br> Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there<br> is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom<br> it is making the payment and, in addition, shall notify the Borrower and the Mezzanine Agent<br> and the Mezzanine Agent shall notify the other Finance Parties. | | --- | --- | | 13. | INCREASED COSTS | | --- | --- | | 13.1 | Increased costs | | --- | --- | | (a) | Subject<br> to Clause 13.3 (Exceptions) the Borrower shall, within three Business Days of a demand<br> by the Mezzanine Agent, pay for the account of a Finance Party the amount of any Increased<br> Costs incurred by that Finance Party or any of its Affiliates as a result of: | | --- | --- | | (i) | the<br> introduction of or any change in (or in the interpretation, administration or application<br> of) any law or regulation after the Signing Date; | | --- | --- | | (ii) | compliance<br> with any law or regulation made after the Signing Date; or | | --- | --- | | (iii) | the<br> implementation or application of, or compliance with, Basel III or CRD IV or any law or regulation<br> that implements or applies Basel III or CRD IV, unless such Increased Costs are reasonably<br> foreseeable on the date of this Agreement. | | --- | --- | | (b) | In<br> this Agreement: | | --- | --- | | (i) | "Increased Costs" means: | | --- | --- | | (A) | a<br> reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's)<br> overall capital; | | --- | --- | | (B) | an<br> additional or increased cost; or | | --- | --- | | (C) | a<br> reduction of any amount due and payable under any Finance Document, | | --- | --- |
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document;
| - 83 - |
| --- | | (ii) | "Basel III" means: | | --- | --- | | (A) | the<br> agreements on capital requirements, a leverage ratio and liquidity standards contained in<br> "Basel III: A global regulatory framework for more resilient banks and banking systems",<br> "Basel III: International framework for liquidity risk measurement, standards and monitoring"<br> and "Guidance for national authorities operating the countercyclical capital buffer"<br> published by the Basel Committee on Banking Supervision in December 2010, each as amended,<br> supplemented or restated; | | --- | --- | | (B) | the<br> rules for global systemically important banks contained in "Global systemically<br> important banks: assessment methodology and the additional loss absorbency requirement –<br> Rules text" published by the Basel Committee on Banking Supervision in November 2011,<br> as amended, supplemented or restated; and | | --- | --- | | (C) | any<br> further guidance or standards published by the Basel Committee on Banking Supervision relating<br> to "Basel III"; | | --- | --- | | (iii) | "CRD IV" means EU CRD IV and UK CRD IV; | | --- | --- | | (iv) | "EU CRD IV" means: | | --- | --- | | (A) | Regulation<br> (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential<br> requirements for credit institutions and investment firms; and | | --- | --- | | (B) | Directive<br> 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to<br> the activity of credit institutions and the prudential supervision of credit institutions<br> and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and<br> 2006/49/EC; | | --- | --- | | (v) | "UK CRD IV" means: | | --- | --- | | (A) | Regulation<br> (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential<br> requirements for credit institutions and investment firms as it forms part of domestic law<br> of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the "Withdrawal Act"); | | --- | --- | | (B) | the<br> law of the United Kingdom or any part of it, which immediately before IP completion day (as<br> defined in the European Union (Withdrawal Agreement) Act 2020) implemented Directive 2013/36/EU<br> of the European Parliament and of the Council of 26 June 2013 on access to the activity<br> of credit institutions and the prudential supervision of credit institutions and investment<br> firms, amending Directive 2002/87/EC<br> and repealing Directives 2006/48/EC and 2006/49/EC and<br> its implementing measures; and | | --- | --- |
| - 84 - |
| --- | | (C) | direct<br> EU legislation (as defined in the Withdrawal Act), which immediately before IP completion<br> day (as defined in the European Union (Withdrawal Agreement) Act 2020) implemented EU CRD<br> IV as it forms part of domestic law of the United Kingdom by virtue of the Withdrawal Act. | | --- | --- | | 13.2 | Increased Cost claims | | --- | --- | | (a) | A<br> Finance Party intending to make a claim pursuant to Clause 13.1 (Increased Costs)<br> shall notify the Mezzanine Agent of the event giving rise to the claim, following which the<br> Mezzanine Agent shall promptly notify the Borrower. | | --- | --- | | (b) | Each<br> Finance Party shall, as soon as practicable after a demand by the Mezzanine Agent, provide<br> a certificate confirming the amount of its Increased Costs. | | --- | --- | | 13.3 | Exceptions | | --- | --- | | (a) | Clause<br> 13.1 (Increased Costs) does not apply to the extent any Increased Cost is: | | --- | --- | | (i) | attributable<br> to a Tax Deduction required by law to be made by an Obligor; | | --- | --- | | (ii) | attributable<br> to a FATCA Deduction required to be made by a Party; | | --- | --- | | (iii) | compensated<br> for by Clause 12.3 (Tax indemnity) (or would have been compensated for under Clause<br> 12.3 (Tax indemnity) but was not so compensated solely because any of the exclusions<br> in paragraph (b) of Clause 12.3 (Tax indemnity) applied); or | | --- | --- | | (iv) | attributable<br> to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. | | --- | --- | | (b) | In<br> this Clause 13.3, a reference to a "Tax Deduction" has the same meaning<br> given to that term in Clause 12.1 (Definitions). | | --- | --- | | 14. | OTHER INDEMNITIES | | --- | --- | | 14.1 | Currency indemnity | | --- | --- | | (a) | If<br> any sum due from an Obligor under the Finance Documents (a "Sum"), or any<br> order, judgment or award given or made in relation to a Sum, has to be converted from the<br> currency (the "First Currency") in which that Sum is payable into another<br> currency (the "Second Currency") for the purpose of: | | --- | --- | | (i) | making<br> or filing a claim or proof against that Obligor; | | --- | --- |
| - 85 - |
| --- | | (ii) | obtaining<br> or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, | | --- | --- |
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Secured Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
| (b) | Each<br> Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance<br> Documents in a currency or currency unit other than that in which it is expressed to be payable. |
|---|---|
| 14.2 | Other indemnities |
| --- | --- |
The Obligors shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability incurred by that Secured Party as a result of:
| (a) | the<br> occurrence of any Event of Default; |
|---|---|
| (b) | a<br> failure by an Obligor to pay any amount due under a Finance Document on its due date, including<br> without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties); |
| --- | --- |
| (c) | funding,<br> or making arrangements to fund, its participation in a Loan requested by the Borrower in<br> a Utilisation Request but not made by reason of the operation of any one or more of the provisions<br> of this Agreement (other than by reason of default or negligence by that Finance Party alone);<br> or |
| --- | --- |
| (d) | a<br> Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given<br> by the Borrower or the Borrower. |
| --- | --- |
| 14.3 | Indemnity to the Mezzanine Agent |
| --- | --- |
The Obligors shall within three (3) Business Days indemnify the Mezzanine Agent against:
| (a) | any<br> cost, loss or liability incurred by the Mezzanine Agent as a result of: |
|---|---|
| (i) | investigating<br> any event which it reasonably believes is a Default; |
| --- | --- |
| (ii) | acting<br> or relying on any notice, request or instruction which it reasonably believes to be genuine,<br> correct and appropriately authorised; or |
| --- | --- |
| (iii) | instructing<br> lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as<br> permitted under this Agreement; and |
| --- | --- |
| - 86 - |
| --- | | (b) | any cost, loss or liability<br> (including, without limitation, for negligence or any other category of liability whatsoever)<br> incurred by the Mezzanine Agent (otherwise<br> than by reason of the Mezzanine Agent's gross negligence or wilful misconduct) (or, in the<br> case of any cost, loss or liability pursuant to Clause 33.11 (Disruption to Payment Systems etc.) notwithstanding the Mezzanine Agent's negligence, gross negligence or any<br> other category of liability whatsoever but not including any claim based on the fraud of<br> the Mezzanine Agent in acting as Mezzanine Agent under the Finance Documents. | | --- | --- | | (c) | Each<br> Obligor's indemnity obligation under this Clause 14.3 (Indemnity to the Mezzanine Agent) shall continue to be in force and effect notwithstanding the discharge or the termination<br> of the Finance Documents or removal or resignation of the Mezzanine Agent. | | --- | --- | | 14.4 | Indemnity to the Security Agent | | --- | --- | | (a) | Each<br> Obligor jointly and severally shall promptly indemnify the Security Agent, each Secured Party<br> and every Receiver and Delegate against any cost, loss or liability incurred by any of them<br> as a result of: | | --- | --- | | (i) | any<br> failure by an Obligor to comply with its obligations under Clause 16 (Costs and Expenses); | | --- | --- | | (ii) | acting<br> or relying on any notice, request or instruction which it reasonably believes to be genuine,<br> correct and appropriately authorised; | | --- | --- | | (iii) | the<br> taking, holding, protection or enforcement of the Transaction Security in connection with<br> the Mezzanine Only Security Documents; | | --- | --- | | (iv) | instructing<br> lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as<br> permitted under this Agreement; | | --- | --- | | (v) | acting<br> as Security Agent, each Secured Party, Receiver or Delegate under the Finance Documents or<br> which otherwise relates to any of the Mezzanine Only Charged Property (otherwise, in each<br> case, than by reason of the Security Agent's, Receiver's or Delegate's gross negligence or<br> wilful misconduct); | | --- | --- | | (vi) | the<br> exercise of any of the rights, powers, discretions and remedies vested in the Security Agent,<br> each Secured Party and each Receiver and Delegate by the Finance Documents or by law; and | | --- | --- | | (vii) | any<br> default by any Obligor in the performance of any of the obligations expressed to be assumed<br> by it in the Finance Documents. | | --- | --- | | (b) | The<br> Security Agent, each Secured Party and every Receiver and Delegate may, in priority to any<br> payment to the Secured Parties, indemnify itself out of the Mezzanine Only Charged Property<br> in respect of, and pay and retain, all sums necessary to give effect to the indemnity in<br> this Clause 14.4 (Indemnity to the Security Agent) and shall have a lien on the Mezzanine<br> Only Transaction Security and the proceeds of the enforcement of the Mezzanine Only Transaction<br> Security for all moneys payable to it. | | --- | --- |
| - 87 - |
| --- | | (c) | Each<br> Obligor's indemnity obligation under this Clause 14.4 (Indemnity to the Security Agent) shall continue to be in force and effect notwithstanding the discharge or termination<br> of the Finance Documents or removal or resignation of the Security Agent. | | --- | --- | | 15. | MITIGATION BY THE LENDERS | | --- | --- | | 15.1 | Mitigation | | --- | --- | | (a) | Each<br> Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate<br> any circumstances which arise and which would result in the Facility ceasing to be available<br> or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause<br> 7.1 (Illegality), Clause 12 (Tax gross-up and indemnities), or Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the<br> Finance Documents to another Affiliate or Facility Office. | | --- | --- | | (b) | Paragraph<br> (a) above does not in any way limit the obligations of any Obligor under the Finance<br> Documents. | | --- | --- | | 15.2 | Limitation of liability | | --- | --- | | (a) | The<br> Obligors shall promptly indemnify each Finance Party for all costs and expenses reasonably<br> incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation). | | --- | --- | | (b) | A<br> Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if,<br> in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to<br> it. | | --- | --- | | 16. | COSTS AND EXPENSES | | --- | --- | | 16.1 | Transaction expenses | | --- | --- |
The Obligors shall within three (3) Business Days of demand pay the Mezzanine Agent, the Arranger and the Security Agent the amount of all costs and expenses (including, but not limited to, pre-agreed legal fees) properly incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
| (a) | this<br> Agreement and any other documents referred to in this Agreement and the Mezzanine Only Transaction<br> Security; and |
|---|---|
| (b) | any<br> other Finance Documents executed after the Signing Date. |
| --- | --- |
| 16.2 | Amendment costs |
| --- | --- |
If:
| (a) | an<br> Obligor requests an amendment, waiver or consent; or |
|---|
| - 88 - |
| --- | | (b) | any<br> amendment or waiver is contemplated or agreed pursuant to Clause 40.4 (Replacement of Screen Rate), | | --- | --- |
the Obligors shall, within three (3) Business Days of demand, reimburse each of the Mezzanine Agent and the Security Agent for the amount of all costs and expenses (including, but not limited to, legal fees) properly incurred by the Mezzanine Agent and the Security Agent (and in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating, complying with or implementing that request, requirement or actual or contemplated agreement.
| 16.3 | Security Agent's management time and additional remuneration |
|---|---|
| (a) | Any<br> amount payable to the Security Agent under Clause 14.4 (Indemnity to the Security Agent)<br> and this Clause 16.3 shall include the cost of utilising the Security Agent's management<br> time or other resources and will be calculated on the basis of such daily or hourly rates<br> as the Security Agent may notify to the Borrower and the Lenders, and is in addition to any<br> other fee paid or payable to the Security Agent. |
| --- | --- |
| (b) | Without<br> prejudice to paragraph (a) above, in the event of: |
| --- | --- |
| (i) | a Default; |
| --- | --- |
| (ii) | the<br> Security Agent (x) considering it expedient or necessary or (y) being requested<br> by an Obligor or Mezzanine Agent (acting on the instructions of the Majority Lenders) to<br> undertake duties which the Security Agent and the Borrower agree to be of an exceptional<br> nature or outside the scope of the normal duties of the Security Agent under the Finance<br> Documents; or |
| --- | --- |
| (iii) | the<br> Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances, |
| --- | --- |
the Borrower shall pay to the Security Agent any additional remuneration (which shall be calculated at its standard hourly rates, and together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.
| (c) | If<br> the Security Agent and the Borrower fail to agree upon the nature of the duties, or upon<br> the additional remuneration referred to in paragraph (b) above or whether additional<br> remuneration is appropriate in the circumstances, any dispute shall be determined by an investment<br> bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved<br> by the Borrower or, failing approval, nominated (on the application of the Security Agent)<br> by the President for the time being of the Law Society of England and Wales (the costs of<br> the nomination and of the investment bank being payable by the Borrower) and the determination<br> of any investment bank shall be final and binding upon the Parties. |
|---|
| - 89 - |
| --- | | 16.4 | Enforcement and preservation costs | | --- | --- |
The Obligors shall, within three (3) Business Days of demand, pay to each Secured Party the amount of all costs and expenses (including, but not limited to, legal fees) incurred by that Secured Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and the Mezzanine Only Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Mezzanine Only Transaction Security or enforcing these rights.
| 16.5 | Advisers |
|---|---|
| (a) | The<br> Borrower acknowledges the appointment of each Adviser and the scope of work set out in the<br> terms of their respective appointments. |
| --- | --- |
| (b) | The<br> Borrower shall, within three (3) Business Days of demand by the Mezzanine Agent, pay<br> to the Mezzanine Agent the amount of all fees, costs and expenses of each Adviser appointed<br> pursuant to this Clause 16.5 (subject to any separate fee arrangement that the Borrower has<br> agreed in writing with such Adviser). |
| --- | --- |
| (c) | In<br> addition to any existing Advisers, any Mezzanine Agent may, at the cost of the Borrower and<br> (unless a Default is continuing) with the prior written approval of the Borrower, from time<br> to time appoint (and dismiss) market, technical, model, legal, tax, insurance, social and<br> environmental or other advisers or accountants (or modify the scope of work of any Adviser)<br> in connection with: |
| --- | --- |
| (i) | any<br> Finance Document or information to be delivered by the Borrower under any Finance Document; |
| --- | --- |
| (ii) | any<br> breach by the Borrower of its obligations under the Transaction Documents; |
| --- | --- |
| (iii) | responding<br> to, evaluating, negotiating or complying with any request from the Borrower for an amendment,<br> waiver or consent; or |
| --- | --- |
| (iv) | any<br> steps necessary or desirable in connection with any Default or any proposal for remedying<br> or otherwise resolving any Default. |
| --- | --- |
| - 90 - |
| --- |
SECTION 7
BANK ACCOUNTS
| 17. | BANK ACCOUNTS |
|---|---|
| 17.1 | Designation of Accounts |
| --- | --- |
The Borrower shall prior to Financial Close, open in its name and, thereafter, maintain
| (a) | a<br> deposit account designated the "Disbursement Account"; and |
|---|---|
| (b) | a<br> deposit account designated the "Debt Service Account"; |
| --- | --- |
| (c) | a<br> deposit account designated the "Disposal Proceeds Account"; and |
| --- | --- |
| (d) | a<br> deposit account designated the "Distribution Account". |
| --- | --- |
| 17.2 | No other accounts |
| --- | --- |
The Borrower shall not open and maintain any other bank account without the prior written consent of the Mezzanine Agent.
| 17.3 | Account bank |
|---|---|
| (a) | Subject<br> to paragraphs (b) and (c) below, each Account must be held with the Account Bank. |
| --- | --- |
| (b) | An<br> Account must be replaced with a bank account at the same or another bank at any time if the<br> Mezzanine Agent so requests (acting reasonably). |
| --- | --- |
| (c) | The<br> replacement of an Account only becomes effective when the relevant bank agrees with the Mezzanine<br> Agent and the Borrower, in a manner satisfactory to the Mezzanine Agent, to fulfil the role<br> of the bank holding that Account. |
| --- | --- |
| 17.4 | Currency |
| --- | --- |
Each Account shall be denominated in EUR.
| 17.5 | Interest |
|---|
Each amount from time to time standing to the credit of an Account shall bear interest at such rate as may from time to time be agreed between the Borrower and the Account Bank or, if no such rate is agreed for any period, at the Account Bank's overnight rate for call deposits in EUR from time to time. Such interest shall be credited to the Operating Account.
| 17.6 | Access to books and records |
|---|---|
| (a) | The<br> Borrower irrevocably grants each of the Mezzanine Agent and the Security Agent and their<br> respective Advisers access to review the books and records and irrevocably waives any right<br> of confidentiality which may exist in respect of records to the extent necessary to allow<br> disclosure of such books and records to each of the Finance Parties and their respective<br> Advisers. |
| --- | --- |
| - 91 - |
| --- | | (b) | The<br> Borrower shall authorise and instruct the Account Bank to give to the Mezzanine Agent and<br> the Security Agent and their respective Advisers unrestricted access to review such books<br> and records held by the Account Bank. | | --- | --- | | (c) | The<br> Mezzanine Agent shall only exercise the access rights under paragraphs (a) and (b) above<br> upon the occurrence of an Event of Default which is continuing. | | --- | --- | | 17.7 | Electronic viewing rights | | --- | --- | | (a) | The<br> Borrower shall irrevocably grant to each of the Mezzanine Agent and the Security Agent electronic<br> viewing rights to the Accounts. | | --- | --- | | (b) | In<br> case it is not feasible to grant such electronic viewing rights. The Borrower shall provide<br> bank account statements: | | --- | --- | | (i) | at least<br> on a monthly basis or such other frequency as the Mezzanine Agent or the Security Agent may<br> specify; and | | --- | --- | | (ii) | at<br> any time upon request by the Mezzanine Agent or the Security Agent. | | --- | --- | | 17.8 | No overdraft | | --- | --- | | (a) | Subject<br> to paragraph (b) below, the Borrower shall not instruct the Account Bank to make any<br> Transfer from an Account if such Transfer would cause such Account to become overdrawn. | | --- | --- | | (b) | To<br> the extent the Transfer would, if made in full, cause the Account to become overdrawn, such<br> Transfer shall be made in part in as great an amount as possible without resulting in that<br> Account becoming overdrawn. | | --- | --- | | (c) | The<br> Borrower shall procure that, if any Transfer cannot be made in full as a result of the provisions<br> of paragraph (a) above, the Account Bank will notify the Mezzanine Agent and the Borrower<br> as soon as practicable (and in any event within five (5) Business Days of the requested<br> Transfer date) and provide details of the payment not made, the date on which it should have<br> been made and the amount unpaid. | | --- | --- | | 17.9 | Operating procedures | | --- | --- |
The Borrower shall maintain each Account in accordance with any mandate agreed between it and the Account Bank and such Account Bank's normal practices, provided that, if there is any conflict between any provision of the Finance Documents and any such mandate (or the Account Bank's normal practices), the provisions of the Finance Documents shall prevail (and, the Borrower, nor any other Obligor, shall not enter into any bank account mandates which are contradictory to, or otherwise in conflict with, the Finance Documents) except where to comply with such provisions would be in breach of any applicable law.
| - 92 - |
| --- | | 17.10 | No effect on obligations | | --- | --- |
No non-payment or partial payment by any Obligor of any sums due and payable to the Finance Parties as a result of:
| (a) | a<br> shortfall in funds available in any Account; |
|---|---|
| (b) | the<br> restrictions on the Transfer and use of funds standing to the credit of the Accounts in this<br> Agreement or any other Finance Document; or |
| --- | --- |
| (c) | the<br> order in which payments are to be made pursuant to this Agreement or any other Finance Document, |
| --- | --- |
shall relieve the Borrower and/or any of the other Obligors of its obligations to make payments due and payable to the Finance Parties pursuant to the Finance Documents.
| 17.11 | Bank charges |
|---|
Each Obligor shall pay to the Account Bank such transaction charges and fees as agreed prior to Financial Close in the bank account mandates.
| 17.12 | No other credits or withdrawal |
|---|
No payments to, or Transfer from, any Account shall be made except as expressly permitted by this Agreement.
| 17.13 | Instructions during a Default |
|---|
Subject to Clause 17.14 (Instructions during an Event of Default), on and at any time after the occurrence of a Default which is continuing:
| (a) | the<br> Borrower shall continue to be entitled to Transfer (or instruct the Account Bank to Transfer)<br> amounts standing to the credit of an Account in accordance with Clause 18 (Deposits into and Withdrawals from Accounts) provided that to the extent the Security Agent has exercised<br> its right under paragraph (b) below and to the extent the instructions of the Security<br> Agent are inconsistent with those of the Borrower, the instructions of the Security Agent<br> shall prevail (and the Borrower shall procure that the instructions of the Security Agent<br> are satisfied); and |
|---|---|
| (b) | the<br> Security Agent may give instructions to the Account Bank from time to time as to what Transfers<br> may or may not be made on the instructions of the Borrower without further consent of the<br> Borrower and/or the Security Agent. |
| --- | --- |
| 17.14 | Instructions during an Event of Default |
| --- | --- |
Notwithstanding Clause 18 (Deposits Into and Withdrawals from Accounts), on and at any time after the occurrence of an Event of Default which is continuing:
| (a) | the<br> Borrower shall no longer be entitled to make any Transfer (or instruct the Account Bank to<br> do so) using monies standing to the credit of, or which would otherwise be credited to, the<br> Accounts and the Borrower shall ensure that the Account Bank shall make Transfers from the<br> Accounts only on the instructions of the Mezzanine Agent and/or the Security Agent; and |
|---|
| - 93 - |
| --- | | (b) | the<br> Mezzanine Agent and/or the Security Agent may give instructions to the Account Bank from<br> time to time to make Transfers using monies standing to the credit of an Account as the Mezzanine<br> Agent and/or the Security Agent (as applicable) so direct. | | --- | --- | | 17.15 | No closure of Accounts | | --- | --- |
The Borrower shall not close any Account without the prior written consent of the Mezzanine Agent and Security Agent.
| 18. | DEPOSITS INTO AND WITHDRAWALS FROM ACCOUNTS |
|---|
All amounts held in any Account shall be applied in accordance with this Clause 18 and no amount shall be deposited in, or withdrawn from, any Account other than as set out in this Clause 18.
| 18.1 | Debt Service Account |
|---|---|
| (a) | The<br> Borrower shall ensure that: |
| --- | --- |
| (i) | all<br> amounts received by it from the Senior Borrower (unless such amounts are expressly stated<br> in this Agreement to be payable to another Account); |
| --- | --- |
| (ii) | all<br> other monies owed to the Borrower by its debtors or other relevant payment obligors; and |
| --- | --- |
| (iii) | all<br> amounts expressly stated in the Finance Documents to be so payable, are immediately paid<br> into the Debt Service Account. |
| --- | --- |
| (b) | Subject<br> to Clause 17.13 (Instructions during a Default), the Borrower shall, on the last day<br> of each Interest Period (if not otherwise stated below), Transfer the amounts standing to<br> the credit of the Debt Service Account for the following purposes and at the following times<br> in the following order of priority: |
| --- | --- |
| (i) | first,<br> in or towards payment pro rata of any fees, costs and expenses owing to the Mezzanine<br> Agent, the Security Agent and any other Finance Party (other than the Lenders) which are<br> due but unpaid under the Finance Documents; |
| --- | --- |
| (ii) | second,<br> in or towards payment pro rata to the Mezzanine Agent for the relevant Finance Parties<br> of any accrued interest, fees and any Break Costs and other financing costs which are due<br> but unpaid under this Agreement and any costs and expenses of any Lender that has prefunded<br> the Mezzanine Agent and/or Common Security Agent in connection with the taking of any enforcement<br> action by the Mezzanine Agent and/or Common Security Agent (as applicable); |
| --- | --- |
| - 94 - |
| --- | | (iii) | third,<br> in or towards repayment pro rata to the Mezzanine Agent for the relevant Finance Parties<br> of any principal due but unpaid; and | | --- | --- | | (iv) | fourth,<br> on the last day of each Interest Period unless otherwise required pursuant to paragraph (b) of<br> Clause 7.11 (Application of prepayments), in connection with a mandatory prepayment<br> pursuant to Clause 7.1 (Illegality), Clause_7.2 (Change of Control) and Clause<br> 7.4 (Mandatory prepayment – Sanctions), to the Mandatory Prepayment Account. | | --- | --- | | (c) | The<br> Borrower shall, to the extent that a Mezzanine Blocked Debt Service Amount has been transferred<br> from the "Mezzanine Blocked Amount Ledger" of the Senior Borrower's "cash<br> trap account" (howsoever defined under the Senior Facility Agreement) Security Agent<br> to the Debt Service Account, apply such amount in full in payment to the Mezzanine Agent<br> for the Lenders of the amounts to which that Mezzanine Blocked Debt Service Amount relates. | | --- | --- | | 18.2 | Disposal Proceeds Account | | --- | --- | | (a) | The<br> Security Agent has sole signing rights in relation to the Disposal Proceeds Account. | | --- | --- | | (b) | The<br> Obligors must ensure that the Prepayment Disposal Proceeds and Prepayment Refinancing Proceeds<br> are, unless immediately applied in accordance with Clause 7.3 (Mandatory prepayment – Disposal of Warehouse Project), immediately paid into the Disposal Proceeds Account in<br> accordance with Clause 24.26 (Disposals). | | --- | --- | | (c) | Subject<br> to the Intercreditor and Subordination Deed and Clause 33.6 (Partial payments): | | --- | --- | | (i) | on<br> the last day of each Interest Period relating to a Loan which has been utilised for the purpose<br> of funding any Eligible Project Costs and/or Eligible Pre-RtB Costs with respect to the Warehouse<br> Projects which have been disposed of; or | | --- | --- | | (ii) | earlier<br> at the request of the Borrower, if it gives the Mezzanine Agent not less than three (3) Business<br> Days' notice, | | --- | --- |
the Security Agent shall withdraw from, and apply amounts standing to the credit of, the Disposal Proceeds Account for the following purposes and at the following times and in the following order of priority:
| (A) | first,<br> in repayment of principal in an amount equal to the Allocated Mezzanine Facility Amount for<br> the relevant Warehouse Project; |
|---|---|
| (B) | second,<br> in payment pro rata to the Mezzanine Agent for the relevant Finance Parties of any<br> interest accrued to the date of payment and fees and any other amount that is or will become<br> due and payable in accordance with paragraph (b) of Clause 7.10 (Restrictions)<br> as a result of those prepayments; and |
| --- | --- |
| - 95 - |
| --- | | (C) | third,<br> if: | | --- | --- | | (1) | a<br> Default was continuing on the date of the disposal, in payment of any remaining surplus (including<br> any Disposal Equity Amount) to the Disbursement Account (such transferred amount being the<br> "Replacement Commitments"); or | | --- | --- | | (2) | no<br> Default was continuing on the date of the disposal and none continues on the date of withdrawal,<br> in payment of any remaining surplus (including any Disposal Equity Amount), to the Distribution<br> Account. | | --- | --- | | 18.3 | Mandatory Prepayment Account | | --- | --- | | (a) | All<br> amounts held in the Mandatory Prepayment Account shall be applied in accordance with this<br> Clause 18.3. | | --- | --- | | (b) | The<br> Borrower shall ensure that: | | --- | --- | | (i) | any<br> and all Compensation Proceeds and Insurance Proceeds received by it are credited to the Mandatory<br> Prepayment Account and applied in accordance with paragraph (c) below; | | --- | --- | | (ii) | all<br> amounts required to be transferred to the Mandatory Prepayment Account pursuant to paragraph<br> (b)(iv) of Clause 18.1 (Debt Service Account) (such amounts being the "Mandatory Prepayment Proceeds – Other") are transferred to such Account and applied<br> in accordance with paragraph (d) below. | | --- | --- | | (c) | Any<br> and all Compensation Proceeds and Insurance Proceeds shall be applied in accordance with<br> Clause 7.5 (Insurance Proceeds and Compensation Proceeds) and Clause 7.11 (Application of prepayments). | | --- | --- | | (d) | All<br> Mandatory Prepayment Proceeds – Other shall be applied (as applicable) in accordance<br> with the provisions of Clause 7 (Prepayment and Cancellation) relating to the relevant<br> mandatory prepayment event. | | --- | --- | | 18.4 | Disbursement Account | | --- | --- | | (a) | Subject<br> to paragraph (b) below, the Borrower shall credit all Utilisations and Replacement Commitments<br> into the Disbursement Account. | | --- | --- | | (b) | The<br> Borrower may credit any Utilisation to the "disbursement account" (howsoever defined)<br> of the Senior Borrower if such is specified in the Utilisation Request delivered in respect<br> of such Utilisation and is approved by the Mezzanine Agent in respect of the same and shall<br> be applied in accordance with the purpose for which such Utilisation was made as generally<br> set out in Clause 3.1 (Purpose) and as specifically set out in the relevant Utilisation<br> Request. | | --- | --- |
| - 96 - |
| --- | | (c) | The<br> Borrower shall apply all Utilisations and Replacement Commitments, with Replacement Commitments<br> in priority to any Utilisation, for the purpose specified in the relevant Utilisation Request<br> and, if the purpose to which such Utilisation relates is: | | --- | --- | | (i) | to<br> pay the purchase price under the relevant Acquisition Agreement for any Eligible Project<br> and the payment of related Acquisition Costs, in accordance with the relevant Funds Flow<br> Statement; and | | --- | --- | | (ii) | to<br> pay Eligible Pre-RtB Costs, towards the invoice(s) and related costs approved by the<br> Mezzanine Agent (acting in consultation with the Lenders' Technical Adviser) as part of approving<br> any invoice delivered by the Borrower to the Mezzanine Agent pursuant to Clause 4.2 (Conditions precedent for each Utilisation to pay Eligible Pre-RtB Costs). | | --- | --- | | 18.5 | Distributions Account | | --- | --- |
The Borrower may use the proceeds that are credited to the Distribution Account in accordance with this Agreement as a Distribution to the Parent provided that no Default has occurred and is continuing.
| 19. | SENIOR ACCOUNTS |
|---|---|
| 19.1 | Prior to discharge of Senior Faciltiy Agreement |
| --- | --- |
The Borrower shall ensure that each of its Subsidiaries operates its accounts, if and to the extent provided in the Senior Facility Agreement and makes all transfers and payments as and when contemplated under the Senior Facility Agreement.
| 19.2 | After discharge of Senior Facility Agreement |
|---|
Notwithstanding the expiry or discharge the Senior Facility Agreement, if and to the extent the provisions of the Senior Facility Agreement provide for the application and upstreaming of the funds to the Senior Borrower, the Borrower shall ensure that its Subsidiaries comply with the account provisions of the Senior Facility Agreement as if it were still in force provided that the amounts which would have been applied in or towards payment to the "Secured Obligations" under and as defined in the Senior Facility Agreement shall instead be transferred to the Borrower and applied in accordance with the terms and provisions of this Agreement.
| - 97 - |
| --- |
SECTION 8
GUARANTEE
| 20. | GUARANTEE AND INDEMNITY |
|---|---|
| 20.1 | Guarantee and indemnity |
| --- | --- |
Each Guarantor irrevocably and unconditionally jointly and severally:
| (a) | guarantees<br> to each Finance Party punctual performance by the Borrower of all that Borrower's obligations<br> under the Finance Documents; |
|---|---|
| (b) | undertakes<br> with each Finance Party that whenever the Borrower does not pay any amount when due under<br> or in connection with any Finance Document, that Guarantor shall immediately on demand pay<br> that amount as if it was the principal obligor; and |
| --- | --- |
| (c) | agrees<br> with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable,<br> invalid or illegal it will, as an independent and primary obligation, indemnify that Finance<br> Party immediately on demand against any cost, loss or liability it incurs as a result of<br> the Borrower not paying any amount which would, but for such unenforceability, invalidity<br> or illegality, have been payable by it under any Finance Document on the date when it would<br> have been due. The amount payable by a Guarantor under this indemnity will not exceed the<br> amount it would have had to pay under this Clause 20 if the amount claimed had been recoverable<br> on the basis of a guarantee. |
| --- | --- |
| 20.2 | Continuing guarantee |
| --- | --- |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
| 20.3 | Reinstatement |
|---|
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, examinership, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 20 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
| 20.4 | Waiver of defences |
|---|
The obligations of each Guarantor under this Clause 20 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 20 (without limitation and whether or not known to it or any Finance Party) including:
| (a) | any<br> time, waiver or consent granted to, or composition with, any Obligor or other person; |
|---|
| - 98 - |
| --- | | (b) | the<br> release of any other Obligor or any other person under the terms of any composition or arrangement<br> with any creditor of any member of the Group; | | --- | --- | | (c) | the<br> taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to<br> perfect, take up or enforce, any rights against, or security over assets of, any Obligor<br> or other person or any non-presentation or non-observance of any formality or other requirement<br> in respect of any instrument or any failure to realise the full value of any security; | | --- | --- | | (d) | any<br> incapacity or lack of power, authority or legal personality of or dissolution or change in<br> the members or status of an Obligor or any other person; | | --- | --- | | (e) | any<br> amendment, novation, supplement, extension (whether of maturity or otherwise), restatement<br> (in each case however fundamental and of whatsoever nature, and whether or not more onerous)<br> or replacement of any Finance Document or any other document or security; | | --- | --- | | (f) | any<br> unenforceability, illegality or invalidity of any obligation of any person under any Finance<br> Document or any other document or security; or | | --- | --- | | (g) | any<br> insolvency or similar proceedings. | | --- | --- | | 20.5 | Guarantor intent | | --- | --- |
Without prejudice to the generality of Clause 20.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental and of whatsoever nature and whether or not more onerous) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new Borrower; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
| 20.6 | Immediate recourse |
|---|
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or Mezzanine Agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 20. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
| - 99 - |
| --- | | 20.7 | Appropriations | | --- | --- |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or Mezzanine Agent on its behalf) may:
| (a) | refrain<br> from applying or enforcing any other moneys, security or rights held or received by that<br> Finance Party (or any trustee or Mezzanine Agent on its behalf) in respect of those amounts,<br> or apply and enforce the same in such manner and order as it sees fit (whether against those<br> amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and |
|---|---|
| (b) | hold<br> in an interest-bearing suspense account any moneys received from any Guarantor or on account<br> of any Guarantor's liability under this Clause 20. |
| --- | --- |
| 20.8 | Deferral of Guarantors' rights |
| --- | --- |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Mezzanine Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 20:
| (a) | to<br> be indemnified by an Obligor; |
|---|---|
| (b) | to<br> claim any contribution from any other guarantor of any Obligor's obligations under the Finance<br> Documents; |
| --- | --- |
| (c) | to<br> take the benefit (in whole or in part and whether by way of subrogation or otherwise) of<br> any rights of the Finance Parties under the Finance Documents or of any other guarantee or<br> security taken pursuant to, or in connection with, the Finance Documents by any Finance Party; |
| --- | --- |
| (d) | to<br> bring legal or other proceedings for an order requiring any Obligor to make any payment,<br> or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking<br> or indemnity under Clause 20.1 (Guarantee and indemnity); |
| --- | --- |
| (e) | to<br> exercise any right of set-off against any Obligor; and/or |
| --- | --- |
| (f) | to<br> claim or prove as a creditor of any Obligor in competition with any Finance Party. |
| --- | --- |
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Mezzanine Agent or as the Mezzanine Agent may direct for application in accordance with Clause 33 (Payment mechanics).
| - 100 - |
| --- | | 20.9 | Release of Guarantors' right of contribution | | --- | --- |
If any Guarantor (a "RetiringGuarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
| (a) | that<br> Retiring Guarantor is released by each other Guarantor from any liability (whether past,<br> present or future and whether actual or contingent) to make a contribution to any other Guarantor<br> arising by reason of the performance by any other Guarantor of its obligations under the<br> Finance Documents; and |
|---|---|
| (b) | each<br> other Guarantor waives any rights it may have by reason of the performance of its obligations<br> under the Finance Documents to take the benefit (in whole or in part and whether by way of<br> subrogation or otherwise) of any rights of the Finance Parties under any Finance Document<br> or of any other security taken pursuant to, or in connection with, any Finance Document where<br> such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
| --- | --- |
| 20.10 | Additional security |
| --- | --- |
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
| 20.11 | Limitations |
|---|
The obligations of an Additional Guarantor shall be limited in case the Guarantor Accession Letter of such Additional Guarantor contains provisions setting out a respective limitation language, in accordance with such provision.
| 20.12 | Guarantee Limitations: Ireland |
|---|
This guarantee does not apply to any liability to the extent that it would (x) result in this guarantee constituting unlawful financial assistance under section 82 of the Irish Companies Act 2014 or (y) result in a breach of section 239 (related party transactions) of the Irish Companies Act 2014.
| - 101 - |
| --- |
SECTION 9
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OFDEFAULT
| 21. | REPRESENTATIONS |
|---|
Each Obligor makes the representations and warranties set out in this Clause 21 to each Finance Party on the Signing Date and, as applicable, the Guarantor Accession Date.
Status, authorisation and governing law
| 21.1 | Status |
|---|---|
| (a) | It<br> is a corporation, duly incorporated and validly existing under the law of its Original Jurisdiction. |
| --- | --- |
| (b) | Each<br> of its Subsidiaries is a limited liability corporation, duly incorporated and validly existing<br> under the law of its jurisdiction of incorporation. |
| --- | --- |
| (c) | It<br> and each of its Subsidiaries has the power to own its assets and carry on its business as<br> it is being conducted and, in case of a ProjectCo, to carry out its Warehouse Project. |
| --- | --- |
| (d) | It<br> is not a FATCA FFI or a US Tax Obligor. |
| --- | --- |
| 21.2 | Binding obligations |
| --- | --- |
Subject to the Legal Reservations:
| (a) | the<br> obligations expressed to be assumed: |
|---|---|
| (i) | by it;<br> and/or |
| --- | --- |
| (ii) | by<br> any of its Subsidiaries |
| --- | --- |
in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations;
| (b) | (without<br> limiting the generality of paragraph (a) above), each Security Document to which it<br> is a party creates the security interests which that Security Document purports to create<br> and those security interests are valid and effective. |
|---|---|
| 21.3 | Non-conflict with other obligations |
| --- | --- |
The entry into and performance by it and each of its Subsidiaries of, and the transactions contemplated by, the Transaction Documents and the granting of the Transaction Security do not and will not conflict with:
| (a) | any<br> law or regulation applicable to it; |
|---|---|
| (b) | its<br> or any of its Subsidiaries' constitutional documents; or |
| --- | --- |
| (c) | any<br> agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of<br> its Subsidiaries' assets. |
| --- | --- |
| - 102 - |
| --- | | 21.4 | Consents obtained | | --- | --- |
It has obtained, and procured that each of its Subsidiaries has obtained, all consents necessary to ensure that no other party to any agreement or arrangement entered into by the Obligor becomes entitled to terminate that agreement or arrangement as a consequence of that Obligor or any of its Subsidiaries entering into the Transaction Documents.
| 21.5 | Power and authority |
|---|
It and each of its Subsidiaries has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is a party and the transactions contemplated by those Transaction Documents.
| 21.6 | Validity and admissibility in evidence |
|---|---|
| (a) | All<br> Authorisations required: |
| --- | --- |
| (i) | to<br> enable it lawfully to enter into, exercise its rights and comply with its obligations in<br> the Transaction Documents to which it is a party; and |
| --- | --- |
| (ii) | to<br> make the Transaction Documents to which it is a party admissible in evidence in each Relevant<br> Jurisdiction, |
| --- | --- |
have been obtained or effected and are in full force and effect.
| (b) | All<br> Authorisations required: |
|---|---|
| (i) | to<br> enable its Subsidiaries to lawfully to enter into, exercise their respective rights and comply<br> with their respective obligations under the Transaction Documents to which they are a party;<br> and |
| --- | --- |
| (ii) | to<br> make the Transaction Documents to which they are a party admissible in evidence in each Relevant<br> Jurisdiction, |
| --- | --- |
have been obtained or effected and are in full force and effect
| 21.7 | Governing law and enforcement |
|---|---|
| (a) | Subject<br> to the Legal Reservations, the choice of governing law of each of the Transaction Documents<br> will be recognised and enforced in each Relevant Jurisdiction. |
| --- | --- |
| (b) | Any<br> judgment obtained in the respective jurisdiction specified in each Finance Document and (if<br> applicable) any awards obtained in an arbitration forum which it has submitted itself to<br> will be recognised and enforced in each Relevant Jurisdiction. |
| --- | --- |
| - 103 - |
| --- |
No insolvency, default or tax liability
| 21.8 | Insolvency |
|---|
No:
| (a) | corporate<br> action, legal proceeding or other procedure or step described in Clause 25.7 (Insolvency proceedings); or |
|---|---|
| (b) | creditors'<br> process described in Clause 25.8 (Creditors' process), |
| --- | --- |
has, to the best of its knowledge (after having made due and careful enquiry), been taken or threatened in respect of it or any of its Subsidiaries, and none of the circumstances described in Clause 25.6 (Insolvency) applies to it or any of its Subsidiaries.
| 21.9 | No default or other adverse event |
|---|---|
| (a) | No<br> Event of Default and, on the date of this Agreement and the date of Financial Close, no Default<br> is continuing or might reasonably be expected to result from the making of any Utilisation<br> or the entry into, the performance of, or any transaction contemplated by, any Transaction<br> Document. |
| --- | --- |
| (b) | No<br> other event or circumstance is outstanding which constitutes a default under any other agreement<br> or instrument which is binding on it or any of its Subsidiaries or to which its (or any of<br> its Subsidiaries') assets are subject which might have a Material Adverse Effect. |
| --- | --- |
| 21.10 | Deduction of Tax |
| --- | --- |
Neither it nor any of its Subsidiaries is required to make any Tax Deduction (as defined in Clause 12.1 (Definitions)) from any payment it may make under any Finance Document to a Lender which is a Qualifying Lender.
| 21.11 | No filing or stamp taxes |
|---|---|
| (a) | Under<br> the law of each Relevant Jurisdiction, it is not necessary that the Finance Documents be<br> filed, recorded or enrolled with any court or other authority in that jurisdiction or that<br> any stamp, registration or similar tax be paid on or in relation to the Finance Documents<br> or the transactions contemplated by the Finance Documents other than as set out in the relevant<br> Guarantor Accession Letter or separately agreed with the Mezzanine Agent in writing with<br> respect to a particular Eligible Jurisdiction and: |
| --- | --- |
| (i) | as set<br> out in the relevant Senior Guarantor Accession Letter; and/or |
| --- | --- |
| (ii) | separately<br> agreed with the Mezzanine Agent in writing with respect to a particular Eligible Jurisdiction, |
| --- | --- |
and except for the registration of particulars of the applicable Security Documents at the Companies Registration Office ("CRO") in Ireland by way of a Form C1 under Section 409(3) of the Irish Companies Act 2014 and, where applicable, notifications to the Irish Revenue Commissioners within twenty-one (21) days of execution thereof. Each Obligor hereby irrevocably and unconditionally authorises any and each solicitor from time to time in Arthur Cox LLP to (a) sign or complete (whether electronically or otherwise) on behalf of that Obligor all required security related registration forms required to be delivered to the CRO in connection with any of the Mezzanine Only Security Document; (b) file (whether electronically or otherwise) each such registration form with the CRO; and (c) include an email address for a solicitor in Arthur Cox LLP in each such registration form for the purposes of receiving any certificate of registration of charge electronically from the CRO.
| - 104 - |
| --- | | (b) | In<br> giving the authorisation at (a) above, each Obligor agrees and acknowledges that (a) no<br> solicitor/client relationship exists between Arthur Cox LLP (or any solicitor at that law<br> firm) and that Obligor; (b) it is that Obligor’s responsibility to comply with<br> the procedures set out in Sections 409(3) and (4) of the Companies Act (without<br> prejudice to Section 410(2) thereof); and (c) Arthur Cox LLP have no liability<br> or responsibility to that Obligor for any failure to comply with the terms of that authorisation. | | --- | --- | | 21.12 | Taxation | | --- | --- | | (a) | It<br> and each of it is Subsidiaries has duly and punctually paid and discharged all Taxes imposed<br> upon it or its assets within the time period allowed without incurring penalties (except<br> to the extent that (i) payment is being contested in good faith, (ii) it has maintained<br> adequate reserves for those Taxes and (iii) payment can be lawfully withheld). | | --- | --- | | (b) | Neither<br> it nor any of its Subsidiaries is materially overdue in the filing of any Tax returns. | | --- | --- | | (c) | No<br> claims are being or are reasonably likely to be asserted against it or any of its Subsidiaries<br> with respect to Taxes. | | --- | --- | | (d) | It<br> is a resident for Tax purposes only in its jurisdiction of incorporation. | | --- | --- | | (e) | It<br> is not a member of a VAT Group. | | --- | --- |
No other business
| 21.13 | Relationships with others |
|---|---|
| (a) | Its<br> constitutional documents, each Shareholder Loan Agreement and each Finance Document to which<br> both the Borrower and the Shareholders are party contain all the material terms of the arrangements<br> between the Borrower and the Shareholders and their Affiliates. |
| --- | --- |
| (b) | Neither<br> it nor any of its Subsidiaries has any material rights against, or obligations to, any person<br> other than under: |
| --- | --- |
| (i) | the<br> Transaction Documents to which it is party and any transactions that they expressly contemplate; |
| --- | --- |
| (ii) | the<br> Shareholder Loan Agreements and the Intragroup Loan Agreements to which it is a party; and |
| --- | --- |
| - 105 - |
| --- | | (iii) | any<br> other contract or arrangement provided that the aggregate amount of payments under such contracts<br> or arrangements, across all Warehouse Projects, does not exceed EUR 250,000 (or equivalent<br> in any other currency) and, per Warehouse Project in any calendar year, EUR 50,000, | | --- | --- | | and, in each case, any transaction that they expressly contemplate. | | | (c) | Each<br> transaction or arrangement that it or any of its Subsidiaries has entered into with any person<br> is on an arm's length basis. | | --- | --- | | (d) | It<br> does not carry out any business other than: | | --- | --- | | (i) | in case<br> of the Borrower: | | --- | --- | | (A) | directly<br> holding the shares in the Senior Borrower; and | | --- | --- | | (B) | directly<br> or indirectly holding shares in ProjectCos which have acceded to the Senior Facilities Agreement<br> as guarantors thereunder by way of Senior Guarantor Accession Letters; | | --- | --- | | (ii) | in<br> the case of its Subsidiaries: | | --- | --- | | (A) | which<br> are Country HoldCos, holding the shares directly in several Project HoldCo(s) and indirectly<br> several ProjectCos in an Eligible Jurisdiction; | | --- | --- | | (B) | which<br> are Project HoldCos, holding shares directly in several ProjectCos in the Eligible Jurisdiction<br> in which it is incorporated; and | | --- | --- | | (C) | which<br> are ProjectCos, carrying out the Eligible Project which it owns. | | --- | --- | | 21.14 | Financial Indebtedness | | --- | --- |
Neither it nor any of its Subsidiaries has any Financial Indebtedness other than as permitted by this Agreement.
| 21.15 | Group Structure |
|---|
The most recent Group Structure Chart delivered to the Mezzanine Agent:
| (a) | pursuant<br> to Schedule 2 (Conditions Precedent and Subsequent) or, as applicable; |
|---|---|
| (b) | as<br> condition precedent to the first Utilisation with respect to a Warehouse Project, |
| --- | --- |
is true, complete and accurate.
| 21.16 | Ownership of the Borrower |
|---|
The Borrower is a wholly owned Subsidiary of the Parent.
| - 106 - |
| --- | | 21.17 | Ownership of the Obligors | | --- | --- | | (a) | The<br> Obligors are, as at the date of this Agreement, wholly owned Subsidiaries (whether directly<br> or indirectly) of the Sponsor. | | --- | --- | | (b) | After<br> the date of this Agreement, the Obligors remain majority-owned (whether directly or indirectly)<br> by the Sponsor. | | --- | --- |
Provision of information – general
| 21.18 | No misleading information |
|---|---|
| (a) | Any<br> written factual information provided by it or any other member of the Group was true and<br> accurate in all material respects as at the date it was provided or as at the date (if any)<br> at which it is stated. |
| --- | --- |
| (b) | The<br> financial projections provided by it or any other member of the Group have been prepared<br> on the basis of recent historical information and on the basis of reasonable assumptions. |
| --- | --- |
| (c) | No<br> information has been given or withheld that results in any information provided by it or<br> any other member of the Group being untrue or misleading in any material respect. |
| --- | --- |
| (d) | All<br> written information supplied by it or any other member of the Group is true, complete and<br> accurate in all material respects as at the date it was given and is not misleading in any<br> respect, and any projections contained in such information have been prepared on the basis<br> of recent historical information and on the basis of reasonable assumptions. |
| --- | --- |
| 21.19 | Financial statements |
| --- | --- |
| (a) | Its<br> and each of its respective Subsidiaries' Original Financial Statements were prepared in accordance<br> with the relevant Accounting Principles consistently applied unless expressly disclosed to<br> the Mezzanine Agent in writing to the contrary before: |
| --- | --- |
| (i) | in case<br> of any Original Obligor, the Signing Date; |
| --- | --- |
| (ii) | in<br> case of any ProjectCo which accedes to the Senior Facility Agreement as a guarantor thereunder,<br> the respective Senior Guarantor Accession Date; and |
| --- | --- |
| (iii) | in<br> case of any ProjectCo which is not a Senior Obligor, its Acquisition Date. |
| --- | --- |
| (b) | Its<br> and each of its respective Subsidiaries' Original Financial Statements fairly present its<br> (or, as applicable, the respective Subsidiary's) financial condition as at the end of the<br> relevant financial year and operations during the relevant financial year (consolidated in<br> the case of the Borrower). |
| --- | --- |
| - 107 - |
| --- | | (c) | Its<br> and each of its respective Subsidiaries' most recent financial statements delivered pursuant<br> to Clause 22.1 (Financial statements): | | --- | --- | | (i) | have<br> been prepared in accordance with the Accounting Principles as applied to the respectiveOriginal<br> Financial Statements; and | | --- | --- | | (ii) | fairly<br> present its consolidated financial condition as at the end of, and its consolidated results<br> of operations for, the period to which they relate. | | --- | --- | | (d) | The<br> budgets and forecasts supplied under this Agreement were arrived at after careful consideration<br> and have been prepared in good faith on the basis of recent historical information and on<br> the basis of assumptions which were reasonable as at the date they were prepared and supplied. | | --- | --- | | (e) | There<br> has been no material adverse change in its business or financial condition (or the business<br> or consolidated financial condition of the Group, in the case of the Borrower) since the<br> date on which its or, as applicable, its respective Subsidiaries, Original Financial Statements<br> are stated to have been prepared. | | --- | --- |
No proceedings or breach of laws
| 21.20 | No proceedings |
|---|---|
| (a) | No<br> litigation, arbitration or administrative proceedings of or before any court, arbitral body<br> or agency which, if adversely determined, might reasonably be expected to have a Material<br> Adverse Effect has or have (to the best of its knowledge and belief) been started or threatened<br> against any member of the Group (or against the directors of any member of the Group) or<br> in relation to any Warehouse Project. |
| --- | --- |
| (b) | No<br> judgment or order of a court, arbitral body or agency which might reasonably be expected<br> to have a Material Adverse Effect has (to the best of its knowledge and belief) been made<br> against any member of the Group (or against the directors of any member of the Group) or<br> in relation to any Warehouse Project. |
| --- | --- |
| 21.21 | E&S compliance |
| --- | --- |
Each member of the Group has performed and observed in all material respects all E&S Standards, E&S Authorisations and all other material covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with any real property which is or was at any time owned, leased or occupied by any member of the Group or on which any member of the Group has conducted any activity where failure to do so might reasonably be expected to have a Material Adverse Effect.
| 21.22 | E&S Claims |
|---|
No E&S Claim has been commenced or (to the best of its knowledge and belief) is threatened against any member of the Group where that claim would be reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect.
| - 108 - |
| --- | | 21.23 | Compliance | | --- | --- |
It and each of its Subsidiaries has performed and observed (and each Warehouse Project complies with), in all material respects, all Compliance Standards.
| 21.24 | Anti-Bribery and anti-corruption |
|---|---|
| (a) | It<br> and each of its Subsidiaries has conducted its business and operations and, in case of a<br> ProjectCo, has carried out the respective Warehouse Project in compliance with applicable<br> Anti-Bribery and Corruption Laws. |
| --- | --- |
| (b) | Neither<br> the Obligor nor any Senior Obligor nor, to the best of its knowledge, any director, officer,<br> employee, associated party or person acting on behalf of the Obligor or its Subsidiaries<br> has engaged in any activity which would breach any Anti-Bribery and Corruption Laws. |
| --- | --- |
| (c) | To<br> the best of its knowledge and belief, no actions or investigations by any governmental or<br> regulatory agency are ongoing or threatened against it or its Subsidiaries, or any of its<br> directors, officers, employee, associated party or person acting on their behalf in relation<br> to a breach of the Anti-Bribery and Corruption Laws. |
| --- | --- |
| (d) | It<br> and each of its Subsidiaries have instituted and enforce policies and procedures designed<br> to ensure compliance with the Anti-Bribery and Corruption Laws. |
| --- | --- |
| (e) | It<br> confirms to act as principal for its own account and not as agent or trustee in any capacity<br> on behalf of any party in relation to the Finance Documents. With regard to § 3 Abs.<br> 1 S. 1 Nr. 2, Abs. 4 GwG, the Guarantor confirms that it provides the Transaction Security<br> in connection with the Secured Obligations of the Obligors and, as a result, for the benefit<br> of the Borrower. |
| --- | --- |
| 21.25 | Sanctions |
| --- | --- |
| (a) | Neither<br> it nor any of its Subsidiaries, and (to its knowledge) none of its or any of its Subsidiaries'<br> directors, officers, employees, agents, controlled affiliates, or other person acting on<br> behalf, at the direction or in the interest of the Obligor or any of their Subsidiaries is,<br> currently a designated target of, or is otherwise a subject of, Sanctions. |
| --- | --- |
| (b) | Each<br> Obligor has instituted and maintains policies and procedures designed to prevent Sanctions<br> violations (by such Obligor and its Subsidiaries and by persons associated with such Obligor<br> and its Subsidiaries). |
| --- | --- |
| (c) | It<br> neither knows nor has reason to believe that it is or may become subject of Sanctions- related<br> investigations or juridical proceedings. |
| --- | --- |
| 21.26 | Non-AIF status |
| --- | --- |
Neither it nor any of its Subsidiaries is an AIF or an AIFM.
| - 109 - |
| --- | | 21.27 | AML compliance | | --- | --- | | (a) | The<br> operations of each Obligor and each of their respective Subsidiaries are in compliance with<br> all Money Laundering Laws and have been conducted at all times in compliance with all Money<br> Laundering Laws. | | --- | --- | | (b) | No<br> action, suit or proceeding by or before any court or governmental agency, authority or body<br> or any arbitrator involving any Obligor or any of their respective Subsidiaries including<br> any of its existing or previous officers, directors, employees, agents, affiliates, associated<br> parties and persons acting on behalf of such Obligor or Subsidiary with respect to Money<br> Laundering Laws is pending and, to the best of its's knowledge, no such actions, suits or<br> proceedings are threatened or contemplated. | | --- | --- | | (c) | Each<br> Obligor and each of its respective Subsidiaries has instituted and enforces policies and<br> procedures designed to ensure compliance with Money Laundering Laws and prevent money laundering,<br> bribery and corruption by such person and by persons associated with such person. | | --- | --- |
Security, ownership of assets, insurance
| 21.28 | Security |
|---|
No Security exists over all or any of its present or future assets or the present and future assets of any other member of the Group other than any Security permitted under Clause 24.24 (Negative Pledge).
| 21.29 | Ranking |
|---|
The Transaction Security has or will have first ranking priority and is not subject to any prior ranking or pari passu ranking Security.
| 21.30 | Transaction Security |
|---|
Each Security Document validly creates the Security which is expressed to be created by that Security Document and evidences the Security it is expressed to evidence.
| 21.31 | Good title to assets and Real Property |
|---|---|
| (a) | It<br> and each of its Subsidiaries has good, valid and marketable title to, or valid leases or<br> licences of, and all appropriate Authorisations to use, the assets necessary to carry on<br> its business as presently conducted and, in case it or any of its Subsidiaries is a ProjectCo,<br> to carry out its respective Warehouse Project. |
| --- | --- |
| (b) | It<br> and each of its Subsidiaries which is a ProjectCo has rights to all Real Property, and where<br> applicable it legally and beneficially leases all Real Property, required to carry out the<br> Warehouse Project at the Site. |
| --- | --- |
| (c) | On: |
| --- | --- |
| (i) | the<br> date of Financial Close; and |
| --- | --- |
| - 110 - |
| --- | | (ii) | the<br> Acquisition Date relating to the relevant ProjectCo, | | --- | --- |
there are or were (as applicable) no outstanding payments under the Real Estate Agreements and, thereafter, nothing overdue thereunder.
| 21.32 | No disposal of interests |
|---|
Neither it nor any of its Subsidiaries has sold or granted (or agreed to sell or grant) any right of pre-emption over, or any lease or tenancy of or otherwise disposed of any of its interests in any of the Charged Property other than the Permitted Disposals and Excluded Permitted Disposals.
| 21.33 | Legal and beneficial owner |
|---|
The Obligors and their respective Subsidiaries are the absolute legal owners and beneficial owners of the assets subject to the Transaction Security.
| 21.34 | Shares |
|---|
The shares which are subject to the Transaction Security are fully paid and not subject to any option to purchase or similar rights. The constitutional documents of companies whose shares are subject to the Transaction Security do not and could not restrict or inhibit any transfer of those shares on creation or on enforcement of the Transaction Security.
| 21.35 | Intellectual Property |
|---|---|
| (a) | Each<br> ProjectCo owns all Intellectual Property that is necessary to carry out the respective Warehouse<br> Project. |
| --- | --- |
| (b) | It<br> has taken all necessary action (including payments of fees and the making of all registrations)<br> to safeguard, maintain in full force and effect, use, and preserve its ability to enforce<br> all Intellectual Property owned or used by it. |
| --- | --- |
| (c) | Its<br> ownership or use of the Intellectual Property does not infringe any rights of any third party. |
| --- | --- |
| (d) | Neither<br> it nor any of its Subsidiaries which is a ProjectCo is aware of any adverse circumstance<br> relating to validity, subsistence or use of any of its Intellectual Property. |
| --- | --- |
| 21.36 | Insurance |
| --- | --- |
| (a) | It<br> and each of its Subsidiaries is in compliance with all of its obligations with respect to<br> insurance under the Transaction Documents to which it is a party. |
| --- | --- |
| (b) | All<br> Insurances which are required to have been effected under the Transaction Documents are in<br> full force and effect, and no event or circumstance has occurred (including any omission<br> to disclose any fact) which could validly entitle an insurer in respect of any of such Insurances<br> to terminate, rescind or otherwise avoid or reduce its or any of its Subsidiaries liability<br> under any such Insurances. |
| --- | --- |
| - 111 - |
| --- |
Miscellaneous
| 21.37 | No Immunity |
|---|
In any proceedings taken in a Relevant Jurisdiction in relation to the Transaction Documents, neither it nor any of its Subsidiaries will be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
| 21.38 | Private and commercial acts |
|---|
Its execution of the Transaction Documents to which it or any of its Subsidiaries is or will be party constitutes, and its exercise of its rights and performance of its obligations under those Transaction Documents will constitute, private and commercial acts done and performed for private and commercial purposes.
| 21.39 | Pari passu ranking |
|---|
Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
| 21.40 | Centre of main interests and establishments |
|---|
For the purposes of the EU Insolvency Regulation, its and the Senior Borrower’s centre of main interest (as that term is used in Article 3(1) of the EU Insolvency Regulation) is situated in its Original Jurisdiction and it has no “establishment” (as that term is used in Article 2(10) of the EU Insolvency Regulation) in any other jurisdiction.
| 21.41 | Bank Recovery and Resolution |
|---|
Neither it nor any member of the Group is an entity which is within the scope of the stabilisation, resolution or recovery powers under the Banking Act 2009, or similar powers under the laws of any other jurisdiction.
| 21.42 | DAC 6 |
|---|
No transaction contemplated by the Transaction Documents nor any transaction to be carried out in connection with any transaction contemplated by the Transaction Documents meets any hallmark set out in Annex IV of the Council Directive of 25 May 2018 (2018/822/EU) amending Directive 2011/16/EU.
| 21.43 | Dealings with SRCs and SDNs |
|---|
It neither has nor intends to have any business operations or other dealings
| (a) | in<br> any Sanctioned Territory, including the Crimea region, Cuba, Iran, Sudan, North Korea<br> and Syria, |
|---|---|
| (b) | with<br> any Specially Designated National (“SDN”) on OFAC’s SDN list or<br> with a designated person targeted by asset freeze Sanctions imposed by the UN, EU, UK or<br> HMT, |
| --- | --- |
| - 112 - |
| --- | | (c) | involving<br> commodities or services of a Sanctioned Territory origin or shipped to, through, or from<br> a Sanctioned Territory, or on Sanctioned Territory owned or registered vessels or aircraft,<br> or finance or subsidize any of the foregoing exceeding 5% aggregated in comparison to its<br> total assets or revenues. | | --- | --- | | 21.44 | Repetition | | --- | --- |
The Repeating Representations are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on:
| (a) | the<br> date of each Utilisation Request, each Utilisation Date, the date of each Compliance Certificate,<br> each Acquisition Date and the first day of each Interest Period; and |
|---|---|
| (b) | in<br> the case of an Additional Obligor, the day on which such person becomes (or it is proposed<br> that such person becomes) an Additional Obligor. |
| --- | --- |
| 22. | INFORMATION UNDERTAKINGS |
| --- | --- |
The undertakings in this Clause 22 remain in force from the Signing Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
| 22.1 | Financial statements |
|---|
The Borrower shall supply to the Mezzanine Agent in sufficient copies for all the Lenders:
| (a) | as<br> soon as the same become available, but in any event within 120 days after the end of each<br> of its financial years: |
|---|---|
| (i) | its<br> audited consolidated financial statements for that financial year; |
| --- | --- |
| (ii) | the<br> audited financial statements of each Obligor for that financial year; and |
| --- | --- |
| (iii) | the<br> audited financial statements of each Senior Obligor and each ProjectCo that is not a Senior<br> Obligor but owns a Warehouse Project for that financial year; and |
| --- | --- |
| (b) | as<br> soon as the same become available, but in any event within sixty (60) days after the end<br> of each half of each of its financial years: |
| --- | --- |
| (i) | its<br> consolidated financial statements for that financial half year; |
| --- | --- |
| (ii) | the<br> financial statements of each Obligor for that financial half year; and |
| --- | --- |
| (iii) | the<br> financial statements of each Senior Obligor and each ProjectCo that is not a Senior Obligor<br> but owns a Warehouse Project for that financial year; and |
| --- | --- |
| - 113 - |
| --- | | (c) | as<br> soon as the same become available, but in any event within forty-five (45) days after the<br> end of each quarter of each of its financial years/: | | --- | --- | | (i) | its<br> consolidated financial statements for that period; | | --- | --- | | (ii) | the<br> financial statements of each Obligor for that period; and | | --- | --- | | (iii) | the<br> financial statements of each Senior Obligor and each ProjectCo that is not a Senior Obligor<br> but owns a Warehouse Project for that period. | | --- | --- | | 22.2 | Compliance Certificate | | --- | --- | | (a) | The<br> Borrower shall supply to the Mezzanine Agent, together with each set of financial statements<br> delivered pursuant to paragraph (a)(i) or (b)(i) of Clause 22.1 (Financial statements)<br> and on each Calculation Date, a Compliance Certificate setting out (in reasonable detail)<br> computations as to compliance with Clause 23 (Financial covenants) as at the date<br> as at which those financial statements were drawn up. | | --- | --- | | (b) | Each<br> Compliance Certificate shall be signed by two (2) directors of the Borrower and, if<br> required to be delivered with the financial statements delivered pursuant to paragraph (a)(i) of<br> Clause 22.1 (Financial statements), shall be reported on by the Borrower’s auditors<br> in the form agreed by the Borrower and all the Lenders before the Signing Date. | | --- | --- | | 22.3 | Requirements as to financial statements | | --- | --- |
(a) The Borrower shall:
| (i) | deliver<br> each set of financial statements pursuant to Clause 22.1 (Financial statements) with: |
|---|---|
| (A) | a<br> balance sheet, profit and loss account, a cashflow statement (in each case, incorporated<br> in such financial statement) and a management discussion and analysis; and |
| --- | --- |
| (B) | a<br> certification by a director of the relevant company as fairly presenting its financial condition<br> as at the date as at which those financial statements were drawn up; and |
| --- | --- |
| (ii) | procure<br> that the management of the Sponsor are available within three (3) Business Days of request<br> to have a detailed discussion and analysis with the Lenders in respect of such financial<br> statements. |
| --- | --- |
| - 114 - |
| --- |
(b)
| (i) | The<br> Borrower shall procure that each set of financial statements of an Obligor, a Senior Obligor<br> or a ProjectCo delivered pursuant to Clause 22.1 (Financial statements) is prepared<br> using the Accounting Principles, accounting practices and financial reference periods consistent<br> with those applied in the preparation of the Original Financial Statements for that Obligor,<br> Senior Obligor or, as applicable, ProjectCo, unless, in relation to any set of financial<br> statements, it notifies the Mezzanine Agent that there has been a change in the Accounting<br> Principles, the accounting practices or reference periods, and its auditors (or, if appropriate,<br> the auditors of the Obligor, Senior Obligor or, as applicable, ProjectCo) deliver to the<br> Mezzanine Agent: |
|---|---|
| (A) | a<br> description of any change necessary for those financial statements to reflect the Accounting<br> Principles, accounting practices and reference periods upon which that Obligor’s, Senior<br> Obligor’s or, as applicable, ProjectCo’s Original Financial Statements were prepared;<br> and |
| --- | --- |
| (B) | sufficient<br> information, in form and substance as may be reasonably required by the Mezzanine Agent,<br> to enable the Lenders to determine whether Clause 23 (Financial covenants) has been<br> complied with and make an accurate comparison between the financial position indicated in<br> those financial statements and that Obligor’s, Senior Obligor’s or, as applicable,<br> ProjectCo’s Original Financial Statements. |
| --- | --- |
| (ii) | If<br> the Borrower notifies the Mezzanine Agent of a change in accordance with paragraph (i) above<br> then the Borrower and Mezzanine Agent shall enter into negotiations in good faith with a<br> view to agreeing: |
| --- | --- |
| (A) | whether<br> or not the change might result in any material alteration in the commercial effect of any<br> of the terms of this Agreement; and |
| --- | --- |
| (B) | if<br> so, any amendments to this Agreement which may be necessary to ensure that the change does<br> not result in any material alteration in the commercial effect of those terms, |
| --- | --- |
and if any amendments are agreed they shall take effect and be binding on each of the Parties in accordance with their terms.
Any reference in this Agreement to “those financial statements” shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
| 22.4 | Financial Model |
|---|---|
| (a) | The<br> Borrower shall maintain the Financial Model (including the Base Case) for the purpose of<br> preparing calculations and forecasts in accordance with this Agreement. |
| --- | --- |
| (b) | The<br> Borrower and the Mezzanine Agent shall each retain one copy of the Financial Model as revised<br> from time to time. |
| --- | --- |
| (c) | The<br> Borrower shall not make any changes to the Financial Model without the Mezzanine Agent’s<br> prior written consent. |
| --- | --- |
| - 115 - |
| --- | | (d) | Each<br> of the Borrower and the Mezzanine Agent may propose structural changes to the Financial Model<br> (in the case of the Mezzanine Agent, only for the purposes of correcting any error or deficiency<br> or to adjust any formula, logic or methodology for making calculations in accordance with<br> the Finance Documents) and any such proposal shall be accompanied by the reasons for such<br> proposal. | | --- | --- | | (e) | Notwithstanding,<br> and without prejudice to, the provisions of this Clause 22.4, no changes shall be made to<br> the Financial Model unless the same change is made to the “financial model” (howsoever<br> defined in the Senior Facility Agreement) delivered pursuant to the Senior Facility Agreement. | | --- | --- | | (f) | If,<br> without prejudice to paragraph (e) above, the Borrower and the Mezzanine Agent agree<br> on any proposed changes to the Financial Model, it shall be updated accordingly and, if the<br> Mezzanine Agent so requires, shall be re-audited by the Model Auditor. | | --- | --- | | 22.5 | Updated Base Case | | --- | --- | | (a) | The<br> Borrower shall produce and deliver to the Mezzanine Agent an updated Base Case (an “Updated Base Case”): | | --- | --- | | (i) | on<br> each day that it is required to deliver a Warehouse Report pursuant to Clause 22.10 (Warehouse Reporting); | | --- | --- | | (ii) | no<br> later than fifteen (15) Business Days prior to the proposed entry to an Enhancement PPA; | | --- | --- | | (iii) | within<br> ten (10) Business Days of: | | --- | --- | | (A) | a<br> Funding Shortfall; | | --- | --- | | (B) | any<br> Key Project Milestone not being achieved by the stipulated date; | | --- | --- | | (C) | any<br> Transaction Document being terminated, cancelled, repudiated or rescinded prior to its originally<br> stated maturity or not renewed upon its expiry unless replaced in the manner described in<br> paragraph (c) of Clause 25.12 (Termination or Repudiation); or | | --- | --- | | (D) | any<br> circumstance equivalent to the matters described in paragraph (b) of Clause 25.13 (Governmental Intervention) (excluding any de minimis book value set out therein); | | --- | --- | | (iv) | as<br> soon as practicable following notification from the Mezzanine Agent that any material event<br> has occurred that necessitates an update to the Assumptions included in the current Base<br> Case; | | --- | --- | | (v) | in<br> any other circumstances in which a calculation or determination is required to be made under<br> a Finance Document by reference to a revised Base Case. | | --- | --- |
| - 116 - |
| --- | | (b) | Each<br> Updated Base Case shall be: | | --- | --- | | (i) | substantially<br> in the form of the Original Base Case; and | | --- | --- | | (ii) | prepared<br> on the basis of Assumptions determined in accordance with Clause 22.6 (Assumptions)<br> (which shall be the same as used for the Senior Facility Agreement). | | --- | --- | | (c) | The<br> Borrower will ensure that, as at the delivery of any Updated Base Case to the Mezzanine Agent: | | --- | --- | | (i) | all<br> the factual information set out in such Updated Base Case is true, complete and accurate<br> in all material respects and has been compiled in good faith and with due care and attention;<br> and | | --- | --- | | (ii) | all<br> projections, forecasts, estimates and opinions made by it in such Updated Base Case were<br> made in good faith and prepared on the basis of the values attributed to the Assumptions<br> disclosed therein, and it was reasonable for it to attribute those values. | | --- | --- | | (d) | The<br> Borrower shall, promptly upon request, deliver to the Mezzanine Agent such information as<br> the Mezzanine Agent may reasonably require in connection with its review of the Updated Base<br> Case. | | --- | --- | | (e) | The<br> Mezzanine Agent shall as soon as reasonably practicable after receipt of the Updated Base<br> Case notify the Borrower if it accepts the Updated Base Case, and if it does not: | | --- | --- | | (i) | the<br> Mezzanine Agent and the Borrower shall discuss (for a period not longer than fifteen (15)<br> Business Days) any changes required to the Updated Base Case; and | | --- | --- | | (ii) | if<br> the Borrower and the Mezzanine Agent are unable to agree on any changes required to the Updated<br> Base Case, the matter shall be referred to the Resolution Procedure and resolved within fifteen<br> (15) Business Days. | | --- | --- | | (f) | In<br> case the Borrower and the Mezzanine Agent refer the matter to the Resolution Procedure, they<br> shall give the Senior Agent and the Senior Borrower an opportunity to join the Resolution<br> Procedure with the aim of ensuring that the results of the Resolution Procedure shall be<br> binding both under the Senior Facility Agreement and this Agreement. | | --- | --- | | 22.6 | Assumptions | | --- | --- | | (a) | Either: | | --- | --- | | (i) | at<br> least five (5) Business Days prior to the date on which an Updated Base Case is required<br> to be delivered to the Mezzanine Agent pursuant to Clause 22.5 (Updated Base Case),<br> or on the date on which the Borrower delivers such Updated Base Case in accordance with Clause<br> 22.5 (Updated Base Case); and | | --- | --- |
| - 117 - |
| --- |
(ii) in any event, on each Calculation Date,
the Borrower shall:
| (A) | update<br> the relevant Assumptions in good faith; and |
|---|---|
| (B) | deliver<br> to the Mezzanine Agent: |
| --- | --- |
| (1) | the<br> proposed updated relevant Assumptions; and |
| --- | --- |
| (2) | a<br> description of any material change to the value of any such updated Assumptions when compared<br> with the value of the Assumptions used to prepare the then current Base Case, giving reasonable<br> details of, and where reasonably available, supporting information for, the reasons for the<br> change. |
| --- | --- |
| (b) | The<br> Updated Base Case shall reflect the updated relevant Assumptions in the manner set out below: |
| --- | --- |
| (i) | taking<br> into account: |
| --- | --- |
| (A) | a<br> Funding Shortfall; |
| --- | --- |
| (B) | any<br> Key Project Milestone not being achieved by the stipulated date; |
| --- | --- |
| (C) | any<br> Transaction Document being terminated, cancelled, repudiated or rescinded prior to its originally<br> stated maturity or not renewed upon its expiry unless replaced in the manner described in<br> paragraph (c) of Clause 25.12 (Termination or Repudiation); and |
| --- | --- |
| (D) | any<br> circumstance equivalent to the matters described in paragraph (b) of Clause 25.13 (Governmental Intervention) (excluding any de minimis book value set out therein); |
| --- | --- |
| (ii) | the<br> updated power price assumptions; and |
| --- | --- |
| (iii) | any<br> change to any contractual sum that was assessed and analysed by the Lenders as part of determining<br> whether a solar PV project satisfies the Eligibility Criteria which has become a Warehouse<br> Project. |
| --- | --- |
| - 118 - |
| --- | | (c) | The<br> Mezzanine Agent may challenge any Assumptions that the Borrower proposes to update, or that<br> it believes the Borrower should have updated, at any time within fifteen (15) Business Days<br> of its receipt of the proposed updated Assumptions. If the Mezzanine Agent challenges any<br> Assumptions that the Borrower proposes to update, or that it believes the Borrower should<br> have updated: | | --- | --- | | (i) | the<br> Mezzanine Agent and the Borrower shall discuss (for a period not longer than ten (10) Business<br> Days) any changes required to the Assumptions; and | | --- | --- | | (ii) | if<br> the Borrower and the Mezzanine Agent are unable to agree on the updated Assumptions, the<br> matter shall be referred to the Resolution Procedure and resolved within ten (10) Business<br> Days, and the updated Assumptions as determined pursuant to that procedure shall become the<br> updated Assumptions for the purposes of producing the Updated Base Case in accordance with<br> Clause 22.5 (Updated Base Case). | | --- | --- | | 22.7 | Valuation Report | | --- | --- | | (a) | The<br> Original Valuation Report shall be the current Valuation Report in respect of the relevant<br> Warehouse Project to which it relates until updated in accordance with this Clause 22.7. | | --- | --- | | (b) | Commencing<br> from the date falling six (6) months after the date of the Original Valuation Report<br> in respect of any given Warehouse Project, the Borrower shall, promptly upon request of the<br> Mezzanine Agent and, in any event, within five | | --- | --- |
(5) Business Days of request by the Mezzanine Agent (unless otherwise agreed by the Mezzanine Agent), deliver an updated Valuation Report to the Mezzanine Agent (in form and substance satisfactory to the Mezzanine Agent).
| (c) | The<br> right of the Mezzanine Agent pursuant to paragraph (b) above shall be limited to one<br> (1) request for every twelve (12) month period following the date specified in paragraph<br> (b) above, provided that no such limitation shall apply when a Default is continuing. |
|---|---|
| 22.8 | Construction Budget and Project Close Confirmation |
| --- | --- |
| (a) | The<br> Original Construction Budget and the Original Project Close Confirmation shall be the current<br> Construction Budget and current Project Close Confirmation, in each case, in respect of the<br> relevant Warehouse Project to which it relates until updated in accordance with this Clause<br> 22.8. |
| --- | --- |
| (b) | The<br> Borrower shall, following receipt by the Mezzanine Agent of any Warehouse Report delivered<br> to it pursuant to Clause 22.10 (Warehouse Reporting) and within three (3) Business<br> Days of the Mezzanine Agent’s request, deliver an updated draft Construction Budget<br> and, only if so requested by the Mezzanine Agent, a draft update to paragraph (a) of<br> the Project Close Confirmation, to the Mezzanine Agent (in each case, in form and substance<br> satisfactory to the Mezzanine Agent acting in consultation with the Lenders’ Technical<br> Adviser (including subject to any condition the Mezzanine Agent imposed by it (acting in<br> its full discretion)) in respect of the relevant Warehouse Project(s) (any such draft<br> prepared substantially in the form of the Original Construction Budget or Original Project<br> Close Confirmation, as applicable). |
| --- | --- |
| - 119 - |
| --- | | 22.9 | Operating Budget | | --- | --- | | (a) | The<br> Borrower shall, within the period commencing on the date falling twenty | | --- | --- |
(20) Business Days prior to the Warehouse Project Completion Longstop Date of a Warehouse Project (as set out in the then current Project Close Confirmation) and ending on the date falling five (5) Business Days prior to the Commercial Operation Date of that Warehouse Project, deliver to the Mezzanine Agent (in form and substance satisfactory to the Mezzanine Agent) an operating budget in connection to that Warehouse Project (such budget being the “Original Operating Budget”) and for the period commencing from the Commercial Operation Date until the date on which the Borrower is obliged to deliver the Warehouse Report pursuant to paragraph (a)(ii) of Clause 22.10 (Warehouse Reporting).
| (b) | The<br> Borrower shall, together with each Warehouse Report delivered to the Mezzanine Agent pursuant<br> to paragraph (a)(ii) of Clause 22.10 (Warehouse Reporting), deliver an update<br> to the Operating Budget for the immediately forthcoming Operating Period. |
|---|---|
| (c) | The<br> Borrower shall ensure that each Operating Budget delivered and updated from time to time<br> pursuant to this Clause 22.9 shall set out the matters listed in paragraph 2(b) of Schedule<br> 13 (Form of Warehouse Report) in form and substance satisfactory to the Mezzanine<br> Agent (and in respect of an update, shall be in the form of the Original Operating Budget<br> agreed to by the Mezzanine Agent). |
| --- | --- |
| 22.10 | Warehouse Reporting |
| --- | --- |
| (a) | The<br> Borrower shall: |
| --- | --- |
| (i) | in<br> connection with Warehouse Projects yet to achieve the Commercial Operation Date, within three<br> (3) Business Days after the end of each calendar month, deliver to the Mezzanine Agent<br> (in form and substance satisfactory to the Mezzanine Agent) the Warehouse Report, in so far<br> as it relates to the construction of each Warehouse Project (on a project- by-project basis<br> and on a consolidated basis), substantially in the form set out in Schedule 13 (Form of Warehouse Report); and |
| --- | --- |
| (ii) | in<br> connection with Warehouse Projects that have achieved the Commercial Operation Date, five<br> (5) Business Days prior to each Calculation Date, deliver to the Mezzanine Agent (in<br> form and substance satisfactory to the Mezzanine Agent) the Warehouse Report, substantially<br> in the form set out in Schedule 13 (Form of Warehouse Report). |
| --- | --- |
| (b) | Each<br> Obligor shall: |
| --- | --- |
| (i) | promptly<br> from the date of receipt, deliver to the Mezzanine Agent any written report delivered to<br> it by the EPC Contractor and / or the Operator; and |
| --- | --- |
| - 120 - |
| --- | | (ii) | within<br> three (3) Business Days of request, any other written report in connection with the<br> construction and/or operation of a Warehouse Project. | | --- | --- | | 22.11 | Market Study | | --- | --- |
The Borrower shall, on each Calculation Date, deliver to the Mezzanine Agent, in form and substance satisfactory to the Mezzanine Agent, an updated Market Study.
| 22.12 | Financial summary |
|---|
The Borrower shall, within three (3) Business Days after the end of each calendar month, deliver to the Mezzanine Agent a financial summary in the form set out in Schedule 16 (Form of financial summary) in respect of (a) each Warehouse Project and (b) all Warehouse Projects on a consolidated basis.
| 22.13 | E&S Claims |
|---|
The Borrower shall inform the Mezzanine Agent in writing as soon as reasonably practicable upon becoming aware of:
| (a) | any<br> E&S Claim that has been commenced or (to the best of its knowledge and belief) is threatened<br> in writing against any member of the Group; or |
|---|---|
| (b) | any<br> facts or circumstances which will or are reasonably likely to result in any E&S Claim<br> being commenced or threatened against any member of the Group. |
| --- | --- |
| 22.14 | Insurance |
| --- | --- |
| (a) | The<br> Borrower shall effect and maintain (and procure that the relevant members of the Group effect<br> and maintain) at all times the Insurances specified in Schedule 15 (Insurance) and<br> all other insurances required at that time under the Project Documents or any other agreements<br> binding on it. |
| --- | --- |
If the Mezzanine Agent determines at any time that terms more favourable to the interests of the Finance Parties (and generally applied in project financings at that time) are available in the international insurance or reinsurance market than those that the Borrower (and any member of the Group) has currently effected, it may refer to the Resolution Procedure the question as to whether the Insurance requirements under this Agreement shall be adjusted to reflect those more favourable terms, and the outcome of that Resolution Procedure shall be final and conclusive and binding on the Parties.
| (b) | The<br> Borrower (and any other member of the Group) may only effect and/or maintain insurance in<br> addition to that required under paragraph (a) above to the extent that any expenditure<br> relating to such additional insurance is included in the current Construction Budget or Operating<br> Budget (as applicable) and that such additional insurance does not affect in any way the<br> Borrower’s (or any other member of the Group’s) or Finance Parties’ rights<br> or remedies under the insurance required under paragraph (a) above. |
|---|
| - 121 - |
| --- | | (c) | The<br> Borrower shall (and shall procure that any member of the Group): | | --- | --- | | (i) | pay<br> all premiums and other amounts due and payable under the Insurances (and provide evidence<br> of payment to the Mezzanine Agent upon request); | | --- | --- | | (ii) | promptly<br> (and in any event within three (3) Business Days of demand) indemnify any Secured Party<br> in respect of any amount due and payable under the Insurances that it has paid on behalf<br> of the Borrower (or such member of the Group); | | --- | --- | | (iii) | comply<br> with the terms of the Insurances and use all reasonable endeavours to ensure that neither<br> it nor any other person does or fails to do anything that may render any Insurance void,<br> voidable, breached, suspended, impaired or defeated in whole or part; | | --- | --- | | (iv) | disclose<br> to each insurer under the Insurances all information required in order to comply with its<br> disclosure obligations under applicable law and industry standards (and put in place internal<br> procedures to ensure that this is done), and ensure that, where representations are made<br> or warranties given in respect of any of the Insurances, any such representations or warranties<br> are complete and accurate and complied with at all times and any conditions precedent to<br> the effectiveness of or liability under any Insurance are complied with at all times; | | --- | --- | | (v) | promptly<br> pursue its rights and remedies against each insurer/reinsurer under the Insurances; | | --- | --- | | (vi) | procure<br> that its broker promptly delivers a report to the Mezzanine Agent on the details (including<br> losses) in respect of any event or circumstance giving rise to any claim (or series of claims<br> in respect of the same event or circumstance giving rise to the claim) under any of the Insurances;<br> and | | --- | --- | | (vii) | in<br> respect of any Insurance that is to be renewed, provide to the Mezzanine Agent a certificate<br> of renewal from the relevant insurer no later than fourteen (14) days prior to the expiry<br> of the policy. | | --- | --- | | (d) | The<br> Borrower shall procure that all Insurances required under this Clause 22.14: | | --- | --- | | (i) | are<br> placed and maintained with insurers each of whom is of sound financial standing and international<br> repute, has a rating for its long-term unsecured and non credit-enhanced debt obligations<br> of BBB+ or higher by S&P Global Ratings, a division of S&P Global Inc. or Baa1 or<br> higher by Moody’s Investors Service Limited or a comparable rating from an internationally<br> recognised credit rating agency, and is otherwise acceptable to the Mezzanine Agent; | | --- | --- | | (ii) | contain<br> no restriction on assignment or transfer that might limit or otherwise affect the effectiveness,<br> attachment or perfection of any proposed Security; and | | --- | --- | | (iii) | provide<br> for payments of claims in the currency of the Revenue; and | | --- | --- |
| - 122 - |
| --- | | (iv) | (in<br> the case of primary insurances) name each of the Secured Parties as co-insureds (and no Secured<br> Party shall be under any duty under such Insurance including in relation to information to<br> the insurer or liability to pay premiums). | | --- | --- | | (e) | If<br> at any time and for any reason any of the Insurances required to be maintained under this<br> Clause 22.14 is not in full force and effect then, without prejudice to the rights of the<br> Secured Parties, the Mezzanine Agent shall have the right (but no obligation) to procure<br> on behalf of itself, the Borrower and the other Secured Parties insurance complying with<br> the requirements of this Clause 22.14. | | --- | --- | | (f) | No<br> Secured Party shall have any liability of any nature whatsoever to procure any insurance<br> under paragraph (e), whether in contract, tort, negligence or otherwise, and upon procuring<br> any such insurance the Mezzanine Agent shall only have such liabilities as are expressly<br> assumed by it in respect of such insurance. | | --- | --- | | (g) | The<br> Mezzanine Agent shall have the right (but no obligation) to pay any premiums due under any<br> of the Insurances if the Borrower fails to do so punctually. | | --- | --- | | (h) | The<br> Borrower shall indemnify each Secured Party against the costs and expenses of procuring any<br> insurance or reinsurance referred to in paragraph (e) and against any premiums paid<br> pursuant to paragraph (g). | | --- | --- | | (i) | Without<br> prejudice to any other obligations of the Borrower under the Finance Documents, the Borrower<br> shall, on the Mezzanine Agent’s request, take all such steps at any time to minimise<br> hazard as the Mezzanine Agent may reasonably consider expedient or necessary. | | --- | --- | | 22.15 | Further information | | --- | --- | | (a) | Upon<br> the Mezzanine Agent’s request, the Borrower shall (and shall ensure that each member<br> of the Group will) promptly deliver (and, in any event, within three (3) Business Days<br> of such request) to the Mezzanine Agent all and other information regarding any member of<br> the Group and / or any Warehouse Project. | | --- | --- | | (b) | The<br> Borrower shall notify the Mezzanine Agent promptly following: | | --- | --- | | (i) | the<br> Non-Euro Ratio exceeding the Non-Euro Cap; and | | --- | --- | | (ii) | when,<br> thereafter, the Non-Euro Ratio falls back to or under the Non- Euro Cap. | | --- | --- | | 22.16 | Information: miscellaneous | | --- | --- |
The Borrower shall supply to the Mezzanine Agent (in sufficient copies for all the Lenders, if the Mezzanine Agent so requests):
| (a) | all<br> documents dispatched by the Borrower to its shareholders (or any class of them) or its creditors<br> generally at the same time as they are dispatched; |
|---|
| - 123 - |
| --- | | (b) | promptly<br> upon becoming aware of them, the details of any litigation, arbitration or administrative<br> proceedings which are current, threatened in writing or pending against any member of the<br> Group (or against the directors of any member of the Group), and which might, if adversely<br> determined, have a Material Adverse Effect; | | --- | --- | | (c) | promptly<br> upon becoming aware of them, the details of any judgment or order of a court, arbitral body<br> or agency which is made against any member of the Group (or against the directors of any<br> member of the Group), and which might have a Material Adverse Effect; | | --- | --- | | (d) | to<br> the extent permitted by law, any filing and/or report delivered to the U.S. Securities and<br> Exchange Commission by any of its Affiliates, in so far as it relates to any Finance Document<br> and/or the Senior Facility Agreement, promptly after any such filing and/or report; and | | --- | --- | | (e) | promptly,<br> such further information regarding the financial condition, business and operations of any<br> member of the Group as any Finance Party (through the Mezzanine Agent) may reasonably request. | | --- | --- | | 22.17 | Notification of default | | --- | --- | | (a) | Each<br> Obligor shall notify the Mezzanine Agent and the Mezzanine Security Agent of any Default<br> (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence<br> (unless that Obligor is aware that a notification has already been provided by another Obligor). | | --- | --- | | (b) | Promptly<br> upon a request by the Mezzanine Agent, the Borrower shall supply to the Mezzanine Agent a<br> certificate signed by two (2) of its directors or senior officers on its behalf certifying<br> that no Default is continuing (or if a Default is continuing, specifying the Default and<br> the steps, if any, being taken to remedy it). | | --- | --- | | 22.18 | Direct electronic delivery by Obligors | | --- | --- |
Any Obligor may satisfy its obligation under this Agreement to deliver any information in relation to those a Lender by delivering that information directly to that Lender in accordance with Clause 36.6 (Electronic communication) to the extent that Lender and the Mezzanine Agent agree to this method of delivery.
| 22.19 | “Know your customer” checks |
|---|---|
| (a) | If: |
| --- | --- |
| (i) | the<br> introduction of or any change in (or in the interpretation, administration or application<br> of) any law or regulation made after the Signing Date; |
| --- | --- |
| (ii) | any<br> change in the status of an Obligor (or of a Holding Company of an Obligor) or the composition<br> of the shareholders of an Obligor (or of a Holding Company of an Obligor) after the Signing<br> Date; or |
| --- | --- |
| - 124 - |
| --- | | (iii) | a<br> proposed assignment or transfer by a Lender of any of its rights and obligations under this<br> Agreement to a party that is not a Lender prior to such assignment or transfer, | | --- | --- |
obliges the Mezzanine Agent or any Lender (or, in the case of limb (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Mezzanine Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Mezzanine Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in limb (iii) above, on behalf of any prospective new Lender) in order for the Mezzanine Agent, such Lender or, in the case of the event described in limb (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
| (b) | Each<br> Lender shall promptly upon the request of the Mezzanine Agent supply, or procure the supply<br> of, such documentation and other evidence as is reasonably requested by the Mezzanine Agent<br> (for itself) in order for the Mezzanine Agent to carry out and be satisfied it has complied<br> with all necessary “know your customer” or other similar checks under all applicable<br> laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
|---|---|
| (c) | The<br> Borrower shall, by not less than ten (10) Business Days’ prior written notice<br> to the Mezzanine Agent, notify the Mezzanine Agent (which shall promptly notify the Lenders)<br> of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant<br> to Clause 28 (Changes to the Obligors). |
| --- | --- |
| (d) | Following<br> the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional<br> Obligor obliges the Mezzanine Agent or any Lender to comply with “know your customer”<br> or similar identification procedures in circumstances where the necessary information is<br> not already available to it, the Borrower shall promptly upon the request of the Mezzanine<br> Agent or any Lender supply, or procure the supply of, such documentation and other evidence<br> as is reasonably requested by the Mezzanine Agent (for itself or on behalf of any Lender)<br> or any Lender (for itself or on behalf of any prospective new Lender) in order for the Mezzanine<br> Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied<br> with all necessary “know your customer” or other similar checks under all applicable<br> laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an<br> Additional Obligor. |
| --- | --- |
| 22.20 | DAC 6 |
| --- | --- |
| (a) | In<br> this Clause, “DAC6” means the Council Directive of 25 May 2018 (2018/822/EU)<br> amending Directive 2011/16/EU. |
| --- | --- |
| - 125 - |
| --- | | (b) | The<br> Borrower shall supply to the Mezzanine Agent (in sufficient copies for all the Lenders, if<br> the Mezzanine Agent so requests): | | --- | --- | | (i) | promptly<br> upon the making of such analysis or the obtaining of such advice, any analysis made or advice<br> obtained on whether any transaction contemplated by the Transaction Documents or any transaction<br> carried out (or to be carried out) in connection with any transaction contemplated by the<br> Transaction Documents contains a hallmark as set out in Annex IV of DAC6; and | | --- | --- | | (ii) | promptly<br> upon the making of such reporting and to the extent permitted by applicable law and regulation,<br> any reporting made to any governmental or taxation authority by or on behalf of any Obligor<br> or by any adviser to such Obligor in relation to DAC6 or any law or regulation which implements<br> DAC6 and any unique identification number issued by any governmental or taxation authority<br> to which any such report has been made (if available). | | --- | --- | | (c) | The<br> Borrower shall supply to the Mezzanine Agent (in sufficient copies for all the Lenders, if<br> the Mezzanine Agent so requests): | | --- | --- | | (i) | promptly<br> upon the making of such analysis or the obtaining of such advice, any analysis made or advice<br> obtained on whether any transaction contemplated by the Transaction Documents or any transaction<br> carried out (or to be carried out) in connection with any transaction contemplated by the<br> Transaction Documents contains a hallmark as set out in Annex IV of DAC6; and | | --- | --- | | (ii) | promptly<br> upon the making of such reporting and to the extent permitted by applicable law and regulation,<br> any reporting made to any governmental or taxation authority by or on behalf of any Obligor<br> or by any adviser to such Obligor in relation to DAC6 or any law or regulation which implements<br> DAC6 and any unique identification number issued by any governmental or taxation authority<br> to which any such report has been made (if available). | | --- | --- | | 23. | FINANCIAL COVENANTS | | --- | --- | | 23.1 | Financial condition | | --- | --- |
The Obligors shall ensure that, on an aggregate basis across the Senior Facility Agreement and this Agreement:
| (a) | at<br> all times, the Loan-to-Value Ratio does not exceed 80%; and |
|---|---|
| (b) | on: |
| --- | --- |
| (i) | each<br> Calculation Date; and |
| --- | --- |
| (ii) | on<br> the date which falls ten (10) Business Days after any circumstance to the matters described<br> in paragraph (b) of Clause 25.13 (Governmental Intervention) (excluding any de minimis book value set out therein), |
| --- | --- |
the LLCR is at least 1.15:1.
| - 126 - |
| --- | | 23.2 | Financial testing | | --- | --- |
The financial covenants set out in Clause 23.1 (Financial condition) shall be tested by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause 22.2 (Compliance Certificate).
| 24. | GENERAL UNDERTAKINGS |
|---|
The undertakings in this Clause 24 remain in force from the Signing Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
Authorisations and compliance with laws
| 24.1 | Authorisations |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) promptly:
| (a) | obtain,<br> comply with and do all that is necessary to maintain in full force and effect; and |
|---|---|
| (b) | supply<br>certified copies to the Mezzanine Agent of, |
any Required Authorisation.
| 24.2 | Compliance with laws |
|---|---|
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply<br> in all respects with the Compliance Standards other than breaches which are of a minor nature<br> only and which do not prejudice the interests of any Finance Party. |
| --- | --- |
| (b) | Paragraph<br> (a) above shall not bind the Obligors in respect of a minor breach of a Compliance Standard<br> which does not prejudice the interests of any Finance Party. |
| --- | --- |
| 24.3 | Project Implementation |
| --- | --- |
| (a) | Each<br> Obligor shall ensure that each ProjectCo will carry out its Warehouse Project in a safe and<br> efficient manner and in accordance with Good Industry Practice and all requirements of the<br> relevant Project Documents. |
| --- | --- |
| (b) | Each<br> Obligor shall ensure that each ProjectCo will at all times maintain adequate supplies of<br> spare parts and other plant, materials and apparatus in accordance with Good Industry Practice. |
| --- | --- |
| - 127 - |
| --- | | 24.4 | Personnel | | --- | --- |
No Obligor shall (and shall procure that no ProjectCo, any Project HoldCo and/or any Country HoldCo) have any employees.
| 24.5 | E&S Compliance |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply in all material respects with, and shall carry out the Project in compliance with, all E&S Standards and E&S Authorisations and obtain and maintain any E&S Authorisations and take all reasonable steps in anticipation of known or expected future changes to or obligations under the same.
| 24.6 | Taxation |
|---|---|
| (a) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall duly<br> and punctually pay and discharge all Taxes imposed upon it or its assets within the time<br> period allowed without incurring penalties (except to the extent that (i) such payment<br> is being contested in good faith, (ii) adequate cash reserves are being maintained by<br> it for those Taxes and (iii) such payment can be lawfully withheld). |
| --- | --- |
| (b) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall ensure<br> that it is not a member of a group for VAT purposes. |
| --- | --- |
| (c) | No<br> Obligor may change its residence for Tax purposes. |
| --- | --- |
| 24.7 | Anti-Bribery and Anti-corruption |
| --- | --- |
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) directly<br> or indirectly use, lend or contribute the proceeds of the Facilities for any purpose which<br> would breach the Anti-Bribery and Corruption Laws or other similar legislation in other jurisdictions. |
| --- | --- |
| (b) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall conduct<br> its business and operations and carry out the Warehouse Project in compliance with applicable<br> Anti-Bribery and Corruption Laws, and maintain and enforce policies and procedures designed<br> to ensure compliance with such laws. |
| --- | --- |
| 24.8 | Sanctions |
| --- | --- |
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) (and shall ensure that any of its directors, officers or employees will) comply in all respects with any Sanctions applicable to it, whether directly or indirectly.
| - 128 - |
| --- | | 24.9 | Use of proceeds | | --- | --- |
No Obligor shall directly or indirectly, use the proceeds of the Facility or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity:
| (a) | to<br> fund or facilitate any activities of or business with any individual or entity (“Person”)<br> that, at the time of such funding or facilitation, is: |
|---|---|
| (i) | the<br> subject or the target of any Sanctions; |
| --- | --- |
| (ii) | owned<br> 50% or more by or otherwise controlled by, or acting on behalf of one or more Persons referenced<br> in clause (i) above; or |
| --- | --- |
| (iii) | located,<br> organized or resident in a Sanctioned Territory; or |
| --- | --- |
| (b) | to<br> fund or facilitate any activities of or business in any Sanctioned Territory; |
| --- | --- |
| (c) | in<br> any manner or for any purpose: |
| --- | --- |
| (i) | that<br> is prohibited by Sanctions: |
| --- | --- |
| (A) | applicable<br> to any Party or any of its Affiliates; or |
| --- | --- |
| (B) | under<br> the law governing any Transaction Document; or |
| --- | --- |
| (ii) | that<br> would result in a violation of Sanctions by any Party or any of its Affiliates; or |
| --- | --- |
| (d) | in<br> any other manner that will result in a violation by any Person (including any Person participating<br> in the transaction, whether as borrower, guarantor or otherwise) of Sanctions. |
| --- | --- |
| 24.10 | Non-AIF status |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) maintain<br> its status of an entity which is neither an AIF nor an AIFM. |
| --- | --- |
| (b) | None<br> of the Obligors will take (or omit to take) any action to the extent that doing so will,<br> or is reasonably likely to, result in it (and the Borrower shall ensure that none of the<br> members of the Group will take (or omit to take) any action to the extent that doing so will,<br> or is reasonably likely to, result in it) being an AIF or an AIFM. |
| --- | --- |
| 24.11 | AML compliance |
| --- | --- |
| (a) | Each<br> Obligor (and the Borrower shall ensure that each other member of the Group will) shall conduct<br> its operations at all times in compliance with the Money Laundering Laws. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) maintain<br> and enforce policies and procedures designed to ensure compliance with Money Laundering Laws<br> and to prevent money laundering, bribery and corruption by that Obligor or, as applicable,<br> any other member of the Group and by persons associated with any of the Obligors and/or any<br> other member of the Group. |
| --- | --- |
| - 129 - |
| --- | | (c) | Each<br> Obligor shall not (and the Borrower shall ensure that none of its Subsidiaries will) in each<br> case including any of their respective existing or previous officers, directors, employees,<br> agents, affiliates, associated parties and persons acting on behalf of such Obligor and/or<br> any of the Borrower’s Subsidiaries, directly or indirectly use the proceeds of the<br> Facility for any purpose that would breach Money Laundering Laws. | | --- | --- |
Restrictions on business
| 24.12 | Merger |
|---|---|
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) enter<br> into any amalgamation, demerger, merger or corporate reconstruction. |
| --- | --- |
| (b) | Paragraph<br> (a) above does not apply to any sale, lease, transfer or other disposal permitted pursuant<br> to Clause 24.26 (Disposals). |
| --- | --- |
| 24.13 | Change of business |
| --- | --- |
| (a) | The<br> Borrower shall procure that no substantial change is made to the general nature of the business<br> of the Borrower or the Group from that carried on at the Signing Date or planned by the Borrower<br> on the basis of the information provided by the Borrower to the Mezzanine Agent as condition<br> precedent to Financial Close. |
| --- | --- |
| (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) do<br> all things necessary to maintain in full force and effect when necessary, all contracts or<br> rights necessary or desirable for the conduct of its business. |
| --- | --- |
| 24.14 | Acquisitions |
| --- | --- |
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) acquire or invest in any company, business, asset or undertaking unless:
| (a) | required<br> to carry out any Warehouse Project; and |
|---|---|
| (b) | such<br> acquisition constitutes the acquisition of further Warehouse Projects, provided that Financial<br> Close (ProjectCo) shall occur on or prior to the date of acquisition of such Warehouse Project. |
| --- | --- |
| 24.15 | Restricted changes |
| --- | --- |
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) change, or allow any change to, any of the following without the Mezzanine Agent’s prior consent (acting reasonably):
| (a) | its<br> financial year end; |
|---|
| - 130 - |
| --- | | (b) | its<br> constitutive documents (other than in respect of minor administrative matters or as required<br> under applicable law) or that would not be prejudicial to the interests of the Finance Parties;<br> and | | --- | --- | | (c) | its<br> Auditor (by way of replacement, dismissal or otherwise), except this paragraph (c) shall<br> not apply to the extent that such restriction on changing its Auditor is prohibited by applicable<br> law. | | --- | --- | | 24.16 | Relationships with others | | --- | --- | | (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) ensure<br> that all the material terms of the arrangements between any Obligor as well as any other<br> member of the Group and the Borrower, the Shareholders and/or any of their Affiliates are<br> contained only in its constitutional documents, each Shareholder Loan Agreement, each Intragroup<br> Loan Agreement and each Transaction Document to which an Obligor, a Shareholder and/or any<br> of its Affiliates is party. | | --- | --- | | (b) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) have<br> any material rights against, or obligations to, any person other than under: | | --- | --- | | (i) | the<br> Transaction Documents and any Enhancement PPAs in accordance with Clause 24.22 (Sale of electricity); | | --- | --- | | (ii) | the<br> Shareholder Loan Agreements and the Intragroup Loan Agreements provided that: | | --- | --- | | (A) | Security,<br> in form and substance satisfactory to the Mezzanine Agent, has been granted to the Security<br> Agent and/or the Common Security Agent (as applicable) over the Shareholder Loans and/or<br> Intragroup Loans made available under such agreements; and | | --- | --- | | (B) | such<br> Intragroup Loan Agreements and Shareholder Loan Agreements are fully subordinated to the<br> Secured Obligations in accordance with the Intercreditor and Subordination Deed; and | | --- | --- | | (iii) | any<br> other contract or arrangement provided that the aggregate amount of payments under such contracts<br> or arrangements, across all Warehouse Projects, does not exceed EUR 250,000 (or equivalent<br> in any other currency) and, per Warehouse Project in any calendar year, EUR 50,000, unless<br> otherwise approved in the Construction Budget or the Operating Budget. | | --- | --- |
and, in each case, any transaction that they expressly contemplate.
| (c) | No<br> Obligor shall (and shall procure that no other member of the Group will) enter into any interest<br> rate or currency swap, interest rate cap or collar, forward rate agreement or other interest<br> rate, currency or commodity hedge (including for the avoidance of doubt any commodity hedge)<br> or similar derivative transactions. |
|---|
| - 131 - |
| --- | | (d) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) ensure<br> that each transaction or arrangement that it enters into or has entered into with any person<br> is on ordinary commercial terms and on an arm’s length basis. | | --- | --- | | 24.17 | Country HoldCo | | --- | --- |
Each Obligor shall ensure that, prior to the first ProjectCo being acquired in an Eligible Jurisdiction, the relevant Country HoldCo is incorporated in Ireland, with 100% of its share capital owned, at all times, by the Senior Borrower and such Country HoldCo owning (indirectly via the relevant Project HoldCo) all ProjectCos in that Eligible Jurisdiction.
| 24.18 | Shares |
|---|---|
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) ensure<br> that its shares are subject at all times to the Transaction Security, are fully paid and<br> are not subject to any option to purchase or similar rights. It shall ensure that its constitutional<br> documents do not and could not restrict or inhibit any transfer of those shares on creation<br> or on enforcement of the Transaction Security. |
| --- | --- |
| (b) | No<br> Obligor (other than the Borrower) shall (and the Borrower shall ensure that no other member<br> of the Group will) issue any (further) shares in its capital without the prior written consent<br> of the Mezzanine Agent. |
| --- | --- |
| (c) | Each<br> Obligor shall ensure that no person has any rights (including voting and dividend rights),<br> benefits or interests in respect of or derived from its shares other than: |
| --- | --- |
| (i) | in<br> case of the ProjectCos- the Project HoldCos, the Country HoldCos and/or the Senior Borrower,<br> as may be applicable; |
| --- | --- |
| (ii) | in<br> case of the Project HoldCos - the Country HoldCos, and/or the Senior Borrower, as may be<br> applicable; |
| --- | --- |
| (iii) | in<br> case of the Country HoldCos, the Senior Borrower; |
| --- | --- |
| (iv) | in<br> case of the Senior Borrower, the Borrower; and |
| --- | --- |
| (v) | in<br> case of the Borrower, the Parent, |
| --- | --- |
or, in each case, a Secured Party under the Transaction Security.
| (d) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) grant<br> to any person any securities convertible into its share capital or granted any rights to<br> call for issuance of further shares in its capital. |
|---|---|
| (e) | The<br> Borrower shall not have at any time any Subsidiaries (other than the ProjectCos, the Project<br> HoldCos and the Country HoldCos) nor any security convertible into shares or other ownership<br> interests in any person. |
| --- | --- |
| - 132 - |
| --- | | (f) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) have<br> at any time any Subsidiaries (other than if applicable any ProjectCos, the Project HoldCos<br> and the Country HoldCos) nor any security convertible into shares or other ownership interests<br> in any person. | | --- | --- | | (g) | Each<br> Obligor shall procure that all Country HoldCos are the (direct and/or indirect) owners of<br> all ProjectCos in the Eligible Jurisdiction of that Country HoldCo. | | --- | --- | | 24.19 | Project Documents | | --- | --- | | (a) | No<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) enter<br> into any contract or arrangement to carry out the Warehouse Project in whole or part other<br> than: | | --- | --- | | (i) | the<br> Transaction Documents and any Enhancement PPAs in accordance with Clause 24.22 (Sale of electricity); | | --- | --- | | (ii) | a<br> CPPA in connection with the sale of GoOs; and | | --- | --- | | (iii) | any<br> other contract or arrangement provided that the aggregate amount of payments under such contracts<br> or arrangements, across all Warehouse Projects, does not exceed EUR 250,000 (or equivalent<br> in any other currency) and, per Warehouse Project in any calendar year, EUR 50,000, unless<br> otherwise approved in the Construction Budget or, as applicable, the Operating Budget. | | --- | --- | | (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) comply<br> with its obligations under, and take all reasonable steps to preserve its rights and remedies<br> under, each Project Document in all material respects. | | --- | --- | | (c) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) take<br> all reasonable steps to mitigate the impact of any default or Force Majeure under any Project<br> Document. | | --- | --- | | (d) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) assign<br> any of its rights, or transfer any of its rights and obligations under any of the Project<br> Documents other than pursuant to the Security Documents. | | --- | --- | | (e) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) amend<br> (or agree to an amendment) of any of the Project Documents in case this might trigger a Funding<br> Shortfall, any delay to any Key Project Milestone and/or a Material Adverse Effect. | | --- | --- | | (f) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) maintain<br> internal capabilities for portfolio reconciliation requirements in accordance with Regulation<br> (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central<br> counterparties and trade repositories dated 4 July 2012 (European Market Infrastructure<br> Regulation), or appoint and maintain a third party service provider for such purposes. | | --- | --- |
| - 133 - |
| --- | | 24.20 | Abandonment | | --- | --- |
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) abandon, mothball, decommission, cancel, suspend or withdraw from any Warehouse Project or any part thereof.
| 24.21 | Procurement |
|---|
Each Obligor shall (and the Borrower shall ensure that each other member of the Group will) use procurement methods in compliance with applicable laws which ensure a sound selection of goods and services at fair market value and that any Obligor and, as applicable, other member of the Group is making its capital investments in a cost effective manner.
| 24.22 | Sale of electricity |
|---|---|
| (a) | With<br> respect to the electricity generated by any Warehouse Project and other than in case any<br> feed-in tariffs or other subsidies apply, no Obligor shall (and the Borrower shall procure<br> that no other member of the Group shall) enter into any other sale and purchase agreement<br> and/or derivative instrument (including any commodity swap or other hedge instrument) other<br> than a Power Purchase Agreement and Enhancement PPAs provided that, in the case of an Enhancement<br> PPA, an Obligor or other member of the Group may only execute an Enhancement PPA if: |
| --- | --- |
| (i) | the<br> Borrower has updated the then current Base Case pursuant to Clause |
| --- | --- |
22.5 (Updated Base Case) in connection with the entry into such proposed Enhancement PPA;
| (ii) | the<br> entry into such Enhancement PPA does not in any way derogate the feed-in tariff or other<br> subsidies that apply in connection with that Warehouse Project; and |
|---|---|
| (iii) | the<br> Debt Sizing Case (calculated by reference to a 25-year debt sizing period commencing on the<br> Commercial Operation Date) applicable to the relevant Warehouse Project to which such Enhancement<br> PPA relates continues to be complied with following the entry into any such Enhancement PPA. |
| --- | --- |
| (b) | Each<br> Obligor shall ensure that at least forty per cent. (40%) of all total aggregated Revenues<br> across all Warehouse Projects is generated from Non- Merchant Revenue, calculated by reference<br> to a twenty (20) year period commencing on the date on which each Warehouse Project achieves<br> its Commercial Operation Date. |
| --- | --- |
| 24.23 | Sale of GoOs |
| --- | --- |
The Borrower shall ensure that each ProjectCo shall sell GoOs in accordance with any CPPA.
| - 134 - |
| --- |
Assets and Security
| 24.24 | Negative pledge |
|---|
In this Clause 24.24, “Quasi-Security” means an arrangement or transaction described in paragraph (b) below.
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will) create<br> or permit to subsist any Security over any of its assets. |
|---|---|
| (b) | No<br> Obligor shall (and the Borrower shall ensure that no other member of the Group will): |
| --- | --- |
| (i) | sell,<br> transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased<br> to or re-acquired by an Obligor or any other member of the Group; |
| --- | --- |
| (ii) | sell,<br> transfer or otherwise dispose of any of its receivables on recourse terms; |
| --- | --- |
| (iii) | enter<br> into any arrangement under which money or the benefit of a bank or other account may be applied,<br> set-off or made subject to a combination of accounts; or |
| --- | --- |
| (iv) | enter<br> into any other preferential arrangement having a similar effect, |
| --- | --- |
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
| (c) | Paragraphs<br> (a) and (b) above do not apply to any Security or (as the case may be) Quasi-Security,<br> listed below: |
|---|---|
| (i) | any<br> netting or set-off arrangement entered into by any member of the Group in the ordinary course<br> of its banking arrangements for the purpose of netting debit and credit balances; |
| --- | --- |
| (ii) | any<br> lien arising by operation of law and in the ordinary course of trading (and not arising as<br> a result of any default or omission by it) and which does not adversely affect the carrying<br> out of the relevant Warehouse Project; |
| --- | --- |
| (iii) | the<br> Transaction Security; |
| --- | --- |
| (iv) | any<br> Security or Quasi-Security arising under any retention of title, hire purchase or conditional<br> sale arrangement or arrangements having similar effect in respect of goods supplied to a<br> member of the Group in the ordinary course of trading and on the supplier’s standard<br> or usual terms and not arising as a result of any default or omission by any member of the<br> Group; |
| --- | --- |
| - 135 - |
| --- | | (v) | any<br> other Security or Quasi-Security referred to for the purpose of this paragraph (c) in<br> any Guarantor Accession Letter; or | | --- | --- | | (vi) | any<br> other Security or Quasi-Security in relation to which the Mezzanine Agent has given its prior<br> written consent. | | --- | --- | | 24.25 | Security | | --- | --- | | (a) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will) take<br> all steps necessary or desirable to preserve the enforceability, perfection, preservation<br> and ranking of the Transaction Security. | | --- | --- | | (b) | Each<br> Obligor shall (and the Borrower shall ensure that each other member of the Group will), forthwith<br> upon the request of the Mezzanine Agent, from time to time enter into such other assignments,<br> mortgages, charges, pledges or other security documents creating, confirming or evidencing<br> Security in favour of the Secured Parties over such assets of the Borrower, shares or agreements<br> as the Mezzanine Agent may specify and take all such steps as may reasonably be required<br> by the Mezzanine Agent to perfect such security interests. | | --- | --- | | 24.26 | Disposals | | --- | --- | | (a) | Subject<br> to paragraphs (b) and (c) below, no Obligor shall (and the Borrower shall ensure<br> that no other member of the Group (including no ProjectCo) will) enter into a single transaction<br> or a series of transactions (whether related or not) and whether voluntary or involuntary<br> to sell, lease, transfer or otherwise dispose of any asset. | | --- | --- | | (b) | Paragraph<br> (a) does not apply to any sale, lease, transfer or other disposal of: | | --- | --- | | (i) | electricity<br> in accordance with any PPA; | | --- | --- | | (ii) | an<br> Excluded Permitted Disposal; | | --- | --- | | (iii) | the<br> GoOs in accordance with any CPPA; and | | --- | --- | | (iv) | a<br> Warehouse Project (as defined in the Senior Facility Agreement) in accordance with the terms<br> of the Senior Facility Agreement and paragraphs (c) and (d) below. | | --- | --- | | (c) | A<br> ProjectCo may dispose of its Warehouse Project, and an Obligor may dispose of its shares<br> (whether directly or indirectly) in a ProjectCo, Project HoldCo or Country HoldCo if: | | --- | --- | | (i) | no<br> Default is continuing or would result from that disposal; | | --- | --- | | (ii) | that<br> disposal is on arm’s length and standard commercial terms; | | --- | --- | | (iii) | that<br> disposal would not result in the Non-Euro Ratio to exceed the Non- Euro Cap; | | --- | --- |
| - 136 - |
| --- | | (iv) | following<br> the completion of that disposal, at least forty per cent. (40%) of all total aggregated Revenues<br> across all Warehouse Projects is generated from Non-Merchant Revenue, calculated by reference<br> to a twenty (20) year period commencing on the date on which each Warehouse Project achieves<br> its Commercial Operation Date, as set out in paragraph (b) of Clause 24.22 (Sale of electricity); | | --- | --- | | (v) | the<br> Obligors, by not less than fifteen (15) Business Days prior to the date of the proposed disposal,<br> notify the Mezzanine Agent (on behalf of all Finance Parties) of the same; and | | --- | --- | | (vi) | the<br> net disposal proceeds are not less than the aggregate of: | | --- | --- | | (A) | the<br> minimum amount of disposal proceeds required to be achieved for that disposal to be permitted<br> under the Senior Facility Agreement and the related “finance documents” (howsoever<br> defined under the Senior Facility Agreement) as notified by the Senior Agent to the Mezzanine<br> Agent (on behalf of the Finance Parties); | | --- | --- | | (B) | the<br> Allocated Mezzanine Facility Amount of that Warehouse Project or the Warehouse Project(s) owned<br> by the relevant ProjectCo, Project HoldCo or, as applicable, Country HoldCo; and | | --- | --- | | (C) | any<br> and all accrued interest, fees, costs and expenses owing to the Agent, the Security Agent<br> and any other Finance Party which are due and remain unpaid, or will be due and payable,<br> under the Finance Documents as at the date of such disposal. | | --- | --- | | (d) | The<br> Obligors must ensure that: | | --- | --- | | (i) | the<br> Prepayment Disposal Proceeds are immediately applied either: | | --- | --- | | (A) | in<br> accordance with Clause 7.3 (Disposal of a Warehouse Project); or | | --- | --- | | (B) | paid<br> into the Disposal Proceeds Account for application in accordance with Clause 18.2 (Disposal Proceeds Account); and | | --- | --- | | (ii) | an<br> amount of the Disposal Proceeds equal to the Disposal Equity Amount shall, unless such amount<br> is applied in prepayment in accordance with Clause 7.3 (Disposal of a Warehouse Project),<br> immediately be transferred to the Disposal Proceeds Account. | | --- | --- | | (e) | For<br> the purposes of this Clause 24.26, “net disposal proceeds” means the gross<br> proceeds of any disposal permitted under paragraph (c) above less an amount determined<br> by the Mezzanine Agent as the reasonable costs and expenses incurred by any Finance Party<br> associated with that disposal. | | --- | --- |
| - 137 - |
| --- | | (f) | The<br> Mezzanine Agent shall notify the Obligors and the Senior Agent of: | | --- | --- | | (g) | Prior<br> to the proposed date of disposal notified by the Obligors to the Mezzanine Agent pursuant<br> to paragraph (c)(v) above, the Mezzanine Agent shall notify the Obligors and the Senior<br> Agent of the anticipated amount of the Prepayment Disposal Proceeds required to be paid for<br> the purposes of this Clause 24.26. | | --- | --- | | (h) | A<br> Warehouse Project disposed of, or a Warehouse Project owned by a ProjectCo or (indirectly)<br> by a Project HoldCo or Country HoldCo (as applicable) the shares of which are disposed of,<br> in accordance with paragraph (c) above will cease to be a Warehouse Project as from<br> the date on which the Mezzanine Agent delivers the notice set out in paragraph (b) of<br> Clause 28.5 (Resignation and release of security on disposal). | | --- | --- | | 24.27 | Preservation of Assets | | --- | --- |
Each Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain and preserve all of its assets that are necessary, in the opinion of the Mezzanine Agent, for the carrying out of each of the Warehouse Projects, in good working order and condition, ordinary wear and tear excepted.
| 24.28 | Good title to assets |
|---|---|
| (a) | The<br> Borrower shall procure that each ProjectCo maintains good, valid and marketable title to,<br> or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary<br> or desirable to carry out the Warehouse Project owned by it. |
| --- | --- |
| (b) | No<br> Obligor shall (and the Borrower shall ensure that no member of the Group will) sell or grant<br> (or agree to sell or grant) any right of pre-emption over, or any lease or tenancy of or<br> otherwise disposed of any of its interests in any of the Charged Property (other than the<br> option to sublease a plot of land which is not used and/or required for purposes of the relevant<br> Warehouse Project). |
| --- | --- |
| 24.29 | Access |
| --- | --- |
Each Obligor shall (and the Borrower shall ensure that each member of the Group will):
| (a) | on<br> request of the Mezzanine Agent, provide the Mezzanine Agent with any information that Mezzanine<br> Agent may reasonably require about that company’s business and affairs, the Charged<br> Property and its compliance with the terms of the Security Documents; and |
|---|---|
| (b) | permit<br> the Finance Parties as well as each of their respective representatives, delegates and professional<br> advisers, including the Technical Adviser, free access at all reasonable times and on reasonable<br> notice at the cost of the Borrower: |
| --- | --- |
| (i) | to<br> inspect and take copies and extracts from the books, accounts and records of the Obligors;<br> and |
| --- | --- |
| (ii) | to<br> view the Site and the Charged Property (without becoming liable as mortgagee in possession). |
| --- | --- |
| - 138 - |
| --- | | 24.30 | Real Property | | --- | --- |
The Borrower shall ensure that each ProjectCo:
| (a) | has<br> at all times rights to all Real Property required to carry out its Warehouse Project at the<br> relevant Site; |
|---|---|
| (b) | supplies<br> to the Security Agent on demand any information in relation to its Real Property that the<br> Security Agent reasonably requires; |
| --- | --- |
| (c) | repairs<br> and keeps in good and substantial repair to the reasonable satisfaction of the Security Agent<br> all buildings, trade and other fixtures, plant, machinery and chattels at any time forming<br> part of the Charged Property and (prior to a Default, on reasonable notice) when necessary<br> replace such items with others of similar quality and value; |
| --- | --- |
| (d) | not<br> at any time without the prior written consent of the Security Agent (i) effects, carrie<br> out or permits any demolition, reconstruction or rebuilding of or any structural alteration<br> or material change in the use of the Real Property, or (ii) sever or unfix or remove<br> any of the fixtures, fittings, plant or machinery (other than its stock in trade or work<br> in progress) on or in the Real Property (except for the purpose and in the course of making<br> necessary repairs to that item or of replacing that item with new or improved models or substitutes); |
| --- | --- |
| (e) | observes<br> and performs all restrictive and other covenants, stipulations and obligations now or at<br> any time affecting any of its Real Property to the extent that they are subsisting and capable<br> of being enforced; and |
| --- | --- |
| (f) | duly<br> and diligently enforces all restrictive or other covenants, stipulations and obligations<br> benefiting any of its Real Property and not waive, release or vary (or agree so to do) the<br> obligations of any other party thereto. |
| --- | --- |
| 24.31 | Further assurance |
| --- | --- |
| (a) | Each<br> Obligor shall (and the Borrower shall procure that each other member of the Group will) promptly<br> do all such acts or execute all such documents (including assignments, transfers, mortgages,<br> charges, notices and instructions) as the Security Agent and/or Common Security Agent may<br> reasonably specify (and in such form as the Security Agent and/or Common Security Agent may<br> reasonably require in favour of the Security Agent or its nominee(s)): |
| --- | --- |
| (i) | to<br> perfect the Security created or intended to be created under or evidenced by the Security<br> Documents (which may include the execution of a mortgage, charge, assignment or other Security<br> over all or any of the assets which are, or are intended to be, the subject of the Transaction<br> Security) or for the exercise of any rights, powers and remedies of the Security Agent or<br> the Finance Parties provided by or pursuant to the Finance Documents or by law; |
| --- | --- |
| (ii) | to<br> confer on the Security Agent, the Common Security Agent and/or on the Finance Parties, Security<br> over any property and assets of that Obligor located in any jurisdiction equivalent or similar<br> to the Security intended to be conferred by or pursuant to the Security Documents; and/or |
| --- | --- |
| - 139 - |
| --- | | (iii) | to<br> facilitate the realisation of the assets which are, or are intended to be, the subject of<br> the Transaction Security. | | --- | --- | | (b) | Each<br> Obligor shall (and the Borrower shall procure that each other member of the Group will) take<br> all such action as is available to it (including making all filings and registrations) as<br> may be necessary for the purpose of the creation, perfection, protection or maintenance of<br> any Security conferred or intended to be conferred on the Security Agent or the Finance Parties<br> by or pursuant to the Finance Documents. | | --- | --- | | (c) | Following<br> a Default that is continuing, each Obligor shall (and procure that each other member of the<br> Group will) promptly do all such acts or execute all such documents as the Security Agent<br> may specify (acting in its absolute discretion) to exercise, and fully benefit from, the<br> right conferred upon the Security Agent under any Power of Attorney. | | --- | --- | | (d) | Each<br> Obligor must use, and must procure that any other member of the Group that is a potential<br> provider of Transaction Security uses, all reasonable endeavours lawfully available to grant<br> such Security. | | --- | --- |
Accounts and financial obligations
| 24.32 | Project expenditure |
|---|---|
| (a) | No<br> Obligor shall (and the Borrower shall ensure that no member of the Group will), with respect<br> to any Warehouse Project incur and/or pay for (in whatever form, including cash and non-cash<br> consideration) any Cost Overrun unless: |
| --- | --- |
| (i) | that<br> Cost Overrun is set out in the most recently delivered Construction Budget and Warehouse<br> Report under this Agreement and approved by the Agent (acting in consultation with the Lenders’<br> Technical Adviser); |
| --- | --- |
| (ii) | no<br> more than an aggregate total of ten per cent. (10%) of Cost Overruns have been incurred by<br> the consolidated Group across all Warehouse Projects; |
| --- | --- |
| (iii) | Security,<br> in form and substance satisfactory to the Mezzanine Agent, has been granted to the Security<br> Agent over the Contingent Equity to be applied in connection with such Cost Overrun and such<br> Contingent Equity (whether by way of Shareholder Loan or by issued share capital) is fully<br> subordinated to the Secured Obligations in accordance with the Intercreditor and Subordination<br> Deed; |
| --- | --- |
| (iv) | any<br> other Security requested by the Mezzanine Agent has been granted to the Security Agent in<br> form and substance satisfactory to the Mezzanine Agent; and |
| --- | --- |
| (v) | other<br> than this condition being satisfied in connection with the incurrence and/or payment of such<br> Cost Overrun under this Agreement, the Senior Agent has notified the Mezzanine Agent that<br> it has otherwise approved such Cost Overrun under the Senior Facility Agreement. |
| --- | --- |
| - 140 - |
| --- | | (b) | Each<br> Obligor shall (and the Borrower shall ensure that each member of the Group will) maintain<br> proper books, accounts, records and procedures in relation to its business and undertaking<br> sufficient to record and monitor the progress of the Warehouse Project and to identify the<br> assets, works and services financed by the Facilities, and retain all records evidencing<br> expenditure on the relevant Warehouse Project. | | --- | --- | | 24.33 | Distributions | | --- | --- | | (a) | The<br> Borrower shall not pay, make or declare any Distribution other than payment to the Parent<br> of the Permitted Distributions. | | --- | --- | | (b) | No<br> Obligor (other than the Borrower) shall (and the Borrower shall ensure that no member of<br> the Group will) pay, make or declare any Distribution other than to the extent permitted<br> pursuant to Clause 18.5 (Distributions Account). | | --- | --- | | 24.34 | Eligible Pre-RtB Costs Rebalance | | --- | --- |
The Borrower shall apply, in full, the proceeds of any "utilisation" (howsoever defined under the Senior Facility Agreement) towards the repayment of the Loan(s) to which such Eligible Pre-RtB Costs were financed by.
| 24.35 | Loans and Guarantees |
|---|
No Obligor shall (and the Borrower shall ensure that no other member of the Group will) make any loans, grant any credit (save in the ordinary course of business) or give any guarantee or indemnity (except as required under any of the Finance Documents) to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of any obligation of any person, other than under any Intragroup Loan Agreement and Shareholder Loan Agreement provided that:
| (a) | Security,<br> in form and substance satisfactory to the Mezzanine Agent, has been granted to the Security<br> Agent and/or the Common Security Agent (as applicable) over the Shareholder Loans and/or<br> Intragroup Loans made available under such agreements; |
|---|---|
| (b) | such<br> Intragroup Loan Agreements and Shareholder Loan Agreements are fully subordinated to the<br> Secured Obligations in accordance with the Intercreditor and Subordination Deed; |
| --- | --- |
| (c) | the<br> aggregate amount of Intragroup Loans made available to any Obligor may not exceed the aggregate<br> of: |
| --- | --- |
| (i) | to<br> the extent funded by the Senior Lenders only, the Allocated Senior Facility Amount in connection<br> with a Warehouse Project to which that Intragroup Loan relates; |
| --- | --- |
| (ii) | to<br> the extent funded by the Lenders only, the Allocated Mezzanine Facility Amount; and |
| --- | --- |
| - 141 - |
| --- | | (iii) | to<br> the extent funded by Contingent Equity, such Contingent Equity and such Contingent Equity<br> (whether by way of Shareholder Loan or by issued share capital) is fully subordinated to<br> the Secured Obligations in accordance with the Intercreditor and Subordination Deed. | | --- | --- | | 24.36 | Indebtedness | | --- | --- | | (a) | The<br> Borrower shall ensure that no member of the Group shall incur, create or permit to subsist<br> or have outstanding any Financial Indebtedness or enter into any agreement or arrangement<br> whereby it is entitled to incur, create or permit to subsist any Financial Indebtedness. | | --- | --- | | (b) | Paragraph<br> (a) above does not apply to any Financial Indebtedness: | | --- | --- | | (i) | arising<br> under or permitted by the Finance Documents; | | --- | --- | | (ii) | any<br> Financial Indebtedness under Shareholder Loans and/or Intragroup Loans made in accordance<br> with Clause 24.35 (Loans and Guarantees); or | | --- | --- | | (iii) | not<br> falling within paragraph (b)(i) above if the aggregate amount does not exceed EUR 250,000. | | --- | --- | | 24.37 | Pari passu ranking | | --- | --- |
Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
Miscellaneous
| 24.38 | Insurance |
|---|---|
| (a) | Each<br> Obligor shall (and the Borrower shall ensure that each ProjectCo will (or another member<br> of the Group will on their behalf)) maintain Insurances on and in relation to its business<br> and assets with reputable underwriters or insurance companies against those risks and to<br> the extent as is usual for companies carrying on the same or substantially similar business,<br> in accordance with the requirements set out in Schedule 15 (Insurance). |
| --- | --- |
| (b) | The<br> Mezzanine Agent shall have the right to request that an Insurance Adviser reviews the Insurances<br> maintained by the ProjectCos (or another member of the Group will on their behalf), including<br> without limitation as to whether or not these meet the criteria for bankability for the purposes<br> of a project financing on the basis of Good Industry Practice as well as the requirements<br> set out in Schedule 15 (Insurance). If the Insurance Adviser determines any shortfall,<br> the Borrower shall ensure that promptly, but at the latest within ten (10) Business<br> Days upon a respective request by the Mezzanine Agent, Insurances are taken out so that<br> the overall insurances meet such standards and requirements. |
| --- | --- |
| - 142 - |
| --- | | 24.39 | Further documents | | --- | --- |
Subject to, but without prejudice to, Clause 24.31 (Further assurance), each Obligor shall (and the Borrower shall ensure that each member of the Group will) execute all such other documents and instruments and do all such other acts as a Finance Party may reasonably determine are necessary to give effect to the provisions of the Transaction Documents and to cause the Transaction Documents to be duly registered, notarised and stamped in any applicable jurisdiction.
| 24.40 | Centre of main interest and establishments |
|---|
In relation to each Obligor, for the purposes of the EU Insolvency Regulation, its centre of main interest (as that term is used in Article 3(1) of the EU Insolvency Regulation) is situated in its Original Jurisdiction and it has no "establishment" (as that term is used in Article 2(10) of the EU Insolvency Regulation) in any other jurisdiction.
| 25. | EVENTS OF DEFAULT |
|---|
Each of the events or circumstances set out in this Clause 25 is an Event of Default (save for Clause 25.26 (Acceleration).
| 25.1 | Non-payment |
|---|
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document or, in respect of the Bad Boy Guarantee, the Sponsor does not pay on the due date thereunder, in each case, at the place and in the currency in which it is expressed to be payable unless:
| (a) | its<br> failure to pay is caused by: |
|---|---|
| (i) | administrative<br> or technical error; or |
| --- | --- |
| (ii) | a Disruption<br> Event; and |
| --- | --- |
| (b) | payment<br> is made within three (3) Business Days of its due date. |
| --- | --- |
| 25.2 | Specific undertakings |
| --- | --- |
| (a) | Any<br> requirement of Clause 23 (Financial covenants) is not satisfied or any Obligor does<br> not comply with any provision of Clause 4.6 (Conditions subsequent), Clause 24.24<br> (Negative Pledge), Clause 24.26 (Disposals), Clause 24.33 (Distributions),<br> Clause 24.34 (Eligible Pre-RtB Costs Rebalance) and/or Clause 24.36 (Indebtedness). |
| --- | --- |
| (b) | The<br> proceeds of any Utilisation are not applied in accordance with the terms of the Finance Documents. |
| --- | --- |
| 25.3 | Other obligations |
| --- | --- |
| (a) | An<br> Obligor does not comply with any provision of the Finance Documents (other than those referred<br> to in Clause 25.1 (Non-payment)). |
| --- | --- |
| - 143 - |
| --- | | (b) | The<br> Sponsor does not comply with any provision of the Bad Boy Guarantee (other than those referred<br> to in Clause 25.1 (Non-payment)). | | --- | --- | | (c) | No<br> Event of Default under paragraphs (a) and (b) above will occur if the failure to<br> comply is capable of remedy and is remedied within fifteen (15) Business Days of the earlier<br> of (i) the Mezzanine Agent giving notice to the Borrower and (ii) any Obligor becoming<br> aware of the failure to comply. | | --- | --- | | 25.4 | Misrepresentation | | --- | --- |
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or, in the case of the Sponsor, the Bad Boy Guarantee, or any other document delivered by or on behalf of any Obligor or the Sponsor under or in connection with any Finance Document or the Bad Boy Guarantee is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
| 25.5 | Cross default |
|---|---|
| (a) | Any<br> Financial Indebtedness of any Major Project Party is not paid when due nor within any originally<br> applicable grace period. |
| --- | --- |
| (b) | Any<br> Financial Indebtedness of any Major Project Party is declared to be or otherwise becomes<br> due and payable prior to its specified maturity as a result of an event of default (however<br> described). |
| --- | --- |
| (c) | Any<br> commitment for any Financial Indebtedness of any Major Project Party is cancelled or suspended<br> by a creditor of any Major Project Party as a result of an event of default (however described). |
| --- | --- |
| (d) | Any<br> creditor of any Major Project Party becomes entitled to declare any Financial Indebtedness<br> of any member of the Group due and payable prior to its specified maturity as a result of<br> an event of default (however described). |
| --- | --- |
| (e) | A<br> "default" (howsoever defined) under the Senior Facility Agreement occurs under<br> the Senior Facility Agreement. |
| --- | --- |
| (f) | No<br> Event of Default will occur under this Clause 25.5 if the aggregate amount of: |
| --- | --- |
| (i) | Financial<br> Indebtedness (other than Financial Indebtedness incurred in connection with grid deposits<br> and other Financial Indebtedness incurred under PPAs) or commitment for Financial Indebtedness<br> (other than Financial Indebtedness incurred in connection with grid deposits and other Financial<br> Indebtedness incurred under PPAs) falling within paragraphs (a) to (d) above is<br> less than EUR 50,000.00; and |
| --- | --- |
| (ii) | Financial<br> Indebtedness incurred (or committed) in connection with grid deposits and Financial Indebtedness<br> incurred (or committed) under PPAs falling within paragraphs (a) to (d) above is<br> less than EUR 500,000. |
| --- | --- |
| - 144 - |
| --- |
For the avoidance of doubt, the limitations set out in this paragraph (f) shall in no way apply in connection with paragraph (e) above.
| 25.6 | Insolvency |
|---|---|
| (a) | A<br> Major Project Party: |
| --- | --- |
| (i) | is unable<br> or admits inability to pay its debts as they fall due; |
| --- | --- |
| (ii) | suspends<br> making payments on any of its debts; or |
| --- | --- |
| (iii) | by<br> reason of actual or anticipated financial difficulties, commences negotiations with one or<br> more of its creditors (excluding any Finance Party in its capacity as such) with a view to<br> rescheduling any of its indebtedness. |
| --- | --- |
| (b) | The<br> value of the assets of any Major Project Party is less than its liabilities (taking into<br> account contingent and prospective liabilities). |
| --- | --- |
| (c) | A<br> moratorium is declared in respect of any indebtedness of any Major Project Party. |
| --- | --- |
| 25.7 | Insolvency proceedings |
| --- | --- |
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
| (a) | the<br> suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, examinership,<br> administration or reorganisation (by way of voluntary arrangement, scheme of arrangement<br> or otherwise) of any Major Project Party; |
|---|---|
| (b) | a<br> composition, compromise, assignment or arrangement with any creditor of any Major Project<br> Party; |
| --- | --- |
| (c) | the<br> appointment of a liquidator (other than in respect of a solvent liquidation of a Major Project<br> Party which is not an Obligor), examiner, receiver, administrative receiver, administrator,<br> compulsory manager or other similar officer in respect of any member of the Group or any<br> of its assets; or |
| --- | --- |
| (d) | enforcement<br> of any Security over any assets of any Major Project Party, |
| --- | --- |
or any analogous procedure or step is taken in any jurisdiction.
This Clause 25.7 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within fourteen days of commencement.
| 25.8 | Creditors' process |
|---|
Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Major Project Party having an aggregate value of EUR 50,000 (unless such process is directly related to PPAs, in which case the aggregate value of EUR 500,000 shall apply) and which is not discharged within ten (10) Business Days of commencement of such expropriation, attachment, sequestration, distress or execution (as applicable).
| - 145 - |
| --- | | 25.9 | Litigation | | --- | --- |
Any litigation, arbitration or administrative proceeding before any court, arbitral body or agency which, if adversely determined, might be reasonably expected to have a Material Adverse Effect has started or been threatened in writing against any member of the Group (or against the directors of any member of the Group) or in relation to any Warehouse Project.
| 25.10 | Final judgment |
|---|---|
| (a) | Any<br> member of the Group fails to comply with any final judgment, final decree, final award or<br> final order made against it by any Authority, other than where that judgment, decree, award<br> or order does not and is not reasonably likely to have a Material Adverse Effect. |
| --- | --- |
| (b) | For<br> the purposes of paragraph (a) above, a judgment, decree, award or order is taken to<br> be final even though an appeal may be pending against it, or it may still be subject to appeal. |
| --- | --- |
| 25.11 | Unlawfulness |
| --- | --- |
| (a) | It<br> is or becomes unlawful for a Major Project Party to perform any of its obligations under<br> the Transaction Documents, or any such obligations are not or cease to be (or are alleged<br> (unless such allegation is obviously frivolous or vexatious) by a member if the Group not<br> to be) legal, valid, binding and enforceable, or otherwise cease to be effective. |
| --- | --- |
| (b) | It<br> is or becomes unlawful for a Major Project Party to perform any of its obligations under<br> the Transaction Documents or any Transaction Security created or expressed to be created<br> or evidenced by the Security Documents ceases to be effective. |
| --- | --- |
| 25.12 | Termination or Repudiation |
| --- | --- |
| (a) | Any<br> Transaction Document is terminated, cancelled repudiated or rescinded prior to its originally<br> stated maturity or not renewed upon its expiry, in each case, provided that such event has<br> a Portfolio Effect (whether on a stand-alone basis or in aggregate across multiple Warehouse<br> Projects). |
| --- | --- |
| (b) | An<br> Obligor repudiates any of the Transaction Security or evidences an intention to repudiate<br> any of the Transaction Security. |
| --- | --- |
| (c) | No<br> Event of Default under paragraph (a) will occur if, to the extent such termination,<br> cancellation or rescission (as applicable) is in respect of a Project Document, the Obligors<br> have, prior to such termination, cancellation or rescission (as applicable), replaced that<br> Project Document by a document or written arrangement in form and substance satisfactory<br> to the Mezzanine Agent: |
| --- | --- |
| - 146 - |
| --- | | (i) | under<br> which the material unperformed obligations owed to the Obligors under the replaced Project<br> Document are assumed or replaced on substantially equivalent terms (or on terms more favourable<br> to the Obligors); and | | --- | --- | | (ii) | with<br> the same counterparties as those parties under the replaced Project Document or with any<br> new counterparties in respect of whom the Mezzanine Agent has provided its prior written<br> consent. | | --- | --- | | 25.13 | Governmental Intervention | | --- | --- |
By or under the authority of any government:
| (a) | the<br> management of any member of the Group is wholly or partially displaced or the authority of<br> any member of the Group in the conduct of its business is wholly or partially curtailed;<br> or |
|---|---|
| (b) | all<br> or a majority of the issued shares of any member of the Group or the whole or any part (the<br> book value of which is ten per cent. (10%) or more of the book value of the whole) of its<br> revenues or assets is seized, nationalised, expropriated or compulsorily acquired; or |
| --- | --- |
| (c) | any<br> restriction is placed on: |
| --- | --- |
| (i) | the<br> conversion of any currency in which the Warehouse Project revenues are denominated into the<br> currency in which any amount due to a Finance Party under the Finance Documents is denominated;<br> or |
| --- | --- |
| (ii) | the<br> payment or transfer to a Finance Party (or to an Mezzanine Agent or other Finance Party on<br> its behalf in accordance with the Finance Documents) of any amount due to it under the Finance<br> Documents. |
| --- | --- |
| 25.14 | Transaction Security |
| --- | --- |
| (a) | Any<br> Obligor fails to perform or comply with any of the obligations assumed by it in the Security<br> Documents to which it is a party. |
| --- | --- |
| (b) | At<br> any time any of the Transaction Security is or becomes unlawful or is not, or ceases to be<br> legal, valid, binding or enforceable or otherwise ceases to be effective. |
| --- | --- |
| (c) | At<br> any time, any of the Transaction Security fails to have first ranking priority or is subject<br> to any prior ranking or pari passu ranking Security. |
| --- | --- |
| 25.15 | Ownership of the Obligors |
| --- | --- |
Any Obligor (other than the Borrower) and/or any ProjectCo, Project HoldCo and/or Country HoldCo ceases to be a wholly owned Subsidiary of the Borrower unless this is the result of a disposal in accordance with the express terms of this Agreement.
| - 147 - |
| --- | | 25.16 | Force Majeure or shutdowns | | --- | --- | | (a) | Any<br> Force Majeure or shutdown of any Warehouse Project (in whole or in any material part): | | --- | --- | | (i) | for<br> a period lasting at least: | | --- | --- | | (A) | whilst<br> such Warehouse Project is in construction, one hundred twenty (120) days (in each case, whether<br> or not consecutive); and | | --- | --- | | (B) | whilst<br> such Warehouse Project is operational, one hundred fifty (150) days (in each case, whether<br> or not consecutive); or | | --- | --- | | (ii) | results<br> in a delay of the respective completion by 90 days or a Material Adverse Effect. | | --- | --- | | (b) | Any<br> Warehouse Project is destroyed (in whole or in any material part) and is not reasonably likely,<br> in the opinion of the Mezzanine Agent (acting in consultation with the Lenders' Technical<br> Adviser) to be reinstated under a Reinstatement Plan so as to satisfy the matters set out<br> in the Project Close Confirmation. | | --- | --- | | 25.17 | Authorisations | | --- | --- |
Any Required Authorisation:
| (a) | is<br> not in full force and effect (whether through failure to obtain, revocation, cancellation,<br> termination or otherwise) at any time when required; or |
|---|---|
| (b) | is<br> modified in any way that is reasonably likely to have a Material Adverse Effect. |
| --- | --- |
| 25.18 | E&S matters |
| --- | --- |
Any E&S Claim is commenced against any Obligor, any ProjectCo, any Project HoldCo, any Country HoldCo or the Warehouse Project that is reasonably likely to result in a Material Adverse Effect.
| 25.19 | Sanctions |
|---|
Any representation or undertaking in relation to the Sanctions made or deemed to be made by any member of the Group in the Transaction Documents or any other document delivered by or on behalf of any member of the Group under or in connection with any Transaction Document is or proves to have been incorrect or misleading when made or deemed to be made.
| 25.20 | Non-AIF status |
|---|
Any representation or undertaking in relation to the Non-AIF Status made or deemed to be made by any of the Obligors in this Agreement is or proves to have been incorrect or misleading when made or deemed to be made.
| - 148 - |
| --- | | 25.21 | Funding Shortfall | | --- | --- |
A Funding Shortfall occurs which has (whether on a stand-alone basis or in aggregate across multiple Warehouse Projects) a Portfolio Effect.
| 25.22 | Material adverse change |
|---|
Any event or circumstance occurs which the Majority Lenders reasonably believe is likely to have a Material Adverse Effect.
| 25.23 | Government subsidy |
|---|
Any electricity generation subsidy and/or tariff has been terminated or is no longer available for any Warehouse Project which has (whether on a stand-alone basis or in aggregate across multiple Warehouse Projects) a Portfolio Effect.
| 25.24 | Key Project Milestones |
|---|
Any Key Project Milestone has not been achieved and such non achievement has (whether on a stand-alone basis or in aggregate across multiple Warehouse Projects) a Portfolio Effect.
| 25.25 | Equity Cure |
|---|---|
| (a) | No<br> Event of Default shall occur under Clause 25.2 (Specific undertakings) solely in relation<br> to a failure to comply with any requirement of Clause 23 (Financial covenants) if<br> any Holding Company of the Borrower makes available to the Borrower additional amounts to<br> be applied as provided for in this Clause 25.25 (each, an "Equity Cure"). |
| --- | --- |
| (b) | The<br> Equity Cure shall be made as follows: |
| --- | --- |
| (i) | within<br> five (5) Business Days after the respective Calculation Date as of which the Borrower<br> does not comply with Clause 23 (Financial covenants), the Borrower notifies the Mezzanine<br> Agent that it intends to make an Equity Cure; |
| --- | --- |
| (ii) | within<br> five (5) Business Days after the notification referred to in paragraph (i) above,<br> the amount of the Equity Cure: |
| --- | --- |
| (A) | is<br> made available to the Borrower; |
| --- | --- |
| (B) | is<br> sufficient to immediately restore the requirements set out in Clause 23 (Financial covenants)<br> following application of such Equity Cure in accordance with Clause 7.6 (Mandatory Prepayment – Equity Cure). |
| --- | --- |
| (c) | An<br> Equity Cure may not be made: |
| --- | --- |
| (i) | on two<br> (2) or more consecutive Calculation Dates; and |
| --- | --- |
| (ii) | more<br> than three (3) times up until the Termination Date. |
| --- | --- |
| - 149 - |
| --- | | 25.26 | Acceleration | | --- | --- |
On and at any time after the occurrence of an Event of Default which is continuing the Mezzanine Agent may, and shall if so directed by the Majority Lenders:
| (a) | by<br> notice to the Borrower: |
|---|---|
| (i) | cancel<br> the Total Commitments, whereupon they shall immediately be cancelled; |
| --- | --- |
| (ii) | declare<br> that all or part of the Loans, together with accrued interest, and all other amounts accrued<br> or outstanding under the Finance Documents be immediately due and payable, whereupon they<br> shall become immediately due and payable; |
| --- | --- |
| (iii) | declare<br> that all or part of the Loans be payable on demand, whereupon they shall immediately become<br> payable on demand by the Mezzanine Agent on the instructions of the Majority Lenders; and/or |
| --- | --- |
| (b) | exercise,<br> or direct the Security Agent and the Common Security Agent to exercise, any or all of its<br> rights, remedies, powers or discretions under any of the Finance Documents. |
| --- | --- |
| - 150 - |
| --- |
SECTION 10
CHANGES TO PARTIES
| 26. | CHANGES TO THE LENDERS |
|---|---|
| 26.1 | Assignments and transfers by the Lenders |
| --- | --- |
Subject to this Clause 26, a Lender (the "Existing Lender") may:
| (a) | assign<br> any of its rights; or |
|---|---|
| (b) | transfer<br> by novation any of its rights and obligations, |
| --- | --- |
to another bank or financial institution or to a trust, fund 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 (the "New Lender").
| 26.2 | Consultation |
|---|
An Existing Lender must consult with the Borrower (whether directly or through the Mezzanine Agent) for no more than ten (10) Business Days before it may make an assignment or transfer in accordance with Clause 26.1 (Assignments and transfers by the Lenders) unless the assignment or transfer is:
| (a) | to<br> another Lender or an Affiliate of any Lender; |
|---|---|
| (b) | to<br> a fund which is a Related Fund of that Existing Lender; or |
| --- | --- |
| (c) | made<br> at a time when an Event of Default is continuing. |
| --- | --- |
Such consultation shall be conclusively evidenced by the notification the Mezzanine Agent sends to the Borrower about the intended assignment or, as the case may be, transfer and asking the Borrower to give its view.
| 26.3 | Other conditions of assignment or transfer |
|---|---|
| (a) | An<br> assignment will only be effective on: |
| --- | --- |
| (i) | receipt<br> by the Mezzanine Agent (whether in the Assignment Agreement or otherwise) of written confirmation<br> from the New Lender (in form and substance satisfactory to the Mezzanine Agent) that the<br> New Lender will assume the same obligations to the other Finance Parties and the other Secured<br> Parties as it would have been under if it had been an Original Lender; and |
| --- | --- |
| (ii) | performance<br> by the Mezzanine Agent of all necessary "know your customer" or other similar<br> checks under all applicable laws and regulations in relation to such assignment to a New<br> Lender, the completion of which the Mezzanine Agent shall promptly notify to the Existing<br> Lender and the New Lender. |
| --- | --- |
| - 151 - |
| --- | | (b) | A<br> transfer will only be effective if the procedure set out in Clause 26.6 (Procedure for transfer) is complied with. | | --- | --- | | (c) | If: | | --- | --- | | (i) | a<br> Lender assigns or transfers any of its rights or obligations under the Finance Documents<br> or changes its Facility Office; and | | --- | --- | | (ii) | as<br> a result of circumstances existing at the date the assignment, transfer or change occurs,<br> an Obligor would be obliged to make a payment to the New Lender or Lender acting through<br> its new Facility Office under Clause 12 (Tax gross-up and indemnities) or Clause 13<br> (Increased costs), | | --- | --- |
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
| (d) | Each<br> New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms,<br> for the avoidance of doubt, that the Mezzanine Agent has authority to execute on its behalf<br> any amendment or waiver that has been approved by or on behalf of the requisite Lender or<br> Lenders in accordance with this Agreement on or prior to the date on which the transfer or<br> assignment becomes effective in accordance with this Agreement and that it is bound by that<br> decision to the same extent as the Existing Lender would have been had it remained a Lender. |
|---|---|
| 26.4 | Assignment or transfer fee |
| --- | --- |
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Mezzanine Agent (for its own account) a fee of EUR 2,000.
| 26.5 | Limitation of responsibility of Existing Lenders |
|---|---|
| (a) | Unless<br> expressly agreed to the contrary, an Existing Lender makes no representation or warranty<br> and assumes no responsibility to a New Lender for: |
| --- | --- |
| (i) | the<br> legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the<br> Transaction Security or any other documents; |
| --- | --- |
| (ii) | the<br> financial condition of any Obligor; |
| --- | --- |
| (iii) | the<br> performance and observance by any Obligor of its obligations under the Finance Documents<br> or any other documents; or |
| --- | --- |
| (iv) | the<br> accuracy of any statements (whether written or oral) made in or in connection with any Finance<br> Document or any other document, |
| --- | --- |
and any representations or warranties implied by law are excluded.
| - 152 - |
| --- | | (b) | Each<br> New Lender confirms to the Existing Lender and the other Finance Parties that it: | | --- | --- | | (i) | has<br> made (and shall continue to make) its own independent investigation and assessment of the<br> financial condition and affairs of each Obligor and its related entities in connection with<br> its participation in this Agreement and has not relied exclusively on any information provided<br> to it by the Existing Lender in connection with any Finance Document; and | | --- | --- | | (ii) | will<br> continue to make its own independent appraisal of the creditworthiness of each Obligor and<br> its related entities whilst any amount is or may be outstanding under the Finance Documents<br> or any Commitment is in force. | | --- | --- | | (c) | Nothing<br> in any Finance Document obliges an Existing Lender to: | | --- | --- | | (i) | accept<br> a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned<br> or transferred under this Clause 26; or | | --- | --- | | (ii) | support<br> any losses directly or indirectly incurred by the New Lender by reason of the non-performance<br> by any Obligor of its obligations under the Finance Documents or otherwise. | | --- | --- | | 26.6 | Procedure for transfer | | --- | --- | | (a) | Subject<br> to the conditions set out in Clause 26.2 (Consultation) and Clause 26.3 (Other conditions of assignment or transfer) a transfer is effected in accordance with paragraph<br> (c) below when the Mezzanine Agent executes an otherwise duly completed Transfer Certificate<br> delivered to it by the Existing Lender and the New Lender. The Mezzanine Agent shall, subject<br> to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly<br> completed Transfer Certificate appearing on its face to comply with the terms of this Agreement<br> and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate. | | --- | --- | | (b) | The<br> Mezzanine Agent shall only be obliged to execute a Transfer Certificate delivered to it by<br> the Existing Lender and the New Lender once it is satisfied it has complied with all necessary<br> "know your customer" or other similar checks under all applicable laws and regulations<br> in relation to the transfer to such New Lender. | | --- | --- | | (c) | Subject<br> to Clause 26.10 (Pro rata interest settlement), on the Transfer Date: | | --- | --- | | (i) | to<br> the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation<br> its rights and obligations under the Finance Documents and in respect of the Transaction<br> Security each of the Obligors and the Existing Lender shall be released from further obligations<br> towards one another under the Finance Documents and in respect of the Transaction Security<br> and their respective rights against one another shall be cancelled (being the "Discharged Rights and Obligations"); | | --- | --- |
| - 153 - |
| --- | | (ii) | each<br> of the Obligors and the New Lender shall assume obligations towards one another and/or acquire<br> rights against one another which differ from the Discharged Rights and Obligations only insofar<br> as that Obligor and the New Lender have assumed and/or acquired the same in place of that<br> Obligor and the Existing Lender; | | --- | --- | | (iii) | the<br> Mezzanine Agent, the Arranger, the Security Agent, the New Lender and the other Lenders shall<br> acquire the same rights and assume the same obligations between themselves and in respect<br> of the Transaction Security as they would have acquired and assumed had the New Lender been<br> an Original Lender with the rights and/or obligations acquired or assumed by it as a result<br> of the transfer and to that extent the Mezzanine Agent, the Arranger, the Security Agent<br> and the Existing Lender shall each be released from further obligations to each other under<br> the Finance Documents; and | | --- | --- | | (iv) | the<br> New Lender shall become a Party as a "Lender". | | --- | --- | | 26.7 | Procedure for assignment | | --- | --- | | (a) | Subject<br> to the conditions set out in Clause 26.2 (Consultation) and Clause 26.3 (Other conditions of assignment or transfer) an assignment may be effected in accordance with<br> paragraph (c) below when the Mezzanine Agent executes an otherwise duly completed Assignment<br> Agreement delivered to it by the Existing Lender and the New Lender. The Mezzanine Agent<br> shall, subject to paragraph (b) below, as soon as reasonably<br> practicable after receipt by it of a duly completed Assignment Agreement appearing on its<br> face to comply with the terms of this Agreement and delivered in accordance with the terms<br> of this Agreement, execute that Assignment Agreement. | | --- | --- | | (b) | The<br> Mezzanine Agent shall only be obliged to execute an Assignment Agreement delivered to it<br> by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary<br> "know your customer" or other similar checks under all applicable laws and regulations<br> in relation to the assignment to such New Lender. | | --- | --- | | (c) | Subject<br> to Clause 26.10 (Pro rata interest settlement), on the Transfer Date: | | --- | --- | | (i) | the<br> Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents<br> expressed to be the subject of the assignment in the Assignment Agreement; | | --- | --- | | (ii) | the<br> Existing Lender will be released by each Obligor and the other Finance Parties from the obligations<br> owed by it (the "Relevant Obligations") and expressed to be the subject<br> of the release in the Assignment Agreement; and | | --- | --- | | (iii) | the<br> New Lender shall become a Party as a "Lender" and will be bound by obligations<br> equivalent to the Relevant Obligations. | | --- | --- |
| - 154 - |
| --- | | (d) | Lenders<br> may utilise procedures other than those set out in this Clause 26.7 to assign their rights<br> under the Finance Documents (but not, without the consent of the relevant Obligor or unless<br> in accordance with Clause 26.6 (Procedure for transfer), to obtain a release by that<br> Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent<br> obligations by a New Lender) provided that they comply with the conditions set out<br> in Clause 26.2 (Consultation) and Clause 26.3 (Other conditions of assignment or transfer). | | --- | --- | | 26.8 | Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower | | --- | --- |
The Mezzanine Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, an Assignment Agreement or an Increase Confirmation send to the Borrower a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation.
| 26.9 | Security over Lenders' rights |
|---|
In addition to the other rights provided to Lenders under this Clause 26, each Lender may following a ten (10) Business Day consultation period with the relevant Obligors, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
| (a) | any<br> charge, assignment or other Security to secure obligations to a federal reserve or central<br> bank; and |
|---|---|
| (b) | any<br> charge, assignment or other Security granted to any holders (or trustee or representatives<br> of holders) of obligations owed, or securities issued, by that Lender as security for those<br> obligations or securities, |
| --- | --- |
except that no such charge, assignment or Security shall:
| (i) | release<br> a Lender from any of its obligations under the Finance Documents or substitute the beneficiary<br> of the relevant charge, assignment or Security for the Lender as a party to any of the Finance<br> Documents; or |
|---|---|
| (ii) | require<br> any payments to be made by an Obligor other than or in excess of, or grant to any person<br> any more extensive rights than, those required to be made or granted to the relevant Lender<br> under the Finance Documents. |
| --- | --- |
| 26.10 | Pro rata interest settlement |
| --- | --- |
| (a) | If<br> the Mezzanine Agent has notified the Lenders that it is able to distribute interest payments<br> on a "pro rata basis" to Existing Lenders and New Lenders then (in respect<br> of any transfer pursuant to Clause 26.6 (Procedure for transfer) or any assignment<br> pursuant to Clause 26.7 (Procedure for assignment) the Transfer Date of which, in<br> each case, is after the date of such notification and is not on the last day of an Interest<br> Period): |
| --- | --- |
| - 155 - |
| --- | | (i) | any<br> interest or fees in respect of the relevant participation which are expressed to accrue by<br> reference to the lapse of time shall continue to accrue in favour of the Existing Lender<br> up to but excluding the Transfer Date ("Accrued Amounts") and shall become<br> due and payable to the Existing Lender (without further interest accruing on them) on the<br> last day of the current Interest Period (or, if the Interest Period is longer than six Months,<br> on the next of the dates which falls at six Monthly intervals after the first day of that<br> Interest Period); and | | --- | --- | | (ii) | the<br> rights assigned or transferred by the Existing Lender will not include the right to the Accrued<br> Amounts, so that, for the avoidance of doubt: | | --- | --- | | (A) | when<br> the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing<br> Lender; and | | --- | --- | | (B) | the<br> amount payable to the New Lender on that date will be the amount which would, but for the<br> application of this Clause 26.10, have been payable to it on that date, but after deduction<br> of the Accrued Amounts. | | --- | --- | | (b) | In<br> this Clause 26.10, references to "Interest Period" shall be construed to include<br> a reference to any other period for accrual of fees. | | --- | --- | | (c) | An<br> Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 26.10<br> but which does not have a Commitment shall be deemed not to be a Lender for the purposes<br> of ascertaining whether the agreement of any specified group of Lenders has been obtained<br> to approve any request for a consent, waiver, amendment or other vote of Lenders under the<br> Finance Documents. | | --- | --- | | 27. | RESTRICTIONS ON DEBT PURCHASE TRANSACTIONS | | --- | --- | | 27.1 | Prohibition on Debt Purchase Transactions by the Group | | --- | --- |
The Obligors may not, and must procure that each other member of the Group does not, enter into any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company that is or will be a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs (b) or (c) of the definition of Debt Purchase Transaction.
| 28. | CHANGES TO THE OBLIGORS |
|---|---|
| 28.1 | Assignments and transfer by Obligors |
| --- | --- |
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
| 28.2 | Additional Guarantors |
|---|---|
| (a) | Subject<br> to compliance with the provisions of paragraphs (c) and (d) of Clause 22.19 ("Know your customer" checks), the Parent may request that any |
| --- | --- |
| - 156 - |
| --- |
of its Subsidiaries or any other member of the Group becomes an Additional Guarantor and grants the Security requested by the Mezzanine Agent in writing.
| (b) | A<br> member of the Group shall become an Additional Guarantor if: |
|---|---|
| (i) | the<br> Parent and the proposed Additional Guarantor deliver to the Mezzanine Agent a duly completed<br> and executed Guarantor Accession Letter; and |
| --- | --- |
| (ii) | the<br> Mezzanine Agent has received all of the documents and other evidence listed in Part E<br> (Conditions precedent for an Additional Obligor) of Schedule 2 (Conditions Precedent and Subsequent) in relation to that Additional Guarantor, each in form and substance<br> satisfactory to the Mezzanine Agent. |
| --- | --- |
| (c) | The<br> Mezzanine Agent shall notify the Parent and the Lenders promptly upon being satisfied that<br> it has received (in form and substance satisfactory to it) all the documents and other evidence<br> listed in Part E (Conditions precedent for an Additional Obligor) of Schedule<br> 2 (Conditions Precedent and Subsequent). |
| --- | --- |
| (d) | Other<br> than to the extent that the Majority Lenders notify the Mezzanine Agent in writing to the<br> contrary before the Mezzanine Agent gives the notification described in paragraph (c) above,<br> the Lenders authorise (but do not require) the Mezzanine Agent to give that notification.<br> The Mezzanine Agent shall not be liable for any damages, costs or losses whatsoever as a<br> result of giving any such notification. |
| --- | --- |
| 28.3 | Resignation of a Guarantor |
| --- | --- |
| (a) | The<br> Parent may request that a Guarantor (other than the Parent) ceases to be a Guarantor by delivering<br> to the Mezzanine Agent a Resignation Letter if: |
| --- | --- |
| (i) | that<br> Guarantor is being disposed of by way of a Permitted Disposal and the Parent has confirmed<br> this is the case; or |
| --- | --- |
| (ii) | all<br> the Lenders have consented to the resignation of that Guarantor. |
| --- | --- |
| (b) | The<br> Mezzanine Agent shall accept a Resignation Letter and notify the Parent and the Lenders of<br> its acceptance if: |
| --- | --- |
| (i) | the<br> Parent has confirmed that no Default is continuing or would result from the acceptance of<br> the Resignation Letter; |
| --- | --- |
| (ii) | no<br> payment is due from the Guarantor under Clause 20.1 (Guarantee and indemnity); and |
| --- | --- |
| (iii) | the<br> Parent has confirmed that it shall ensure that the Disposal Proceeds will be applied in in<br> accordance with Clause 7.3 (Disposal of a Warehouse Project) or paid into the Disposal<br> Proceeds Account for application in accordance with Clause 18.3 (Disposal Proceeds Account). |
| --- | --- |
| - 157 - |
| --- | | (c) | The<br> resignation of that Guarantor shall not be effective until the date of the relevant Permitted<br> Disposal at which time that company shall cease to be a Guarantor and shall have no further<br> rights or obligations under the Finance Documents as a Guarantor. | | --- | --- | | 28.4 | Repetition of Representations | | --- | --- |
Delivery of a Guarantor Accession Letter constitutes confirmation by the relevant Additional Guarantor that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
| 28.5 | Resignation and release of security on disposal |
|---|
If a Guarantor is or is proposed to be the subject of a Permitted Disposal then:
| (a) | where<br> that Guarantor created Transaction Security over any of its assets or business in favour<br> of the Security Agent, or Transaction Security in favour of the Security Agent was created<br> over the shares (or equivalent) of that Guarantor, the Security Agent may, at the cost and<br> request of the Parent, release those assets, business or shares (or equivalent) and issue<br> certificates of non- crystallisation; and |
|---|---|
| (b) | any<br> resignation of that Guarantor and related release of Transaction Security referred to in<br> paragraph (a) above shall become effective only on the making of that disposal and on<br> the date on which the Mezzanine Agent (acting on the instructions of all Lenders) notifies<br> the Obligors that all other obligations under the Finance Documents relating to such disposal<br> are discharged in full by the Obligors in form and substance satisfactory to the Mezzanine<br> Agent. |
| --- | --- |
| - 158 - |
| --- |
SECTION 11
THE FINANCE PARTIES
| 29. | ROLE OF THE MEZZANINE AGENT AND, THE ARRANGER AND THE REFERENCE BANKS |
|---|---|
| 29.1 | Appointment of the Mezzanine Agent |
| --- | --- |
| (a) | Each<br> of the Arranger and the Lenders appoints the Mezzanine Agent to act as its agent under and<br> in connection with the Finance Documents. |
| --- | --- |
| (b) | Each<br> of the Arranger and the Lenders authorises the Mezzanine Agent to perform the duties, obligations<br> and responsibilities and to exercise the rights, powers, authorities and discretions specifically<br> given to the Mezzanine Agent under or in connection with the Finance Documents together with<br> any other incidental rights, powers, authorities and discretions. |
| --- | --- |
| 29.2 | Instructions |
| --- | --- |
| (a) | The<br> Mezzanine Agent shall: |
| --- | --- |
| (i) | unless<br> a contrary indication appears in a Finance Document, exercise or refrain from exercising<br> any right, power, authority or discretion vested in it as Mezzanine Agent in accordance with<br> any instructions given to it by: |
| --- | --- |
| (A) | all<br> Lenders if the relevant Finance Document stipulates the matter is an all Lender decision;<br> and |
| --- | --- |
| (B) | in<br> all other cases, the Majority Lenders; and |
| --- | --- |
| (ii) | not<br> be liable for any act (or omission) if it acts (or refrains from acting) in accordance with<br> paragraph (i) above. |
| --- | --- |
| (b) | The<br> Mezzanine Agent shall be entitled to request instructions, or clarification of any instruction,<br> from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is<br> a decision for any other Lender or group of Lenders, from that Lender or group of Lenders)<br> as to whether, and in what manner, it should exercise or refrain from exercising any right,<br> power, authority or discretion. The Mezzanine Agent may refrain from acting unless and until<br> it receives any such instructions or clarification that it has requested. |
| --- | --- |
| (c) | Save<br> in the case of decisions stipulated to be a matter for any other Lender or group of Lenders<br> under the relevant Finance Document and unless a contrary indication appears in a Finance<br> Document, any instructions given to the Mezzanine Agent by the Majority Lenders shall override<br> any conflicting instructions given by any other Parties and will be binding on all Finance<br> Parties save for the Security Agent. |
| --- | --- |
| (d) | The<br> Mezzanine Agent may refrain from acting in accordance with any instructions of any Lender<br> or group of Lenders until it has received any indemnification and/or security that it may<br> in its discretion require (which may |
| --- | --- |
| - 159 - |
| --- |
be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.
| (e) | In<br> the absence of instructions, the Mezzanine Agent may act (or refrain from acting) as it considers<br> to be in the best interest of the Lenders. |
|---|---|
| (f) | The<br> Mezzanine Agent is not authorised to act on behalf of a Lender (without first obtaining that<br> Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.<br> This paragraph (f) shall not apply to any legal or arbitration proceeding relating to<br> the perfection, preservation or protection of rights under the Mezzanine Only Security Documents<br> or enforcement of the Mezzanine Only Transaction Security. |
| --- | --- |
| 29.3 | Duties of the Mezzanine Agent |
| --- | --- |
| (a) | The<br> Mezzanine Agent's duties under the Finance Documents are solely mechanical and administrative<br> in nature. |
| --- | --- |
| (b) | Subject<br> to paragraph (c) below, the Mezzanine Agent shall promptly forward to a Party the original<br> or a copy of any document which is delivered to the Mezzanine Agent for that Party by any<br> other Party. |
| --- | --- |
| (c) | Without<br> prejudice to Clause 26.8 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower), paragraph (b) above shall not apply to any Transfer Certificate,<br> any Assignment Agreement or any Increase Confirmation. |
| --- | --- |
| (d) | Except<br> where a Finance Document specifically provides otherwise, the Mezzanine Agent is not obliged<br> to review or check the adequacy, accuracy or completeness of any document it forwards to<br> another Party. |
| --- | --- |
| (e) | If<br> the Mezzanine Agent receives notice from a Party referring to this Agreement, describing<br> a Default and stating that the circumstance described is a Default, it shall promptly notify<br> the other Finance Parties. |
| --- | --- |
| (f) | If<br> the Mezzanine Agent is aware of the non-payment of any principal, interest, commitment fee<br> or other fee payable to a Finance Party (other than the Mezzanine Agent, the Arranger or<br> the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties. |
| --- | --- |
| (g) | The<br> Mezzanine Agent shall provide to the Borrower within one (1) Business Day of a request<br> by the Borrower (but no more frequently than once per calendar month), a list (which may<br> be in electronic form) setting out the names of the Lenders as at the date of that request,<br> their respective Commitments, the address and (if applicable) fax number (and the department<br> or officer, if any, for whose attention any communication is to be made) of each Lender for<br> any communication to be made or document to be delivered under or in connection with the<br> Finance Documents, the electronic mail address and/or any other information required to enable<br> the transmission of information by electronic mail or other electronic means to and by each<br> Lender to whom any communication under or in connection with the Finance Documents may be<br> made by that means and the account details of each Lender for any payment to be distributed<br> by the Mezzanine Agent to that Lender under the Finance Documents. |
| --- | --- |
| - 160 - |
| --- | | (h) | The<br> Mezzanine Agent shall promptly forward to the Security Agent a copy of all notices issued<br> pursuant to Clause 25.26 (Acceleration). | | --- | --- | | (i) | The<br> Mezzanine Agent shall have only those duties, obligations and responsibilities expressly<br> specified in the Finance Documents to which it is expressed to be a party (and no others<br> shall be implied). | | --- | --- | | 29.4 | Role of the Arranger | | --- | --- |
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
| 29.5 | No fiduciary duties |
|---|---|
| (a) | Nothing<br> in any Finance Document constitutes the Mezzanine Agent or the Arranger as a trustee or fiduciary<br> of any other person. |
| --- | --- |
| (b) | Neither<br> the Mezzanine Agent or the Arranger shall be bound to account to any Lender for any sum or<br> the profit element of any sum received by it for its own account. |
| --- | --- |
| 29.6 | Business with the Group |
| --- | --- |
The Mezzanine Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
| 29.7 | Rights and discretions |
|---|---|
| (a) | The<br> Mezzanine Agent may: |
| --- | --- |
| (i) | rely<br> on any representation, communication, notice or document believed by it to be genuine, correct<br> and appropriately authorised; |
| --- | --- |
| (ii) | assume<br> that: |
| --- | --- |
| (A) | any<br> instructions received by it from the Majority Lenders, any Lenders or any group of Lenders<br> are duly given in accordance with the terms of the Finance Documents; and |
| --- | --- |
| (B) | unless<br> it has received notice of revocation, that those instructions have not been revoked; and |
| --- | --- |
| - 161 - |
| --- | | (iii) | rely<br> on a certificate from any person: | | --- | --- | | (A) | as<br> to any matter of fact or circumstance which might reasonably be expected to be within the<br> knowledge of that person; or | | --- | --- | | (B) | to<br> the effect that such person approves of any particular dealing, transaction, step, action<br> or thing, | | --- | --- |
as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.
| (b) | The<br> Mezzanine Agent may assume (unless it has received notice to the contrary in its capacity<br> as agent for the Lenders) that: |
|---|---|
| (i) | no<br> Default has occurred (unless it has actual knowledge of a Default arising under Clause 25.1<br> (Non-payment)); |
| --- | --- |
| (ii) | any<br> right, power, authority or discretion vested in any Party or any group of Lenders has not<br> been exercised; and |
| --- | --- |
| (iii) | any<br> notice or request made by the Borrower (other than a Utilisation Request) is made on behalf<br> of and with the consent and knowledge of all the Obligors. |
| --- | --- |
| (c) | The<br> Mezzanine Agent may engage and pay for the advice or services of any lawyers, accountants,<br> tax advisers, surveyors or other professional advisers or experts. |
| --- | --- |
| (d) | Without<br> prejudice to the generality of paragraph (c) above or paragraph (e) below, the<br> Mezzanine Agent may at any time engage and pay for the services of any lawyers to act as<br> independent counsel to the Mezzanine Agent (and so separate from any lawyers instructed by<br> the Lenders) if the Mezzanine Agent in its reasonable opinion deems this to be desirable. |
| --- | --- |
| (e) | The<br> Mezzanine Agent may rely on the advice or services of any lawyers, accountants, tax advisers,<br> surveyors or other professional advisers or experts (whether obtained by the Mezzanine Agent<br> or by any other Party) and shall not be liable for any damages, costs or losses to any person,<br> any diminution in value or any liability whatsoever arising as a result of its so relying. |
| --- | --- |
| (f) | The<br> Mezzanine Agent may act in relation to the Finance Documents through its officers, employees<br> and agents and the Mezzanine Agent shall not: |
| --- | --- |
| (i) | be<br> liable for any error of judgment made by any such person; or |
| --- | --- |
| (ii) | be<br> bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct,<br> omission or default on the part of any such person, |
| --- | --- |
unless such error or such loss was directly caused by the Mezzanine Agent's gross negligence or wilful misconduct.
| - 162 - |
| --- | | (g) | Unless<br> a Finance Document expressly provides otherwise, the Mezzanine Agent may disclose to any<br> other Party any information it reasonably believes it has received as agent under this Agreement. | | --- | --- | | (h) | Without<br> prejudice to the generality of paragraph (g) above, the Mezzanine Agent: | | --- | --- | | (i) | may<br> disclose; and | | --- | --- | | (ii) | on the written request of the Borrower,<br> or the Majority Lenders shall, as soon as reasonably practicable, disclose, | | --- | --- |
the identity of a Defaulting Lender to the Borrower and to the other Finance Parties.
| (i) | Notwithstanding<br> any other provision of any Finance Document to the contrary, neither the Mezzanine Agent<br> nor the Arranger is obliged to do or omit to do anything if it would, or might in its reasonable<br> opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or<br> duty of confidentiality. |
|---|---|
| (j) | Notwithstanding<br> any provision of any Finance Document to the contrary, the Mezzanine Agent is not obliged<br> to expend or risk its own funds or otherwise incur any financial liability in the performance<br> of its duties, obligations or responsibilities or the exercise of any right, power, authority<br> or discretion if it has grounds for believing the repayment of such funds or adequate indemnity<br> against, or security for, such risk or liability is not reasonably assured to it. |
| --- | --- |
| 29.8 | Responsibility for documentation |
| --- | --- |
Neither the Mezzanine Agent nor the Arranger is responsible or liable for:
| (a) | the<br> adequacy, accuracy or completeness of any information (whether oral or written) supplied<br> by the Mezzanine Agent, the Arranger, an Obligor or any other person in or in connection<br> with any Finance Document or the transactions contemplated in the Finance Documents or any<br> other agreement, arrangement or document entered into, made or executed in anticipation of,<br> under or in connection with any Finance Document; |
|---|---|
| (b) | the<br> legality, validity, effectiveness, adequacy or enforceability of any Finance Document or<br> the Transaction Security or any other agreement, arrangement or document entered into, made<br> or executed in anticipation of, under or in connection with any Finance Document or the Transaction<br> Security; or |
| --- | --- |
| (c) | any<br> determination as to whether any information provided or to be provided to any Finance Party<br> is non-public information the use of which may be regulated or prohibited by applicable law<br> or regulation relating to insider dealing or otherwise. |
| --- | --- |
| - 163 - |
| --- | | 29.9 | No duty to monitor | | --- | --- |
The Mezzanine Agent shall not be bound to enquire:
| (a) | whether<br> or not any Default has occurred; |
|---|---|
| (b) | as<br> to the performance, default or any breach by any Party of its obligations under any Finance<br> Document; or |
| --- | --- |
| (c) | whether<br> any other event specified in any Finance Document has occurred. |
| --- | --- |
| 29.10 | Exclusion of liability |
| --- | --- |
| (a) | Without<br> limiting paragraph (b) below (and without prejudice to any other provision of any Finance<br> Document excluding or limiting the liability of the Mezzanine Agent), the Mezzanine Agent<br> will not be liable (including, without limitation, for negligence or any other category of<br> liability whatsoever) for: |
| --- | --- |
| (i) | any<br> damages, costs or losses to any person, any diminution in value, or any liability whatsoever<br> arising as a result of taking or not taking any action under or in connection with any Finance<br> Document or the Mezzanine Only Transaction Security, unless directly caused by its gross<br> negligence or wilful misconduct; |
| --- | --- |
| (ii) | exercising,<br> or not exercising, any right, power, authority or discretion given to it by, or in connection<br> with, any Finance Document, the Mezzanine Only Transaction Security or any other agreement,<br> arrangement or document entered into, made or executed in anticipation of, under or in connection<br> with, any Finance Document or the Mezzanine Only Transaction Security other than by reason<br> of its gross negligence or wilful misconduct; or |
| --- | --- |
| (iii) | without<br> prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs<br> or losses to any person, any diminution in value or any liability whatsoever arising as a<br> result of: |
| --- | --- |
| (A) | any<br> act, event or circumstance not reasonably within its control; or |
| --- | --- |
| (B) | the<br> general risks of investment in, or the holding of assets in, any jurisdiction, |
| --- | --- |
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
| - 164 - |
| --- | | (b) | No<br> Party (other than the Mezzanine Agent) may take any proceedings against any officer, employee<br> or agent of the Mezzanine Agent in respect of any claim it might have against the Mezzanine<br> Agent or in respect of any act or omission of any kind by that officer, employee or agent<br> in relation to any Finance Document or any Transaction Documents and any officer, employee<br> or agent of the Mezzanine Agent may rely on this paragraph (b) subject to Clause 1.4<br> (Third party rights) and the provisions of the Third Parties Act. | | --- | --- | | (c) | The<br> Mezzanine Agent will not be liable for any delay (or any related consequences) in crediting<br> an account with an amount required under the Finance Documents to be paid by the Mezzanine<br> Agent if the Mezzanine Agent has taken all necessary steps as soon as reasonably practicable<br> to comply with the regulations or operating procedures of any recognised clearing or settlement<br> system used by the Mezzanine Agent for that purpose. | | --- | --- | | (d) | Nothing<br> in this Agreement shall oblige the Mezzanine Agent or the Arranger to carry out: | | --- | --- | | (i) | any<br> "know your customer" or other checks in relation to any person; or | | --- | --- | | (ii) | any<br> check on the extent to which any transaction contemplated by this Agreement might be unlawful<br> for any Lender or for any Affiliate of any Lender, | | --- | --- |
on behalf of any Lender and each Lender confirms to the Mezzanine Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Mezzanine Agent or the Arranger.
| (e) | Without<br> prejudice to any provision of any Finance Document excluding or limiting the Mezzanine Agent's<br> liability, any liability of the Mezzanine Agent arising under or in connection with any Finance<br> Document or the Mezzanine Only Transaction Security shall be limited to the amount of actual<br> loss which has been finally judicially determined to have been suffered (as determined by<br> reference to the date of default of the Mezzanine Agent or, if later, the date on which the<br> loss arises as a result of such default) but without reference to any special conditions<br> or circumstances known to the Mezzanine Agent at any time which increase the amount of that<br> loss. In no event shall the Mezzanine Agent be liable for any loss of profits, goodwill,<br> reputation, business opportunity or anticipated saving, or for special, punitive, indirect<br> or consequential damages, whether or not the Mezzanine Agent has been advised of the possibility<br> of such loss or damages. |
|---|---|
| 29.11 | Lenders' indemnity to the Mezzanine Agent |
| --- | --- |
| (a) | Each<br> Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments<br> are then zero, to its share of the Total Commitments immediately prior to their reduction<br> to zero) indemnify the Mezzanine Agent, within three (3) Business Days of demand, against<br> any cost, loss or liability (including, without limitation, for negligence or any other category<br> of liability whatsoever) incurred by the Mezzanine Agent (otherwise than by reason of the |
| --- | --- |
| - 165 - |
| --- |
Mezzanine Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 33.11 (Disruptionto payment systems etc.), notwithstanding the Mezzanine Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Mezzanine Agent) in acting as Mezzanine Agent under the Finance Documents (unless the Mezzanine Agent has been reimbursed by an Obligor pursuant to a Finance Document).
| (b) | Subject<br> to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender<br> for any payment that Lender makes to the Mezzanine Agent pursuant to paragraph (a) above. |
|---|---|
| (c) | Paragraph<br> (b) above shall not apply to the extent that the indemnity payment in respect of which<br> the Lender claims reimbursement relates to a liability of the Mezzanine Agent to an Obligor. |
| --- | --- |
| 29.12 | Resignation of the Mezzanine Agent |
| --- | --- |
| (a) | The<br> Mezzanine Agent may resign and appoint one of its Affiliates acting through an office in<br> the United Kingdom as successor by giving notice to the Lenders and the Borrower. |
| --- | --- |
| (b) | Alternatively,<br> the Mezzanine Agent may resign by giving 30 days' notice to the Lenders and the Borrower,<br> in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor<br> Mezzanine Agent. |
| --- | --- |
| (c) | If<br> the Majority Lenders have not appointed a successor Mezzanine Agent in accordance with paragraph<br> (b) above within 20 days after notice of resignation was given, the retiring Mezzanine<br> Agent (after consultation with the Borrower) may appoint a successor Mezzanine Agent (acting<br> through an office in the United Kingdom). |
| --- | --- |
| (d) | If<br> the Mezzanine Agent wishes to resign because (acting reasonably) it has concluded that it<br> is no longer appropriate for it to remain as agent and the Mezzanine Agent is entitled to<br> appoint a successor Mezzanine Agent under paragraph (c) above, the Mezzanine Agent may<br> (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the<br> proposed successor Mezzanine Agent to become a party to this Agreement as Mezzanine Agent)<br> agree with the proposed successor Mezzanine Agent amendments to this Clause 29 and any other<br> term of this Agreement dealing with the rights or obligations of the Mezzanine Agent consistent<br> with then current market practice for the appointment and protection of corporate trustees<br> together with any reasonable amendments to the agency fee payable under this Agreement which<br> are consistent with the successor Mezzanine Agent's normal fee rates and those amendments<br> will bind the Parties. |
| --- | --- |
| (e) | The<br> retiring Mezzanine Agent shall make available to the successor Mezzanine Agent such documents<br> and records and provide such assistance as the successor Mezzanine Agent may reasonably request<br> for the purposes of performing its functions as Mezzanine Agent under the Finance Documents.<br> The Borrower shall, within three Business Days of demand, reimburse the retiring Mezzanine |
| --- | --- |
| - 166 - |
| --- |
Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.
| (f) | The<br> Mezzanine Agent's resignation notice shall only take effect upon the appointment of a successor. |
|---|---|
| (g) | Upon<br> the appointment of a successor, the retiring Mezzanine Agent shall be discharged from any<br> further obligation in respect of the Finance Documents (other than its obligations under<br> paragraph (e) above), but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Mezzanine Agent) and this Clause 25 (and any agency fees for the account of the<br> retiring Mezzanine Agent shall cease to accrue from (and shall be payable on) that date).<br> Any successor and each of the other Parties shall have the same rights and obligations amongst<br> themselves as they would have had if such successor had been an original Party. |
| --- | --- |
| (h) | The<br> Mezzanine Agent shall resign in accordance with paragraph (b) above (and, to the extent<br> applicable, shall use reasonable endeavours to appoint a successor Mezzanine Agent pursuant<br> to paragraph (c) above) if on or after the date which is three months before the earliest<br> FATCA Application Date relating to any payment to the Mezzanine Agent under the Finance Documents,<br> either: |
| --- | --- |
| (i) | the<br> Mezzanine Agent fails to respond to a request under Clause 12.8 (FATCA Information)<br> and a Lender reasonably believes that the Mezzanine Agent will not be (or will have ceased<br> to be) a FATCA Exempt Party on or after that FATCA Application Date; |
| --- | --- |
| (ii) | the<br> information supplied by the Mezzanine Agent pursuant to Clause 12.8 (FATCA Information)<br> indicates that the Mezzanine Agent will not be (or will have ceased to be) a FATCA Exempt<br> Party on or after that FATCA Application Date; or |
| --- | --- |
| (iii) | the<br> Mezzanine Agent notifies the Borrower and the Lenders that the Mezzanine Agent will not be<br> (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; |
| --- | --- |
and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Mezzanine Agent were a FATCA Exempt Party, and that Lender, by notice to the Mezzanine Agent, requires it to resign.
| 29.13 | Replacement of the Mezzanine Agent |
|---|---|
| (a) | After<br> consultation with the Borrower, the Majority Lenders may, by giving thirty (30) days' notice<br> to the Mezzanine Agent (or, at any time the Mezzanine Agent is an Impaired Mezzanine Agent,<br> by giving any shorter notice determined by the Majority Lenders) replace the Mezzanine Agent<br> by appointing a successor Mezzanine Agent (acting through an office in the United Kingdom). |
| --- | --- |
| (b) | The<br> retiring Mezzanine Agent shall (at its own cost if it is an Impaired Mezzanine Agent and<br> otherwise at the expense of the Lenders) make available |
| --- | --- |
| - 167 - |
| --- |
to the successor Mezzanine Agent such documents and records and provide such assistance as the successor Mezzanine Agent may reasonably request for the purposes of performing its functions as Mezzanine Agent under the Finance Documents.
| (c) | The<br> appointment of the successor Mezzanine Agent shall take effect on the date specified in the<br> notice from the Majority Lenders to the retiring Mezzanine Agent. As from this date, the<br> retiring Mezzanine Agent shall be discharged from any further obligation in respect of the<br> Finance Documents (other than its obligations under paragraph (b) above) but shall remain<br> entitled to the benefit of Clause 14.3 (Indemnity to the Mezzanine Agent) and this<br> Clause 29 (and any agency fees for the account of the retiring Mezzanine Agent shall cease<br> to accrue from (and shall be payable on) that date). |
|---|---|
| (d) | Any<br> successor Mezzanine Agent and each of the other Parties shall have the same rights and obligations<br> amongst themselves as they would have had if such successor had been an original Party. |
| --- | --- |
| 29.14 | Confidentiality |
| --- | --- |
| (a) | In<br> acting as agent for the Finance Parties, the Mezzanine Agent shall be regarded as acting<br> through its agency division which shall be treated as a separate entity from any other of<br> its divisions or departments. |
| --- | --- |
| (b) | If<br> information is received by another division or department of the Mezzanine Agent, it may<br> be treated as confidential to that division or department and the Mezzanine Agent shall not<br> be deemed to have notice of it. |
| --- | --- |
| 29.15 | Relationship with the Lenders |
| --- | --- |
| (a) | Subject<br> to Clause 26.10 (Pro rata interest settlement), the Mezzanine Agent may treat the<br> person shown in its records as Lender at the opening of business (in the place of the Mezzanine<br> Agent's principal office as notified to the Finance Parties from time to time) as the Lender<br> acting through its Facility Office: |
| --- | --- |
| (i) | entitled<br> to or liable for any payment due under any Finance Document on that day; and |
| --- | --- |
| (ii) | entitled<br> to receive and act upon any notice, request, document or communication or make any decision<br> or determination under any Finance Document made or delivered on that day, |
| --- | --- |
unless it has received not less than five (5) Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
| (b) | Any<br> Lender may by notice to the Mezzanine Agent appoint a person to receive on its behalf all<br> notices, communications, information and documents to be made or despatched to that Lender<br> under the Finance Documents. Such notice shall contain the address, (if applicable) fax number<br> and (where communication by electronic mail or other electronic means is permitted under<br> Clause 36.6 (Electronic communication)) electronic mail address and/or any other information<br> required to enable the transmission of information by that means (and,<br>in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of<br>a substitute address, (if applicable) fax number, electronic mail address (or such other information), department and officer by that<br>Lender for the purposes of Clause 36.2 (Addresses) and paragraph (a)(ii) of Clause 36.6 (Electronic communication)<br>and the Mezzanine Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information<br>and documents as though that person were that Lender. |
|---|
| - 168 - |
| --- | | 29.16 | Credit appraisal by the Lenders | | --- | --- |
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Mezzanine Agent, the Security Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
| (a) | the<br> financial condition, status and nature of each member of the Group; |
|---|---|
| (b) | the<br> legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the<br> Mezzanine Only Transaction Security and any other agreement, arrangement or document entered<br> into, made or executed in anticipation of, under or in connection with any Finance Document<br> or the Mezzanine Only Transaction Security; |
| --- | --- |
| (c) | whether<br> that Lender has recourse, and the nature and extent of that recourse, against any Party or<br> any of its respective assets under or in connection with any Finance Document, the Mezzanine<br> Only Transaction Security, the transactions contemplated by the Finance Documents or any<br> other agreement, arrangement or document entered into, made or executed in anticipation of,<br> under or in connection with any Finance Document or the Mezzanine Only Transaction Security; |
| --- | --- |
| (d) | the<br> adequacy, accuracy or completeness of any information provided by the Mezzanine Agent, any<br> Party or by any other person under or in connection with any Finance Document, the transactions<br> contemplated by any Finance Document or any other agreement, arrangement or document entered<br> into, made or executed in anticipation of, under or in connection with any Finance Document;<br> and |
| --- | --- |
| (e) | the<br> right or title of any person in or to, or the value or sufficiency of any part of the Mezzanine<br> Only Charged Property, the priority of any of the Mezzanine Only Transaction Security or<br> the existence of any Security affecting the Mezzanine Only Charged Property. |
| --- | --- |
| 29.17 | Mezzanine Agent's management time |
| --- | --- |
Any amount payable to the Mezzanine Agent under Clause 14.3 (Indemnity to the Mezzanine Agent), Clause 16 (Costs and expenses) and Clause 29.11 (Lenders' indemnity to the Mezzanine Agent) shall include the cost of utilising the Mezzanine Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Mezzanine Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Mezzanine Agent under Clause 11 (Fees).
| - 169 - |
| --- | | 29.18 | Deduction from amounts payable by the Mezzanine Agent | | --- | --- |
If any Party owes an amount to the Mezzanine Agent under the Finance Documents the Mezzanine Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Mezzanine Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
| 29.19 | Amounts paid in error |
|---|---|
| (a) | If<br> the Mezzanine Agent pays an amount to another Party and within five (5) Business Days<br> of the date of payment the Mezzanine Agent notifies that Party that such payment was an Erroneous<br> Payment, then the Party to whom that amount was paid by the Mezzanine Agent shall on demand<br> refund the same to the Mezzanine Agent. |
| --- | --- |
| (b) | Neither: |
| --- | --- |
| (i) | The<br> obligations of any Party to the Mezzanine Agent; nor |
| --- | --- |
| (ii) | The<br> remedies of a Mezzanine Agent, |
| --- | --- |
(whether arising under this Clause 29.19 or otherwise) which relate to an Erroneous Payment will be affected by any act, omission, matter or thing which, but for this paragraph (b), would reduce, release or prejudice any such obligation or remedy (whether or not known by the Mezzanine Agent or any other Party).
| (c) | In<br> this Agreement, "Erroneous Payment" means a payment of an amount by the<br> Mezzanine Agent to another Party which the Mezzanine Agent determines (acting reasonably)<br> was made in error. |
|---|---|
| 29.20 | Role of Reference Banks |
| --- | --- |
| (a) | No<br> Reference Bank is under any obligation to provide a quotation or any other information to<br> the Mezzanine Agent. |
| --- | --- |
| (b) | No<br> Reference Bank will be liable for any action taken by it under or in connection with any<br> Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross<br> negligence or wilful misconduct. |
| --- | --- |
| (c) | No<br> Party (other than the relevant Reference Bank) may take any proceedings against any officer,<br> employee or agent of any Reference Bank in respect of any claim it might have against that<br> Reference Bank or in respect of any act or omission of any kind by that officer, employee<br> or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any<br> officer, employee or agent of each Reference Bank may rely on this Clause 29.20 subject to<br> Clause 1.4 (Third party rights) and the provisions of the Third Parties Act. |
| --- | --- |
| - 170 - |
| --- | | 29.21 | Third party Reference Banks | | --- | --- |
A Reference Bank which is not a Party may rely on Clause 29.20 (Role of Reference Banks), Clause 40.3 (Other exceptions) and Clause 42 (Confidentiality of Funding Rates and Reference Bank Quotations), subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.
| 30. | THE SECURITY AGENT |
|---|---|
| 30.1 | Security Agent as trustee |
| --- | --- |
| (a) | The<br> Security Agent declares that it holds the Mezzanine Only Transaction Security on trust for<br> the Secured Parties on the terms contained in this Agreement. |
| --- | --- |
| (b) | Each<br> of the Secured Parties authorises the Security Agent to perform the duties, obligations and<br> responsibilities and to exercise the rights, powers, authorities and discretions specifically<br> given to the Security Agent under or in connection with the Finance Documents together with<br> any other incidental rights, powers, authorities and discretions. |
| --- | --- |
| 30.2 | Instructions |
| --- | --- |
| (a) | The<br> Security Agent shall: |
| --- | --- |
| (i) | subject<br> to paragraphs (c) and (d) below, exercise or refrain from exercising any right,<br> power, authority or discretion vested in it as Security Agent in accordance with any instructions<br> given to it by the Mezzanine Agent (acting on behalf of the Majority Lenders or, as the case<br> may be, all the Lenders); and |
| --- | --- |
| (ii) | not<br> be liable for any act (or omission) if it acts (or refrains from acting) in accordance with<br> paragraph (i) above. |
| --- | --- |
| (b) | The<br> Security Agent shall be entitled to request instructions, or clarification of any instruction,<br> from the Mezzanine Agent as to whether, and in what manner, it should exercise or refrain<br> from exercising any right, power, authority or discretion and the Security Agent may refrain<br> from acting unless and until it receives those instructions or that clarification. |
| --- | --- |
| (c) | Paragraph<br> (a) above shall not apply: |
| --- | --- |
| (i) | where<br> a contrary indication appears in this Agreement; |
| --- | --- |
| (ii) | where<br> this Agreement requires the Security Agent to act in a specified manner or to take a specified<br> action; |
| --- | --- |
| - 171 - |
| --- | | (iii) | in<br> respect of any provision which protects the Security Agent's own position in its personal<br> capacity as opposed to its role of Security Agent for the Secured Parties including, without<br> limitation, Clause 30.5 (No duty to account) to Clause 30.10 (Exclusion of liability),<br> Clause 30.13 (Confidentiality) to Clause 30.18 (Custodians and nominees) and<br> Clause 30.21 (Acceptance of title) to Clause 30.25 (Disapplication of Trustee Acts); | | --- | --- | | (iv) | in<br> respect of the exercise of the Security Agent's discretion to exercise a right, power or<br> authority under any of: | | --- | --- | | (A) | Clause<br> 35.1 (Order of application); and | | --- | --- | | (B) | Clause<br> 35.4 (Permitted Deductions). | | --- | --- | | (d) | If<br> giving effect to instructions given by the Mezzanine Agent (acting on the instructions of<br> the Majority Lenders) would (in the Security Agent's opinion) have an effect equivalent to<br> an amendment or waiver which is subject to Clause 32.5 (Exceptions), the Security<br> Agent shall not act in accordance with those instructions unless consent to it so acting<br> is obtained from each Party (other than the Security Agent) whose consent would have been<br> required in respect of that amendment or waiver. | | --- | --- | | (e) | In<br> exercising any discretion to exercise a right, power or authority under the Finance Documents<br> where either: | | --- | --- | | (i) | it<br> has not received any instructions as to the exercise of that discretion; or | | --- | --- | | (ii) | the<br> exercise of that discretion is subject to paragraph (c)(iv) above, | | --- | --- |
the Security Agent shall do so having regard to the interests of all the Secured Parties.
| (f) | The<br> Security Agent may refrain from acting in accordance with any instructions of the Mezzanine<br> Agent, the Majority Lenders or any other group of Lenders until it has received any indemnification<br> and/or security, and/or (with respect to any payment by the Security Agent which may be imminent)<br> any prefunding that it may in its discretion require (which may be greater in extent than<br> that contained in the Finance Documents and which may include payment in advance) for any<br> cost, loss or liability (together with any applicable VAT) which it may incur in complying<br> with those instructions. |
|---|---|
| (g) | Without<br> prejudice to the provisions of the remainder of this Clause 30.2, in the absence of instructions,<br> the Security Agent may act (or refrain from acting) as it considers in its discretion to<br> be appropriate. |
| --- | --- |
| (h) | At<br> any time after receipt by the Security Agent of notice from the Mezzanine Agent directing<br> the Security Agent to exercise all or any of its rights, remedies, powers or discretions<br> under any of the Finance Documents, the Security Agent may, and shall if so directed by the<br> Mezzanine Agent (provided that the Security Agent has been appropriately indemnified and/or<br> secured and/or prefunded),take any action as in its sole discretion it thinks fit to enforce<br> the Mezzanine Only Transaction Security. |
| --- | --- |
| - 172 - |
| --- | | (i) | The<br> Secured Parties shall not have any independent power to enforce or have recourse to, any<br> of the Mezzanine Only Transaction Security or to exercise any right, power, authority or<br> discretion arising under the Mezzanine Only Security Documents except through the Security<br> Agent. | | --- | --- | | 30.3 | Duties of the Security Agent | | --- | --- | | (a) | The<br> Security Agent's duties under the Finance Documents are solely mechanical and administrative<br> in nature. | | --- | --- | | (b) | The<br> Security Agent shall promptly forward to the Mezzanine Agent a copy of any document received<br> by the Security Agent from any Obligor under any Finance Document. | | --- | --- | | (c) | Except<br> where a Finance Document specifically provides otherwise, the Security Agent is not obliged<br> to review or check the adequacy, accuracy or completeness of any document it forwards to<br> another Party. | | --- | --- | | (d) | If<br> the Security Agent receives notice from a Party referring to any Finance Document, describing<br> a Default and stating that the circumstance described is a Default, it shall promptly notify<br> the Mezzanine Agent. | | --- | --- | | (e) | The<br> Security Agent shall have only those duties, obligations and responsibilities expressly specified<br> in the Finance Documents to which it is expressed to be a party (and no others shall be implied). | | --- | --- | | 30.4 | No fiduciary duties to Obligors | | --- | --- |
Nothing in this Agreement constitutes the Security Agent as an agent, trustee or fiduciary of any Obligor.
| 30.5 | No duty to account |
|---|
The Security Agent shall not be bound to account to any other Secured Party for any sum or the profit element of any sum received by it for its own account.
| 30.6 | Business with the Group |
|---|
The Security Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
| 30.7 | Rights and discretions |
|---|---|
| (a) | The<br> Security Agent may: |
| --- | --- |
| (i) | rely<br> on any representation, communication, notice or document believed by it to be genuine, correct<br> and appropriately authorised; |
| --- | --- |
| - 173 - |
| --- | | (ii) | assume<br> that: | | --- | --- | | (A) | any<br> instructions received by it from the Mezzanine Agent, any Lenders or any group of Lenders<br> are duly given in accordance with the terms of the Finance Documents; | | --- | --- | | (B) | unless<br> it has received notice of revocation, that those instructions have not been revoked; and | | --- | --- | | (C) | if<br> it receives any instructions to act in relation to the Mezzanine Only Transaction Security,<br> that all applicable conditions under the Finance Documents for so acting have been satisfied;<br> and | | --- | --- | | (iii) | rely<br> on a certificate from any person: | | --- | --- | | (A) | as<br> to any matter of fact or circumstance which might reasonably be expected to be within the<br> knowledge of that person; or | | --- | --- | | (B) | to<br> the effect that such person approves of any particular dealing, transaction, step, action<br> or thing, | | --- | --- |
as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.
| (b) | The<br> Security Agent shall be entitled to carry out all dealings with the Lenders through the Mezzanine<br> Agent and may give to the Mezzanine Agent any notice or other communication required to be<br> given by the Security Agent to the Lenders. |
|---|---|
| (c) | The<br> Security Agent may assume (unless it has received written notice to the contrary in its capacity<br> as security trustee for the Secured Parties) that: |
| --- | --- |
| (i) | no Default<br> has occurred; |
| --- | --- |
| (ii) | any<br> right, power, authority or discretion vested in any Party, any Lenders or any group of Lenders<br> has not been exercised; and |
| --- | --- |
| (iii) | any<br> notice made by the Borrower is made on behalf of and with the consent and knowledge of all<br> the Obligors. |
| --- | --- |
| (d) | The<br> Security Agent may engage and pay for the advice or services of any lawyers, accountants,<br> tax advisers, surveyors or other professional advisers or experts. |
| --- | --- |
| (e) | Without<br> prejudice to the generality of paragraph (d) above or paragraph (f) below, the<br> Security Agent may at any time engage and pay for the services of any lawyers to act as independent<br> counsel to the Security Agent (and so separate from any lawyers instructed by any Finance<br> Party) if the Security Agent in its opinion deems this to be desirable. |
| --- | --- |
| - 174 - |
| --- | | (f) | The<br> Security Agent may rely on the advice or services of any lawyers, accountants, tax advisers,<br> surveyors or other professional advisers or experts (whether obtained by the Security Agent<br> or by any other Party) and shall not be liable for any damages, costs or losses to any person,<br> any diminution in value or any liability whatsoever arising as a result of its so relying. | | --- | --- | | (g) | The<br> Security Agent, any Receiver and any Delegate may act in relation to the Finance Documents<br> and the Mezzanine Only Transaction Security through its officers, employees and agents and<br> shall not: | | --- | --- | | (i) | be<br> liable for any error of judgment made by any such person; or | | --- | --- | | (ii) | be<br> bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct,<br> omission or default on the part of any such person, | | --- | --- |
unless such error or such loss was directly caused by the Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct.
| (h) | Unless<br> this Agreement expressly specifies otherwise, the Security Agent may disclose to any other<br> Party any information it reasonably believes it has received as security trustee under this<br> Agreement. |
|---|---|
| (i) | Notwithstanding<br> any other provision of any Finance Document to the contrary, the Security Agent is not obliged<br> to do or omit to do anything if it would, or might in its reasonable opinion, constitute<br> a breach of any law or regulation or a breach of any fiduciary duty or duty of confidentiality. |
| --- | --- |
| (j) | Notwithstanding<br> any provision of any Finance Document to the contrary, the Security Agent is not obliged<br> to expend or risk its own funds or otherwise incur any financial liability in the performance<br> of its duties, obligations or responsibilities or the exercise of any right, power, authority<br> or discretion if it has grounds for believing the repayment of such funds or adequate indemnity<br> against, or security for, such risk or liability is not reasonably assured to it. |
| --- | --- |
| 30.8 | Responsibility for documentation |
| --- | --- |
None of the Security Agent, any Receiver nor any Delegate is responsible or liable for:
| (a) | the<br> adequacy, accuracy or completeness of any information (whether oral or written) supplied<br> by the Security Agent, an Obligor or any other person in or in connection with any Finance<br> Document or the transactions contemplated in the Finance Documents or any other agreement,<br> arrangement or document entered into, made or executed in anticipation of, under or in connection<br> with any Finance Document; or |
|---|---|
| (b) | the<br> legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the<br> Mezzanine Only Transaction Security or any other agreement, arrangement or document entered<br> into, made or executed in anticipation of, under or in connection with any Finance Document<br> or the Mezzanine Only Transaction Security; or |
| --- | --- |
| - 175 - |
| --- | | (c) | any<br> determination as to whether any information provided or to be provided to any Secured Party<br> is non-public information the use of which may be regulated or prohibited by applicable law<br> or regulation relating to insider dealing or otherwise. | | --- | --- | | 30.9 | No duty to monitor | | --- | --- |
The Security Agent shall not be bound to enquire:
| (a) | whether<br> or not any Default has occurred; |
|---|---|
| (b) | as<br> to the performance, default or any breach by any Party of its obligations under any Finance<br> Document; or |
| --- | --- |
| (c) | whether<br> any other event specified in any Finance Document has occurred. |
| --- | --- |
| 30.10 | Exclusion of liability |
| --- | --- |
| (a) | Without<br> limiting paragraph (b) below (and without prejudice to any other provision of any Finance<br> Document excluding or limiting the liability of the Security Agent, any Receiver or Delegate),<br> none of the Security Agent, any Receiver nor any Delegate will be liable for: |
| --- | --- |
| (i) | any<br> damages, costs or losses to any person, any diminution in value or any liability whatsoever<br> arising as a result of taking or not taking any action under or in connection with any Finance<br> Document or the Mezzanine Only Transaction Security unless directly caused by its gross negligence<br> or wilful misconduct; |
| --- | --- |
| (ii) | exercising<br> or not exercising any right, power, authority or discretion given to it by or in connection<br> with any Finance Document, the Mezzanine Only Transaction Security or any other agreement,<br> arrangement or document entered into, made or executed in anticipation of, under or in connection<br> with, any Finance Document or the Mezzanine Only Transaction Security; |
| --- | --- |
| (iii) | any<br> shortfall which arises on the enforcement or realisation of the Mezzanine Only Transaction<br> Security; or |
| --- | --- |
| (iv) | without<br> prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs,<br> losses, any diminution in value or any liability whatsoever arising as a result of: |
| --- | --- |
| (A) | any<br> act, event or circumstance not reasonably within its control; or |
| --- | --- |
| (B) | the<br> general risks of investment in, or the holding of assets in, any jurisdiction, |
| --- | --- |
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets; breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
| - 176 - |
| --- | | (b) | No<br> Party (other than the Security Agent, that Receiver or that Delegate (as applicable)) may<br> take any proceedings against any officer, employee or agent of the Security Agent, a Receiver<br> or a Delegate in respect of any claim it might have against the Security Agent, a Receiver<br> or a Delegate or in respect of any act or omission of any kind by that officer, employee<br> or agent in relation to any Finance Document or any Mezzanine Only Transaction Security and<br> any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on<br> this paragraph (b) subject to Clause 1.4 (Third party rights) and the provisions<br> of the Third Parties Act. | | --- | --- | | (c) | Nothing<br> in this Agreement shall oblige the Security Agent to carry out: | | --- | --- | | (i) | any<br> "know your customer" or other checks in relation to any person; or | | --- | --- | | (ii) | any<br> check on the extent to which any transaction contemplated by this Agreement might be unlawful<br> for any Secured Party (other than the Security Agent), | | --- | --- |
on behalf of any Secured Party (other than the Security Agent) and each Secured Party (other than the Security Agent) confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.
| (d) | Without<br> prejudice to any provision of any Finance Document excluding or limiting the liability of<br> the Security Agent, any Receiver or Delegate, any liability of the Security Agent, any Receiver<br> or Delegate arising under or in connection with any Finance Document or the Mezzanine Only<br> Transaction Security shall be limited to the amount of actual loss which has been finally<br> judicially determined to have been suffered (as determined by reference to the date of default<br> of the Security Agent, Receiver or Delegate (as the case may be) or, if later, the date on<br> which the loss arises as a result of such default) but without reference to any special conditions<br> or circumstances known to the Security Agent, Receiver or Delegate (as the case may be) at<br> any time which increase the amount of that loss. In no event shall the Security Agent, any<br> Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity<br> or anticipated saving, or for special, punitive, indirect or consequential damages, whether<br> or not the Security Agent, Receiver or Delegate (as the case may be) has been advised of<br> the possibility of such loss or damages. |
|---|
| - 177 - |
| --- | | 30.11 | Lenders' indemnity to the Security Agent | | --- | --- | | (a) | Each<br> Lender shall in proportion to its share of the Total Commitments (or, if the Total Commitments<br> are then zero, to its share of the Total Commitments immediately prior to their reduction<br> to zero), indemnify the Security Agent and every Receiver and every Delegate, within three<br> Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise<br> than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence<br> or wilful misconduct) in acting as Security Agent, Receiver or Delegate under, or exercising<br> any authority conferred under, the Finance Documents (unless the relevant Security Agent,<br> Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document). | | --- | --- | | (b) | Subject<br> to paragraph (c) below, the Borrower shall immediately on demand reimburse any Lender<br> for any payment that Lender makes to the Security Agent pursuant to paragraph (a) above. | | --- | --- | | (c) | Paragraph<br> (b) above shall not apply to the extent that the indemnity payment in respect of which<br> the Lender claims reimbursement relates to a liability of the Security Agent to an Obligor. | | --- | --- | | (d) | Lenders'<br> indemnity obligation under this Clause 30.11 (Lenders' Indemnity to the Security Agent) shall continue to be in force and effect notwithstanding the discharge or termination<br> of the Finance Documents or removal or resignation of the Security Agent. | | --- | --- | | 30.12 | Resignation of the Security Agent | | --- | --- | | (a) | The<br> Security Agent may resign and appoint one of its Affiliates as successor by giving notice<br> to the Borrower and to the Mezzanine Agent on behalf of the Lenders. | | --- | --- | | (b) | Alternatively<br> the Security Agent may resign by giving 30 days' notice to the other Parties (or the Mezzanine<br> Agent on behalf of the Lenders), in which case the Majority Lenders may appoint a successor<br> Security Agent. | | --- | --- | | (c) | If<br> the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph<br> (b) above within 20 days after notice of resignation was given, the retiring Security<br> Agent (after consultation with the Mezzanine Agent) may appoint a successor Security Agent. | | --- | --- | | (d) | The<br> retiring Security Agent shall, make available to the successor Mezzanine Agent such documents<br> and records and provide such assistance as the successor Security Agent may reasonably request<br> for the purposes of performing its functions as Security Agent under the Finance Documents.<br> The Borrower shall, within three Business Days of demand, reimburse the retiring Security<br> Agent for the amount of all costs and expenses (including legal fees) properly incurred by<br> it in making available such documents and records and providing such assistance. | | --- | --- | | (e) | The<br> Security Agent's resignation notice shall only take effect upon: | | --- | --- | | (i) | the<br> appointment of a successor; and | | --- | --- | | (ii) | the<br> transfer of all the Mezzanine Only Transaction Security to that successor. | | --- | --- |
| - 178 - |
| --- | | (f) | Upon<br> the appointment of a successor, the retiring Security Agent shall be discharged from any<br> further obligation in respect of the Finance Documents (other than its obligations under<br> paragraph (b) of Clause 30.22 (Winding up of trust) and paragraph (d) above)<br> but shall remain entitled to the benefit of this Clause 30.12 and Clause 14.3 (Indemnity to the Security Agent) and Clause 30.11<br> (Lenders' indemnity to the Mezzanine Security Agent) (and any Security Agent<br> fees for the account of the retiring Security Agent shall cease to accrue from (and shall<br> be payable on) that date). Any successor and each of the other Parties shall have the same<br> rights and obligations amongst themselves as they would have had if that successor had been<br> an original Party. | | --- | --- | | (g) | The<br> Majority Lenders may, by notice to the Security Agent, require it to resign in accordance<br> with paragraph (b) above. In this event, the Security Agent shall resign in accordance<br> with paragraph (b) above but the cost referred to in paragraph (d) above shall<br> be for the account of the Borrower. | | --- | --- | | 30.13 | Confidentiality | | --- | --- | | (a) | In<br> acting as trustee for the Secured Parties, the Security Agent shall be regarded as acting<br> through its trustee division which shall be treated as a separate entity from any of its<br> other divisions or departments. | | --- | --- | | (b) | If<br> information is received by another division or department of the Security Agent, it may be<br> treated as confidential to that division or department and the Security Agent shall not be<br> deemed to have notice of it. | | --- | --- | | (c) | Notwithstanding<br> any other provision of any Finance Document to the contrary, the Security Agent is not obliged<br> to disclose to any other person (i) any confidential information or (ii) any other<br> information if the disclosure would, or might in its reasonable opinion, constitute a breach<br> of any law or regulation or a breach of any fiduciary duty. | | --- | --- | | 30.14 | Information from the Secured Parties | | --- | --- |
Each Secured Party shall supply the Security Agent with any information that the Security Agent may specify as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent.
| 30.15 | Credit appraisal by the Secured Parties |
|---|
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Secured Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
| (a) | the<br> financial condition, status and nature of each member of the Group; |
|---|---|
| (b) | the<br> legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the<br> Mezzanine Only Transaction Security and any other agreement, arrangement or document entered<br> into, made or executed in anticipation of, under or in connection with any Finance Document<br> or the Mezzanine Only Transaction Security; |
| --- | --- |
| - 179 - |
| --- | | (c) | whether<br> that Secured Party has recourse, and the nature and extent of that recourse, against any<br> Party or any of its respective assets under or in connection with any Finance Document, the<br> Mezzanine Only Transaction Security, the transactions contemplated by the Finance Documents<br> or any other agreement, arrangement or document entered into, made or executed in anticipation<br> of, under or in connection with any Finance Document or the Mezzanine Only Transaction Security; | | --- | --- | | (d) | the<br> adequacy, accuracy or completeness of any information provided by the Security Agent, any<br> Party or by any other person under or in connection with any Finance Document, the transactions<br> contemplated by any Finance Document or any other agreement, arrangement or document entered<br> into, made or executed in anticipation of, under or in connection with any Finance Document;<br> and | | --- | --- | | (e) | the<br> right or title of any person in or to, or the value or sufficiency of any part of the Charged<br> Property (in so far as it relates to the Mezzanine Only Transaction Security), the priority<br> of any of the Mezzanine Only Transaction Security or the existence of any Security affecting<br> the Charged Property (in so far as it relates to the Mezzanine Only Transaction Security). | | --- | --- | | 30.16 | No responsibility to perfect Transaction Security | | --- | --- |
The Security Agent shall not be liable for any failure to:
| (a) | require<br> the deposit with it of any deed or document certifying, representing or constituting the<br> title of any Obligor to any of the Charged Property; |
|---|---|
| (b) | obtain<br> any licence, consent or other authority for the execution, delivery, legality, validity,<br> enforceability or admissibility in evidence of any Finance Document or the Transaction Security; |
| --- | --- |
| (c) | register,<br> file or record or otherwise protect any of the Transaction Security (or the priority of any<br> of the Transaction Security) under any law or regulation or to give notice to any person<br> of the execution of any Finance Document or of the Transaction Security; |
| --- | --- |
| (d) | take,<br> or to require any Obligor to take, any step to perfect its title to any of the Charged Property<br> or to render the Transaction Security effective or to secure the creation of any ancillary<br> Security under any law or regulation; or |
| --- | --- |
| (e) | require<br> any further assurance in relation to any Security Document. |
| --- | --- |
| 30.17 | Insurance by Security Agent |
| --- | --- |
| (a) | The<br> Security Agent shall not be obliged: |
| --- | --- |
| (i) | to<br> insure any of the Charged Property; |
| --- | --- |
| - 180 - |
| --- | | (ii) | to<br> require any other person to maintain any insurance; or | | --- | --- | | (iii) | to<br> verify any obligation to arrange or maintain insurance contained in any Finance Document, | | --- | --- |
and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.
| (b) | Where<br> the Security Agent is named on any insurance policy as an insured party, it shall not be<br> liable for any damages, costs or losses to any person as a result of its failure to notify<br> the insurers of any material fact relating to the risk assumed by such insurers or any other<br> information of any kind, unless the Mezzanine Agent requests it to do so in writing and the<br> Security Agent fails to do so within fourteen days after receipt of that request. |
|---|---|
| 30.18 | Custodians and nominees |
| --- | --- |
The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.
| 30.19 | Delegation by the Security Agent |
|---|---|
| (a) | Each<br> of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power<br> of attorney or otherwise to any person for any period, all or any right, power, authority<br> or discretion vested in it in its capacity as such. |
| --- | --- |
| (b) | That<br> delegation may be made upon any terms and conditions (including the power to sub-delegate)<br> and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as<br> the case may be) may, in its discretion, think fit in the interests of the Secured Parties. |
| --- | --- |
| (c) | No<br> Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible<br> for any damages, costs or losses incurred by reason of any misconduct, omission or default<br> on the part of, any such delegate or sub- delegate. |
| --- | --- |
| 30.20 | Additional Security Agents |
| --- | --- |
| (a) | The<br> Security Agent may at any time appoint (and subsequently remove) any person to act as a separate<br> trustee or as a co-trustee jointly with it: |
| --- | --- |
| (i) | if<br> it considers that appointment to be in the interests of the Secured Parties; |
| --- | --- |
| (ii) | for<br> the purposes of conforming to any legal requirement, restriction or condition which the Security<br> Agent deems to be relevant; or |
| --- | --- |
| - 181 - |
| --- | | (iii) | for<br> obtaining or enforcing any judgment in any jurisdiction, | | --- | --- |
and the Security Agent shall give prior notice to the Borrower and the Secured Parties of that appointment.
| (b) | Any<br> person so appointed shall have the rights, powers, authorities and discretions (not exceeding<br> those given to the Security Agent under or in connection with the Finance Documents) and<br> the duties, obligations and responsibilities that are given or imposed by the instrument<br> of appointment. |
|---|---|
| (c) | The<br> remuneration that the Security Agent may pay to that person, and any costs and expenses (together<br> with any applicable VAT) incurred by that person in performing its functions pursuant to<br> that appointment shall, for the purposes of this Agreement, be treated as costs and expenses<br> incurred by the Security Agent. |
| --- | --- |
| 30.21 | Acceptance of title |
| --- | --- |
The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any Obligor may have to any of the Charged Property and shall not be liable for, or bound to require any Obligor to remedy, any defect in its right or title.
| 30.22 | Winding up of trust |
|---|
If the Security Agent, with the approval of the Agent (acting on the instructions of the Majority Lenders,) determines that:
| (a) | all<br> of the Secured Obligations have been fully and finally discharged; and |
|---|---|
| (b) | no<br> Secured Party is under any commitment, obligation or liability (actual or contingent) to<br> make advances or provide other financial accommodation to any Obligor pursuant to the Finance<br> Documents, |
| --- | --- |
then:
| (i) | the<br> trusts set out in this Agreement shall be wound up and the Security Agent shall release,<br> without recourse or warranty, all of the Mezzanine Only Transaction Security and the rights<br> of the Security Agent under each of the Mezzanine Only Security Documents; and |
|---|---|
| (ii) | any<br> Security Agent which has resigned pursuant to Clause 30.12 (Resignation of the Security Agent) shall release, without recourse or warranty, all of its rights under each Mezzanine<br> Only Security Document. |
| --- | --- |
| 30.23 | Releases |
| --- | --- |
Upon a disposal of any of the Mezzanine Only Charged Property or the resignation of an Obligor in accordance with Clause 28 (Changesto the Obligors):
| (a) | pursuant<br> to the enforcement of the Mezzanine Only Transaction Security by a Receiver or the Security<br> Agent; |
|---|
| - 182 - |
| --- | | (b) | if<br> that disposal is permitted under the Finance Documents; or | | --- | --- | | (c) | if<br> the Security Agent is instructed to release the Mezzanine Only Transaction Security granted<br> by the resigning Obligor under the terms of Clause 28 (Changes to the Obligors), | | --- | --- |
the Security Agent shall (at the cost and upon the request of the Obligors) without incurring any liability, release that property from the Mezzanine Only Transaction Security given by that Obligor and is authorised to execute, without the need for any further authority from the Secured Parties, any release of the Mezzanine Only Transaction Security or other claim over that asset or Obligor and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.
| 30.24 | Powers supplemental to Trustee Acts |
|---|
The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.
| 30.25 | Disapplication of Trustee Acts |
|---|
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.
| 31. | CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
|---|
No provision of this Agreement will:
| (a) | interfere<br> with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever<br> manner it thinks fit; |
|---|---|
| (b) | oblige<br> any Finance Party to investigate or claim any credit, relief, remission or repayment available<br> to it or the extent, order and manner of any claim; or |
| --- | --- |
| (c) | oblige<br> any Finance Party to disclose any information relating to its affairs (tax or otherwise)<br> or any computations in respect of Tax. |
| --- | --- |
| 32. | SHARING AMONG THE FINANCE PARTIES |
| --- | --- |
| 32.1 | Payments to Finance Parties |
| --- | --- |
If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from an Obligor other than in accordance with Clause 33 (Payment mechanics) or Clause 35 (Application of Proceeds) (a "Recovered Amount") and applies that amount to a payment due under the Finance Documents then:
| (a) | the<br> Recovering Finance Party shall, within three Business Days, notify details of the receipt<br> or recovery to the Mezzanine Agent; |
|---|
| - 183 - |
| --- | | (b) | the<br> Mezzanine Agent shall determine whether the receipt or recovery is in excess of the amount<br> the Recovering Finance Party would have been paid had the receipt or recovery been received<br> or made by the Mezzanine Agent and distributed in accordance with Clause 33 (Payment mechanics),<br> without taking account of any Tax which would be imposed on the Mezzanine Agent in relation<br> to the receipt, recovery or distribution; and | | --- | --- | | (c) | the<br> Recovering Finance Party shall, within three Business Days of demand by the Mezzanine Agent,<br> pay to the Mezzanine Agent an amount (the "Sharing Payment") equal to such<br> receipt or recovery less any amount which the Mezzanine Agent determines may be retained<br> by the Recovering Finance Party as its share of any payment to be made, in accordance with<br> Clause 33.6 (Partial payments). | | --- | --- | | 32.2 | Redistribution of payments | | --- | --- |
The Mezzanine Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 33.6 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
| 32.3 | Recovering Finance Party's rights |
|---|
On a distribution by the Mezzanine Agent under Clause 32.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
| 32.4 | Reversal of redistribution |
|---|
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
| (a) | each<br> Sharing Finance Party shall, upon request of the Mezzanine Agent, pay to the Mezzanine Agent<br> for the account of that Recovering Finance Party an amount equal to the appropriate part<br> of its share of the Sharing Payment (together with an amount as is necessary to reimburse<br> that Recovering Finance Party for its proportion of any interest on the Sharing Payment which<br> that Recovering Finance Party is required to pay) (the "Redistributed Amount");<br> and |
|---|---|
| (b) | as<br> between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to<br> the relevant Redistributed Amount will be treated as not having been paid by that Obligor. |
| --- | --- |
| - 184 - |
| --- | | 32.5 | Exceptions | | --- | --- | | (a) | This<br> Clause 32 shall not apply to the extent that the Recovering Finance Party would not, after<br> making any payment pursuant to this Clause, have a valid and enforceable claim against the<br> relevant Obligor. | | --- | --- | | (b) | A<br> Recovering Finance Party is not obliged to share with any other Finance Party any amount<br> which the Recovering Finance Party has received or recovered as a result of taking legal<br> or arbitration proceedings, if: | | --- | --- | | (i) | it<br> notified that other Finance Party of the legal or arbitration proceedings; and | | --- | --- | | (ii) | that<br> other Finance Party had an opportunity to participate in those legal or arbitration proceedings<br> but did not do so as soon as reasonably practicable having received notice and did not take<br> separate legal or arbitration proceedings. | | --- | --- |
| - 185 - |
| --- |
SECTION 12
ADMINISTRATION
| 33. | PAYMENT MECHANICS |
|---|---|
| 33.1 | Payments to the Mezzanine Agent |
| --- | --- |
| (a) | On<br> each date on which an Obligor or a Lender is required to make a payment under a Finance Document<br> that Obligor or Lender shall make the same available to the Mezzanine Agent (unless a contrary<br> indication appears in a Finance Document) for value on the due date at the time and in such<br> funds specified by the Mezzanine Agent as being customary at the time for settlement of transactions<br> in the relevant currency in the place of payment. |
| --- | --- |
| (b) | Payment<br> shall be made to such account in the principal financial centre of the country of that currency(or,<br> in relation to euro, in a principal financial centre in such Participating Member State or<br> London, as specified by the Mezzanine Agent) and with such bank as the Mezzanine Agent, in<br> each case, specifies. |
| --- | --- |
| 33.2 | Distributions by the Mezzanine Agent |
| --- | --- |
Each payment received by the Mezzanine Agent under the Finance Documents for another Party shall, subject to Clause 33.3 (Distributionsto an Obligor), Clause 33.4 (Clawback and pre-funding) and Clause 29.18 (Deduction from amounts payable by the MezzanineAgent) be made available by the Mezzanine Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Mezzanine Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London, as specified by that Party).
| 33.3 | Distributions to an Obligor |
|---|
The Mezzanine Agent may (with the consent of the Obligor or in accordance with Clause 34 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
| 33.4 | Clawback and pre-funding |
|---|---|
| (a) | Where<br> a sum is to be paid to the Mezzanine Agent under the Finance Documents for another Party,<br> the Mezzanine Agent is not obliged to pay that sum to that other Party (or to enter into<br> or perform any related exchange contract) until it has been able to establish to its satisfaction<br> that it has actually received that sum. |
| --- | --- |
| (b) | Unless<br> paragraph (c) below applies, if the Mezzanine Agent pays an amount to another Party<br> and it proves to be the case that the Mezzanine Agent had not actually received that amount,<br> then the Party to whom that amount (or the proceeds of any related exchange contract) was<br> paid by the Mezzanine Agent shall on demand refund the same to the Mezzanine Agent together<br> with interest on that amount from the date of payment to the date of receipt by the Mezzanine<br> Agent, calculated by the Mezzanine Agent to reflect its cost of funds. |
| --- | --- |
| - 186 - |
| --- | | (c) | If<br> the Mezzanine Agent has notified the Lenders that it is willing to make available amounts<br> for the account of the Borrower before receiving funds from the Lenders then if and to the<br> extent that the Mezzanine Agent does so but it proves to be the case that it does not then<br> receive funds from a Lender in respect of a sum which it paid to the Borrower: | | --- | --- | | (i) | the<br> Mezzanine Agent shall notify the Borrower of that Lender's identity and the Borrower to whom<br> that sum was made available shall on demand refund it to the Mezzanine Agent; and | | --- | --- | | (ii) | the<br> Lender by whom those funds should have been made available or, if that Lender fails to do<br> so, the Borrower to whom that sum was made available, shall on demand pay to the Mezzanine<br> Agent the amount (as certified by the Mezzanine Agent) which will indemnify the Mezzanine<br> Agent against any funding cost incurred by it as a result of paying out that sum before receiving<br> those funds from that Lender. | | --- | --- | | 33.5 | Impaired Mezzanine Agent | | --- | --- | | (a) | If,<br> at any time, the Mezzanine Agent becomes an Impaired Mezzanine Agent, an Obligor or a Lender<br> which is required to make a payment under the Finance Documents to the Mezzanine Agent in<br> accordance with Clause 33.1 (Payments to the Mezzanine Agent) may instead either: | | --- | --- | | (i) | pay<br> that amount direct to the required recipient(s); or | | --- | --- | | (ii) | if<br> in its absolute discretion it considers that it is not reasonably practicable to pay that<br> amount direct to the required recipient(s), pay that amount or the relevant part of that<br> amount to an interest-bearing account held with an Acceptable Bank and in relation to which<br> no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender<br> making the payment (the "Paying Party") and designated as a trust account<br> for the benefit of the Party or Parties beneficially entitled to that payment under the Finance<br> Documents (the "Recipient Party" or "Recipient Parties"). | | --- | --- |
In each case such payments must be made on the due date for payment under the Finance Documents.
| (b) | All<br> interest accrued on the amount standing to the credit of the trust account shall be for the<br> benefit of the Recipient Party or the Recipient Parties pro rata to their respective<br> entitlements. |
|---|---|
| (c) | A<br> Party which has made a payment in accordance with this Clause 33.5 shall be discharged of<br> the relevant payment obligation under the Finance Documents and shall not take any credit<br> risk with respect to the amounts standing to the credit of the trust account. |
| --- | --- |
| - 187 - |
| --- | | (d) | Promptly<br> upon the appointment of a successor Mezzanine Agent in accordance with Clause 29.13 (Replacement of the Mezzanine Agent), each Paying Party shall (other than to the extent that that<br> Party has given an instruction pursuant to paragraph (e) below) give all requisite instructions<br> to the bank with whom the trust account is held to transfer the amount (together with any<br> accrued interest) to the successor Mezzanine Agent for distribution to the relevant Recipient<br> Party or Recipient Parties in accordance with Clause 33.2 (Distributions by the Mezzanine Agent). | | --- | --- | | (e) | A<br> Paying Party shall, promptly upon request by a Recipient Party and to the extent: | | --- | --- | | (i) | that<br> it has not given an instruction pursuant to paragraph (d) above; and | | --- | --- | | (ii) | that<br> it has been provided with the necessary information by that Recipient Party, | | --- | --- |
give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.
| 33.6 | Partial payments |
|---|---|
| (a) | If<br> the Mezzanine Agent receives a payment that is insufficient to discharge all the amounts<br> then due and payable by an Obligor under the Finance Documents, the Mezzanine Agent shall<br> apply that payment towards the obligations of that Obligor under the Finance Documents in<br> the following order: |
| --- | --- |
| (i) | first,<br> in or towards payment pro rata of any unpaid amount owing to the Mezzanine Agent,<br> the Security Agent (including any Receiver or Delegate) under the Finance Documents; |
| --- | --- |
| (ii) | secondly,<br> in or towards payment pro rata of any unpaid amount owing to the Arranger and accrued<br> interest, fee or commission due to any Finance Party but unpaid under this Agreement; |
| --- | --- |
| (iii) | thirdly,<br> in or towards payment pro rata of any principal due but unpaid under this agreement;<br> and |
| --- | --- |
| (iv) | fourthly,<br> in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. |
| --- | --- |
| (b) | The<br> Mezzanine Agent shall, if so directed by the Majority Lenders, vary the order set out in<br> paragraphs (a)(ii) to (a)(iv) above. |
| --- | --- |
| (c) | Paragraphs<br> (a) and (b) above will override any appropriation made by an Obligor. |
| --- | --- |
| - 188 - |
| --- | | 33.7 | No set-off by Obligors | | --- | --- | | (a) | All<br> payments to be made by an Obligor under the Finance Documents shall be calculated and be<br> made without (and free and clear of any deduction for) set-off or counterclaim. | | --- | --- | | 33.8 | Business Days | | --- | --- | | (a) | Any<br> payment under any Finance Document which is due to be made on a day that is not a Business<br> Day shall be made on the next Business Day in the same calendar month (if there is one) or<br> the preceding Business Day (if there is not). | | --- | --- | | (b) | During<br> any extension of the due date for payment of any principal or Unpaid Sum under this Agreement<br> interest is payable on the principal or Unpaid Sum at the rate payable on the original due<br> date. | | --- | --- | | 33.9 | Currency of account | | --- | --- | | (a) | Subject<br> to paragraphs (b) and (c) below, euro is the currency of account and payment for<br> any sum due from an Obligor under any Finance Document. | | --- | --- | | (b) | Each<br> payment in respect of costs, expenses or Taxes shall be made in the currency in which the<br> costs, expenses or Taxes are incurred. | | --- | --- | | (c) | Any<br> amount expressed to be payable in a currency other than euro shall be paid in that other<br> currency. | | --- | --- | | 33.10 | Change of currency | | --- | --- | | (a) | Unless<br> otherwise prohibited by law, if more than one currency or currency unit are at the same time<br> recognised by the central bank of any country as the lawful currency of that country, then: | | --- | --- | | (i) | any<br> reference in the Finance Documents to, and any obligations arising under the Finance Documents<br> in, the currency of that country shall be translated into, or paid in, the currency or currency<br> unit of that country designated by the Mezzanine Agent (after consultation with the Borrower);<br> and | | --- | --- | | (ii) | any<br> translation from one currency or currency unit to another shall be at the official rate of<br> exchange recognised by the central bank for the conversion of that currency or currency unit<br> into the other, rounded up or down by the Mezzanine Agent (acting reasonably). | | --- | --- | | (b) | If<br> a change in any currency of a country occurs, this Agreement will, to the extent the Mezzanine<br> Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary,<br> be amended to comply with any generally accepted conventions and market practice in the Relevant<br> Market and otherwise to reflect the change in currency. | | --- | --- |
| - 189 - |
| --- | | 33.11 | Disruption to payment systems etc. | | --- | --- |
If either the Mezzanine Agent determines (in its discretion) that a Disruption Event has occurred or the Mezzanine Agent is notified by the Borrower that a Disruption Event has occurred:
| (a) | the<br> Mezzanine Agent may, and shall if requested to do so by the Borrower, consult with the Borrower<br> with a view to agreeing with the Borrower such changes to the operation or administration<br> of the Facility as the Mezzanine Agent may deem necessary in the circumstances; |
|---|---|
| (b) | the<br> Mezzanine Agent shall not be obliged to consult with the Borrower in relation to any changes<br> mentioned in paragraph (a) above if, in its opinion, it is not practicable to do so<br> in the circumstances and, in any event, shall have no obligation to agree to such changes; |
| --- | --- |
| (c) | the<br> Mezzanine Agent may consult with the Finance Parties in relation to any changes mentioned<br> in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not<br> practicable to do so in the circumstances; |
| --- | --- |
| (d) | any<br> such changes agreed upon by the Mezzanine Agent and the Borrower shall (whether or not it<br> is finally determined that a Disruption Event has occurred) be binding upon the Parties as<br> an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding<br> the provisions of Clause 40 (Amendments and Waivers); |
| --- | --- |
| (e) | the<br> Mezzanine Agent shall not be liable for any damages, costs or losses to any person, any diminution<br> in value or any liability whatsoever (including, without limitation for negligence, gross<br> negligence or any other category of liability whatsoever but not including any claim based<br> on the fraud of the Mezzanine Agent) arising as a result of its taking, or failing to take,<br> any actions pursuant to or in connection with this Clause 33.11; and |
| --- | --- |
| (f) | the<br> Mezzanine Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph<br> (d) above. |
| --- | --- |
| 34. | SET-OFF |
| --- | --- |
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
| 35. | APPLICATION OF PROCEEDS |
|---|---|
| 35.1 | Order of Application |
| --- | --- |
All amounts from time to time received or recovered by the Security Agent in connection with the realisation or enforcement of all or any part of the Mezzanine Only Transaction Security shall be held by the Security Agent on trust to apply them at such times as the Security Agent sees fit, to the extent permitted by applicable law, in the following order of priority:
| (a) | in<br> discharging any sums owing to the Security Agent (in its capacity as trustee, any Receiver<br> or any Delegate; |
|---|
| - 190 - |
| --- | | (b) | in<br> payment to the Mezzanine Agent, on behalf of the Secured Parties, for application towards<br> the discharge of all sums due and payable by any Obligor under any of the Finance Documents<br> in accordance with Clause 33.6 (Partial Payments); | | --- | --- | | (c) | if<br> none of the Obligors is under any further actual or contingent liability under any Finance<br> Document, in payment to any person to whom the Security Agent is obliged to pay in priority<br> to any Obligor; and | | --- | --- | | (d) | the<br> balance, if any, in payment to the relevant Obligor. | | --- | --- | | 35.2 | Investment of Proceeds | | --- | --- |
Prior to the application of the proceeds of the Mezzanine Only Transaction Security in accordance with Clause 35.1 (Order of Application) the Security Agent may, at its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent or Mezzanine Agent with any financial institution (including itself) and for so long as the Security Agent thinks fit (the interest being credited to the relevant account) pending the application from time to time of those monies at the Security Agent's discretion in accordance with the provisions of this Clause 35.
| 35.3 | Currency Conversion |
|---|---|
| (a) | For<br> the purpose of or pending the discharge of any of the Secured Obligations the Security Agent<br> may convert any moneys received or recovered by the Security Agent from one currency to another,<br> at the spot rate at which the Security Agent is able to purchase the currency in which the<br> Secured Obligations are due with the amount received. |
| --- | --- |
| (b) | The<br> obligations of any Obligor to pay in the due currency shall only be satisfied to the extent<br> of the amount of the due currency purchased after deducting the costs of conversion. |
| --- | --- |
| 35.4 | Permitted Deductions |
| --- | --- |
The Security Agent shall be entitled (a) to set aside by way of reserve amounts required to meet and (b) to make and pay, any deductions and withholdings (on account of Tax or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement, and to pay all Tax which may be assessed against it in respect of any of the Mezzanine Only Charged Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (except in connection with its remuneration for performing its duties under this Agreement).
| - 191 - |
| --- | | 35.5 | Discharge of Secured Obligations | | --- | --- | | (a) | Any<br> payment to be made in respect of the Secured Obligations by the Security Agent may be made<br> to the Mezzanine Agent on behalf of the Lenders and that payment shall be a good discharge<br> to the extent of that payment, to the Security Agent. | | --- | --- | | (b) | The<br> Security Agent is under no obligation to make payment to the Mezzanine Agent in the same<br> currency as that in which any Unpaid Sum is denominated. | | --- | --- | | 35.6 | Sums received by Obligors | | --- | --- |
If any of the Obligors receives any sum which, pursuant to any of the Finance Documents, should have been paid to the Security Agent, that sum shall promptly be paid to the Security Agent for application in accordance with this Clause.
| 36. | NOTICES |
|---|---|
| 36.1 | Communications in writing |
| --- | --- |
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by letter or (if applicable) fax.
| 36.2 | Addresses |
|---|
The address and (if applicable) 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 or in connection with the Finance Documents is:
| (a) | in<br> the case of the Borrower, that identified with its name below; |
|---|---|
| (b) | in<br> the case of each Lender or any other Obligor, that notified in writing to the Mezzanine Agent<br> on or prior to the date on which it becomes a Party; and |
| --- | --- |
| (c) | in<br> the case of the Mezzanine Agent and Security Agent, that identified with its name below, |
| --- | --- |
or any substitute address or (if applicable) fax number or department or officer as the Party may notify to the Mezzanine Agent (or the Mezzanine Agent may notify to the other Parties, if a change is made by the Mezzanine Agent) by not less than five Business Days' notice.
| 36.3 | Delivery |
|---|---|
| (a) | Any<br> communication or document made or delivered by one person to another under or in connection<br> with the Finance Documents will only be effective: |
| --- | --- |
| (i) | if by<br> way of fax, when received in legible form; or |
| --- | --- |
| - 192 - |
| --- | | (ii) | if<br> by way of letter, when it has been left at the relevant address or five (5)Business Days<br> after being deposited in the post postage prepaid in an envelope addressed to it at that<br> address, | | --- | --- |
and, if a particular department or officer is specified as part of its address details provided under Clause 36.2 (Addresses), if addressed to that department or officer.
| (b) | Any<br> communication or document to be made or delivered to the Mezzanine Agent or to the Security<br> Agent will be effective only when actually received by the Mezzanine Agent or the Security<br> Agent and then only if it is expressly marked for the attention of the department or officer<br> identified with the Mezzanine Agent's or the Security Agent's signature below (or any substitute<br> department or officer as the Mezzanine Agent shall specify for this purpose). |
|---|---|
| (c) | All<br> notices from or to an Obligor shall be sent through the Mezzanine Agent. |
| --- | --- |
| (d) | Any<br> communication or document made or delivered to the Borrower in accordance with this Clause<br> will be deemed to have been made or delivered to each of the Obligors. |
| --- | --- |
| (e) | All<br> notices to a Lender from the Security Agent shall be sent through the Mezzanine Agent. |
| --- | --- |
| (f) | Any<br> communication or document which becomes effective, in accordance with paragraphs (a) to<br> (e) above, after 5:00 p.m. in the place of receipt shall be deemed only to become<br> effective on the following day. |
| --- | --- |
| 36.4 | Notification of address and fax number |
| --- | --- |
Promptly upon changing its address or fax number, the Mezzanine Agent shall notify the other Parties.
| 36.5 | Communication when Mezzanine Agent is Impaired Mezzanine Agent |
|---|
If the Mezzanine Agent is an Impaired Mezzanine Agent the Parties may, instead of communicating with each other through the Mezzanine Agent, communicate with each other directly and (while the Mezzanine Agent is an Impaired Mezzanine Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Mezzanine Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Mezzanine Agent has been appointed.
| - 193 - |
| --- | | 36.6 | Electronic communication | | --- | --- | | (a) | Any<br> communication or document to be made or delivered by one Party to another under or in connection<br> with the Finance Documents may be made by electronic mail or other electronic means (including,<br> without limitation, by way of posting to a secure website) if those two Parties: | | --- | --- | | (i) | notify<br> each other in writing of their electronic mail address and/or any other information required<br> to enable the transmission of information by that means; and | | --- | --- | | (ii) | notify<br> each other of any change to their address or any other such information supplied by them<br> by not less than five Business Days' notice. | | --- | --- | | (b) | Any<br> such electronic communication or delivery as specified in paragraph (a) above to be<br> made between an Obligor and a Finance Party may only be made in that way to the extent that<br> those two Parties agree that, unless and until notified to the contrary, this is to be an<br> accepted form of communication or delivery. | | --- | --- | | (c) | Any<br> such electronic communication or document as specified in paragraph (a) above made or<br> delivered by one Party to another will be effective only when actually received (or made<br> available) in readable form and in the case of any electronic communication or document made<br> or delivered by a Party to the Mezzanine Agent only if it is addressed in such a manner as<br> the Mezzanine Agent shall specify for this purpose. | | --- | --- | | (d) | Any<br> electronic communication or document which becomes effective, in accordance with paragraph<br> (c) above, after 5:00 p.m. in the place in which the Party to whom the relevant<br> communication or document is sent or made available has its address for the purpose of this<br> Agreement shall be deemed only to become effective on the following day. | | --- | --- | | (e) | Any<br> reference in a Finance Document to a communication being sent or received or a document being<br> delivered shall be construed to include that communication or document being made available<br> in accordance with this Clause 36.6. | | --- | --- | | 36.7 | English language | | --- | --- | | (a) | Any<br> notice given under or in connection with any Finance Document must be in English. | | --- | --- | | (b) | All<br> other documents provided under or in connection with any Finance Document must be: | | --- | --- | | (i) | in<br> English; or | | --- | --- | | (ii) | if<br> not in English, and if so required by the Mezzanine Agent, accompanied by a certified English<br> translation and, in this case, the English translation will prevail unless the document is<br> a constitutional, statutory or other official document. | | --- | --- |
| - 194 - |
| --- | | 37. | CALCULATIONS AND CERTIFICATES | | --- | --- | | 37.1 | Accounts | | --- | --- |
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are primafacie evidence of the matters to which they relate.
| 37.2 | Certificates and determinations |
|---|
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
| 37.3 | Day count convention |
|---|
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice.
| 38. | PARTIAL INVALIDITY |
|---|
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
| 39. | REMEDIES AND WAIVERS |
|---|
No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
| 40. | AMENDMENTS AND WAIVERS |
|---|---|
| 40.1 | Required consents |
| --- | --- |
| (a) | Subject<br> to Clause 40.2 (All Lender matters) and Clause 40.3 (Other exceptions) and<br> Clause 30.23 (Releases) and the Intercreditor and Subordination Deed, any term of<br> the Finance Documents may be amended or waived only with the consent of the Majority Lenders<br> and the Obligors and any such amendment or waiver will be binding on all Parties. |
| --- | --- |
| - 195 - |
| --- | | (b) | The<br> Mezzanine Agent, or in respect of the Mezzanine Only Security Documents the Security Agent,<br> may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause<br> 40. | | --- | --- | | (c) | Paragraph<br> (c) of Clause 26.10 (Pro rata interest settlement) shall apply to this Clause<br> 40. | | --- | --- | | 40.2 | All Lender matters | | --- | --- |
Subject to the Intercreditor and Subordination Deed, an amendment or waiver of any term of any Finance Document that has the effect of changing or which relates to:
| (a) | the<br> definitions of "Termination Date", "Majority Lenders", "Sanction<br> Provisions", "Sanctioned Territory", "Sanctions", "Sanctions<br> Authority", "Sanctions Mandatory Prepayment Event", "AIF", "AIFM",<br> "AIFMD", "AIFMD Law" and "Anti-Bribery and Corruption Laws"<br> in Clause 1.1 (Definitions); |
|---|---|
| (b) | an<br> extension to the date of payment of any amount under the Finance Documents; |
| --- | --- |
| (c) | a<br> reduction in the Margin or a reduction in the amount of any payment of principal, interest,<br> fees or commission payable; |
| --- | --- |
| (d) | a<br> change in currency of payment of any amount under the Finance Documents; |
| --- | --- |
| (e) | an<br> increase in any Commitment, an extension of the Availability Period or any requirement that<br> a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility; |
| --- | --- |
| (f) | a<br> change to the Borrower or Guarantors (other than in accordance Clause 28 (Changes to the Obligors)); |
| --- | --- |
| (g) | any<br> provision which expressly requires the consent of all the Lenders; |
| --- | --- |
| (h) | Clause<br> 2.4 (Finance Parties' rights and obligations), Clause 5.1 (Delivery of a Utilisation Request), Clause 7.1 (Illegality), Clause 7.2 (Change of control), Clause<br> 7.4 (Mandatory prepayment - Sanctions), Clause 7.11 (Application of prepayments),<br> Clause 21.24 (Anti-Bribery and Anti-Corruption), Clause 21.25 (Sanctions),<br> Clause 21.26 (Non-AIF status), Clause 21.43 (Dealings with SRCs and SDNs),<br> Clause 24.7 (Anti-Bribery and Anti-Corruption), Clause 24.8 (Sanctions), Clause<br> 24.9 (Use of proceeds), Clause 24.10 (Non-AIF status), Clause 25.19 (Sanctions),<br> Clause 25.20 (Non-AIF status), Clause 26 (Changes to the Lenders), Clause 27<br> (Changes to the Obligors),Clause 32 (Sharing among the Finance Parties), this<br> Clause 40, Clause 45 (Governing law); or Clause 46 (Jurisdiction); |
| --- | --- |
| (i) | the<br> nature or scope of the guarantee and indemnity granted under Clause 20 (Guarantee and indemnity); or |
| --- | --- |
| (j) | the<br> nature or scope of the Charged Property or the manner in which the proceeds of enforcement<br> of the Transaction Security are distributed, shall not be made without the prior consent<br> of all the Lenders. |
| --- | --- |
| - 196 - |
| --- | | 40.3 | Other exceptions | | --- | --- |
Subject to the Intercreditor and Subordination Deed an amendment or waiver which relates to the rights or obligations of the Mezzanine Agent, the Security Agent, the Arranger or a Reference Bank (each in their capacity as such) may not be effected without the consent of the Mezzanine Agent, the Security Agent, the Arranger or that Reference Bank, as the case may be.
| 40.4 | Replacement of Screen Rate |
|---|---|
| (a) | Subject<br> to Clause 40.3 (Other exceptions), if a Screen Rate Replacement Event has occurred<br> in relation to any Screen Rate for a currency which can be selected for a Loan, any amendment<br> or waiver which relates to: |
| --- | --- |
| (i) | providing<br> for the use of a Replacement Benchmark in relation to that currency in place of that Screen<br> Rate; and |
| --- | --- |
| (ii) | |
| --- | |
| (A) | aligning<br> any provision of any Finance Document to the use of that Replacement Benchmark; |
| --- | --- |
| (B) | enabling<br> that Replacement Benchmark to be used for the calculation of interest under this Agreement<br> (including, without limitation, any consequential changes required to enable that Replacement<br> Benchmark to be used for the purposes of this Agreement); |
| --- | --- |
| (C) | implementing<br> market conventions applicable to that Replacement Benchmark; |
| --- | --- |
| (D) | providing<br> for appropriate fallback (and market disruption) provisions for that Replacement Benchmark;<br> or |
| --- | --- |
| (E) | adjusting<br> the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of<br> economic value from one Party to another as a result of the application of that Replacement<br> Benchmark (and if any adjustment or method for calculating any adjustment has been formally<br> designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall<br> be determined on the basis of that designation, nomination or recommendation), |
| --- | --- |
may be made with the consent of the Mezzanine Agent (acting on the instructions of the Majority Lenders) and the Obligors.
| (b) | In<br> this Clause 40.4: |
|---|
"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.
| - 197 - |
| --- |
"Replacement Benchmark" means a benchmark rate which is:
| (a) | formally<br> designated, nominated or recommended as the replacement for a Screen Rate by: |
|---|---|
| (i) | the<br> administrator of that Screen Rate (provided that the market or economic reality that<br> such benchmark rate measures is the same as that measured by that Screen Rate); or |
| --- | --- |
| (ii) | any<br> Relevant Nominating Body, |
| --- | --- |
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Benchmark" will be the replacement under paragraph (ii) above;
| (b) | in<br> the opinion of the Majority Lenders and the Obligors, generally accepted in the international<br> or any relevant domestic syndicated loan markets as the appropriate successor to a Screen<br> Rate; or |
|---|---|
| (c) | in<br> the opinion of the Majority Lenders and the Obligors, an appropriate successor to a Screen<br> Rate. |
| --- | --- |
"Screen Rate Replacement Event" means, in relation to a Screen Rate:
| (a) | the<br> methodology, formula or other means of determining that Screen Rate has, in the opinion of<br> the Majority Lenders, and the Obligors materially changed; |
|---|---|
| (b) | |
| --- | |
| (i) | |
| --- | |
| (A) | the<br> administrator of that Screen Rate or its supervisor publicly announces that such administrator<br> is insolvent; or |
| --- | --- |
| (B) | information<br> is published in any order, decree, notice, petition or filing, however described, of or filed<br> with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory<br> or judicial body which reasonably confirms that the administrator of that Screen Rate is<br> insolvent, |
| --- | --- |
providedthat, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;
| (ii) | the<br> administrator of that Screen Rate publicly announces that it has ceased or will cease, to<br> provide that Screen Rate permanently or indefinitely and, at that time, there is no successor<br> administrator to continue to provide that Screen Rate; |
|---|
| - 198 - |
| --- | | (iii) | the<br> supervisor of the administrator of that Screen Rate publicly announces that that Screen Rate<br> has been or will be permanently or indefinitely discontinued; or | | --- | --- | | (iv) | the<br> administrator of that Screen Rate or its supervisor announces that that Screen Rate may no<br> longer be used; or | | --- | --- | | (c) | the<br> administrator of that Screen Rate determines that that Screen Rate should be calculated in<br> accordance with its reduced submissions or other contingency or fallback policies or arrangements<br> and either: | | --- | --- | | (i) | the<br> circumstance(s) or event(s) leading to such determination are not (in the opinion<br> of the Majority Lenders and the Obligors) temporary; or | | --- | --- | | (ii) | that<br> Screen Rate is calculated in accordance with any such policy or arrangement for a period<br> no less than three (3) months; or | | --- | --- | | (d) | in<br> the opinion of the Majority Lenders and the Obligors, that Screen Rate is otherwise no longer<br> appropriate for the purposes of calculating interest under this Agreement. | | --- | --- | | 40.5 | Disenfranchisement of Defaulting Lenders | | --- | --- | | (a) | For<br> so long as a Defaulting Lender has any Available Commitment, in ascertaining: | | --- | --- | | (i) | the<br> Majority Lenders; or | | --- | --- | | (ii) | whether: | | --- | --- | | (A) | any<br> given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments<br> under the Facility; or | | --- | --- | | (B) | the<br> agreement of any specified group of Lenders, | | --- | --- |
has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents,
that Defaulting Lender's Commitment under the Facility will be reduced by the amount of its Available Commitment under the Facility and to the extent that that reduction results in that Defaulting Lender's Commitment being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of paragraphs (i) and (ii) above.
| (b) | For<br> the purposes of this Clause 40.5, the Mezzanine Agent may assume that the following Lenders<br> are Defaulting Lenders: |
|---|---|
| (i) | any<br> Lender which has notified the Mezzanine Agent that it has become a Defaulting Lender; |
| --- | --- |
| - 199 - |
| --- | | (ii) | any<br> Lender in relation to which it is aware that any of the events or circumstances referred<br> to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender"<br> has occurred, | | --- | --- |
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Mezzanine Agent) or the Mezzanine Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
| 40.6 | Excluded Commitments |
|---|
If any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within fifteen (15) Business Days (unless the Borrower and the Mezzanine Agent agree to a longer time period in relation to any request) of that request being made:
| (a) | its<br> Commitment shall not be included for the purpose of calculating the Total Commitments under<br> the Facility when ascertaining whether any relevant percentage (including, for the avoidance<br> of doubt, unanimity) of Total Commitments has been obtained to approve that request; and |
|---|---|
| (b) | its<br> status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement<br> of any specified group of Lenders has been obtained to approve that request. |
| --- | --- |
| 40.7 | Replacement of a Defaulting Lender |
| --- | --- |
| (a) | The<br> Borrower may, at any time a Lender has become and continues to be a Defaulting Lender, by<br> giving fifteen (15) Business Days' prior written notice to the Mezzanine Agent and such Lender: |
| --- | --- |
| (i) | replace<br> such Lender by requiring such Lender to (and to the extent permitted by law, such Lender<br> shall) transfer pursuant to Clause 26 (Changes to the Lenders) all (and not part only)<br> of its rights and obligations under this Agreement; or |
| --- | --- |
| (ii) | require<br> such Lender to (and to the extent permitted by law, such Lender shall) transfer pursuant<br> to Clause 26 (Changes to the Lenders) all (and not part only) of the undrawn Commitment<br> of the Lender, |
| --- | --- |
to an Eligible Institution (a "Replacement Lender") which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender in accordance with Clause 26 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer which is either:
| (A) | in<br> an amount equal to the outstanding principal amount of such Lender's participation in the<br> outstanding Loans and all accrued interest (to the extent that the Mezzanine Agent has not<br> given a notification under Clause 26.10 (Pro rata interest settlement)), Break Costs<br> and other amounts payable in relation thereto under the Finance Documents; or |
|---|
| - 200 - |
| --- | | (B) | in<br> an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrower<br> and which does not exceed the amount described in paragraph (A) above. | | --- | --- | | (b) | Any<br> transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be<br> subject to the following conditions: | | --- | --- | | (i) | the<br> Borrower shall have no right to replace the Mezzanine Agent; | | --- | --- | | (ii) | neither<br> the Mezzanine Agent nor the Defaulting Lender shall have any obligation to the Borrower to<br> find a Replacement Lender; | | --- | --- | | (iii) | the<br> transfer must take place no later than five (5) after the notice referred to in paragraph<br> (a) above; | | --- | --- | | (iv) | in<br> no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender<br> any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and | | --- | --- | | (v) | the<br> Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to<br> paragraph (a) above once it is satisfied that it has complied with all necessary "know<br> your customer" or other similar checks under all applicable laws and regulations in<br> relation to that transfer to the Replacement Lender. | | --- | --- | | (c) | The<br> Defaulting Lender shall perform the checks described in paragraph (b)(v) above as soon<br> as reasonably practicable following delivery of a notice referred to in paragraph (a) above<br> and shall notify the Mezzanine Agent and the Borrower when it is satisfied that it has complied<br> with those checks. | | --- | --- | | 40.8 | Sanction Provisions | | --- | --- |
In relation to the Original Lender and each other Lender that notifies the Mezzanine Agent to this effect (each a "Restricted Lender"), the Sanction Provisions shall only apply for the benefit of that Restricted Lender to the extent that the Sanction Provisions would not result in any violation of, conflict with or liability under any Blocking Regulation or a similar anti-boycott statute. In connection with any amendment, waiver, determination or direction relating to any part of the Sanction Provisions of which a Restricted Lender does not have the benefit, the Commitments of that Restricted Lender will be excluded for the purpose of determining whether the consent of the Majority Lenders has been obtained or whether the determination or direction by the Majority Lenders has been made.
| 41. | CONFIDENTIAL INFORMATION |
|---|---|
| 41.1 | Confidentiality |
| --- | --- |
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 41.2 (Disclosure of Confidential Information) and Clause 41.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
| - 201 - |
| --- | | 41.2 | Disclosure of Confidential Information | | --- | --- |
Any Finance Party may disclose:
| (a) | to<br> any of its Affiliates and Related Funds and any of its or their officers, directors, employees,<br> professional advisers, auditors, partners and Representatives such Confidential Information<br> as that Finance Party shall consider appropriate if any person to whom the Confidential Information<br> is to be given pursuant to this paragraph (a) is informed in writing of its confidential<br> nature and that some or all of such Confidential Information may be price- sensitive information<br> except that there shall be no such requirement to so inform if the recipient is subject to<br> professional obligations to maintain the confidentiality of the information or is otherwise<br> bound by requirements of confidentiality in relation to the Confidential Information; |
|---|---|
| (b) | to<br> any person: |
| --- | --- |
| (i) | to<br> (or through) whom it assigns or transfers (or may potentially assign or transfer) all or<br> any of its rights and/or obligations under one or more Finance Documents or which succeeds<br> (or which may potentially succeed) it as Mezzanine Agent and, in each case, to any of that<br> person's Affiliates, Related Funds, Representatives and professional advisers; |
| --- | --- |
| (ii) | with<br> (or through) whom it enters into (or may potentially enter into), whether directly or indirectly,<br> any sub-participation in relation to, or any other transaction under which payments are to<br> be made or may be made by reference to, one or more Finance Documents and/or one or more<br> Obligors and to any of that person's Affiliates, Related Funds, Representatives and professional<br> advisers; |
| --- | --- |
| (iii) | appointed<br> by any Finance Party or by a person to whom paragraph (b)(i) or (ii) above applies<br> to receive communications, notices, information or documents delivered pursuant to the Finance<br> Documents on its behalf (including, without limitation, any person appointed under paragraph<br> (b) of Clause 29.15 (Relationship with the Lenders)); |
| --- | --- |
| (iv) | who<br> invests in or otherwise finances (or may potentially invest in or otherwise finance), directly<br> or indirectly, any transaction referred to in paragraph (b)(i) or (b)(ii) above; |
| --- | --- |
| (v) | to<br> whom information is required or requested to be disclosed by any court of competent jurisdiction<br> or any governmental, banking, taxation or other regulatory authority or similar body, the<br> rules of any relevant stock exchange or pursuant to any applicable law or regulation; |
| --- | --- |
| - 202 - |
| --- | | (vi) | to<br> whom information is required to be disclosed in connection with, and for the purposes of,<br> any litigation, arbitration, administrative or other investigations, proceedings or disputes; | | --- | --- | | (vii) | to<br> whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security<br> (or may do so) pursuant to Clause 26.9 (Security over Lenders' rights); | | --- | --- | | (viii) | who<br> is a Party; or | | --- | --- | | (ix) | with<br> the consent of the Borrower; | | --- | --- |
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
| (A) | in<br> relation to paragraphs (b)(i), (b)(ii) and (b)(iii) above, the person to whom the<br> Confidential Information is to be given has entered into a Confidentiality Undertaking except<br> that there shall be no requirement for a Confidentiality Undertaking if the recipient is<br> a professional adviser and is subject to professional obligations to maintain the confidentiality<br> of the Confidential Information; |
|---|---|
| (B) | in<br> relation to paragraph (b)(iv) above, the person to whom the Confidential Information<br> is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements<br> of confidentiality in relation to the Confidential Information they receive and is informed<br> that some or all of such Confidential Information may be price-sensitive information; |
| --- | --- |
| (C) | in<br> relation to paragraphs (b)(v), (b)(vi) and (b)(vii) above, the person to whom the<br> Confidential Information is to be given is informed of its confidential nature and that some<br> or all of such Confidential Information may be price-sensitive information except that there<br> shall be no requirement to so inform if, in the opinion of that Finance Party, it is not<br> practicable so to do in the circumstances; and |
| --- | --- |
| (c) | to<br> any person appointed by that Finance Party or by a person to whom paragraph (b)(i) or<br> (b)(ii) above applies to provide administration or settlement services in respect of<br> one or more of the Finance Documents including without limitation, in relation to the trading<br> of participations in respect of the Finance Documents, such Confidential Information as may<br> be required to be disclosed to enable such service provider to provide any of the services<br> referred to in this paragraph (c) if the service provider to whom the Confidential Information<br> is to be given has entered into a confidentiality agreement substantially in the form of<br> the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service<br> Providers or such other form of confidentiality undertaking agreed between the Borrower and<br> the relevant Finance Party; and |
| --- | --- |
| (d) | to<br> any insurer or reinsurer; |
| --- | --- |
| - 203 - |
| --- | | (e) | to<br> consultants or service providers (including second party opinion provider, if applicable)<br> for the purpose of assessing the sustainability features of the transaction under this Agreement,<br> including, where applicable, the alignment of this Agreement with the current industry market<br> standards for green, social, and sustainability-linked loans issued by the Loan Market Association,<br> or, as the case may be, other international sustainability standards or benchmarks such as<br> the UN Social Development Goals; and | | --- | --- | | (f) | to<br> any rating agency (including its professional advisers) such Confidential Information as<br> may be required to be disclosed to enable such rating agency to carry out its normal rating<br> activities in relation to the Finance Documents and/or the Obligors if the rating agency<br> to whom the Confidential Information is to be given is informed of its confidential nature<br> and that some or all of such Confidential Information may be price-sensitive information. | | --- | --- |
Nothing in any Finance Document shall prevent disclosure of any Confidential Information or other matter to the extent that preventing that disclosure would otherwise cause any transaction contemplated by the Finance Documents or any transaction carried out in connection with any transaction contemplated by the Finance Documents to become an arrangement described in Part II A 1 of Annex IV of Directive 2011/16/EU.
| 41.3 | Disclosure to numbering service providers |
|---|---|
| (a) | Any<br> Finance Party may disclose to any national or international numbering service provider appointed<br> by that Finance Party to provide identification numbering services in respect of this Agreement,<br> the Facility and/or one or more Obligors the following information: |
| --- | --- |
| (i) | names<br> of Obligors; |
| --- | --- |
| (ii) | country<br> of domicile of Obligors; |
| --- | --- |
| (iii) | place<br> of incorporation of Obligors; |
| --- | --- |
| (iv) | date<br> of this Agreement; |
| --- | --- |
| (v) | Clause<br> 45 (Governing law); |
| --- | --- |
| (vi) | the<br> names of the Mezzanine Agent and the Arranger; |
| --- | --- |
| (vii) | date<br> of each amendment and restatement of this Agreement; |
| --- | --- |
| (viii) | amounts<br> of, and names of, the Facility (and any tranches); |
| --- | --- |
| (ix) | amount<br> of Total Commitments; |
| --- | --- |
| (x) | currencies<br> of the Facility; |
| --- | --- |
| (xi) | type<br> of Facility; |
| --- | --- |
| (xii) | ranking<br> of Facility; |
| --- | --- |
| - 204 - |
| --- | | (xiii) | Termination<br> Date for the Facility; | | --- | --- | | (xiv) | changes<br> to any of the information previously supplied pursuant to paragraphs (i) to (xiii) above;<br> and | | --- | --- | | (xv) | such<br> other information agreed between such Finance Party and the Borrower, | | --- | --- |
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
| (b) | The<br> Parties acknowledge and agree that each identification number assigned to this Agreement,<br> the Facility and/or one or more Obligors by a numbering service provider and the information<br> associated with each such number may be disclosed to users of its services in accordance<br> with the standard terms and conditions of that numbering service provider. |
|---|---|
| (c) | Each<br> Obligor represents that none of the information set out in paragraphs (i) to |
| --- | --- |
(xv) of paragraph (a) above is, nor will at any time be, unpublished price- sensitive information.
| (d) | The<br> Mezzanine Agent shall notify the Borrower and the other Finance Parties of: |
|---|---|
| (i) | the<br> name of any numbering service provider appointed by the Mezzanine Agent in respect of this<br> Agreement, the Facility and/or one or more Obligors; and |
| --- | --- |
| (ii) | the<br> number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one<br> or more Obligors by such numbering service provider. |
| --- | --- |
| 41.4 | Entire agreement |
| --- | --- |
This Clause 41 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
| 41.5 | Inside information |
|---|
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
| - 205 - |
| --- | | 41.6 | Notification of disclosure | | --- | --- |
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
| (a) | of<br> the circumstances of any disclosure of Confidential Information made pursuant to paragraph<br> (b)(v) of Clause 41.2 (Disclosure of Confidential Information) except where such<br> disclosure is made to any of the persons referred to in that paragraph during the ordinary<br> course of its supervisory or regulatory function; and |
|---|---|
| (b) | upon<br> becoming aware that Confidential Information has been disclosed in breach of this Clause<br> 41. |
| --- | --- |
| 41.7 | Fee Letters |
| --- | --- |
Notwithstanding anything to the contrary in this Agreement or in any other Finance Document to which any Party is a party, no Party, other than Deutsche Bank AG, London Branch (at its absolute discretion) shall disclose any Fee Letter (including the contents thereof) to any other person unless otherwise required by law.
| 41.8 | Continuing obligations |
|---|
The obligations in this Clause 41 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve (12) months from the earlier of:
| (a) | the<br> date on which all amounts payable by the Obligors under or in connection with this Agreement<br> have been paid in full and all Commitments have been cancelled or otherwise cease to be available;<br> and |
|---|---|
| (b) | the<br> date on which such Finance Party otherwise ceases to be a Finance Party. |
| --- | --- |
| 42. | CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS |
| --- | --- |
| 42.1 | Confidentiality and disclosure |
| --- | --- |
| (a) | The<br> Mezzanine Agent and each Obligor agree to keep each Funding Rate (and, in the case of the<br> Mezzanine Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone,<br> save to the extent permitted by paragraphs (b), (c) and (d) below. |
| --- | --- |
| (b) | The<br> Mezzanine Agent may disclose: |
| --- | --- |
| (i) | any<br> Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the relevant<br> Borrower pursuant to Clause 8.5 (Notification of rates of interest); and |
| --- | --- |
| (ii) | any<br> Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration<br> services in respect of one or more of the Finance Documents to the extent necessary to enable<br> such service provider to provide those services if the service provider to whom that information<br> is to be given has entered into a confidentiality agreement substantially in the form of<br> the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service<br> Providers or such other form of confidentiality undertaking agreed between the Mezzanine<br> Agent and the relevant Lender or Reference Bank, as the case may be. |
| --- | --- |
| - 206 - |
| --- | | (c) | The<br> Mezzanine Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor<br> may disclose any Funding Rate, to: | | --- | --- | | (i) | any<br> of its Affiliates and any of its or their officers, directors, employees, professional advisers,<br> auditors, partners and Representatives if any person to whom that Funding Rate or Reference<br> Bank Quotation is to be given pursuant to this paragraph (i) is informed in writing<br> of its confidential nature and that it may be price-sensitive information except that there<br> shall be no such requirement to so inform if the recipient is subject to professional obligations<br> to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise<br> bound by requirements of confidentiality in relation to it; | | --- | --- | | (ii) | any<br> person to whom information is required or requested to be disclosed by any court of competent<br> jurisdiction or any governmental, banking, taxation or other regulatory authority or similar<br> body, the rules of any relevant stock exchange or pursuant to any applicable law or<br> regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given<br> is informed in writing of its confidential nature and that it may be price-sensitive information<br> except that there shall be no requirement to so inform if, in the opinion of the Mezzanine<br> Agent or relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; | | --- | --- | | (iii) | any<br> person to whom information is required to be disclosed in connection with, and for the purposes<br> of, any litigation, arbitration, administrative or other investigations, proceedings or disputes<br> if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed<br> in writing of its confidential nature and that it may be price-sensitive information except<br> that there shall be no requirement to so inform if, in the opinion of the Mezzanine Agent<br> or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;<br> and | | --- | --- | | (iv) | any<br> person with the consent of the relevant Lender or Reference Bank, as the case may be. | | --- | --- | | (d) | The<br> Mezzanine Agent's obligations in this Clause 42 relating to Reference Bank Quotations are<br> without prejudice to its obligations to make notifications under Clause 8.5 (Notification of rates of interest) provided that (other than pursuant to paragraph (b)(i) above)<br> the Mezzanine Agent shall not include the details of any individual Reference Bank Quotation<br> as part of any such notification. | | --- | --- |
| - 207 - |
| --- | | 42.2 | Related obligations | | --- | --- | | (a) | The<br> Mezzanine Agent and each Obligor acknowledge that each Funding Rate (and, in the case of<br> the Mezzanine Agent, each Reference Bank Quotation) is or may be price-sensitive information<br> and that its use may be regulated or prohibited by applicable legislation including securities<br> law relating to insider dealing and market abuse and the Mezzanine Agent and each Obligor<br> undertake not to use any Funding Rate or, in the case of the Mezzanine Agent, any Reference<br> Bank Quotation for any unlawful purpose. | | --- | --- | | (b) | The<br> Mezzanine Agent and each Obligor agree (to the extent permitted by law and regulation) to<br> inform the relevant Lender or Reference Bank, as the case may be: | | --- | --- | | (i) | of<br> the circumstances of any disclosure made pursuant to paragraph (b)(v) of Clause 42.1<br> (Confidentiality and disclosure) except where such disclosure is made to any of the<br> persons referred to in that paragraph during the ordinary course of its supervisory or regulatory<br> function; and | | --- | --- | | (ii) | upon<br> becoming aware that any information has been disclosed in breach of this Clause 42. | | --- | --- | | 42.3 | No Event of Default | | --- | --- |
No Event of Default will occur under Clause 25.3 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 42.
| 42.4 | Tax Disclosure |
|---|
Notwithstanding any of the provisions of the Finance Documents, the Obligors and the Finance Parties hereby agree that each Party and each employee, representative or other agent of each Party may disclose to any and all persons, without limitation of any kind, the "tax structure" and "taxtreatment" (in each case within the meaning of the U.S. Treasury Regulation Section 1.6011-4) of the Facility and any materials of any kind (including opinions or other tax analyses) that are provided to any of the foregoing relating to such tax structure and tax treatment.
| 43. | BAIL-IN |
|---|---|
| 43.1 | Contractual recognition of bail-in |
| --- | --- |
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
| - 208 - |
| --- | | (a) | any<br> Bail-In Action in relation to any such liability, including (without limitation): | | --- | --- | | (i) | a<br> reduction, in full or in part, in the principal amount, or outstanding amount due (including<br> any accrued but unpaid interest) in respect of any such liability; | | --- | --- | | (ii) | a<br> conversion of all, or part of, any such liability into shares or other instruments of ownership<br> that may be issued to, or conferred on, it; and | | --- | --- | | (iii) | a<br> cancellation of any such liability; and | | --- | --- | | (b) | a<br> variation of any term of any Finance Document to the extent necessary to give effect to any<br> Bail-In Action in relation to any such liability. | | --- | --- | | 43.2 | Bail-In definitions | | --- | --- |
In this Clause 43:
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
"Bail-In Action" means the exercise of any Write-down and Conversion Powers. "Bail-In Legislation" means:
in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time;
in relation to the United Kingdom, the UK Bail-In Legislation; and
in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time.
"Resolution Authority" means any body which has authority to exercise any Write- down and Conversion Powers.
"UK Bail-In Legislation" means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
| - 209 - |
| --- |
"Write-down and ConversionPowers" means:
in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
in relation to the UK Bail-In Legislation, any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
in relation to any other applicable Bail-In Legislation:
any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
any similar or analogous powers under that Bail-In Legislation.
| 44. | COUNTERPARTS |
|---|
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
| - 210 - |
| --- |
SECTION 13
GOVERNING LAW AND ENFORCEMENT
| 45. | GOVERNING LAW |
|---|
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
| 46. | JURISDICTION |
|---|---|
| 46.1 | English courts |
| --- | --- |
| (a) | The<br> courts of England have exclusive jurisdiction to settle any dispute arising out of or in<br> connection with this Agreement (including a dispute relating to non- contractual obligations<br> arising from or in connection with this Agreement, or a dispute regarding the existence,<br> validity or termination of this Agreement or the consequences of its nullity) (a "Dispute"). |
| --- | --- |
| (b) | Each<br> Obligor agrees that the courts of England are the most appropriate and convenient courts<br> to settle Disputes and accordingly no Obligor shall argue to the contrary. |
| --- | --- |
| 46.2 | Service of process |
| --- | --- |
Each Obligor agrees that the documents which start any proceedings in relation to any Finance Document, and any other documents required to be served in connection with those proceedings, may be served on it by being delivered to Law Debenture Corporate Services Limited at 8th Floor, 100 Bishopsgate, London EC2N 4AG, or to such other address in England and Wales as each such Obligor may specify by notice in writing to the Mezzanine Agent. Nothing in this paragraph shall affect the right of any Finance Party to serve process in any other manner permitted by law. This Clause applies to proceedings in England and proceedings elsewhere.
| 46.3 | Resolution Procedure |
|---|
If any matter is referred to the Resolution Procedure under the Finance Documents, the following procedure shall apply to resolve the matter, and such procedure shall not constitute a Dispute for so long as it is continuing in accordance with this Clause:
| (a) | the<br> Borrower and the Mezzanine Agent shall discuss the challenged matter in good faith for a<br> period not exceeding ten (10) Business Days with a view to agreeing the challenged matter.<br> If at the end of that period (or such longer period as the Borrower and the Mezzanine Agent<br> may agree) the Borrower and the Mezzanine Agent have: |
|---|---|
| (i) | agreed<br> the challenged matter, the Mezzanine Agent shall notify the Borrower of such agreement and<br> such notification shall (absent manifest error) be final and conclusive with respect to the<br> challenged matter; or |
| --- | --- |
| (ii) | not<br> agreed the challenged matter, the challenged matter shall be referred to a person appointed<br> in accordance with paragraph (b) below (an "Expert") for determination<br> in accordance with the remainder of this Clause. |
| --- | --- |
| - 211 - |
| --- | | (b) | The<br> Expert shall be: | | --- | --- | | (i) | a<br> person having appropriate expertise with respect to, but no interest in the outcome of, the<br> challenged matter referred to it and shall be appointed by the Mezzanine Agent with the consent<br> of the Borrower (such consent not to be unreasonably withheld or delayed). If the Borrower<br> and the Mezzanine Agent are unable to agree on the identity of the Expert within five (5) Business<br> Days, either of them may request the President for the time being of the International Centre<br> for Expertise (the International Chamber of Commerce) or an equivalent independent and internationally<br> recognised body to appoint an Expert, provided that such person has, prior to the date of<br> such appointment, confirmed in writing to the Borrower and the Mezzanine Agent that it has<br> no conflict in acting as an Expert, has no interest in the outcome of the challenged matter<br> and will remain neutral and impartial at all times when considering such referral; and | | --- | --- | | (ii) | given<br> terms of reference determined by the Mezzanine Agent (acting in consultation with the Borrower)<br> stating the reason for which the relevant referral is being made to him. The Borrower and<br> the Mezzanine Agent may each provide such Expert with whatever supporting evidence they think<br> appropriate and shall provide such Expert with such supporting evidence as is requested by<br> such Expert. | | --- | --- | | (c) | An<br> Expert shall: | | --- | --- | | (i) | not<br> be bound to choose either the proposal made by the Borrower or that made by the Mezzanine<br> Agent but shall be free to make his own reasonable determination of the point referred to<br> it; | | --- | --- | | (ii) | act<br> as an expert in determining the matter referred to it and not as an arbitrator; and | | --- | --- | | (iii) | give<br> its decision as soon as practicable and, in any event, no later than fifteen (15) Business<br> Days after the date of receipt of the terms of reference from the Mezzanine Agent. | | --- | --- | | (d) | At<br> all times during a dispute but prior to the decision of an Expert pursuant to this Clause<br> 46.3, the Assumptions, calculations or other determinations made by the Mezzanine Agent shall<br> prevail for the purposes of any calculations to be made under the Finance Documents, provided<br> that any Default that is continuing solely due to a calculation based on the Assumptions<br> that are the subject of a challenge under this Clause (and which would not have occurred<br> or be continuing if the relevant calculation had been based on the Assumptions determined<br> by the Borrower) shall be deemed not to be continuing until such time as the dispute relating<br> to the Assumptions is resolved in accordance with this Clause. The Expert's decision (when<br> received) shall apply retrospectively to the relevant date to the extent that such decision<br> was not available on that date. | | --- | --- |
| - 212 - |
| --- | | (e) | An<br> Expert's determination shall (absent manifest error) be final and binding on all the Parties<br> in respect of the subject matter referred to it. | | --- | --- | | (f) | Once<br> an Expert has reached a decision on the challenged matters, the Borrower shall update any<br> documents or information previously delivered by it to the Mezzanine Agent to reflect the<br> outcome of that determination. | | --- | --- | | (g) | The<br> costs of any reference to an Expert will be borne by the Borrower, subject to the terms of<br> reference agreed pursuant to this Clause. | | --- | --- |
This Agreement has been entered into on thedate stated at the beginning of this Agreement.
| - 213 - |
| --- |
SIGNATURES
THE BORROWER
For and on behalf of
AEG MH 03 LIMITED
| By: | /s/ Vincent Browne |
|---|---|
| Name: Vincent Browne | |
| Title: CEO |
Address: Suite 9/10, Blanchardstown Corporate Park Dublin 15
Fax:
Attention: Vincent Browne
THE ORIGINAL GUARANTOR
For and on behalf of
AEG MH 01 LIMITED
| By: | /s/ Vincent Browne |
|---|---|
| Name: Vincent Browne | |
| Title: CEO |
Address: Suite 9/10, Blanchardstown Corporate Park Dublin 15
Fax:
Attention: Vincent Browne
- DABOG –
Signature Page to the Mezzanine Facility Agreement -
THE ARRANGER
For and on behalf of
DEUTSCHE BANK AG
| By: | /s/ Pierre Kahn | Paul Battelle |
|---|---|---|
| Name: | Pierre Kahn | Paul Battelle |
Title: Authorised Signatory
Address: Mainzer Landstrabe 11-17, Frankfur am Main, Germany
Attention: tie.pm@db.com
THE ORIGINAL LENDER
For and on behalf of
DEUTSCHE BANK AG
| By: | /s/ Pierre Kahn | /s/ Paul Battelle |
|---|---|---|
| Name: | Pierre Kahn | Paul Battelle |
Title: Authorised Signatory
Address: Mainzer Landstrabe 11-17, Frankfur am Main, Germany
Attention: tie.pm@db.com
- DABOG –
Signature Page to the Mezzanine Facility Agreement -
THE MEZZANINE AGENT
For and on behalf of
LAW DEBENTURE CORPORATE SERVICES LIMITED
| By: | /s/ Rich Lynn |
|---|---|
| Name: Rich Lynn |
Title: Authorized Signatory
Address: 8^th^ Floor, 100 Bishopsgate, London EC2N 4AG
Fax: +44 (o) 20 7606 0643
Attention: Loan Agency-Rich Lynn
THE SECURITY AGENT
For and on behalf of
THE LAW DEBENTURE TRUST CORPORATION P.L.C.
| By: | /s/ Laura Watson |
|---|---|
| Name: Laura Watson |
Title: Authorized Signatory
Address: 8^th^ Floor, 100 Bishopsgate, London EC2N 4AG
Fax: +44 (o) 20 7606 0643
Attention: Trust Management: 204832
- DABOG –
Signature Page to the Mezzanine Facility Agreement -
Exhibit 10.8
EXHIBIT A
NEITHER THIS SECURITY NOR THE SECURITIES INTOWHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANYSTATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANTTO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCEWITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTIONWITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
ALTERNUS FUNDCO LIMITED
CONVERTIBLE PROMISSORY NOTE
AS AMENDED AND RESTATED
| Issue Date: March 8th, 2023 (First Tranche) & March 30th, 2023<br> (Second Tranche) & April 19th, 2023 (Third Tranche) | Principal Amount: | ||
|---|---|---|---|
| Maturity Date: April 19th, 2024 (as possibly extended as per section<br> 2b below) | for the First Tranche &<br><br> the Second Tranche & the Third Tranche<br><br> <br><br><br> <br>Purchase Price Amount: | €<br><br> <br>€<br><br> <br>€<br><br> <br><br><br> <br>€ | 250,000.00<br><br> <br>250,000.00<br><br> <br>350,000.00<br><br> <br><br><br> <br>850,000.00 |
This Amended and Restated Note is to modify certain terms and conditionsto that certain Convertible Promissory Note issued on March 8, 2023 and on March 30, 2023 in the principal amount of €250,000.00each from Alternus FundCo Limited, an Irish corporation (the “Company”) to Wissam Anastas (the “Payee” or “Holder”).
THISCONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued Notes of Alternus FundCo Limited, an Irish corporation (the “Company”), (this “Note” and, collectively with the other notes of such series, the “Notes”). Unless otherwise separately defined herein, all capitalized terms used in this Note shall have the same meaning as is set forth in the Subscription Agreement or the Investor Rights Agreement.
FORVALUE RECEIVED, the Company, promises to pay to the order of Wissam Anastas (the "Payee" or “Holder”), at the office of the Payee or at such other place as Payee may designate in writing, the principal sum of Eight Hundred Fifty Thousand Euro (€850,000.00) (the "Principal Amount") on the terms set forth below. Commencing on the Issuance Date (as defined above), fourteen percent (14%) interest per annum shall accrue and be payable as set forth below All payments hereunder shall be made in Euro currency and without setoff, deduction or counterclaim.
1. Definitions.
The following terms shall have the meanings herein specified:
"ALT Shares” means the ordinary shares, par value €0.01 per share, of Alternus Energy Group Plc.
“Common Stock” means the common stock, par value US$0.0001 per share, of Clean Energy Acquisitions Corp. (“CLIN”).
“De-SPAC of CLIN” means the acquisition by or merger with CLIN of a target company in as envisaged in CLIN’s SPAC documentation or as otherwise decided by CLIN and/or its shareholders.
"Holder" means the Payee, and each endorsee, pledgee, assignee, owner and holder of this Note, as such; and any consent, waiver or agreement in writing by the then Holder with respect to any matter or thing in connection with this Note, whether altering any provision hereof or otherwise, shall bind all subsequent Holders. Notwithstanding the foregoing, the Company may treat the registered holder of this Note as the Holder for all purposes.
“Investor Majority” means the holders of 60% of the nominal amount of the Notes outstanding, from time to time and at any time.
"Person" means an individual, trust, partnership, firm, association, corporation or other organization or a government or governmental authority.
“Step In” means, in relation with any and all of the Italian SPV’s, the right for Holder, by sending a written step-in notice signed by the Investor Majority to the Company, to exercise, to the fullest extent permitted under the applicable law, in the place and stead of the shareholders and/or management of each of the Italian SPVs, any and all rights and remedies of Provider under this Agreement in accordance with the terms of this Agreement.
“Step In Period” means the longer of (i) one year from the Step In being effective and (ii) the Holder having recovered through the Step In all of outstanding Principal and accrued interest under this Note.
“RTB” means, with respect to each solar power plant project of each Italian SPV:
“RtB” means when all the following cumulative conditions are met:
(i) all the land agreements securing the title to establish land rights on the power plant project land have been executed in notarial form by the Italian SPV owning such project and have been duly registered (trascritti) with the competent land registries, provided that the relevant lands shall be free of any encumbrance;
(ii) all the authorisations required to develop, construct and operate the relevant power plant project and its interconnection facilities have been duly obtained by the relevant Italian SPV, are effective and not subject to any conditions precedent, so that the Italian SPV may start construction works of the power plant project; and
(iii) the 60/120-day statutory terms to challenge the relevant authorisations before the competent Court and the President of the Italian Republic (starting from the publication of the relevant authorisations on the relevant Official Bulletin – Bollettino Ufficiale Regionale) have expired without any deed of challenge being filed or, if any deed of challenge has been filed, such challenge has been settled by means of a non-challengeable judgement (sentenza passata in giudicato) in favour of the relevant Italian SPV or the relevant action has been waived (rinunciaall'azione) by any and all the entitled person(s) (including any authority).
Words of one gender include the other gender; the singular includes the plural; and the plural includes the singular, unless the context otherwise requires.
2. Payment of this Note- Principal and Interest.
(a) Interest. The outstanding principal amount of this Note shall bear interest at a rate of fourteen percent (14%) per annum commencing on the Issuance Date (for the First Tranche, Second Tranche and Third Tranche, respectively) and accrue semi-annually until the Maturity Date (as defined above). Such interest will be based on a 365-day year and calculated with interest computed semi-annually based on the actual number of days elapsed. All accrued interest shall be due and payable on the Maturity Date.
(b) Paymentat Maturity Deadline. The Principal Amount and all accrued interest shall be due and payable on the Maturity Date, and at any time thereafter the Holder may proceed to collect such principal and accrued interest. The Maturity Date shall be automatically extended for one year unless the Investor Majority objects in writing by sending notice of the same to the Company at least two months prior to the initial Maturity Date.
(c) ConversionPrivilege. The Holder shall have the right at any time ninety (90) days after the De-SPAC of CLIN, and until (i) the Maturity Date and until (ii) this Note is fully paid (such period the “Conversion Period”), to convert all or part of the outstanding and unpaid portion of this Note (including the Principal Amount and all accrued interest) (the “Conversion”) at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of the Common Stock (such shares, the “Conversion Shares”), for the Principal Amount and all accrued interest into one million three hundred twenty thousand (1,320,000) Conversion Shares. The Holder may exercise its conversion right by sending at any time during the Conversion Period one or several Conversion notices, each to convert a third of the Principal (and corresponding interests) into Four Hundred Forty Thousand (440,000) Conversion Shares. For the purpose of calculating repaid and outstanding interests in relation thereof, Conversion shall at all time deemed to have been made from the outstanding part of the Principal (and corresponding interests) which has been drawn down earliest, in line with a first in first out principle.
If the De-SPAC of CLIN has not taken place by the Maturity Date, the Holder shall have the right on the Maturity Date and at any time ninety (90) days thereafter and until this Note is fully paid, to convert all of the outstanding and unpaid portion of this Note, including the Principal Amount and all accrued interest, at the election of the Holder into fully paid and non-assessable ALT Shares at the conversion price per share equal to 9 NOK. Upon delivery to the Company of a completed ALT Notice of Conversion, a form of which is attached hereto as Annex B, Company shall issue and deliver to the Holder that number of ALT Shares for this Note converted in accordance with the foregoing within 5 business days.
(e) Notwithstanding anything to the contrary contained herein, the number of Conversion Shares that may be acquired by the Holder upon conversion of this Note (or otherwise in respect hereof) shall be limited to the extent necessary to ensure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the 1934 Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder.
(f) Piggyback Registration Rights
Pursuant to the Investor Rights Agreement by and among CLIN, Alternus Energy Group PLC (the Company’s parent company) and Sponsor dated October 12, 2022 (the “IRA”), CLIN is obligated to register its equity securities under a Shelf Registration Statement (as defined in the IRA) within forty-five (45) days of the Closing Date of the de-SPAC (as defined in the IRA), and the Company shall:
(i) promptly (but in no event less than ten (10) Business Days before the anticipated filing date of the relevant Registration Statement) give to each Holder confidential written notice of such proposed filing (the “Piggyback Registration Notice”), such Piggyback Registration Notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution and the name of the proposed Underwriter(s), if any, in such offering and (B) offer to the Holder of this Note the opportunity to register the sale of such number of Common Stock as such Holder may request in writing within five (5) days after receipt of the Piggyback Registration Notice; and
(ii) include in such Registration (and any related qualification under state securities laws or other similar compliance), and in any Underwritten Offering involved therein, all the Common Stock specified in a written request or requests made within five (5) days after receipt of a Piggyback Registration Notice by the Holder.
3.Security. This Note and the obligations of the Company hereunder shall at all times be secured by a parent company guarantee provided by Alternus Energy Group Plc in a form reasonably satisfactory to Holder and, if so required, to Company undertakes to assign to the direct owners of the Italian SPVs all or part of the funds provided by the Holder herein. Additionally, this Note and the obligations of the Company hereunder shall at all times be secured by a pledge over the participation (quota ownership) in a form reasonably satisfactory to Holder (each an “Italian Share Pledge”) in Risorse Solari I S.r.l. (the entity that owns the Mottola project), Risorse Solari III S.r.l. (the entity that owns the Monteiasi project), AED Italia-01 S.r.l. (the entity that owns the Caprarica project) and PC-Italia-03 S.r.l. (the entity that owns the Santa Vittoria project) (each an “Italian SPV”). If any one or more of these projects fail to reach ready to build (RTB) status by 31, March 2024, and this Note is still outstanding, then the Company shall immediately replace that Italian SPV with another Italian SPV that has a project that is, or is about to, reach RTB, subject to the Investor Majority’s refusal within two working days after being provided with reasonably detailed information (to be supported by available documentation) on the status of the project(s) held by the new SPV.
Upon breach of one of more covenants and obligations set out in this Agreement (not limited to the representation and warranties section) the Holder, is entitled, subject to a written notice to the relevant guarantor/pledgor, to enforce the Parent Company Guarantee as well as any and all of the Italian Share Pledges.
All security (the Parent Company Guarantee and any and all Italian pledges shall be terminated and released by the Holder immediately after this Note is fully repaid or converted.
4. Representations andWarranties
The Company hereby represents and warrants to the Holder, while this Note is outstanding, that:
| (a) | it is duly incorporated and validly existing under the laws<br>of the country of its incorporation; |
|---|
| (b) | all necessary actions have been taken and conditions satisfied<br>in order to enable it to enter into, perform and comply with its obligations pursuant to this Instrument and those obligations are valid,<br>binding and enforceable upon it; |
|---|
| (c) | its entry into and performance of or compliance with its obligations<br>pursuant to this Instrument does not violate or exceed any power granted under its Constitution; |
|---|
| (d) | The four Italian SPVs are wholly owned subsidiaries of AEG MH 02 Limited, which is ultimately wholly owned<br>by the parent company, Alternus Energy Group Plc. |
|---|---|
| (e) | Save as otherwise agreed in this Note and as otherwise provided and disclosed to the Holder, the Italian<br>SPVs’ shares and assets are and shall remain free of any surety or encumbrances. |
| --- | --- |
| (f) | Save as otherwise provided under this Note and to the other holders pursuant to these Notes, or as otherwise<br>provided and disclosed to the Holder, the Company shall procure that none of the Italian SPVs shall<br>incur, create or assume any indebtedness. Any additional indebtedness incurred, created or<br>assumed by the Company shall expressly exclude the Italian SPVs. |
| --- | --- |
| (g) | Neither the Company nor Altnua nor any of the Italian SPVs shall dissolve, liquidate or wind up its affairs<br>or sell substantially all of its assets. |
| --- | --- |
| (h) | Alternus Energy Group Plc has the full right and authority to assign the Italian Share Pledges at any<br>time, including during an event of default as that term is defined in the Solis Bond terms. |
| --- | --- |
| (i) | It has, and that all relevant bodies have, all the authority to constitute the Parent Company Guarantee,<br>the Italian Share Pledge, the call and step in rights as described in Section 6 hereunder and that all relevant companies have a valid<br>corporate benefit and interest and guarantees, the existence of a corporate benefit and interest in doing so, and that such obligations<br>and all other obligations undertaken herein to the benefit of the Holder are valid and enforceable. |
| --- | --- |
| (j) | Each holder of the Company’s Notes issued and outstanding at any point in time shall rank pari passu,<br>equally and rateably, without discrimination or preference among themselves and as secured obligations of the Company, pursuant to the<br>Italian Share Pledges. |
| --- | --- |
5. Most Favored Nation.
If, while this Note is outstanding, the Company issues other indebtedness of the Company convertible, exchangeable or exercisable into the Common Stock with terms that are different than the terms herein (“Other Debt”), then the Company will provide the Holder with written notice thereof, together with a copy of all other documentation relating to such Other Debt. The Company will provide such notice to Holder promptly following the issuance of such Other Debt. In the event Holder determines that the terms of the Other Debt are preferable to the terms of this Note, Holder will notify the Company in writing within five (5) days following Holder’s receipt of such notice from the Company. Promptly after receipt of such written notice from Holder, but in any event within thirty (30) days, the Company will amend and restate this Note to be substantially identical to a promissory note evidencing the Other Debt, including the Note Balance and accrued interest.
6. Events of Default.
Events
The existence of any of the following conditions shall constitute an Event of Default:
(a) Nonpayment of the Note at the Maturity Date, if such breach remains unpaid and uncured for a period of thirty (30) business days.
(b) The Company or Altnua is unable or admits inability to pay its debts as they fall due, or is deemed to, or is declared to, be unable to pay its debts under applicable law.
(c) Commencement of proceedings under any bankruptcy or insolvency law or other law for the reorganization, arrangement, composition or similar relief or aid of debtors or creditors if such proceeding remains undismissed and unstayed for a period of sixty (60) days following notice to the Company by the Holder.
(d) If the Company or Altnua shall dissolve, liquidate or wind up its affairs or sell substantially all of its assets.
(e) Any invalidity or unenforceability of the Parent Company Guarantee, the Italian Share Pledge, the call and step in rights as described in Section 6 hereunder.
(f) Any breach of the representations, warranties and undertakings given herein by the Company (not to be limited to the representation and warranties section).
The Company shall immediately inform the Holder of (i) the occurrence of any Event of Default and (ii) as soon as the Company becomes aware of it, the risk of occurrence of the same.
Call
Upon the occurrence of an Event of Default under this Section, the Holders, by way of written notice signed by the Investor Majority, shall have the right, at the election of the Investor Majority, and the Company shall procure (including by initiating immediately from the date hereof any corporate action necessary to prepare all required documentation in a form reasonably acceptable to Holder and, if so required, to assign to the direct owners of the Italian SPVs all or part of the funds provided by the Holder herein) that this right if exercised is enforced, to convert all of the outstanding and unpaid portion of this Note, including the Principal Amount and all accrued interest, into a maximum total (for all debt holders, on a pro rata basis) of 50% of the fully paid and non-assessable quotas of one or several of the Italian SPVs of Investor Majority’s choice (the “Italian SPV Ownership Conversion Date”) by providing written notice to the Company. The relevant Italian SPV quotas shall be valued at book value at the Italian SPV Ownership Conversion Date. Alternus or one of its affiliate companies shall have the right at any time thereafter to buy back the Italian SPV shareholding at 200% of the higher of the (i) euro amount converted by the Holder pursuant to this provision, or (ii) the fair market value of the applicable Italian SPV at the Italian SPV Ownership Conversion Date.
Step In
During the occurrence and continuance of any Event of Default, and in addition to any other rights Holder may have hereunder or at law or in equity, Holder shall also have the right, but not the obligation, by way of written notice signed by the Investor Majority, and the Company shall procure (including by initiating immediately from the date hereof any corporate action necessary to prepare all required documentation in a form reasonably acceptable to Holder and, if so required, to assign to the Italian SPVs all or part of the funds provided by the Holder herein) that this right if exercised is enforced, to Step In for the Step In Period and in particular to:
| - | take over the management of the Italian SPVs and to |
|---|---|
| - | take all decisions and actions it deems necessary in relation with the Italian SPVs, including restructuring<br>the SPVs and/or organizing the sale of its assets. |
| --- | --- |
Company shall and shall procure that its affiliate cooperate(s) with the Holder and provide(s) all reasonable assistance to Holder to give effect to the Step In right. At any time after exercising the Step-In right, Holder may, at its sole discretion, issue a written step out notice signed by the Investor Majority to Company relinquishing its Step In right and the date on which such relinquishment shall be effective.
Notwithstanding the foregoing, nothing set forth in this Section shall excuse Company of its obligations to remedy its default and perform its obligations hereunder.
Security
If, for any reason, be it legal or factual, the rights herein (call & step-in sections) may not be exercised and/or enforced, or not be timely exercised and/or enforced, the Holder shall have a claim against the Company corresponding to the loss of value resulting for the Holder from the non-exercise or non-timely exercise of such right, such claim to in any event be covered by the Security referred to under Section 3 above and in particular by the Italian Share Pledge.
Upon the occurrence of an Event of Default under this Section, the Holder, is entitled, subject to a written notice to the relevant guarantor/pledgor, to enforce the Parent Company Guarantee as well as any and all of the Italian Share Pledges.
- Information Rights.
The Company shall furnish the following information to the Holder:
| (a) | unaudited financial statements including a balance sheet and profit and loss account in respect of each<br>financial quarter of Altnua forthwith upon the consolidated information of the Alternus group becoming publicly available and in any event<br>not later than the expiration of 45 days after the end of the financial quarter to which the profit and loss account in question relates; |
|---|
(b) information about the status of each of the projects owned by the Italian SPVs, to be provided on a monthly basis within 10 business days of the end of each month.
The Company shall use its reasonable best efforts to provide an opinion of counsel on behalf of the Company and each other party to any of the loan documents, in form and substance reasonably satisfactory to the Holder.
8.Reorganization, Reclassification, Consolidation, Merger or Sale. If any reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected, appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof shall thereafter be applicable to the surviving corporation. The Company will not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the surviving corporation (if other than the Company) resulting from such consolidation or the corporation purchasing such assets shall assume by written instrument, executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such assets as, in accordance with the foregoing provisions, such Holder may be entitled to receive.
If the shares of the Company are subdivided or combined into a greater or smaller number of shares, or if a dividend is paid in shares of the Company, the shares of the Company shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of the Company outstanding immediately after such event bears to the total number of shares of the Company outstanding immediately prior to such event.
9.Transfer. Transfer of this Note shall be subject to prior delivery by the proposed transferee to the Company of an opinion of counsel that such transfer is in compliance with all U.S. federal and all other applicable laws. In order to transfer this Note, the Holder, or its duly authorized attorney, shall surrender this Note at the office of the Company pursuant to Section 14 herein, accompanied by an assignment duly executed by the Holder hereof.
10.Loss or Mutilation of Note. Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, together with an indemnity reasonably satisfactory to the Company, in the case of loss, theft, or destruction, or the surrender and cancellation of this Note, in the case of mutilation, the Company shall execute and deliver to the Holder a new Note of like tenor and denomination as this Note.
11.Holder not Shareholder. This Note does not confer upon the Holder any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the conversion hereof.
12.Waivers. The failure of Holder to enforce at any time any of the provisions of this Note shall not, absent an express written waiver signed by Holder specifying the provision being waived, be construed to be a waiver of any such provision, nor in any way to affect the validity of this Note or any part hereof or the right of Holder thereafter to enforce each and every such provision. No waiver of any breach of this Note shall be held to be a waiver of any other or subsequent breach. The Company waives presentment, demand, notice of dishonor, protest and notice of nonpayment and protest.
13.Taxes. The Company agrees that it will pay, when due and payable, any and all stamp, original issue or similar taxes which may be payable in respect of the issue of this Note. The Company shall not be required to pay any stamp, original issue or similar tax which may be payable in respect of any transfer involved in the transfer and delivery of this Note to a person other than of the Payee.
14.Notices. All notices or other communications to a party required or permitted hereunder shall be in writing and shall be delivered personally or by facsimile or electronic transmission (receipt confirmed electronically) to such party (or, in the case of an entity, to an executive officer of such party) or shall be sent by a reputable express delivery service or by certified mail, postage prepaid with return receipt requested, addressed as follows:
if to Payee to:
Wissam Anastas
Address: 26 Aberdeen Court, W9 1AF, London, UK
Email: Wissam.anastas@giracap.com
if to the Company to:
Vincent Browne, Director
Alternus Fundco Limited
Address: Suite 9/10, Plaza 212, Blanchardstown Corporate Park 2,
Dublin 15, D15 R504
Email: vb@alternusenergy.com
Any party may change the above specified recipient and/or mailing address by notice to all other parties given in the manner herein prescribed. All notices shall be deemed given on the day when actually delivered as provided above (if delivered personally or by facsimile or email, provided that any such facsimile or email is received during regular business hours at the recipient's location) or on the day shown on the return receipt (if delivered by mail or delivery service).
15.Headings. The titles and headings to the Sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Note. This Note shall be construed without regard to any presumption or other rule requiring construction hereof against the party causing this Note to be drafted.
16.Applicable Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of Ireland and the parties agree that the Irish courts are to have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement or its subject matter or formation and accordingly that any suit, action or proceedings so arising may be brought in such courts, and each of the Borrower, Arranger and the Lender hereby irrevocably submits to the exclusive jurisdiction of the courts of Ireland. The Company and the Lender shall co-operate in good faith and exercise all reasonable efforts to implement and effect the terms of this Note. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the validity the Agreement itself but the Parties shall amend the agreement to the extent necessary to make it enforceable while preserving the economic balance existing prior to the relevant provision having been held invalid, illegal or unenforceable.
17.Survival Of Representations And Warranties; Attorneys Fee. This Note shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto. If this Note is not paid when due or if the Company breaches any provisions of this Note, in addition to all other amounts due herein, the Company promises to pay all costs of collection and all reasonable attorney fees and court costs incurred by Holder.
18.Assignment. This Note may not be assigned by either party hereto without the prior written consent of the other (except that the Company may without the prior written consent of the Holder assign this Note in the event of a merger, acquisition, reorganization or the sale of all or substantially all of its assets to another corporation to the surviving entity of such merger, acquisition, reorganization or sale).
19.Investor Majority.
Where any provisions of this Note requires a consent, waiver, notice or other action from or on behalf of an Investor Majority such consent, waiver, notice or other action may be given in writing by any Holder, or such Holders, as individually, or between them, hold such number of Notes as constitutes an Investor Majority.
********Signature Page Follows *********
IN WITNESS WHEREOF, Alternus Fundco Limited has caused this Convertible Promissory Note to be signed in its name by the signature of its duly authorized representative.
| SIGNED AND DELIVERED as a Deed | |
|---|---|
| for and on behalf of ALTERNUS FUNDCO LIMITED | |
| by its lawfully appointed attorney Vincent Browne | |
| in the presence of: | |
| /s/ David Farrell | |
| (Witness' Signature) | /s/ Vincent Browne |
| (Signature of Attorney) | |
| David Farrell | ALTERNUS FUNDCO LIMITED |
| (Witness' Name) | |
| Cross, Ardagh, Co. Langford, N39 RR66 | |
| (Witness' Address) | |
| Chief Commercial Officer | |
| (Witness' Occupation) |
Annex A
NOTICE OF CONVERSION
TO:
The undersigned hereby irrevocably elects to convert €____ of the Principal Amount and €____ of accrued interest of the Note dated _________________, 2023 into Shares of Common Stock of CLIN, according to the conditions stated therein, as of the Conversion Date written below.
| Conversion Date: | |
|---|---|
| Signature: | |
| --- | |
| Name: | |
| --- | |
| Address: | |
| --- | |
| Amount to be converted: | € |
| --- | --- |
| Number of shares to be issued: | |
| --- | |
| Please issue the shares to: | |
| --- | |
| Address to: | |
| --- | |
| Authorized Signature: | |
| --- | |
| Name: | |
| --- | |
| Title: | |
| --- | |
| Phone Number: | |
| --- |
Annex B
NOTICE OF CONVERSION
TO:
The undersigned hereby irrevocably elects to convert €__________ of the Principal Amount and €____________ of accrued interest of the Note dated _________________, 2023 into ALT Shares, according to the conditions stated therein, as of the Conversion Date written below.
| Conversion Date: | |
|---|---|
| Signature: | |
| --- | |
| Name: | |
| --- | |
| Address: | |
| --- | |
| Amount to be converted: | € |
| --- | --- |
| Amount of Note unconverted: | € |
| --- | --- |
| Conversion Price per share: | US$ |
| --- | --- |
| Number of shares to be issued: | |
| --- | |
| Please issue the shares to: | |
| --- | |
| Address to: | |
| --- | |
| Authorized Signature: | |
| --- | |
| Name: | |
| --- | |
| Title: | |
| --- | |
| Phone Number: | |
| --- |
Exhibit 10.9
ALTERNUS ENERGY AMERICAS INC.
SECURED PROMISSORY NOTE
| Issue Date: October 3, 2023 | Principal Amount: | US$ | 3,150,000 |
|---|---|---|---|
| Maturity Date: March 31, 2024 | Purchase Price Amount: | US$ | 2,205,000 |
FORVALUE RECEIVED, BEING THE PURCHASE PRICE, ALTERNUS ENERGY AMERICAS INC., a Delaware corporation with offices located at 360 Kingsley Park Drive, Suite 250, Fort Mill, SC, 29715 , (the "Company"), promises to repay to the order of SCM Tech, LLC, a Florida limited liability company (the "Payee"), at the office of the Payee or at such other place as Payee may designate in writing, the principal sum of Three Million, One Hundred Fifty Thousand US Dollars (US$3,150,000) (the "Principal Amount") on the terms set forth below. All payments hereunder shall be made in United States Dollars and without setoff, deduction or counterclaim. This Secured Promissory Note (this “Note”) is issued pursuant to a Securities Purchase Agreement, on even date hereof, by and between the Company and the Holder (the “Purchase Agreement”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement.
1. Definitions.
The following terms shall have the meanings herein specified:
“AEG PLC” means Alternus Energy Group Plc., an Irish public company and the ultimate parent company of the Company and Blue Sky.
“Blue Sky” means Blue Sky Energy I B.V., a Netherlands private limited liability company.
“Common Stock” means the common stock, par value US$0.0001 per share, of Clean Earth Acquisitions Corp. (“CLIN”) to be renamed Alternus Clean Energy Inc. at the de-SPAC of CLIN.
“De-SPAC of CLIN” means the business combination between AEG PLC and CLIN as envisaged in CLIN’s current SEC Proxy filings.
"Holder" / “Lender” means the Payee, and each endorsee, pledgee, assignee, owner and holder of this Note, as such; and any consent, waiver or agreement in writing by the then Holder with respect to any matter or thing in connection with this Note, whether altering any provision hereof or otherwise, shall bind all subsequent Holders. Notwithstanding the foregoing, the Company may treat the registered holder of this Note as the Holder for all purposes.
Words of one gender include the other gender; the singular includes the plural; and the plural includes the singular, unless the context otherwise requires.
2. Payment, Interest and Repayment Instructionof this Note
| (a) | Payment Schedule. The Principal Amount shall be repaid at the earlier of, (i) within 15 days of the closing to the De-SPAC<br>of CLIN, or (ii) upon closing of the sale of Blue Sky, or (iii) March 31, 2024, with repayment no later than the Maturity<br>Date unless otherwise mutually agreed between the Company and the Payee, and with a maximum extension of three months from Maturity Date<br>(the “Extension Expiry Date”). |
|---|---|
| (b) | Payment Interest. Interest shall commence to accrue at a daily rate of US$2,205 per day from the<br>Maturity Date. |
| --- | --- |
Additionally, the Company shall pay to Payee 5% of the Principal Amount if repayment of the Note does not occur by the Maturity Date.
(c) Prepayment. This Note may be prepaid prior to the Maturity Date, provided that if such prepayment is made prior to the 3 month anniversary of the Issue Date, the total prepayment amount shall be $2,992,500. Any prepayment after the 3 month anniversary of the Issue Date shall be for the full Principal Amount.
(d) Authorizationto Sell Assets. AEG PLC is in the process of negotiating and selling Blue Sky, which owns the rights to a solar park project located at Rotterdam The Hague Airport. AEG PLC and its wholly owned subsidiary, AEG JD 02 Limited, the direct parent company of Blue Sky, has agreed to grant a limited irrevocable authority to the Holder which shall only be exercisable in the event the Principal Amount is not discharged in full by the Extension Expiry Date.
AEG PLC will, upon execution of this Agreement deliver to the Holder an undated, signed irrevocable authority to complete the sale of Blue Sky (either by Holder itself or by appointing a third party to complete such sale) in the form set out in Schedule 1 hereof. AEG PLC authorises the Holder to date and otherwise complete the irrevocable authority at any time after the expiry of the Extension Expiry Date if the Principal Amount remains unpaid.
(e) ParentCompany Guarantee. Payment of the principal amount due on this Note is secured by a parent company guarantee issued by AEG PLC (the “PCG”), executed simultaneously herewith.
3. Warrants.
| (a) | Upon the De-SPAC of CLIN, AEG PLC, as the majority shareholder of CLIN and having control of the Board<br>of Directors of CLIN, shall authorize the issuance of the following warrants to purchase shares of Common Stock: (i) warrants to<br>purchase up to 300,000 shares of Common Stock, exercisable at $0.01 per share and having a term of 3 years, and (ii) warrants to<br>purchase up to 100,000 shares of Common Stock, exercisable at $11.50 per share and having a 5 year term (together, the “Warrants”). |
|---|---|
| (b) | Should the De-SPAC of CLIN not occur by the Extension Expiry Date, AEG PLC shall grant warrants to purchase<br>394,819 shares of AEG PLC’s ordinary shares, exercisable at 5.00 NOK per share, and having a 10 year term. |
| --- | --- |
4. Events of Default.
The existence of any of the following conditions shall constitute an Event of Default:
(a) Non-payment of the Note in accordance with Section 2(a) of the Note, only to the extent that such breach remains unpaid and uncured after the Extension Expiry Date.
(b) Commencement of proceedings under any bankruptcy or insolvency law or other law for the reorganization, arrangement, composition or similar relief or aid of debtors or creditors of the Company or AEG PLC if such proceeding remains undismissed and unstayed for a period of 60 days following such commencement.
(c) If the Company or AEG PLC shall dissolve, liquidate or wind up its affairs or sell substantially all of its assets, unless the provisions of Section 5 of this Note are met, in which case there is no Event of Default.
(d) Attachment or similar process of execution is levied against a material portion of AEG PLC’s assets and such process is not terminated and any orders issued pursuant thereto canceled within 90 calendar days
Upon the occurrence of an Event of Default under this Section 4, the Note shall, at the option of the Holder, become immediately due and payable in full without notice or demand.
Upon the occurrence of an Event of Default under this Section 4, any cash available to AEG PLC from Blue Sky’s business operations shall be transferred to the Holder and credited towards repayment of the accrued but unpaid interest on the Note.
**5.**Reorganization, Reclassification, Consolidation, Merger or Sale.
If any reorganization of the corporate capital of the Company or AEG PLC, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected, (other than the de-SPAC of CLIN) appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof shall thereafter be applicable to the surviving corporation. The Company will not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the surviving corporation (if other than the Company) resulting from such consolidation or the corporation purchasing such assets shall assume by written instrument, executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder the PCG.
6. Transfer; Investment Representations.
This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations. Transfer of this Note shall be subject to prior delivery by the proposed transferee to the Company of an opinion of counsel that such transfer is in compliance with all federal and all other applicable laws. In order to transfer this Note, the Holder, or its duly authorized attorney, shall surrender this Note at the office of the Company pursuant to Section 11 herein, accompanied by an assignment duly executed by the Holder hereof.
7. Loss or Mutilation of Note.
Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, together with an indemnity reasonably satisfactory to the Company, in the case of loss, theft, or destruction, or the surrender and cancellation of this Note, in the case of mutilation, the Company shall execute and deliver to the Holder a new Note of like tenor and denomination as this Note.
8. Holder not Shareholder.
This Note does not confer upon the Holder any right to vote or to consent or to receive notice as a shareholder of the Company, AEG PLC or CLIN, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder.
9. Waivers.
The failure of Holder to enforce at any time any of the provisions of this Note shall not, absent an express written waiver signed by Holder specifying the provision being waived, be construed to be a waiver of any such provision, nor in any way to affect the validity of this Note or any part hereof or the right of Holder thereafter to enforce each and every such provision. No waiver of any breach of this Note shall be held to be a waiver of any other or subsequent breach. The Company waives presentment, demand, notice of dishonor, protest and notice of non-payment and protest.
10. Taxes.
The Company agrees that it will pay, when due and payable, any and all stamp, original issue or similar taxes which may be payable in respect of the issue of this Note. The Company shall not be required to pay any stamp, original issue or similar tax which may be payable in respect of any transfer involved in the transfer and delivery of this Note to a person other than of the Payee.
11. Notices.
All notices or other communications to a party required or permitted hereunder shall be in writing and shall be delivered personally or by facsimile or electronic transmission (receipt confirmed electronically) to such party (or, in the case of an entity, to an executive officer of such party) or shall be sent by a reputable express delivery service or by certified mail, postage prepaid with return receipt requested, addressed as follows:
if to Payee to:
SCM Tech, LLC1810
1810 W. Kennedy Blvd., #205
Tampa, FL 33606
if to the Company to:
Alternus Energy Americas Inc.
Attn: Director
Suite 250, 360 Kingsley Park Drive, Fort Mill, SC 29715
Email: vb@alternusenergy.com; td@alternusenergy.com
Any party may change the above specified recipient and/or mailing address by notice to all other parties given in the manner herein prescribed. All notices shall be deemed given on the day when actually delivered as provided above (if delivered personally or by facsimile or email, provided that any such facsimile or email is received during regular business hours at the recipient's location) or on the day shown on the return receipt (if delivered by mail or delivery service).
12. Headings.
The titles and headings to the Sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Note. This Note shall be construed without regard to any presumption or other rule requiring construction hereof against the party causing this Note to be drafted.
13. Applicable Law and Jurisdiction.
This Note (and any non-contractual obligations arising out of or in connection with this Note) shall be governed by and construed in accordance with the laws of Delaware. All disputes arising out of or in connection with this Note and the documents connected therewith shall exclusively be settled by the courts of Delaware. The Company and the Holder each hereby waive any objection to such exclusive jurisdiction and courts represents an inconvenient forum.
14. Survival Of Representations And Warranties;Attorneys Fee.
This Note shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto. If this Note is not paid when due or if the Company breaches any provisions of this Note, in addition to all other amounts due herein, the Company promises to pay all costs of collection and all reasonable attorney fees and court costs incurred by Holder.
15.Assignment.
This Note may not be assigned by either party hereto without the prior written consent of the other (except that the Company may without the prior written consent of the Holder assign this Note in the event of a merger, acquisition, reorganization or the sale of all or substantially all of its assets to another corporation to the surviving entity of such merger, acquisition, reorganization or sale).
INWITNESS WHEREOF, ALTERNUS ENERGY AMERICAS INC. has caused this Secured Loan Note to be signed in its name by signature of its duly authorized representative.
| /s/ Vincent Browne |
|---|
| Name: Vincent Browne |
| Title: Director |
SCHEDULE 1
Irrevocable Authority
| From: | Alternus<br> Energy Group Plc, AEG JD 02 Limited |
|---|---|
| To: | ● |
| Date: | ● |
| Re: | Proposed sale of the entire issued share<br> capital in Blue Sky Energy I B.V (the “Target”) |
We hereby acknowledge and confirm that you are authorized to complete the sale of the Target and that upon closing of such sale, the sum of $3,150,000 shall be immediately distributed from the net closing proceeds to SCM Tech, LLC.
| Yours faithfully |
|---|
| /s/ Vincent Browne |
| Authorised Signatory |
| Alternus Energy Group Plc |
| /s/ Vincent Browne |
| Authorised Signatory |
| AEG JD 02 Limited |
Exhibit 10.10
NEITHER THE ISSUANCE AND SALE OF THE SECURITIESREPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATIONIS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
| Right<br> to Purchase 100,000 shares of Common Stock of Alternus Clean Energy Inc. (subject to adjustment as provided herein) |
|---|
COMMON STOCK PURCHASE WARRANT
| Warrant No.: [*] | Issue Date: December 22, 2023 |
|---|
ALTERNUS CLEAN ENERGY INC., a corporation organized under the laws of the State of Delaware (the “Company”), hereby certifies that, for value received, SCM Tech, LLC, a Florida limited liability company, having a registered address of 1810 W. Kennedy Blvd., #205, Tampa, Florida 33606, or its successors, representatives, and permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time after the Issue Date until 5:00 p.m., E.S.T on the 5^th^ annual anniversary of the Issue Date (the “Expiration Date”), up to One Hundred Thousand (100,000) fully paid and nonassessable shares of Common Stock at a per share purchase price of Eleven Dollars and Fifty Cents ($11.50) (this “Warrant”). One Hundred Percent (100%) of the Common Stock subject to this Warrant shall be fully vested an immediately exercisable as of the Issue Date. The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the “Purchase Price.” The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
(a) The term “AEG PLC” shall mean Alternus Energy Group Plc, an Irish corporation with registration number 642708 and offices located at Suite 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin D15 R504.
(b) The term “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Exchange Act.
(c) The term “Company” shall mean Alternus Clean Energy Inc., a Delaware corporation, (formerly known as Clean Earth Acquisitions Corp. (“CLIN”)), with offices located at 360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715.
(d) The term “Common Stock” or “Common Shares” means the Company's common stock, $0.0001 par value per share.
(e) The term “Person” means an individual, trust, partnership, firm, association, corporation or other organization or a government or governmental authority.
| (Warrant) | 1 |
|---|
(f) The term “Trading Day” means a day on which the Company’s principal trading market, the Nasdaq Global Market, or a similar exchange or quotation system is open for trading.
1. Exercise of Warrant.
1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date, the right to exercise this Warrant will accrue (vest) as to 100% of the shares subject to this warrant immediately.
The shares of Common Stock subject to this Warrant may be purchased at any time from and after the Issue Date, up to and including the Expiration Date. The number of shares of Common Stock that may be purchased as of any such vesting date will be rounded up to the nearest whole number.
From and after the Issuance Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 3.
1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and delivery within two days thereafter of payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect. The original Warrant is not required to be surrendered to the Company until it has been fully exercised.
1.3. Partial Exercise. This Warrant may be exercised in part (but not for a fractional share) by delivery of a Subscription Form in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect. On any such partial exercise provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.
1.4. Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder should fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.
1.6. Delivery of Stock Certificates, etc. on Exercise. The Company agrees that, provided the full Purchase Price listed in the Subscription Form is received as specified in Section 1.2, the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which delivery of a Subscription Form shall have occurred and payment made for such shares as aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, one full share of Common Stock, together with any other stock or other securities and property to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
| (Warrant) | 2 |
|---|
1.7 Holder’s Exercise Limitations. Notwithstanding the above, the Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to this Section or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section, in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section 1.7, provided that the Beneficial Ownership Limitation in no event exceeds 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section shall continue to apply. Any such increase will not be effective until the 61^st^ day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section as may be necessary to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
| (Warrant) | 3 |
|---|
2. Piggyback Registration Rights.
Pursuant to the Investor Rights Agreement by and among CLIN and AEG PLC dated October 12, 2022, a copy of which is attached hereto as Exhibit C (the “IRA”), CLIN is obligated to register its equity securities under a Shelf Registration Statement (as defined in the IRA) within forty-five (45) days of the Closing Date of the de-SPAC (as defined in the IRA), and the Company shall:
(i) promptly (but in no event less than ten (10) business days before the anticipated filing date of the relevant Shelf Registration Statement) give to the Holder confidential written notice of such proposed filing (the “Piggyback Registration Notice”), such Piggyback Registration Notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution and the name of the proposed Underwriter(s), if any, in such offering and (B) offer to the Holder of this Warrant the opportunity to register the sale of such number of Common Shares as such Holder may request in writing within five (5) business days after receipt of the Piggyback Registration Notice; and
(ii) include in such Shelf Registration Statement (and any related qualification under state securities laws or other similar compliance), and in any Underwritten Offering (as defined in the IRA) involved therein, all the Common Stock specified in a written request or requests made within five (5) business days after receipt of a Piggyback Registration Notice by the Holder.
Sections 3.1(a)-(c), 3.3 – 3.9 and 3.12 of the IRA shall apply to this Agreement, mutatis mutandis, and are incorporated herein by reference, as if they had been fully set forth herein.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on its shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Purchase Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Purchase Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.
3.2. Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section 3.2.
| (Warrant) | 4 |
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4. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. This Warrant entitles the Holder hereof, upon written request, to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company's Common Stock.
5. Publicly Traded. The Company is in full compliance with all reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder, and the Company has maintained all requirements for the continued listing of the Common Stock. The Common Stock is traded on the Nasdaq Global Market, and the Company shall use its best efforts to maintain such listing of (and shall not voluntarily delist) the Common stock on such exchange or a similar exchange or quotation system prior to the fifth anniversary of the Issue Date.
6. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.
6. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.
7. Transfer on the Company's Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
8. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
| (Warrant) | 5 |
|---|
If to the Company, to:
Alternus Clean Energy Inc.
360 Kingsley Park Drive
Suite 250
Fort Mill, SC 29715
Attn: Vincent Browne
Attn: Taliesin Durant
| Email: | vb@alternusenergy.com |
|---|---|
| Email: | td@alternusenergy.com |
| --- | --- |
If to the Holder, to:
SCM Tech, LLC
1810 W. Kennedy Blvd., #205
Tampa, Florida 33606
| Attn: | Vivek Seth |
|---|---|
| Email: | vseth@sunsarcapital.com<br> <br><br> twiley@sunsarcapital.com |
| --- | --- |
With a copy to (which shall not constitute notice):
Gunster Yoakley and Stewart, P.A.
601 Bayshore Avenue, Suite 700
Tampa, Florida 33606
| Attn: | David Koche, Esquire |
|---|---|
| Email: | dkoche@barnettbolt.com<br><br> dkoche@gunster.com <br><br> hbrownlee@gunster.com |
| --- | --- |
9. Law Governing This Warrant. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of Delaware or in the federal courts located in the state and county of Delaware. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
| (Warrant) | 6 |
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
| ALTERNUS CLEAN ENERGY INC. | |
|---|---|
| By: | |
| Name: Vincent Browne | |
| Title: Chief Executive Officer | |
| (Warrant) | 7 |
| --- | --- |
Exhibit A
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: ALTERNUS CLEAN ENERGY INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase:
________ shares of the Common Stock covered by such Warrant.
The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________. Such payment takes the form of:
$__________ in lawful money of the United States
The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _________________________________ whose address is _______________________________________________________________________.
The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act.
| Dated:___________________ | |
|---|---|
| (Signature must conform to name of holder as specified on the face of the Warrant) | |
| (Address) | |
| (Warrant) | 8 |
| --- | --- |
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading "Transferees" the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of Alternus Clean Energy Inc. to which the within Warrant relates specified under the headings "Percentage Transferred" and "Number Transferred," respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of Alternus Clean Energy Inc. with full power of substitution in the premises.
| Transferees | Percentage<br> Transferred | Number<br> Transferred |
|---|---|---|
| Dated:____________,<br> ________ | ||
| --- | --- | |
| (Signature must conform to name of holder as specified on the face of the warrant) | ||
| Signed in the presence of: | ||
| (Name) | ||
| (address) | ||
| ACCEPTED AND AGREED: | ||
| [TRANSFEREE] | ||
| (address) | ||
| (Name) |
1
Exhibit C
Investor Rights Agreement
(attached)
2
Exhibit 10.11
NEITHER THE ISSUANCE AND SALE OF THE SECURITIESREPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATIONIS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
| Right to Purchase 300,000 shares of Common Stock of Alternus Clean Energy Inc. (subject to adjustment as provided herein) |
|---|
COMMON STOCK PURCHASE WARRANT
| Warrant No.: [*] | Issue Date: December 22, 2023 |
|---|
ALTERNUS CLEAN ENERGY INC., a corporation organized under the laws of the State of Delaware (the “Company”), hereby certifies that, for value received, SCM Tech, LLC, a Florida limited liability company, having a registered address of 1810 W. Kenndy Blvd., #205, Tampa, Florida 33606, or its successors, representatives, and permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time after the Issue Date until 5:00 p.m., E.S.T on the 3^rd^ annual anniversary of the Issue Date (the “Expiration Date”), up to Three Hundred Thousand (300,000) fully paid and nonassessable shares of Common Stock at a per share purchase price of One Cent ($0.01) (this “Warrant”). One Hundred Percent (100%) of the shares of Common Stock subject to this Warrant shall be fully vested and immediately exercisable as of the Issue Date. The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the “Purchase Price.” The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein.
As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
(a) The term “AEG PLC” shall mean Alternus Energy Group Plc, an Irish corporation with registration number _642708 and offices located at Suite 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin D15 R504.
(b) The term “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Exchange Act.
(c) The term “Company” shall mean Alternus Clean Energy Inc., a Delaware corporation, (formerly known as Clean Earth Acquisitions Corp. (“CLIN”)), with offices located at 360 Kingsley Park Drive, Suite 250, Fort Mill, SC 29715.
(d) The term “Common Stock” or “Common Shares” means the Company's common stock, $0.0001 par value per share.
(e) The term “Person” means an individual, trust, partnership, firm, association, corporation or other organization or a government or governmental authority.
| (Warrant) | 1 |
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(f) The term “Trading Day” means a day on which the Company’s principal trading market, the Nasdaq Global Market, or a similar exchange or quotation system is open for trading.
1. Exercise of Warrant.
1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date, the right to exercise this Warrant will accrue (vest) as to 100% of the shares subject to this Warrant immediately.
The shares of Common Stock subject to this Warrant may be purchased at any time from and after the Issue Date, up to and including the Expiration Date. The number of shares of Common Stock that may be purchased as of any such vesting date will be rounded up to the nearest whole number.
From and after the Issuance Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 3.
1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and delivery within two days thereafter of payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect. The original Warrant is not required to be surrendered to the Company until it has been fully exercised.
1.3. Partial Exercise. This Warrant may be exercised in part (but not for a fractional share) by delivery of a Subscription Form in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect. On any such partial exercise provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.
1.4. Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder should fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.
1.6. Delivery of Stock Certificates, etc. on Exercise. The Company agrees that, provided the full Purchase Price listed in the Subscription Form is received as specified in Section 1.2, the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which delivery of a Subscription Form shall have occurred and payment made for such shares as aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, one full share of Common Stock, together with any other stock or other securities and property to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
| (Warrant) | 2 |
|---|
1.7 Holder’s Exercise Limitations. Notwithstanding the above, the Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to this Section or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section, in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section1.7, provided that the Beneficial Ownership Limitation in no event exceeds 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section shall continue to apply. Any such increase will not be effective until the 61^st^ day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section as sas may be necessary to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
| (Warrant) | 3 |
|---|
2. Piggyback Registration Rights.
Pursuant to the Investor Rights Agreement by and among CLIN and AEG PLC dated October 12, 2022, a copy of which is attached hereto as Exhibit C (the “IRA”), CLIN is obligated to register its equity securities under a Shelf Registration Statement (as defined in the IRA) within forty-five (45) days of the Closing Date of the de-SPAC (as defined in the IRA), and the Company shall:
(i) promptly (but in no event less than ten (10) business days before the anticipated filing date of the relevant Shelf Registration Statement), give to the Holder confidential written notice of such proposed filing (the “Piggyback Registration Notice”), such Piggyback Registration Notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution and the name of the proposed Underwriter(s), if any, in such offering and (B) offer to the Holder of this Warrant the opportunity to register the sale of such number of Common Shares as such Holder may request in writing within five (5) business days after receipt of the Piggyback Registration Notice; and
(ii) include in such Shelf Registration Statement (and any related qualification under state securities laws or other similar compliance), and in any Underwritten Offering (as defined in the IRA) involved therein, all the Common Stock specified in a written request or requests made within five (5) business days after receipt of a Piggyback Registration Notice by the Holder.
Sections 3.1(a)-(c), 3.3 – 3.9 and 3.12 of the IRA shall apply to this Agreement, mutatis mutandis, and are incorporated herein by reference, as if they had been fully set forth herein.
3. Adjustment for Reorganization, Consolidation, Merger, etc.
3.1. Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on its shares of Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Purchase Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Purchase Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.
3.2. Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company's securities and property (including cash, where applicable) receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section 3.2.
| (Warrant) | 4 |
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4. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant. This Warrant entitles the Holder hereof, upon written request, to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company's Common Stock.
5. Publicly Traded. The Company is in full compliance with all reporting requirements of the Exchange Act and the rules and regulations promulgated thereunder, and the Company has maintained all requirements for the continued listing of the Common Stock. The Common Stock is traded on the Nasdaq Global Market, and the Company shall use its best efforts to maintain such listing of (and shall not voluntarily delist) the Common stock on such exchange or a similar exchange or quotation system prior to the third anniversary of the Issue Date.
6. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor's endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.
7. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.
8. Transfer on the Company's Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
9. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
| (Warrant) | 5 |
|---|
If to the Company, to:
Alternus Clean Energy Inc.
360 Kingsley Park Drive
Suite 250
Fort Mill, SC 29715
Attn: Vincent Browne
Attn: Taliesin Durant
| Email: | vb@alternusenergy.com |
|---|---|
| Email: | td@alternusenergy.com |
| --- | --- |
If to the Holder, to:
SCM Tech, LLC
1810 W. Kennedy Blvd., #205
Tampa, Florida 33606
| Attn: | Vivek Seth |
|---|---|
| Email: | vseth@sunsarcapital.com<br> <br><br> twiley@sunsarcapital.com |
| --- | --- |
With a copy to (which shall not constitute notice):
Gunster Yoakley and Stewart, P.A.
601 Bayshore Avenue, Suite 700
Tampa, Florida 33606
| Attn: | David Koche, Esquire |
|---|---|
| Email: | dkoche@barnettbolt.com<br><br> dkoche@gunster.com <br><br> hbrownlee@gunster.com |
| --- | --- |
10. Law Governing This Warrant. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of Delaware or in the federal courts located in the state and county of Delaware. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Company and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
| (Warrant) | 6 |
|---|
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
| ALTERNUS CLEAN ENERGY INC. | |
|---|---|
| By: | |
| Name: Vincent Browne | |
| Title: Chief Executive Officer | |
| (Warrant) | 7 |
| --- | --- |
Exhibit A
FORM OF SUBSCRIPTION
(to be signed only on exercise of Warrant)
TO: ALTERNUS CLEAN ENERGY INC.
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase:
________ shares of the Common Stock covered by such Warrant.
The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________. Such payment takes the form of:
$__________ in lawful money of the United States
The undersigned requests that the certificates for such shares be issued in the name of, and delivered to ______________________________________ whose address is __________________________________________________________________________________.
The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act.
| Dated:___________________ | |
|---|---|
| (Signature must conform to the name of holder as Specified on the face of the Warrant) | |
| (Address) | |
| (Warrant) | 8 |
| --- | --- |
Exhibit B
FORM OF TRANSFEROR ENDORSEMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading "Transferees" the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of Alternus Clean Energy Inc. to which the within Warrant relates specified under the headings "Percentage Transferred" and "Number Transferred," respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of Alternus Clean Energy Inc. with full power of substitution in the premises.
| Transferees | Percentage Transferred | Number Transferred |
|---|---|---|
| Dated:____________,<br> ________ | ||
| --- | --- | |
| (Signature must conform to name of holder as specified on the face of the warrant) | ||
| Signed in the presence of: | ||
| (Name) | ||
| (address) | ||
| ACCEPTED AND AGREED: | ||
| [TRANSFEREE] | ||
| (address) | ||
| (Name) |
1
Exhibit C
Investor Rights Agreement
(attached)
2
Exhibit 10.12
ExecutionVersion: Private and Confidential
Dated: 22 of December 2023
| (1) | AEG JD 03 Limited |
|---|---|
| (2) | Mr. Vincent Browne |
| --- | --- |
EmploymentContract (Agreement)
| 1 |
| --- |
Contents
| 1. | Operative Provisions: | 3 |
|---|---|---|
| 2. | Appointment, Term and Notice | 4 |
| 3. | Duties | 4 |
| 4. | Place of Work | 5 |
| 5. | Hours of Work | 5 |
| 6. | Salary | 6 |
| 7. | Bonus | 6 |
| 8. | Pension and Other Benefits | 6 |
| 9. | Stock based Compensation | 8 |
| 10. | Motor Car | 8 |
| 11. | Expenses | 8 |
| 12. | Laptop and Mobile Telephones | 9 |
| 13. | HOLIDAYS | 9 |
| 14. | Absence from Work | 10 |
| 15. | Obligations during Employment | 11 |
| 16. | Termination of Employment | 13 |
| 17. | Restrictions on the Executive after Termination of Employment | 14 |
| 18. | Company Property | 19 |
| 19. | Intellectual Property | 20 |
| 20. | Disciplinary and Grievance Procedures and Suspension | 20 |
| 21. | Deductions | 21 |
| 22. | Data Protection | 21 |
| 23. | Notices | 21 |
| 24. | Previous Agreements | 21 |
| 25. | Guarantee | 22 |
| 26. | Warranty | 22 |
| 27. | Collective agreements | 22 |
| 28. | Law and jurisdiction | 22 |
| 29. | Amendment | 23 |
| 30. | Execution and Delivery | 23 |
THIS AGREEMENT is made on 22 December 2023.
| 2 |
| --- |
BETWEEN
| (1) | ALTERNUS CLEAN ENERGY INC. of 360 Kingsley Park Drive, Suite 250, Fort Mill, South Carolina<br> (hereinafter called the ‘‘Parent’’) |
|---|---|
| (2) | AEG JD 03 Limited of Suites 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15,<br> d15 R504 (hereinafter called the ‘‘Company’’) and |
| --- | --- |
| (3) | Mr. Vincent Browne (hereinafter called the ‘‘Executive’’) |
| --- | --- |
Together, ‘the Parties’
and includes the terms of Employment required by the Terms of Employment (Information) Act 1994 -2001.
**1.**Operative Provisions:
Definitions and Interpretation
| 1.1. | In<br> this Agreement the following words and expressions have the following meanings: |
|---|---|
| Board | The<br> Board of Directors of the Parent from time to time; |
| --- | --- |
| Confidential<br> Information | shall<br> include, but not be limited to, the following (whether recorded in writing, on computer disk or in any other manner) trade secrets;<br> secret manufacturing processes; customer data, including but not limited to, any such information disclosing the names and addresses<br> of customers and suppliers of the Company , the person at such contact or supplier to contact, the requirements of such customer<br> or supplier, discounts offered by the Company ; investment and pricing policies; product performance data; marketing information;<br> technical designs or specifications of the Company’s products; business plans or dealings relating to the current or future<br> activities of the Company including the timing of all or any such matters; know-how; computer passwords; product lines; research<br> activities and results; internal management accounts, any document marked “confidential” or any information which the<br> Executive has been told is confidential or which the Executive might reasonably expect the Company would regard as confidential or<br> which by its very nature is confidential to the Company, or any information which has been given to the Company in confidence by<br> customers, suppliers or other persons, and whether or not recorded in documentary form, computer disk or tape, which the Executive<br> shall acquire at any time during the Executive’s employment but which does not form part of the Executive’s own stock<br> in trade provided that it shall not include any information or knowledge which may subsequently come into the public domain after<br> the Termination Date other than by way of unauthorised disclosure by the Executive; |
| 3 |
| --- | | Group | the<br> Parent and each and any of the subsidiaries from time to time; | | --- | --- | | Termination<br> Date | the<br> date on which the Executive’s employment under this Agreement terminates and references to “from the Termination Date”<br> mean from and including the date of termination. | | 1.1. | Unless<br> the context otherwise requires words denoting the singular shall include the plural and vice<br> versa and reference to any gender shall include all other genders. | | --- | --- | | 1.2. | References<br> to the word “include” or “including” are to be construed without<br> limitation. | | --- | --- | | 1.3. | References<br> in this Agreement to statutory provisions include all modifications and re- enactments of<br> them and all subordinate legislation under them. | | --- | --- | | 1.4. | Headings<br> in this Agreement are inserted for convenience only and shall not affect its construction. | | --- | --- |
**2.**Appointment, Term and Notice
| 2.1. | The<br> Company will employ the Executive and the Executive will serve the Company as its Chief Executive<br> Officer. |
|---|---|
| 2.2. | The<br> Executive’s appointment shall be deemed to have commenced on 22 December 2023<br> (or other such date as agreed between the parties) (“Commencement Date”). For<br> the avoidance of doubt, a probation period shall not apply to the Agreement. This contract<br> will be deemed as a continuity of employment from the Executives original employment agreement. |
| --- | --- |
| 2.3. | The<br> change in contract is deemed to be in accordance with business contractual structure and<br> is not part of a TUPE or redundancy practice. For avoidance of doubt, the employee cannot<br> claim a form of settlement or redundancy due to the transfer of this agreement. |
| --- | --- |
| 2.4. | If<br> this Agreement is terminated due to a change of control event of the Company, the Executive’s<br> employment shall be transferred to the Parent. |
| --- | --- |
| 2.5. | The<br> Executive will report directly to the Board of Directors. |
| --- | --- |
**3.**Duties
| 3.1. | The<br> Executive will carry out the duties and functions to support and execute the commercial objectives<br> of the Company. |
|---|
| 4 |
| --- | | 3.2. | The<br> Executive will exercise the powers and comply with the instructions assigned or given to<br> the Executive from time to time. Except when prevented by illness, accident or holiday the<br> Executive will devote all of the Executive’s time, attention and skill to the affairs<br> of the Company. | | --- | --- |
The Executive will at all times keep the Board promptly and fully informed (in writing if so requested) of the conduct of the business or affairs of the Company and provide such explanations and assistance as the Board may require in connection with such business or affairs and the Executive’s employment under this Agreement.
| 3.3. | The<br> Executive expressly acknowledges that he will draw to the attention of the Company any act<br> by a director, employee or third party that is a breach on their part or may harm the interests<br> of the Company. The Executive will be included in the Group’s ‘Directors and<br> Officers Insurance Policy’. |
|---|
**4.**Place of Work
| 4.1. | The Company’s<br> head office is at Suite 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 R504 but<br> the Executive will be required to perform his duties inside the Republic of Ireland, being his principle<br> place of work, as the Company may require and it is a condition of the Executive’s employment that<br> the Executive complies with any such requirement. |
|---|---|
| 4.2. | In<br> the performance of the Executive’s duties, the Executive will be required to travel<br> both throughout and outside the Republic of Ireland as and when necessary. |
| --- | --- |
**5.**Hours of Work
| 5.1. | The<br> Company’s normal office hours are from 9am to 5:30pm Monday to Friday but the Executive<br> will work such hours as are needed for the proper performance of his duties including hours<br> outside the Company’s normal office hours without additional remuneration in order<br> to meet the requirements of the business. |
|---|
| 5 |
| --- |
**6.**Salary
6.1 The Executive’s basic annual salary is €120,000 (One Hundred and Twenty Thousand Euros) per annum which will accrue from day to day and be payable monthly in arrears on or before the last day of each month.
6.2 The Executive’s salary may be subject to review annually on or before the 31^st^of March each year. A bench-marking process will govern this process.
**7.**Bonus
7.1 In addition to the Base Salary, you will be eligible to earn a bonus of up to 100% of Salary based on you achieving certain milestone deliverables and the Company achieving specific operating objective and based on reasonable specific performance targets that shall be defined with the mutual agreement of yourself and the Board of Directors as will be agreed on or before June 30, 2024 and annually thereafter. The initial Bonus period will commence on the Effective Date to the end of 2024 and annually thereafter.
7.2 Any bonus amount earned for each calendar year may be payable on March 31 of the following year. The Parties agree that such bonus can be paid over a longer period (jointly agreed). Any unpaid amount will be carried forward as a payable to the Executive.
7.3 Unless otherwise expressly provided herein, whenever any annual amounts payable hereunder are to be prorated for any period of service less than a full year ending on December 31, such proration shall be determined by multiplying (x) the amount that would be payable for the full year by (y) a fraction, the denominator of which shall be 365 and the numerator of which shall be the number of days during the applicable year for which you were employed by the Company pursuant to this Contract.
**8.**Pension and Other Benefits
8.1 The Company will:
8.1.1. contribute in equal monthly instalments to the Executive’s relevant pension scheme, such as a PRSA an amount equal to 8% (eight percent) of your basic annual salary during each year of his employment under this Agreement.
| 6 |
| --- |
8.1.2. provide the Executive and his immediate family at the Company’s expense with cover under the following VHI plans (Company Plan Plus Level 1 for Vincent Browne and Company Plan Extra Level 2 (one policy) and One Plan Family (two policies)), subject to and upon the rules of the said scheme from time to time in force and to the Executive and the Executive’s family being eligible to participate in or benefit from the scheme. The Executive will transfer his existing direct debit to the Company.
8.1.1. put in place life cover and income protection cover policies.
8.1.1.1. The life cover insurance policy will cover four times your basic annual salary.
8.1.1.2. The income protection cover insurance policy will be cover an event of absence from work for a specific period because of illness or injury for a period of longer than 26 consecutive weeks, Executive will be entitled to 75% of basic annual salary less any relevant social welfare benefit payment.
8.1.2. meet costs incurred by Executive in maintaining pre-agreed relevant professional qualifications or memberships of professional bodies including accountancy professional body membership.
8.1.3. meet the cost of pre-agreed executive training and coaching as part of the Executive’s on-going professional development.
8.2 In respect of the benefits provided to the Executive under this Clause, the Company reserves the right to substitute other schemes for them or amend the scale or level of benefits provided that each and every benefit shall not be less favourable than the benefits provided to the Executive under the existing scheme.
| 7 |
| --- |
8.3 If any scheme provider refuses for any reason (whether based on its own interpretation of the terms of the scheme or otherwise) to provide any benefits to the Executive, the Company shall not be liable to provide any such benefits itself. In this circumstance, the Company and the Executive will agree an equitable process where an equivalent compensation may be paid in lieu of the Executive.
**9.**Stock based Compensation
9.1 In addition to the Base Salary and the Annual Bonus, you shall be eligible for stock and/or other stock-based incentive compensation awards, to be determined by the Company’s Board of Directors in its sole and absolute discretion. The Company is currently working on the most tax efficient option scheme for these, which will be provided in due course.
**10.**Motor Car
10.1 The Company will provide a car for Executive’s business and minimal private use up to a value of €100,000 provided that such a car is full electric, which is subject to special benefit-in-kind (“BIK”) payments whereby the first €45,000 in value is exempt from BIK calculations under current legislation. If not provided with the car, the Company will cover the cost of a charging unit for the Executive at his principal private residence. Appropriate BIK amounts will be deducted via payroll (subject to car-pooling relief). Should legislation change the Company will not be responsible to adjust the net BIK and any new BIK will be deducted from payroll. The Company will fund the tax and insurance cost of the motor car. A full Company car policy and terms will be agreed before commencement date.
10.2 If Executive does not wish to avail of the Company car option, a gross annual payment of €12,000 will be paid with annual salary.
11. Expenses
11.1 The Company will reimburse to the Executive all business expenses reasonably and properly incurred in the performance of the Executive’s duties under this Agreement on hotel, travelling, entertainment and other similar items provided that the Executive produces to the Company all appropriate receipts or other satisfactory evidence of expenditure.
| 8 |
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**12.**Laptop and Mobile Telephones
12.1. The Company will reimburse to the Executive all business expenses reasonably and properly incurred in the performance of the Executive’s duties under this Agreement on hotel, travelling, entertainment and other similar items provided that the Executive produces to the Company all appropriate receipts or other satisfactory evidence of expenditure.
**13.**Holidays
13.1 In this clause “holiday year” means the period from 1^st^ January to 31^st^ December in each year.
13.2 In addition to statutory bank and public holidays the Executive will be entitled to 24 working days’ paid holiday in each holiday year. The above excludes approximately 4 days taken for the Christmas period when the office is closed.
13.3 All holidays are to be taken at such times as may be approved by the CEO in advance.
13.4 The Executive will not be entitled to any pay in lieu of holiday except when employment terminates, and the Executive has not taken his accrued entitlement as at the Termination Date. On termination, the Executive’s holiday entitlement will be calculated pro-rata for each completed calendar month worked in that holiday year. Where the Executive’s employment is terminated because of misconduct or where the full contractual notice period is not given by the Executive, unused accrued holiday pay over the statutory minimum laid down by law will not be paid.
13.5 Where the Executive has taken more or less than his holiday entitlement in the holiday year in which the employment terminates, a proportionate adjustment will be made by way of addition to or deduction from as appropriate the Executive’s final gross salary calculated on a pro-rata basis.
13.6 The Executive may request time off for reasons other than holiday such as bereavement, jury service, unpaid leave, or attendance for examinations and in these circumstances should apply for permission for time off to the CEO and such permission will not be unreasonably withheld.
| 9 |
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**14.**Absence from Work
14.1 If the Executive is absent from work due to illness injury or other incapacity the Executive must notify the CEO as soon as possible on the first day of absence that the Executive will be unable to attend. The Executive must then keep the CEO informed on a regular basis of his progress and when he expects to return to work.
14.2 If the Executive is absent from work due to illness or injury which continues for 3 or more consecutive days (including weekends) the Executive must provide the Company with a medical certificate and give or send it immediately to the Company. If absence is prolonged the Executive should continue to submit regular medical certificates, on a weekly basis, to cover the entire period of his absence and to keep the Company informed generally as to the Executive’s condition and the likely date of return to work.
14.3 Failure to comply with the above procedures may disqualify the Executive from receiving company sick pay.
14.4 The Company will be entitled, at its expense, to require the Executive to be examined by an independent medical practitioner of the Company’s choice at any time and the Executive agrees that the doctor carrying out the examination may disclose to and discuss with the Company the results of the examination.
14.5 Provided that the Executive has complied with the notification and certification procedures above, if the Executive is absent from duties as a result of illness or injury the Executive will be entitled to receive his basic salary for a maximum period of 6 (six) weeks in any period of 12 months to be discussed. Company sick pay will be reduced by the amount of any illness benefit payments recoverable by the Executive (whether or not recovered) in respect of illness or injury.
14.6 The Company reserves the right to withhold payments of salary and/or any other sum otherwise payable to the Executive under this Agreement in respect of any unauthorised absence from work. The Company may recover from the Executive (by deductions from salary or other sums payable to the Executive by the Company, or otherwise on terms acceptable to the Company) any sums paid to the Executive in respect of any unauthorised absence from work.
| 10 |
| --- |
14.7 If the Executive is absent from work due to an accident which occurred or a condition which was sustained either on or off duty any company sick pay received by the Executive from the Company in respect of the absence will be treated as a loan which the Executive must repay to the Company if the Executive recovers damages in respect of an injury, condition or absence from work.
**15.**Obligations during Employment
15.1 During employment by the Company the Executive shall:
| 15.1.1. | abide<br> by any relevant Company policy, rule or procedure which may be in force from time to<br> time; |
|---|---|
| 15.1.2. | not<br> without the Company’s prior written consent hold any Material Interest (being more<br> than 25% of voting control) in any company, business or organisation which: |
| --- | --- |
| 15.1.2.1. | is<br> in competition with the Company or the Group; |
| --- | --- |
| 15.1.2.2. | impairs<br> the Executive’s ability to act at all times in the best interests of the Company; or |
| --- | --- |
| 15.1.2.3. | requires<br> the Executive to disclose Confidential Information in order properly to discharge his duties<br> to or further his interest in such person, firm, company, organisation or business; |
| --- | --- |
| 15.1.3. | not<br> divulge Confidential Information or obtain or seek to obtain any direct or indirect financial<br> advantage from the disclosure of such information provided that this obligation not to divulge<br> Confidential Information does not apply to disclosures made with the prior written consent<br> of the Company or required by a Court Order; |
| --- | --- |
| 11 |
| --- | | 15.1.4. | not<br> directly or indirectly receive or obtain in respect of any goods or services sold or purchased<br> or other business transacted (whether or not by the Executive) by or on behalf of the Company<br> any discount, rebate, commission or other inducement (whether in cash or in kind) which is<br> not authorised by the Company’s rules or guidelines from time to time and if the<br> Executive or any company, organisation or business in which the Executive holds any Material<br> Interest shall obtain any such discount, rebate, commission or inducement the Executive shall<br> immediately account to the Company for the amount the Executive or they receive; | | --- | --- | | 15.1.5. | not<br> introduce to any person, firm or company any business of any kind with which the Company<br> for which the Executive has performed services under this Agreement is able to deal and not<br> have any financial interest in, or derive any financial benefit from, contracts or transactions<br> entered into by the Company with any third party, without first disclosing such interest<br> or benefit to the Board and obtaining its written approval; | | --- | --- | | 15.1.6. | not<br> make any notes or memoranda relating to any matter within the scope of the business dealings<br> or affairs of the Company otherwise than for the benefit of the Company or without the prior<br> written consent of the Board to remove from the Company premises or copy or allow others<br> to copy the contents of any document, disk, tape or other tangible items which contains any<br> Confidential Information or which belongs to the Company; | | --- | --- |
if so requested by the Company delete all Confidential Information from any computer disks, tapes or other reusable material in the Executive’s possession or under the Executive’s control and destroy all other documents and tangible items in the Executive’s possession or under the Executive’s control which contain or refer to any Confidential Information;
| 15.1.7. | observe<br> the provisions of and procure his spouse and children shall observe any code in relation<br> to dealings in securities and such other codes, guidance or statements which have been or<br> are adopted by the Board or which directors of the Company are required to observe by law<br> or by any recognised stock exchange or other regulatory body or authority. |
|---|
| 12 |
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**16.**Termination of Employment
| 16.1. | For<br> Cause. Notwithstanding any other provision contained in this Agreement, the Company may terminate<br> this Agreement immediately, at any time, for Cause. For purposes of this Agreement, "Cause"<br> shall mean any of the following: (i) the conviction of a felony, or a crime involving<br> dishonesty or moral turpitude; (ii) fraud, misappropriation, or embezzlement; or (iii) willful<br> failure or gross negligence in the performance of assigned duties, which failure or negligence<br> continues for more than thirty (30) days following written notice of such failure or negligence.<br> If your employment is terminated for Cause, this Agreement shall terminate and the Company<br> will have no further obligation to you, except as otherwise provided by law. |
|---|---|
| 16.2. | Without<br> Cause. The Company may terminate this Agreement without Cause at any time by giving at least<br> ninety (90) days' advance written notice to you. In the event of such termination, you will<br> receive all outstanding Base Salary earned to the date of termination, and, if the Agreement<br> is terminated within the Initial Term or any Renewal Term, a termination payment equal to<br> five years of Base Salary (collectively defined as "Termination Payment"). |
| --- | --- |
| 16.3. | Change<br> in Control. A Change in Control means (i) The acquisition, directly or indirectly, by<br> any person or related group of persons (other than the Company or a person that directly<br> or indirectly controls, is controlled by, or is under common control with, the Company) of<br> beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities<br> of the Company representing more than 35% of the total combined voting power of the Company's<br> then outstanding securities pursuant to a tender or exchange offer made directly to the Company's<br> shareholders which the Board does not recommend such shareholders accept, or (iii) the<br> consummation of a merger or consolidation of the Company with or into another entity or any<br> other corporate reorganization, if more than 50% of the combined voting power of the continuing<br> or surviving entity's securities outstanding immediately after such merger, consolidation<br> or other reorganization is owned by persons who were not shareholders of the Company immediately<br> prior to such merger, consolidation or other reorganization, or (iv) the sale, transfer<br> or other disposition of all or substantially all of the Company's assets. A transaction shall<br> not constitute a Change in Control if its sole purpose is to change the state of the Company's<br> incorporation or to create a holding company that will |
| --- | --- |
| 13 |
| --- | | 16.4. | be<br> owned in substantially the same proportions by the persons who held the Company's securities<br> immediately before such transactions | | --- | --- | | 16.5. | If,<br> at any time during the Term of this Agreement, the Company closes a Change in Control transaction,<br> then this Agreement will automatically terminate and the Company shall pay you the Termination<br> Payment and any unvested stock shall automatically become fully vested. | | --- | --- | | 16.6. | By<br> You for any reason. If you terminate this Agreement for any reason during the Term other<br> than Good Reason, you must give ninety (90) days prior written notice. If you terminate this<br> Agreement for any reason other than for Good Reason, this Agreement shall terminate and the<br> Company will have no further obligation to you, except as otherwise provided by law. | | --- | --- | | 16.7. | By<br> You for Good Reason. You may terminate this Agreement for Good Reason, at any time, by giving<br> at least ninety (90) days' advance written notice to Company. In the event of your termination<br> of Agreement for Good Reason, you will be entitled to receive your Base Salary then in effect,<br> prorated to the date of termination, and the Termination Payment, provided you: (a) comply<br> with all surviving provisions of this Agreement; (b) execute a full general release,<br> releasing all claims, known or unknown, that you may have against Company arising out of<br> or in any way related to your services or termination of this Agreement with Company. All<br> other Company obligations to you pursuant to this Agreement will become automatically terminated<br> and completely extinguished. You will be deemed to have resigned for Good Reason in the following<br> circumstances: (a) Company's material breach of this Agreement; (b) your position<br> and/or duties are so materially modified that your duties are no longer consistent with the<br> duties contained in this Agreement; or (c) your seat on the Board of Directors is eliminated. | | --- | --- |
**17.**Restrictions on the Executive after Terminationof Employment
The Executive will have no claim against the Company in respect of the termination of his employment under this Agreement in connection with the sale of the whole or a substantial part of the business or undertaking of the Company or on or by reason of the liquidation of the Company for the purposes of amalgamation or reconstruction (whether or not by reason of insolvency) if the Executive is offered employment on no less favourable terms than those contained in this Agreement (apart from the identity of the employer) with any person, firm or company as a result of such sale or of such amalgamation or reconstruction.
| 14 |
| --- |
**18.**Company Property
| 18.1. | Definitions |
|---|
In this Clause 18 the following words and expressions have the following meanings:
| Businesses | All<br> and any commercial activities of the Company:<br><br> <br>1. With<br> which the Executive shall have been concerned or involved to any material extent at any time during the Relevant Period; or<br><br> <br><br><br> <br>2. which<br> the Company shall at the Termination Date have determined to carry on with a view to profit in the foreseeable future and in relation<br> to which the Executive shall at the Termination Date possess any confidential information |
|---|---|
| Critical<br> Person | any<br> person who was an employee, director or consultant employed or engaged by the Company at any time within the Relevant Period and<br> with whom the Executive had direct or indirect contact or frequent dealings with or was responsible for and who by reason of such<br> employment or engagement and in particular his seniority and the expertise or knowledge of trade secrets or Confidential Information<br> of the Company or knowledge of or influence over the clients, customers or suppliers of the Company is likely to be able to assist<br> or benefit the business in or proposing to be in competition with the Company ; |
| 15 |
| --- | | Relevant<br> Customer | Any<br> person, firm or company who or which at any time during the Relevant Period is or was negotiating with, a client or customer of,<br> or in the habit of dealing with, the Company for the sale or supply of Relevant Products or Services, and with whom the Executive<br> had personal contact or dealings on behalf of the Businesses or of which the Executive had personal knowledge during the Relevant<br> Period in the course of the Executive’s employment under this Agreement. | | --- | --- | | Relevant<br> Products or Services | The<br> period of 3 months immediately before the Termination Date. | | Restricted<br> Territory | Products<br> or services which are of the same kind as or of a similar kind to our competitive with any products or services sold or supplied<br> by the Company in the ordinary course of the Businesses within the Relevant Period and with which sale or supply the Secevutive was<br> directly concerned or connected or of which the Executive had personal knowledge during the Relevant Period in the course of the<br> Executive’s employment under this Agreement; | | Restricted<br> Territory | Any<br> area where the Company carries on business during the Relevant Period. |
| 16 |
| --- | | 18.2. | Reasonableness of Restrictions | | --- | --- |
The Executive acknowledges that in the ordinary course of his employment the Executive will be exposed to Confidential Information and the Company’s, customers, suppliers and employees for the purposes of the Businesses. The Executive acknowledges that such Confidential Information and contact with customers, suppliers and employees may not be readily available to others engaged in a business similar to that of the Company or to the general public and that a disclosure of Confidential Information and or contact with customers, suppliers and/or employees as set out in Clause 18.5 will be liable to cause significant harm to the Company. The Executive agrees that the provisions of this Clause 18 are necessary and reasonable to protect the legitimate interests of the Company and customers.
| 18.3. | Confidential Information |
|---|
After the termination of employment for whatever reason the Executive will not at any time and in any manner use or divulge or communicate to any person, firm, company
or other organisation any Confidential Information except if such disclosure is with the prior written consent of the Company or required by a Court Order.
| 18.4. | Non-Competition |
|---|
The Executive agrees that he will not, without the prior written consent of the Company, directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as principal, shareholder, director, executive, employee, agent, consultant, independent contractor, partner or otherwise for a period of 6 months from the Termination Date (so long as this does not restrict the Executive from employment or other similar arrangements in the absence of income):
| 18.4.1. | be<br> engaged, concerned or interested in, or provide technical, commercial, or professional advice<br> to, any other business which supplies Relevant Products or Services in competition with the<br> Company in the Restricted Territory; be engaged, concerned or interested in any business<br> which at any time during the Relevant Period has supplied Relevant Products or Services to<br> the Company or is or was at any time during the Relevant Period a Relevant Customer if such<br> engagement, concern or interest causes or would cause a supplier to cease or materially reduce<br> its supplies to the Company or the Relevant Customer to cease or materially reduce its orders<br> or contracts with the Company; |
|---|
| 17 |
| --- | | 18.4.2. | hold<br> any Material Interest in any company which requires or might reasonably be thought by the<br> Company to require the Executive to disclose or make use of any Confidential Information<br> in order to properly discharge his duties or to further the Executive’s interest in<br> such person, firm or company. | | --- | --- | | 18.5. | Non-Solicitation/Dealing/Poaching/Interference | | --- | --- | | 18.5.1. | The<br> Executive agrees that he will not, without the prior written consent of the Company, directly<br> or indirectly and whether alone or in conjunction with or on behalf of any other person and<br> whether as principal, shareholder, director, executive or employee. | | --- | --- | | 18.5.1.1. | for<br> a period of 12 months from the Termination Date so as to canvass, solicit or approach or<br> cause to be canvassed, solicited or approached any Relevant Customer for the sale or supply<br> of Relevant Products or Services or endeavour to do so; | | --- | --- | | 18.5.1.2. | for<br> a period of 12 months from the Termination Date in connection with any business in or proposing<br> to be in competition with the Company, solicit, induce or entice away from the Company, employ,<br> seek to employ, engage or appoint or in any way cause to be employed, engaged or appointed<br> a Critical Person, whether or not such a person would commit any breach of his/her contract<br> of employment or engagement by leaving the service of the Company; | | --- | --- |
| 18 |
| --- | | 18.5.1.3. | at<br> any time after the Termination Date use in connection with any business any name which includes<br> the name of the Company. | | --- | --- | | 18.5.1.4. | for<br> a period of 6 months from the Termination Date interfere with the continuance of supplies<br> to the Company from any suppliers who have been supplying materials or services to the Company<br> at any time during the Relevant Period and with whom the Executive has had personal contact. | | --- | --- | | 18.6. | Each<br> covenant contained in Clauses 18 shall be construed as a separate covenant and, if one or<br> more of the covenants is held to be against the public interest or unlawful or in any way<br> an unreasonable restraint of trade, the remaining covenants shall continue to bind the Executive. | | --- | --- | | 18.7. | If<br> the Executive applies for or is offered new employment, or a new engagement, before entering<br> into any related contract the Executive will bring the terms of this Agreement to the attention<br> of the third party proposing, directly or indirectly, to appoint or engage the Executive. | | --- | --- | | 18.8. | The<br> Executive’s obligations pursuant to such clause will constitute a separate and distinct<br> covenant and the invalidity or enforceability of any such covenant shall not affect the validity<br> or enforceability of the covenants. | | --- | --- |
**19.**Intellectual Property
| 19.1. | On<br> request and in any event of the termination of his employment, the Executive will immediately<br> return to the Company all originals and copies of all documents, computer disks and tapes<br> and other tangible items in the Executive’s possession or under the Executive’s<br> control which belong to the Company or the Group and/or which contain or refer to any Confidential<br> Information or which in any other way relate or belong to the Company or the Group. |
|---|
| 19 |
| --- |
**20.**Disciplinary and Grievance Procedures andSuspension
| 20.1. | All<br> present and future copyright, know-how, rights to prevent unauthorised extraction and other<br> intellectual property rights in any product or work developed or partly developed by the<br> Executive during the course of the employment with the Company shall remain the sole and<br> exclusive property of the Company and this Agreement does not purport to grant, assign or<br> transfer any rights in such products or works to the Executive. |
|---|
**21.**Deductions
| 21.1. | The<br> statutory provisions relating to disciplinary procedures in place from time to time are applicable<br> to the employment. The Company has a disciplinary procedure, a copy of which is available<br> on request from the Company and published in the Company handbook. The disciplinary procedure<br> is not incorporated by reference to this Agreement and does not form part of it. |
|---|---|
| 21.2. | The<br> statutory provisions relating to grievance procedures in place from time to time are applicable<br> to the employment. If the Executive has a grievance in relation to the employment or is dissatisfied<br> with a disciplinary decision against the Executive, the Executive may apply in writing to<br> the Board in the first instance. |
| --- | --- |
| 21.3. | The<br> Company is entitled (without prejudice to its rights consequently to terminate this Agreement<br> on the same or any other ground) to suspend the Executive on full pay on good cause for so<br> long as may be reasonably necessary to carry out any investigation, including, but not limited<br> to, any investigation under the disciplinary procedure and hold a disciplinary hearing and<br> may require the Executive during such period: |
| --- | --- |
| 21.3.1. | not<br> to enter any premises of the Company and; |
| --- | --- |
| 21.3.2. | to<br> abstain from contacting any customers, suppliers or employees of the Company; |
| --- | --- |
provided that the Executive shall not be employed by or provide services to any third party during the period for which he is suspended.
| 20 |
| --- |
**22.**Data Protection
The Executive authorises the Company to deduct from his remuneration (including salary, pay in lieu of notice, commission, bonus, holiday pay and company sick pay) at any time during the employment or in any event on termination of employment any monies owed by the Executive to the Company or any Group company.
**23.**Notices
| 23.1. | The<br> Executive gives the Company permission to collect, retain and process information about him,<br> including but not limited to details of his date of birth, sex and ethnic origin. The Company<br> warrants that this information will only be used in order that the Company can monitor its<br> compliance with the law |
|---|
and best practice in terms of equal opportunities and non-discrimination.
| 23.2. | Should<br> the Executive’s personal circumstances change such as to render out the of date the<br> information held by the Company, he should notify the Company immediately. |
|---|
**24.**Previous Agreements
| 24.1. | Any<br> notice given under this Agreement shall be in writing and shall be served on the party (in<br> the case of the Executive) at the above address or any other address notified by the Executive<br> to the Company or (in the case of the Parent) at its registered office. |
|---|---|
| 24.2. | Any<br> notice shall be taken to have been received on the date and time of its actual receipt except<br> that if correctly addressed and stamped and sent by registered post. |
| --- | --- |
**25.**Guarantee
| 25.1. | This<br> Agreement constitutes the whole and only entire agreement between the parties in relation<br> to the Executive’s employment with the Company and supersedes and extinguishes any<br> prior drafts, previous agreements, undertakings, representations, warranties and arrangements<br> of any nature whatsoever, whether or not in writing, between the parties relating to the<br> Executive’s employment with the Company. |
|---|
| 21 |
| --- | | 25.2. | The<br> Parties acknowledge that they have no outstanding claim against each other. | | --- | --- | | 25.3. | This<br> Agreement supersedes any conflicting terms in the Parent’s employee handbook. | | --- | --- |
**26.**Warranty
| 26.1. | In<br> consideration of the Executive providing his services to the Company, (which the Parent acknowledges<br> is of benefit to it) and for other good and valuable consideration, the receipt and adequacy<br> of which is acknowledged by the Parent, the Parent undertakes to procure the delivery of<br> all matters relating to this Agreement as they relate to the Parent, and furthermore the<br> Parent acknowledges and irrevocably guarantees the contractual commitments of the Company<br> under this Agreement. If the Company is incapable of providing any or all payments, benefits,<br> and/or remuneration provided for under this Agreement (howsoever described herein), the Parent<br> shall be liable to the Executive for the same. |
|---|
**27.**Collective agreements
| 27.1. | The<br> Executive warrants to the Company that by virtue of entering into this Agreement the Executive<br> will not be in breach of any express or implied terms of any contract with or any unresolvable<br> obligation to any third-party binding upon the Executive. |
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**28.**Law and jurisdiction
| 28.1. | There<br> are no collective agreements in place which affect the Executive’s employment with<br> the Company. |
|---|
**29.**Amendment
| 29.1. | The<br> Agreement will be governed by and interpreted in accordance with Irish law and the parties<br> irrevocably agree to submit to the jurisdiction of the Irish courts over any claim or matter<br> or to settle any dispute which may arise out of or in connection with this Agreement and<br> that accordingly any proceedings may be brought in such courts. |
|---|
| 22 |
| --- |
**30.**Execution and Delivery
| 30.1. | All<br> changes to this Agreement (other than an increase in salary) must be agreed between the Company<br> and the Executive in writing. |
|---|
**31.**Execution and Delivery
This Agreement may be executed by the parties hereto on separate counterparts, each of which when executed, shall constitute the original and all such counterparts together constitute but one and the same instrument.
The parties agree and consent to the signing of this Agreement by electronic signature (whatever form the electronic signature takes) and that this method of signature is as conclusive of the intention of the parties to be bound by this Agreement as if signed by each party’s manuscript signature.
This Agreement is sent to you in duplicate. If you agree with the terms and conditions of your employment, I would be obliged if you could sign the attached copy and return it to me as soon as possible. Please also initial each individual page of this Agreement to demonstrate that you have read and understood the content.
Yours sincerely,
| /s/ John Thomas |
|---|
| John Thomas, Board Director |
| Date: 22 December 2023 |
| 23 |
| --- |
I, Vincent Browne, acknowledge receipt of this Agreement and I confirm that I have read, understand and accept the terms and conditions set out herein.
| /s/ Vincent Browne |
|---|
| Vincent Browne |
| Executive |
| Date: |
| 24 |
| --- |
Exhibit 10.13
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement (the “Agreement”) is made effective as of May 15, 2021 ("Effective Date"), by and between Altemus Energy Americas Inc., a Delaware corporation ("Company") and VestCo Corp., a Delaware corporation ("VestCo"). The Company and VestCo (collectively "Parties") agree to the following terms and conditions:
RECITALS:
A. Whereas, VestCo is capable of providing certain business development services; and
B. Whereas, the Company is in need of these services, and desires to enter into this Agreement with VestCo to perform such services upon the terms and conditions as are hereinafter provided.
NOW THEREFORE, in consideration of the mutual covenants and conditions set forth in this Agreement and other good and valuable consideration, and with the intent to be legally bound hereby, the Company and VestCo agree as follows:
1. Services: Company hereby retains VestCo to perform certain consulting services related to business development and the management and growth of the Company in the photovoltaic solar market in North, South and Central America (the "Services"), and VestCo hereby accepts such retention and agrees to do and perform such services upon the terms and conditions set forth herein. It is the express intention of the Parties that VestCo is an independent contractor and not an agent, joint venture or partner of the Company.
2. Compensation. The Company shall pay VestCo certain fees for the Services, on a monthly retainer basis equal to $16,000 per month. VestCo shall invoice the Company within 10 business days after the Services are provided. Additionally, the Company shall pay VestCo a per megawatt fee to be calculated for each project and approved by the CFO and the Board of the Company; such payments to be determined prior to the first annual anniversary of this Agreement.
3. Expenses. Company shall reimburse VestCo for all expenses that are incurred as a result of VestCo's Services, but all expenses must be approved in writing by the Company.
4. Termand Termination. The term of this Agreement shall commence on the Effective Date and continue for five (5) years. Thereafter, the Agreement shall automatically extend for additional one year terms unless otherwise notified 30 days before the expiration. The Agreement may be terminated before the natural expiration by mutual agreement or by either Party upon a material breach of the Agreement by the other Party that remains uncured for a period of20 days. Upon termination of the Agreement, all materials and information created by VestCo during the term of this Agreement shall be returned to the Company.
5. Authority. VestCo shall have no right or authority, express or implied, to commit, bind or otherwise obligate the Company in any manner whatsoever except to the extent specifically provided herein or specifically authorized in writing by the Company.
6. Non-Interferenceand No Solicitation. VestCo covenants and agrees that it will not, at any time, whether for its own account or for the account of another person, interfere with the Company's computer(s) and/or the Company's computer network, or, during the term of this Agreement and for a period of one year after the termination of this Agreement, the relationship of the Company with, or endeavor to entice away from the Company any person, who at any time during the term of VestCo’s engagement with the Company was an employee, customer, potential customer, affiliate or supplier of the Company, excluding VestCo’s preexisting customers, potential customers, affiliates or suppliers.
7. Protectionof Confidential Information of the Company. VestCo understands that its work for the Company creates a relationship of trust and confidence between the Company and itself. During and after the period of its engagement with the Company, VestCo will not use or disclose or allow anyone else to use or disclose any "Confidential Information" (as defined below) relating to the Company, its products, services, suppliers or customers except as may be necessary in the performance of VestCo's work for the Company or as may be authorized in advance by appropriate officers of the Company. "Confidential Information" shall include, but not be limited to, methodologies, processes, tools, innovations, business strategies, financial information, forecasts, personnel information, customer lists, trade secrets and any other non-public technical or business information, whether in writing or given to VestCo orally, which VestCo knows or has reason to know the Company would like to treat as confidential for any purpose, such as maintaining a competitive advantage or avoiding undesirable publicity. VestCo will keep Confidential Information secret and will not allow any unauthorized use of the same, whether or not any document containing it is marked as confidential. These restrictions, however, will not apply to Confidential Information that has become known to the public generally through no fault or breach of mine or that the Company regularly gives to third parties without restriction on use or disclosure. Upon termination of VestCo's work with the Company, VestCo will promptly deliver to the Company all documents and materials of any nature pertaining to its work with the Company and VestCo will not take with me any documents or materials or copies thereof containing any Confidential Information.
8. Notices. Notice shall be deemed to have been made, if by hand upon the date so delivered; if by registered or certified mail, postage prepaid and return receipt requested, upon third day after deposit in the mail; if by express mail service on the date actually delivered; and if by facsimile or electronic mail, upon receipt.
9. Jurisdictionand Governing Law. Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by binding mediation. Failing mediation, the Parties shall go to arbitration. This Agreement shall be governed by Delaware Law, without regard to its choice of law provisions. Each party irrevocably consents to the jurisdiction and venue of the courts in the State of Delaware with regard to any action concerning this Agreement. The prevailing party in any action in law or equity to enforce this Agreement shall be entitled to recover its reasonable attorneys' fees, court costs and expenses incurred in such action.
10. EntireAgreement. This agreement, including the exhibits and schedules which are referenced herein and incorporated by this reference, is the entire agreement between the Company and VestCo with respect to the subject matter thereof and cancels and supercedes any and all prior agreements regarding the subject matter thereof and cancels and supercedes any and all prior agreements regarding the subject matter hereof between the Parties. This agreement shall be binding upon the Parties and their respective successors, heirs and permitted assigns. This Agreement may not be altered, modified, changed or discharged except in writing signed by both the Parties.
11. Survival. Any and all provisions that are intended to survive, shall survive termination or expiration of this Agreement.
12. Validity. If any one or more of the provisions (or any part thereof) of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby.
13. NoWaiver of Rights. The delay or failure of either Party to enforce at any time any provision of this Agreement shall in no way be considered a waiver of any such provision, or any other provision, of this Agreement. No waiver of, or delay or failure to enforce any provision of this Agreement shall in any way be considered a continuing waiver or be construed as a subsequent waiver of any such provision, or any other provision of this agreement.
IN WITNESS WHEREOF, the Parties hereto have hereby executed this Agreement.
| Company: | ||
|---|---|---|
| Alternus Energy Americas Inc. | ||
| By: | /s/ John Thomas | |
| Name: | John Thomas | |
| Title: | Director | |
| Dated: | May 15, 2021 | |
| VESTCO Corp. | ||
| By: | /s/ Vincent Browne | |
| Name: | Vincent Browne | |
| Title: | Director | |
| Dated: | May 15, 2021 |
Exhibit 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”), effective as of December 22, 2023, is by and among Alternus Clean Energy Inc. ( the “Company”) and Joseph E. Duey (the “Executive”).
NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
| 1. | Nature of Employment. |
|---|---|
| a. | Duties and Responsibilities. Executive shall serve as the Chief Financial Officer of the Company<br>during the Term of this Agreement. Executive shall have such general executive powers and active management over the property, business,<br>and affairs of the Company as is consistent with the offices of the Chief Financial Officer, subject to the direction of the Company’s<br>President and Chief Executive Officer (the “Chief Executive Officer”) and the Company’s Board of Directors (the “Board”).<br>Executive shall report to the Chief Executive Officer. Executive shall be based in the Fort Mill, SC office, subject to reasonable business<br>travel in connection with the performance of Executive’s duties hereunder. |
| --- | --- |
| b. | Other Business Activities. Executive will devote his time, attention and best efforts to the Company’s<br>business on a full-time basis. Notwithstanding the foregoing, and provided the Company’s Board of Directors approves, such approval<br>not to be unreasonably withheld, Executive shall be entitled to (i) serve on the Board of Directors of other companies, and (ii) participate<br>in other professional and business activities as Executive may elect from time to time, in his sole discretion, provided that such activities<br>do not violate Section 4 of this Agreement. |
| --- | --- |
| 2. | Compensation. |
| --- | --- |
| a. | Salary. During the Term (as defined below), Executive’s base salary shall be at an annual<br>rate of two hundred fifty thousand dollars ($250,000), subject to normal withholding, and as such base salary may be adjusted from time<br>to time by the Board (or an authorized committee thereof) in its sole discretion (the “Base Salary”). The Base Salary shall<br>be paid by the Company in accordance with the Company’s payroll practices as in effect from time to time, which may be in substantially<br>equal installments on a bi-monthly basis. |
| --- | --- |
| b. | Bonus. During the Term, Executive will be eligible to earn an annual cash bonus of up to 100% of<br>Executive’s then-current Base Salary, based on the level of achievement of specific performance targets for the applicable calendar<br>year, with such performance targets to be defined with the mutual agreement of the Executive and the Company’s President and Chief<br>Executive Officer, and subject to the approval of the Board (or an authorized committee thereof) prior to or as soon as reasonably practicable<br>following the commencement of the applicable calendar year. The Bonus period will commence on January 1^st^ of each applicable<br>calendar year period.. Any Bonus amount earned for each financial year will be payable on or before March 15 of the following year.<br>Executive must be actively employed by the Company on the date such annual bonus is paid in order to be eligible to receive the annual<br>bonus for any applicable calendar year. . |
| --- | --- |
| 1 | Confidential |
| --- | --- | | c. | Long-Term Incentive Compensation. During the Term, Executive will be eligible to be granted equity<br>and/or equity-based awards under the Company’s long-term incentive compensation plan(s) (as in effect from time to time), in<br>amounts and on terms as determined by the Board (or an authorized committee thereof) in its sole discretion. | | --- | --- | | d. | Vacation. During the Term, Executive shall be entitled to receive four weeks of paid vacation annually,<br>to be taken in accordance with the Company’s vacation policy as in effect from time to time. Executive may schedule his vacations<br>at his discretion so long as the timing of such vacations does not interfere with his responsibilities to the Company. Executive shall<br>also be entitled to five paid sick days annually, and paid US holidays as per the Company plan. | | --- | --- | | e. | Benefits. During the<br>Term, Executive will be entitled to receive the Company’s benefits made available to other<br>employees to the full extent of his eligibility. Subject to applicable eligibility criteria and terms and conditions of the applicable<br>benefit plan, Executive shall be entitled to enroll in a medical, dental and vision insurance program, as well as a matching 401k retirement<br>program on the first day of the month following the first thirty days of employment. Nothing herein shall require the Company to maintain<br>any benefit plan, or shall preclude the Company from terminating or amending any benefit plan from time to time in its sole discretion. | | --- | --- | | f. | Expenses. During the Term, the Company shall reimburse Executive for all reasonable business-related<br>expenses incurred by Executive in connection with his employment with the Company, including entertainment, travel, meals, and lodging<br>in accordance with the policies, practices, and procedures in effect generally with respect to other peer executives of the Company. | | --- | --- | | g. | Vehicle Allowance. During the Term, Executive shall be entitled to receive from the Company a vehicle<br>allowance of one thousand five hundred dollars ($1,500) per month. The Company shall impute taxes to Executive in respect of such vehicle<br>allowance as the Company may determine to be necessary or advisable from time to time in its sole discretion. | | --- | --- | | h. | Performance and Compensation Review. The Board (or an authorized committee thereof) will review<br>Executive’s performance on an annual basis. Adjustments to salary and other compensation may be made by the Board (or an authorized<br>committee thereof) in its sole and absolute discretion, at that time. | | --- | --- | | 3. | Term and Termination and Termination Payments. | | --- | --- | | a. | Term.<br>This Agreement shall be effective as of December 22, 2023, and continue for a period of five<br>(5) years (the "Initial Term”). After the Initial Term, the Agreement automatically renews annually for additional one<br>(1)-year terms thereafter (together, the “Term”), unless not later than sixty (60) calendar days prior to the end of the<br>then-applicable Term, either the Company or Executive, in such party’s sole discretion, shall elect that such extension shall not<br>take effect and shall have given timely written notice of such election not to extend. | | --- | --- |
| 2 | Confidential |
| --- | --- | | b. | Termination. | | --- | --- | | i. | By Death. Executive's employment with the Company shall terminate automatically upon Executive's death.<br>If Executive's employment is terminated by reason of Executive's death, this Agreement shall terminate and the Company will have no further<br>obligation to Executive, except as otherwise provided by law or by paragraph 3(d)(i) and 2(f) of this Agreement. | | --- | --- | | ii. | By Disability. The Company may terminate Executive's employment with the Company during any period in<br>which Executive is considered by the Company to be disabled. Executive shall be considered "disabled" if, in the sole opinion<br>of the Company, as determined in good faith, Executive is prevented, after reasonable accommodation by the Company, from properly performing<br>his duties due to a mental or physical illness for a period of 180 days in the aggregate in any 12-month period. If Executive's employment<br>is terminated by reason of Executive's disability, this Agreement shall terminate and the Company will have no further obligation to Executive,<br>except as otherwise provided by law or by paragraph 3(d)(i) and 2(f) of this Agreement. | | --- | --- | | iii. | For Cause. Notwithstanding any other provision contained in this Agreement, the Company may terminate<br>this Agreement immediately, at any time, for Cause. For purposes of this Agreement, "Cause" shall mean any of the following:<br>(i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement;<br>or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more<br>than thirty (30) days following written notice of such failure or negligence. If Executive's employment is terminated for Cause, this<br>Agreement shall terminate and the Company will have no further obligation to Executive, except as otherwise provided by law or by paragraphs<br>3(d)(i) and 2(f) of this Agreement. | | --- | --- | | iv. | Without Cause. If Executive's employment is terminated by the Company without Cause during the Term, the<br>Company must give Executive two weeks prior written notice (which the Company may elect to shorten in its sole discretion provided that<br>the Company pays Executive’s Base Salary through such notice period), and subject to Executive timely executing and not revoking<br>a release of claims in favor of the Company and its affiliates in a form reasonably acceptable to the Company (the “Release”),<br>and the Company shall pay to the Executive a lump sum cash amount of severance pay equal to one year of Base Salary, payable in the Company’s<br>first regular payroll period that follows the sixtieth (60^th^) day following the termination of Executive’s employment. | | --- | --- | | v. | Change in Control. A Change in Control means (i) The acquisition, directly or indirectly, by any<br>person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under<br>common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities<br>of the Company representing more than 50% of the total combined voting power of the Company’s then outstanding securities pursuant<br>to a tender or exchange offer made directly to the Company’s shareholders which the Board does not recommend such shareholders accept,<br>or (ii) the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization,<br>if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such<br>merger, consolidation or other reorganization is owned by persons who were not shareholders of the Company immediately prior to such merger,<br>consolidation or other reorganization, or (iii) the sale, transfer or other disposition of all or substantially all of the Company’s<br>assets. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation<br>or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities<br>immediately before such transactions. | | --- | --- |
| 3 | Confidential |
| --- | --- |
If, at any time during the Term of this Agreement, the Company closes a Change in Control transaction, and, within the two year period immediately following such Change in Control transaction, either the Executive (i) resigns for Good Reason under Section 3(b)(vii), or (ii) is terminated without Cause under Section 3(b)(iv), then this Agreement will automatically terminate and, subject to Executive timely executing and not revoking a Release, the Company shall pay to the Executive a lump sum cash amount of severance pay equal to two years of Base Salary, payable in the Company’s first regular payroll period that follows the sixtieth (60^th^) day following the termination of Executive’s employment, and any unvested equity or equity-based awards shall automatically become fully vested (with any such awards subject to performance-based vesting to be determined based on actual performance through the date of termination, if applicable).
| vi. | By Executive for any reason. If Executive terminates this Agreement for any reason during the Term other<br>than Good Reason, Executive must give ninety (90) days prior written notice. If Executive terminates this Agreement for any reason other<br>than for Good Reason, this Agreement shall terminate and the Company will have no further obligation to Executive, except as otherwise<br>provided by law or by paragraphs 3(d)(i) and 2(f) of this Agreement. |
|---|---|
| vii. | By Executive for Good Reason. Executive may terminate this Agreement for Good Reason, at any time, by<br>giving at advance written notice to Company no later than twenty (20) days after the condition giving rise to Good Reason first occurs,<br>and provided that the Company has not cured the condition giving rise to Good Reason (if curable) within thirty (30) days of such written<br>notice, and further provided that Executive terminates Executive’s employment no later than ninety (90) days after the condition<br>giving rise to Good Reason first occurs. In the event of Executive's termination of Agreement for Good Reason, (A) Executive will<br>be entitled to receive his salary then in effect, prorated to the date of termination, and (B) the Company shall pay to the Executive<br>a lump sum cash amount of severance pay equal to one year of Base Salary, payable in the Company’s first regular payroll period<br>that follows the sixtieth (60^th^) day following the termination of Executive’s employment, with respect to subclause (A) only<br>, provided Executive: (a) complies with all surviving provisions of this Agreement as specified in Sections 5 - 7 below; and (b) timely<br>executes and does not revoke a Release. All other Company obligations to Executive pursuant to this Agreement will become automatically<br>terminated and completely extinguished. Executive will be deemed to have resigned for Good Reason in the following circumstances: (a) Company's<br>material breach of this Agreement; (b) Executive's position and/or duties are so materially modified that Executive's duties are<br>no longer consistent with the duties contained in this Agreement; or (c) Executive no longer reports to the Chief Executive Officer. |
| --- | --- |
| 4 | Confidential |
| --- | --- | | c. | Obligations of Executive on Termination. | | --- | --- | | i. | Executive acknowledges and agrees that all property, including keys, credit cards, books, manuals, records,<br>reports, notes, contracts, customer lists, Confidential Information as defined in this Agreement, copies of any of the foregoing, and<br>any equipment furnished to Executive by the Company, belong to the Company and shall be promptly returned to the Company upon termination<br>of employment. | | --- | --- | | ii. | Upon termination of employment, Executive shall be deemed to have resigned from all offices and directorships<br>then held with the Company. | | --- | --- | | iii. | Except as expressly set forth in Section 3(b), Executive acknowledges and agrees that all<br>unvested Company equity or equity-based awards issued to the Executive as of the termination date shall automatically and without any<br>action by any party be immediately forfeited and cancelled. | | --- | --- | | iv. | Executive acknowledges and agrees that Executive will comply with all of the surviving terms of this Agreement,<br>specifically including, but not limited to, Sections 4 through 7 of this Agreement, unless this Agreement is terminated by the Company<br>without cause or by the Executive for Good Reason, in which case Section 4 (Non-Compete) shall not apply. | | --- | --- | | d. | Obligations of the Company on Termination. | | --- | --- | | i. | For Any Reason. Upon termination of this Agreement for any reason, the Company's obligations to Executive<br>under this Agreement shall include (a) the prorated payment of Executive's salary through the date of termination to the extent not<br>paid by then; (b) other than in connection with a termination of Executive’s employment for Cause, the payment of earned and<br>accrued bonus or incentive payments due Executive, if any, at the time of termination under any bonus or incentive plans in which Executive<br>participated prior to termination; (c) the payment of any unused accrued vacation through the date of termination; and (d) the<br>payment of any reimbursable business expenses that were documented by Executive prior to termination in accordance with the Company's<br>policies as set forth in paragraph 2.f. of this Agreement and that were not reimbursed by the Company at the time of the termination of<br>this Agreement. | | --- | --- | | 4. | Non-Compete. During the Non-Competition Period (as hereinafter defined), the Executive shall not<br>in any manner, directly, including through entities controlled by such Executive (i) engage or participate in a business, or otherwise<br>perform services for third parties which are competitive with those performed by the Company, or any parent, subsidiary or other affiliate<br>of the Company (a “Company Affiliate”), with respect to a business (“Competitive Services”), or (ii) own<br>or operate any business which engages or participates in the same or similar business or businesses conducted by the Company or Company<br>Affiliate which performs Competitive Services. Executive shall be deemed to be engaged in the Business or performing Competitive Services<br>if the Executive engages in such business or performs such services directly, whether for the Executive’s own account or for that<br>of another person, firm or corporation, or whether as a stockholder, principal, partner, member, agent, investor, proprietor, director,<br>officer, employee or consultant, except as an employee, director or consultant of the Company or a Company Affiliate; provided,<br>however, that the Executive may hold an investment of no more than 5% of the equity securities of any publicly traded entity without<br>violating this Agreement. For the purposes of this Agreement, the “Non-Competition Period” shall mean during the period of<br>employment by the Company or any Company Affiliate and for a period of six months following the termination of Executive’s<br>employment relationship with the Company, or any current or future Company Affiliate. | | --- | --- |
| 5 | Confidential |
| --- | --- | | 5. | Non-Solicitation. During the Non-Solicitation Period (as hereinafter defined), Executive will not<br>influence or attempt to influence customers of the Company or a Company Affiliate to divert their business to any individual or entity<br>then in competition with the Company. During the Non-Solicitation Period (as hereinafter defined), the Executive shall not in any manner<br>solicit or hire any employees or consultants of the Company, or any Company Affiliate, which shall include employees or consultants: (i) with<br>continuing contracts with the Company or a Company Affiliate; (ii) retained, employed or engaged by the Company or a Company Affiliate<br>but without continuing contracts; or (iii) whose contracts expire or otherwise terminate for any reason preceding or following the<br>first day of the Non-Solicitation Period. During the Non-Solicitation Period, Executive will not influence or attempt to influence any<br>customers or suppliers of the Company, or other third parties doing business with of the Company, to divert their business to any individual<br>or entity then in competition with the Company. During the Non-Solicitation Period, Executive will not disrupt, damage, impair, or interfere<br>with the business of the Company in any way. Executive further agrees not to make any negative or disparaging statements about the Company,<br>its affiliates, employees or representatives to any third party. For the purposes of this Agreement, the “Non-Solicitation Period”<br>shall mean during the period of employment by the Company or any Company Affiliate and for a period of two (2) years following the<br>termination of the Executive’s employment or consultant relationship with the Company, or any current or future Company Affiliate. | | --- | --- | | 6. | Confidential Information. Executive acknowledges<br>and agree that his employment with Company is conditioned upon the execution of a separate Confidentiality Agreement in the form attached<br>to this Agreement as Exhibit B (the “Confidentiality Agreement”) which prohibits the unauthorized use or disclosure of<br>Company’s confidential information. Executive agrees that she will<br>comply with the provisions of that Confidentiality Agreement. Executive further agrees that Company may change or amend its Confidentiality<br>Agreement from time to time in its discretion. Executive agrees to sign any amended Confidentiality Agreement(s) which may be issued<br>by Company as a condition of his continued employment with Company. | | --- | --- | | 7. | Covenant to Report; Ownership of Trade Secrets and other Intellectual Property. | | --- | --- | | a. | All written materials, records and documents made by the Executive or coming into his possession during<br>the course of his employment by Company concerning the business or affairs of the Company shall be the sole property of the Company; and,<br>upon the termination of his employment or upon the request of the Company, the Executive shall promptly deliver the same to the Company. | | --- | --- | | b. | Executive agrees that any trade secret, invention, improvement, patent, patent application, or writing,<br>and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented), obtained by Executive<br>in the course of employment with the Company, and relating to the business, property, methods or customers of the Company, shall be and<br>become the property of the Company, and Executive hereby transfers and assigns to the Company any rights he may have or acquire in any<br>of the foregoing. Executive agrees to give the Company prompt written notice of his acquisition of any such trade secret, invention, improvement,<br>patent, patent application, writing, program, system, or novel technique and to execute such instruments or transfer, assignment, conveyance,<br>or confirmation and such other documents and to do all appropriate lawful acts as may be requested by the Company to transfer, assign,<br>confirm, and perfect in the Company all legally protectable rights in such trade secret, invention, improvement, patent, patent application,<br>writing, program, system, or novel technique. | | --- | --- |
| 6 | Confidential |
| --- | --- | | 8. | Arbitration: | | --- | --- | | a. | Arbitrable Claims. The following claims are covered by this arbitration provision (“Arbitrable<br>Claims”): any and all claims for wages or other compensation; any and all contract or tort claims; any and all claims arising from<br>or related to your employment or the termination of your employment with Company; and any and all claims for discrimination or harassment<br>under any local, state or federal common or statutory law, based on race, color, sex, religion, national origin, ancestry, age, marital<br>status, medical condition, physical or mental disability, sexual orientation or any other protected characteristic. You and Company agree<br>to settle by final and binding arbitration all such Arbitrable Claims that Company may have against you or that you may have against Company<br>or against any of its related entities, or against any then current or former officer, director, employee or agent of Company, in their<br>capacity as such or otherwise. If this arbitration provision is held to be void or unenforceable with respect to a particular claim or<br>class of claims, that fact shall not affect the validity or enforceability of the arbitration provisions with respect to any other claim<br>or class of claims. YOU AND COMPANY ACKNOWLEDGE AND AGREE THAT BY SIGNING THIS AGREEMENT, YOU AND COMPANY HAVE VOLUNTARILY ELECTED TO<br>ARBITRATE ALL ARBITRABLE CLAIMS RATHER THAN LITIGATE THEM IN A JUDICIAL FORUM AND THAT YOU AND COMPANY ARE GIVING UP THE RIGHT TO A JURY<br>TRIAL AND TO A TRIAL IN A COURT OF LAW. | | --- | --- | | b. | Procedure. All Arbitrable Claims shall be settled by final and binding arbitration in accordance<br>with the employment dispute resolution rules of the American Arbitration Association (“AAA”) in effect at the time the<br>demand for arbitration is made. Such arbitration shall be filed with the AAA and shall be heard in South Carolina. The arbitrator shall<br>apply, as applicable, federal or South Carolina substantive law and law of remedies. South Carolina Code of Civil Procedure Section 1283.05,<br>which provides for certain discovery rights, shall apply to any arbitration. In reaching a decision, the arbitrator shall have no authority<br>to change, extend, modify or suspend any of the terms of this Agreement but shall have the authority to order injunctive and/or other<br>equitable relief. A judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Either you or<br>Company may bring an action in any court of competent jurisdiction, if necessary, to compel arbitration under this arbitration provision,<br>to obtain preliminary relief in support of claims to be prosecuted in arbitration or to enforce an arbitration award. | | --- | --- | | 9. | No Assignment. This Agreement is personal to Executive, and Executive may not assign any rights<br>or delegate any responsibilities hereunder without the prior written consent of the Company. | | --- | --- |
| 7 | Confidential |
| --- | --- | | 10. | Waiver or Modification. No provision of this Agreement may be modified, amended, or waived unless<br>in writing and signed by you and Company. A waiver of any one provision shall not be deemed to be a waiver of any other provision. | | --- | --- | | 11. | Compliance with Code Section 409A. | | --- | --- | | a. | Notwithstanding any provision of this Agreement<br>to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation”for<br>purposes of Section 409A of the Code, and any regulations and guideline issued thereunder (“Section 409A”)<br>would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service, Executive’s<br>employment will be deemed to have terminated on the date of Executive “separation from service” (within the meaning of<br>Treas. Reg. Section 1.409A-1(h)) with Company. | | --- | --- | | b. | It is intended that this Agreement will comply with or be exempt from Section 409A to the extent<br>that any compensation and benefits provided hereunder constitute deferred compensation subject to Section 409A. This Agreement shall<br>be interpreted on a basis consistent with this intent. The Parties will negotiate in good faith to amend this Agreement as necessary to<br>comply with Section 409A in a manner that preserves the original intent of the Parties to the extent reasonably possible. No action<br>or failure to act, pursuant to this Section 14 shall subject Company to any claim, liability, or expense, and Company shall not have<br>any obligation to indemnify or otherwise protect Executive from the obligation to pay any taxes pursuant to Section 409A. | | --- | --- | | c. | For purposes of the application of Treas. Reg. § 1.409A-1(b)(4)(or any successor provision),<br>each payment in a series of payments will be deemed a separate payment. | | --- | --- | | d. | Notwithstanding anything in this Agreement to<br>the contrary, if any amount or benefit that would constitute non-exempt **“deferred compensation”**for purposes<br>of Section 409A would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service<br>during a period in which Executive is a “specified Executive”(as defined under Section 409A and the final<br>regulations thereunder), then, subject to any permissible acceleration of payment by Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic<br>relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): | | --- | --- | | i. | if the payment or distribution is payable in a lump sum, the Executive’s right to receive payment<br>or distribution of such non-exempt deferred compensation will be delayed until the earlier of Executive’s death or the first day<br>of the seventh month following Executive’s separation from service; and | | --- | --- | | ii. | if the payment or distribution is payable over time, the amount of such non-exempt deferred compensation<br>that would otherwise be payable during the six months immediately following Executive’s separation from service will be accumulated,<br>and the Executive’s right to receive payment or distribution of such accumulated amount will be delayed until the earlier of Executive’s<br>death or the first day of the seventh month following Executive’s separation from service, whereupon the accumulated amount will<br>be paid or distributed to Executive and the normal payment or distribution schedule for any remaining payments or distributions will resume. | | --- | --- |
| 8 | Confidential |
| --- | --- |
This Section 14(d) should not be construed to prevent the application of Treas. Reg § 1.409A-1(b)(9)(iii)(or any successor provision) to amounts payable hereunder (or any portion thereof).
| 12. | Golden Parachute Limitation. Notwithstanding anything in this Section or elsewhere in this<br>Agreement to the contrary, in the event the payments and benefits payable hereunder to or on behalf of Executive (which the Parties<br>agree will not include any portion of payments allocated to the non-competition and non-solicitation provisions of Section 9) that<br>are classified as payments of reasonable compensation for purposes of Section 280G of the Code, when added to all other amounts and<br>benefits payable to or on behalf of Executive, would result in the loss of a deduction under Code Section 280G, or the imposition<br>of an excise tax under Code Section 4999, the amounts and benefits payable hereunder shall be reduced to such extent as may be necessary<br>to avoid such loss of deduction or imposition of excise tax. In applying this principle, the reduction shall be made in a manner consistent<br>with the requirements of Section 409A and where two or more economically equivalent amounts are subject to reduction, but payable<br>at different times, such amounts shall be reduced on a pro-rata basis. All calculations required to be made under this subsection<br>will be made by the Company’s independent public accountants, subject to the right of Executive’s professional advisors to<br>review the same. The Parties recognize that the actual implementation of the provisions of this subsection are complex and agree to deal<br>with each other in good faith to resolve any questions or disagreements arising hereunder. |
|---|---|
| 13. | Exceptions. Notwithstanding anything in this Agreement, nothing contained in this Agreement shall<br>prohibit either Party (or either Party’s attorney(s)) from (a) filing a charge with, reporting possible violations of federal<br>law or regulation to, participating in any investigation by, or cooperating with any governmental agency or entity or making other disclosures<br>that are protected under the whistleblower provisions of applicable law or regulation, (b) communicating directly with, cooperating<br>with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including,<br>but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the National Labor Relations<br>Board or the U.S. Department of Justice) for the purpose of reporting or investigating a suspected violation of law, or from providing<br>such information to the Party’s attorney(s) or in a sealed complaint or other document filed in a lawsuit or other governmental<br>proceeding and/or (c) receiving an award for information provided to any governmental agency. Pursuant to 18 USC Section 1833(b),<br>the Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade<br>secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an<br>attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other<br>document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, nothing in this Agreement is intended to<br>or shall preclude either party from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other<br>judicial, administrative or legal process or otherwise as required by law. If the Executive is required to provide testimony, then unless<br>otherwise directed or requested by a governmental agency or law enforcement, the Executive shall notify the Company as soon as reasonably<br>practicable after receiving any such request of the anticipated testimony. Further, nothing in this Agreement shall prevent the Executive<br>from (i) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other<br>conduct that the Executive has reason to believe is unlawful or (ii) exercising any rights Executive may have under Section 7<br>of the National Labor Relations Act. |
| --- | --- |
| 9 | Confidential |
| --- | --- | | 14. | Survival. It is the express intention and agreement of the parties hereto that the provisions of<br>this Agreement that are intended to survive the ending of your employment shall survive the ending of your employment. | | --- | --- | | 15. | Severability. Should any provision of this Agreement be held invalid, void, or unenforceable for<br>any reason, such adjudication shall in no way affect any other provision of this Agreement or the validity or enforcement of the remainder<br>of the Agreement and the provision affected shall be curtailed only to the extent necessary to bring it within the applicable requirements<br>of the law. | | --- | --- | | 16. | Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims<br>or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of South Carolina. | | --- | --- | | 17. | Entire Agreement. This Agreement and the Confidentiality Agreement which you will be required to<br>sign as a condition of your employment constitute the complete understanding between you and Company concerning the terms of your employment.<br>All prior representations, agreements, arrangements and understandings between or among you and representatives of Company, whether oral<br>or written, have been fully and completely merged herein and are fully superseded by this Agreement. | | --- | --- | | 18. | Executive acknowledges that he has read and understands this Agreement, and agrees that he has freely<br>and voluntarily entered into this Agreement without duress or undue influence imposed on him of any kind. | | --- | --- |
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement by their duly authorized representatives on the dates set forth below.
| AGREED: | |||
|---|---|---|---|
| ALTERNUS CLEAN<br> ENERGY, INC. | EXECUTIVE: | ||
| By: | /s/<br> Vincent Browne | By: | /s/ Joseph Duey |
| Name: | Vincent Browne | Name: | Joseph E. Duey |
| --- | --- | --- | --- |
| Title: | Director | ||
| Date: December 22, 2023 | Date: December 22, 2023 | ||
| --- | --- |
| 10 | Confidential |
| --- | --- |
Exhibit 10.15
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”), effective as of December 22, 2023, is by and among Alternus Clean Energy Inc. (the “Company”) and Taliesin Durant, (the “Executive”).
NOW THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:
| 1. | Nature of Employment. |
|---|---|
| a. | Duties and Responsibilities. Executive shall serve as the Chief Legal Officer of the Company during<br>the Term of this Agreement. Executive shall have such general executive powers and active management over the property, business, and<br>affairs of the Company as is consistent with the offices of the Chief Legal Officer, subject to the direction of the Company’s President<br>and Chief Executive Officer (the ‘’Chief Executive Officer’’), and the Company’s Board of Directors (the<br> “Board”). Executive shall report to the Chief Executive Officer. Executive shall be based in the Fort Mill, SC office subject<br>to reasonable business travel in connection with the performance of Executive’s duties hereunder . |
| --- | --- |
| b. | Other Business Activities. Executive will devote her time, attention and best efforts to the Company’s<br>business on a full-time basis. Notwithstanding the foregoing, and provided the Company’s Board of Directors approves, such approval<br>not to be unreasonably withheld, Executive shall be entitled to (i) serve on the Board of Directors of other companies, and (ii) participate<br>in other professional and business activities as Executive may elect from time to time, in her sole discretion, provided that such activities<br>do not violate Section 4 of this Agreement. |
| --- | --- |
| 2. | Compensation. |
| --- | --- |
| a. | Salary. During the Term (as defined below), Executive’s base salary shall be at an annual<br>rate of one hundred ninety thousand dollars ($190,000), subject to normal withholding, and as such base salary may be adjusted from time<br>to time by the Board (or an authorized committee thereof) in its sole discretion (the “Base Salary”). The Base Salary shall<br>be paid by the Company in accordance with the Company’s payroll practices as in effect from time to time, which may be in substantially<br>equal installments on a bi-monthly basis. |
| --- | --- |
| b. | Bonus. During the Term, Executive will be eligible to earn an annual cash bonus of up to 100% of<br>Executive’s then-current Base Salary based on the level of achievement of specific performance targets for the applicable calendar<br>year, with such performance targets to be defined with the mutual agreement of the Executive and the Company’s President and Chief<br>Executive Officer, and subject to the approval of the Board (or an authorized committee thereof) prior to or as soon as reasonably practicable<br>following the commencement of the applicable calendar year. The Bonus period will commence on January 1^st^ of each applicable<br>calendar year period. Any Bonus amount earned for each financial year will be payable on or before March 15 of the following year.<br>Executive must be actively employed by the Company on the date such annual bonus is paid in order to be eligible to receive the annual<br>bonus for any applicable calendar year. |
| --- | --- |
| 1 | Confidential |
| --- | --- | | c. | Long-Term Incentive Compensation. During the Term, Executive will be eligible to be granted equity and/or equity-based awards under<br>the Company’s long-term incentive compensation plan(s) (as in effect from time to time), in amounts and on terms as determined<br>by the Board (or an authorized committee thereof) in its sole discretion. | | --- | --- | | d. | Vacation. During the Term, Executive shall be entitled to receive four weeks of paid vacation annually,<br>to be taken in accordance with the Company’s vacation policy as in effect from time to time.. Executive may schedule her vacations<br>at her discretion so long as the timing of such vacations does not interfere with her responsibilities to the Company. Executive shall<br>also be entitled to five paid sick days annually, and paid US holidays as per the Company plan. | | --- | --- | | e. | Benefits. During the Term, Executive will be entitled to receive<br>the Company’s benefits made available to other employees to the full extent of her eligibility.<br>Subject to applicable eligibility criteria and terms and conditions of the applicable benefit plan, Executive<br>shall be entitled to enroll in a medical, dental and vision insurance program, as well as a matching 401k retirement program on the first<br>day of the month following the first thirty days of employment. Nothing herein shall require the Company to maintain any benefit plan,<br>or shall preclude the Company from terminating or amending any benefit plan from time to time in its sole discretion. | | --- | --- | | f. | Expenses. During the Term, the Company shall reimburse Executive for all reasonable business-related<br>expenses incurred by Executive in connection with her employment with the Company, including entertainment, travel, meals, and lodging<br>in accordance with the policies, practices, and procedures in effect generally with respect to other peer executives of the Company. | | --- | --- | | g. | Vehicle Allowance. During the Term, Executive shall be entitled to receive from the Company a vehicle allowance of one thousand<br>five hundred dollars ($1,500) per month. The Company shall impute taxes to Executive in respect of such vehicle allowance as the Company<br>may determine to be necessary or advisable from time to time in its sole discretion. | | --- | --- | | h. | Performance and Compensation Review. The Board (or an authorized committee thereof) will review<br>Executive’s performance on an annual basis. Adjustments to salary and other compensation may be made by the Board (or an authorized<br>committee thereof) in its sole and absolute discretion, at that time. | | --- | --- | | 3. | Term and Termination and Termination Payments. | | --- | --- | | a. | Term. This Agreement shall be effective as of December 22, 2023, and continue for a period of five (5) years<br>(the ‘’Initial Term’’). After the Initial Term, the Agreement automatically renews annually for additional one<br>(1)-year terms thereafter (together, the “Term”), unless not later than sixty (60) calendar days prior to the end of the then-applicable<br>Term, either the Company or Executive, in such party’s sole discretion, shall elect that such extension shall not take effect and<br>shall have given timely written notice of such election not to extend. | | --- | --- |
| 2 | Confidential |
| --- | --- | | b. | Termination. | | --- | --- | | i. | By Death. Executive's employment with the Company shall terminate automatically upon Executive's death.<br>If Executive's employment is terminated by reason of Executive's death, this Agreement shall terminate and the Company will have no further<br>obligation to Executive, except as otherwise provided by law or by paragraph 3(d)(i) and 2(f) of this Agreement. | | --- | --- | | ii. | By Disability. The Company may terminate Executive's employment with the Company during any period in<br>which Executive is considered by the Company to be disabled. Executive shall be considered "disabled" if, in the sole opinion<br>of the Company, as determined in good faith, Executive is prevented, after reasonable accommodation by the Company, from properly performing<br>her duties due to a mental or physical illness for a period of 180 days in the aggregate in any 12-month period. If Executive's employment<br>is terminated by reason of Executive's disability, this Agreement shall terminate and the Company will have no further obligation to Executive,<br>except as otherwise provided by law or by paragraph 3(d)(i) and 2(f) of this Agreement. | | --- | --- | | iii. | For Cause. Notwithstanding any other provision contained in this Agreement, the Company may terminate<br>this Agreement immediately, at any time, for Cause. For purposes of this Agreement, "Cause" shall mean any of the following:<br>(i) the conviction of a felony, or a crime involving dishonesty or moral turpitude; (ii) fraud, misappropriation or embezzlement;<br>or (iii) willful failure or gross negligence in the performance of assigned duties, which failure or negligence continues for more<br>than thirty (30) days following written notice of such failure or negligence. If Executive's employment is terminated for Cause, this<br>Agreement shall terminate and the Company will have no further obligation to Executive, except as otherwise provided by law or by paragraphs<br>3(d)(i) and 2(f) of this Agreement. | | --- | --- | | iv. | Without Cause. If Executive's employment is terminated by the Company without Cause during the Term, the<br>Company must give Executive two weeks prior written notice (which the Company may elect to shorten in its sole discretion provided that<br>the Company pays Executive’s Base Salary through such notice period), and subject to Executive timely executing and not revoking<br>a release of claims in favor of the Company and its affiliates in a form reasonably acceptable to the Company (the “Release”),<br>and the Company shall pay to the Executive a lump sum cash amount of severance pay equal to one year of Base Salary, payable in the Company’s<br>first regular payroll period that follows the sixtieth (60th) day following the termination of Executive’s employment. | | --- | --- | | v. | Change in Control. A Change in Control means (i) The acquisition, directly or indirectly, by any<br>person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under<br>common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities<br>of the Company representing more than 50% of the total combined voting power of the Company’s then outstanding securities pursuant<br>to a tender or exchange offer made directly to the Company’s shareholders which the Board does not recommend such shareholders accept,<br>or (ii) the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization,<br>if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such<br>merger, consolidation or other reorganization is owned by persons who were not shareholders of the Company immediately prior to such merger,<br>consolidation or other reorganization, or (iii) the sale, transfer or other disposition of all or substantially all of the Company’s<br>assets. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation<br>or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities<br>immediately before such transactions. | | --- | --- |
| 3 | Confidential |
| --- | --- |
If, at any time during the Term of this Agreement, the Company closes a Change in Control transaction, and, within the two year period immediately following such Change in Control transaction, either the Executive (i) resigns for Good Reason under Section 3(b)(vii), or (ii) is terminated without Cause under Section 3(b)(iv), then this Agreement will automatically terminate and, subject to Executive timely executing and not revoking a Release, the Company shall pay to the Executive a lump sum cash amount of severance pay equal to two years of Base Salary, payable in the Company’s first regular payroll period that follows the sixtieth (60th) day following the termination of Executive’s employment, and any unvested equity or equity-based awards shall automatically become fully vested (with any such awards subject to performance-based vesting to be determined based on actual performance through the date of termination, if applicable).
| vi. | By Executive for any reason. If Executive terminates this Agreement for any reason during the Term other<br>than Good Reason, Executive must give ninety (90) days prior written notice. If Executive terminates this Agreement for any reason other<br>than for Good Reason, this Agreement shall terminate and the Company will have no further obligation to Executive, except as otherwise<br>provided by law or by paragraphs 3(d)(i) and 2(f) of this Agreement. |
|---|---|
| vii. | By Executive for Good Reason. Executive may terminate this Agreement for Good Reason, at any time, by<br>giving at advance written notice to Company no later than twenty (20) days after the condition giving rise to Good Reason first occurs,<br>and provided that the Company has not cured the condition giving rise to Good Reason (if curable) within thirty (30) days of such written<br>notice, and further provided that Executive terminates Executive’s employment no later than ninety (90) days after the condition<br>giving rise to Good Reason first occurs. In the event of Executive's termination of Agreement for Good Reason, (A) Executive will<br>be entitled to receive his salary then in effect, prorated to the date of termination, and (B) the Company shall pay to the Executive<br>a lump sum cash amount of severance pay equal to one year of Base Salary, payable in the Company’s first regular payroll period<br>that follows the sixtieth (60th) day following the termination of Executive’s employment, with respect to subclause (A) only<br>, provided Executive: (a) complies with all surviving provisions of this Agreement as specified in Sections 5 - 7 below; and (b) timely<br>executes and does not revoke a Release. All other Company obligations to Executive pursuant to this Agreement will become automatically<br>terminated and completely extinguished. Executive will be deemed to have resigned for Good Reason in the following circumstances: (a) Company's<br>material breach of this Agreement; (b) Executive's position and/or duties are so materially modified that Executive's duties are<br>no longer consistent with the duties contained in this Agreement; or (c) Executive no longer reports to the Chief Executive Officer. |
| --- | --- |
| 4 | Confidential |
| --- | --- | | c. | Obligations of Executive on Termination. | | --- | --- | | i. | Executive acknowledges and agrees that all property, including keys, credit cards, books, manuals, records,<br>reports, notes, contracts, customer lists, Confidential Information as defined in this Agreement, copies of any of the foregoing, and<br>any equipment furnished to Executive by the Company, belong to the Company and shall be promptly returned to the Company upon termination<br>of employment. | | --- | --- | | ii. | Upon termination of employment, Executive shall be deemed to have resigned from all offices and directorships<br>then held with the Company. | | --- | --- | | iii. | Except as expressly set forth in Section 3(b), Executive acknowledges and agrees that all unvested Company equity or equity-based<br>awards issued to the Executive as of the termination date shall automatically and without any action by any party be immediately forfeited<br>and cancelled. | | --- | --- | | iv. | Executive acknowledges and agrees that Executive will comply with all of the surviving terms of this Agreement,<br>specifically including, but not limited to, Sections 4 through 7 of this Agreement, unless this Agreement is terminated by the Company<br>without cause or by the Executive for Good Reason, in which case Section 4 (Non-Compete) shall not apply. | | --- | --- | | d. | Obligations of the Company on Termination. | | --- | --- | | i. | For Any Reason. Upon termination of this Agreement for any reason, the Company's obligations to Executive<br>under this Agreement shall include (a) the prorated payment of Executive's salary through the date of termination to the extent not<br>paid by then; (b) other than in connection with a termination of Executive’s employment for Cause, the payment of earned and<br>accrued bonus or incentive payments due Executive, if any, at the time of termination under any bonus or incentive plans in which Executive<br>participated prior to termination; (c) the payment of any unused accrued vacation through the date of termination; and (d) the<br>payment of any reimbursable business expenses that were documented by Executive prior to termination in accordance with the Company's<br>policies as set forth in paragraph 2.f. of this Agreement and that were not reimbursed by the Company at the time of the termination of<br>this Agreement. | | --- | --- | | 4. | Non-Compete. During the Non-Competition Period (as hereinafter defined), the Executive shall not<br>in any manner, directly, including through entities controlled by such Executive (i) engage or participate in a business, or otherwise<br>perform services for third parties which are competitive with those performed by the Company, or any parent, subsidiary or other affiliate<br>of the Company (a “Company Affiliate”), with respect to a business (“Competitive Services”), or (ii) own<br>or operate any business which engages or participates in the same or similar business or businesses conducted by the Company or Company<br>Affiliate which performs Competitive Services. Executive shall be deemed to be engaged in the Business or performing Competitive Services<br>if the Executive engages in such business or performs such services directly, whether for the Executive’s own account or for that<br>of another person, firm or corporation, or whether as a stockholder, principal, partner, member, agent, investor, proprietor, director,<br>officer, employee or consultant, except as an employee, director or consultant of the Company or a Company Affiliate; provided,<br>however, that the Executive may hold an investment of no more than 5% of the equity securities of any publicly traded entity without<br>violating this Agreement. For the purposes of this Agreement, the “Non-Competition Period” shall mean during the period of<br>employment by the Company or any Company Affiliate and for a period of six months following the termination of Executive’s<br>employment relationship with the Company, or any current or future Company Affiliate. | | --- | --- |
| 5 | Confidential |
| --- | --- | | 5. | Non-Solicitation. During the Non-Solicitation Period (as hereinafter defined), Executive will not<br>influence or attempt to influence customers of the Company or a Company Affiliate to divert their business to any individual or entity<br>then in competition with the Company. During the Non-Solicitation Period (as hereinafter defined), the Executive shall not in any manner<br>solicit or hire any employees or consultants of the Company, or any Company Affiliate, which shall include employees or consultants: (i) with<br>continuing contracts with the Company or a Company Affiliate; (ii) retained, employed or engaged by the Company or a Company Affiliate<br>but without continuing contracts; or (iii) whose contracts expire or otherwise terminate for any reason preceding or following the<br>first day of the Non-Solicitation Period. During the Non-Solicitation Period, Executive will not influence or attempt to influence any<br>customers or suppliers of the Company, or other third parties doing business with of the Company, to divert their business to any individual<br>or entity then in competition with the Company. During the Non-Solicitation Period, Executive will not disrupt, damage, impair, or interfere<br>with the business of the Company in any way. Executive further agrees not to make any negative or disparaging statements about the Company,<br>its affiliates, employees or representatives to any third party. For the purposes of this Agreement, the “Non-Solicitation Period”<br>shall mean during the period of employment by the Company or any Company Affiliate and for a period of two (2) years following the<br>termination of the Executive’s employment or consultant relationship with the Company, or any current or future Company Affiliate. | | --- | --- | | 6. | Confidential Information. Executive acknowledges<br>and agree that her employment with Company is conditioned upon the execution of a separate Confidentiality Agreement in the form attached<br>to this Agreement as Exhibit B (the “Confidentiality Agreement”) which prohibits the unauthorized use or disclosure of<br>Company’s confidential information. Executive agrees that she will<br>comply with the provisions of that Confidentiality Agreement. Executive further agrees that Company may change or amend its Confidentiality<br>Agreement from time to time in its discretion. Executive agrees to sign any amended Confidentiality Agreement(s) which may be issued<br>by Company as a condition of her continued employment with Company. | | --- | --- | | 7. | Covenant to Report; Ownership of Trade Secrets and other Intellectual Property. | | --- | --- | | a. | All written materials, records and documents made by the Executive or coming into her possession during<br>the course of her employment by Company concerning the business or affairs of the Company shall be the sole property of the Company; and,<br>upon the termination of her employment or upon the request of the Company, the Executive shall promptly deliver the same to the Company. | | --- | --- | | b. | Executive agrees that any trade secret, invention, improvement, patent, patent application, or writing,<br>and any program, system, or novel technique, whether or not capable of being trademarked, copyrighted or patented), obtained by Executive<br>in the course of employment with the Company, and relating to the business, property, methods or customers of the Company, shall be and<br>become the property of the Company, and Executive hereby transfers and assigns to the Company any rights he may have or acquire in any<br>of the foregoing. Executive agrees to give the Company prompt written notice of her acquisition of any such trade secret, invention, improvement,<br>patent, patent application, writing, program, system, or novel technique and to execute such instruments or transfer, assignment, conveyance,<br>or confirmation and such other documents and to do all appropriate lawful acts as may be requested by the Company to transfer, assign,<br>confirm, and perfect in the Company all legally protectable rights in such trade secret, invention, improvement, patent, patent application,<br>writing, program, system, or novel technique. | | --- | --- |
| 6 | Confidential |
| --- | --- | | 8. | Arbitration: | | --- | --- | | a. | Arbitrable Claims. The following claims are covered by this arbitration provision (“Arbitrable<br>Claims”): any and all claims for wages or other compensation; any and all contract or tort claims; any and all claims arising from<br>or related to your employment or the termination of your employment with Company; and any and all claims for discrimination or harassment<br>under any local, state or federal common or statutory law, based on race, color, sex, religion, national origin, ancestry, age, marital<br>status, medical condition, physical or mental disability, sexual orientation or any other protected characteristic. You and Company agree<br>to settle by final and binding arbitration all such Arbitrable Claims that Company may have against you or that you may have against Company<br>or against any of its related entities, or against any then current or former officer, director, employee or agent of Company, in their<br>capacity as such or otherwise. If this arbitration provision is held to be void or unenforceable with respect to a particular claim or<br>class of claims, that fact shall not affect the validity or enforceability of the arbitration provisions with respect to any other claim<br>or class of claims. YOU AND COMPANY ACKNOWLEDGE AND AGREE THAT BY SIGNING THIS AGREEMENT, YOU AND COMPANY HAVE VOLUNTARILY ELECTED TO<br>ARBITRATE ALL ARBITRABLE CLAIMS RATHER THAN LITIGATE THEM IN A JUDICIAL FORUM AND THAT YOU AND COMPANY ARE GIVING UP THE RIGHT TO A JURY<br>TRIAL AND TO A TRIAL IN A COURT OF LAW. | | --- | --- | | b. | Procedure. All Arbitrable Claims shall be settled by final and binding arbitration in accordance<br>with the employment dispute resolution rules of the American Arbitration Association (“AAA”) in effect at the time the<br>demand for arbitration is made. Such arbitration shall be filed with the AAA and shall be heard in South Carolina. The arbitrator shall<br>apply, as applicable, federal or South Carolina substantive law and law of remedies. South Carolina Code of Civil Procedure Section 1283.05,<br>which provides for certain discovery rights, shall apply to any arbitration. In reaching a decision, the arbitrator shall have no authority<br>to change, extend, modify or suspend any of the terms of this Agreement but shall have the authority to order injunctive and/or other<br>equitable relief. A judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Either you or<br>Company may bring an action in any court of competent jurisdiction, if necessary, to compel arbitration under this arbitration provision,<br>to obtain preliminary relief in support of claims to be prosecuted in arbitration or to enforce an arbitration award. | | --- | --- | | 9. | No Assignment. This Agreement is personal to Executive, and Executive may not assign any rights<br>or delegate any responsibilities hereunder without the prior written consent of the Company. | | --- | --- |
| 7 | Confidential |
| --- | --- | | 10. | Waiver or Modification. No provision of this Agreement may be modified, amended, or waived unless<br>in writing and signed by you and Company. A waiver of any one provision shall not be deemed to be a waiver of any other provision. | | --- | --- | | 11. | Compliance with Code Section 409A. | | --- | --- | | a. | Notwithstanding any provision of this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred<br>compensation” for purposes of Section 409A of the Code, and any regulations and guideline issued thereunder (“Section 409A”)<br>would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service, Executive’s<br>employment will be deemed to have terminated on the date of Executive “separation from service” (within the meaning of Treas.<br>Reg. Section 1.409A 1(h)) with Company. | | --- | --- | | b. | It is intended that this Agreement will comply with or be exempt from Section 409A to the extent that any compensation and benefits<br>provided hereunder constitute deferred compensation subject to Section 409A. This Agreement shall be interpreted on a basis consistent<br>with this intent. The Parties will negotiate in good faith to amend this Agreement as necessary to comply with Section 409A in a<br>manner that preserves the original intent of the Parties to the extent reasonably possible. No action or failure to act, pursuant to this<br>Section 14 shall subject Company to any claim, liability, or expense, and Company shall not have any obligation to indemnify or otherwise<br>protect Executive from the obligation to pay any taxes pursuant to Section 409A. | | --- | --- | | c. | For purposes of the application of Treas. Reg. § 1.409A-1(b)(4)(or any successor provision),<br>each payment in a series of payments will be deemed a separate payment. | | --- | --- | | d. | Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred<br>compensation” for purposes of Section 409A would otherwise be payable or distributable under this Agreement by reason of Executive’s<br>separation from service during a period in which Executive is a “specified Executive” (as defined under Section 409A<br>and the final regulations thereunder), then, subject to any permissible acceleration of payment by Company under Treas. Reg. Section 1.409A<br>3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): | | --- | --- | | i. | if the payment or distribution is payable in a lump sum, the Executive’s right to receive payment<br>or distribution of such non-exempt deferred compensation will be delayed until the earlier of Executive’s death or the first day<br>of the seventh month following Executive’s separation from service; and | | --- | --- | | ii. | if the payment or distribution is payable over time, the amount of such non-exempt deferred compensation<br>that would otherwise be payable during the six months immediately following Executive’s separation from service will be accumulated,<br>and the Executive’s right to receive payment or distribution of such accumulated amount will be delayed until the earlier of Executive’s<br>death or the first day of the seventh month following Executive’s separation from service, whereupon the accumulated amount will<br>be paid or distributed to Executive and the normal payment or distribution schedule for any remaining payments or distributions will resume. | | --- | --- |
| 8 | Confidential |
| --- | --- |
This Section 14(d) should not be construed to prevent the application of Treas. Reg § 1.409A-1(b)(9)(iii)(or any successor provision) to amounts payable hereunder (or any portion thereof).
| 12. | Golden Parachute Limitation. Notwithstanding anything in this Section or elsewhere in this<br>Agreement to the contrary, in the event the payments and benefits payable hereunder to or on behalf of Executive (which the Parties<br>agree will not include any portion of payments allocated to the non-competition and non-solicitation provisions of Section 9) that<br>are classified as payments of reasonable compensation for purposes of Section 280G of the Code, when added to all other amounts and<br>benefits payable to or on behalf of Executive, would result in the loss of a deduction under Code Section 280G, or the imposition<br>of an excise tax under Code Section 4999, the amounts and benefits payable hereunder shall be reduced to such extent as may be necessary<br>to avoid such loss of deduction or imposition of excise tax. In applying this principle, the reduction shall be made in a manner consistent<br>with the requirements of Section 409A and where two or more economically equivalent amounts are subject to reduction, but payable<br>at different times, such amounts shall be reduced on a pro-rata basis. All calculations required to be made under this subsection<br>will be made by the Company’s independent public accountants, subject to the right of Executive’s professional advisors to<br>review the same. The Parties recognize that the actual implementation of the provisions of this subsection are complex and agree to deal<br>with each other in good faith to resolve any questions or disagreements arising hereunder. |
|---|---|
| 13. | Exceptions. Notwithstanding anything in this Agreement, nothing contained in this Agreement shall<br>prohibit either Party (or either Party’s attorney(s)) from (a) filing a charge with, reporting possible violations of federal<br>law or regulation to, participating in any investigation by, or cooperating with any governmental agency or entity or making other disclosures<br>that are protected under the whistleblower provisions of applicable law or regulation, (b) communicating directly with, cooperating<br>with, or providing information (including trade secrets) in confidence to, any federal, state or local government regulator (including,<br>but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the National Labor Relations<br>Board or the U.S. Department of Justice) for the purpose of reporting or investigating a suspected violation of law, or from providing<br>such information to the Party’s attorney(s) or in a sealed complaint or other document filed in a lawsuit or other governmental<br>proceeding and/or (c) receiving an award for information provided to any governmental agency. Pursuant to 18 USC Section 1833(b),<br>the Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade<br>secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an<br>attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other<br>document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, nothing in this Agreement is intended to<br>or shall preclude either party from providing truthful testimony in response to a valid subpoena, court order, regulatory request or other<br>judicial, administrative or legal process or otherwise as required by law. If the Executive is required to provide testimony, then unless<br>otherwise directed or requested by a governmental agency or law enforcement, the Executive shall notify the Company as soon as reasonably<br>practicable after receiving any such request of the anticipated testimony. Further, nothing in this Agreement shall prevent the Executive<br>from (i) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other<br>conduct that the Executive has reason to believe is unlawful or (ii) exercising any rights Executive may have under Section 7<br>of the National Labor Relations Act. |
| --- | --- |
| 9 | Confidential |
| --- | --- | | 14. | Survival. It is the express intention and agreement of the parties hereto that the provisions of<br>this Agreement that are intended to survive the ending of your employment shall survive the ending of your employment. | | --- | --- | | 15. | Severability. Should any provision of this Agreement be held invalid, void, or unenforceable for<br>any reason, such adjudication shall in no way affect any other provision of this Agreement or the validity or enforcement of the remainder<br>of the Agreement and the provision affected shall be curtailed only to the extent necessary to bring it within the applicable requirements<br>of the law. | | --- | --- | | 16. | Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims<br>or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of South Carolina. | | --- | --- | | 17. | Entire Agreement. This Agreement and the Confidentiality Agreement which you will be required to<br>sign as a condition of your employment constitute the complete understanding between you and Company concerning the terms of your employment.<br>All prior representations, agreements, arrangements and understandings between or among you and representatives of Company, whether oral<br>or written, have been fully and completely merged herein and are fully superseded by this Agreement. | | --- | --- | | 18. | Executive acknowledges that he has read and understands this Agreement, and agrees that he has freely<br>and voluntarily entered into this Agreement without duress or undue influence imposed on her of any kind. | | --- | --- |
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement by their duly authorized representatives on the dates set forth below.
| AGREED: | |||
|---|---|---|---|
| ALTERNUS CLEAN ENERGY INC. | EXECUTIVE: | ||
| By: | /s/ Vincent Browne | By: | /s/ Taliesin Durant |
| Name: | Vincent Browne | Name: | Taliesin Durant |
| --- | --- | --- | --- |
| Title: | Director | ||
| Date: | Date: |
| 10 | Confidential |
| --- | --- |
Exhibit 10.16
CONTRACT OF EMPLOYMENT
This Contract of Employment (the “Contract”), dated as of the 31st of March, 2021, is by and between Alternus Energy Group plc., an Irish company with registration number 642708 located at Suite 11, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15 (the “Company”) and Mr. Gary Swan, an individual and Irish citizen residing at 55 Heathervue, Greystones, Co. Wicklow. (the “Employee”).
Job Title
Your job title is “Chief Construction Officer” (or other suitable title to be agreed) reporting directly to the CEO. You will be required to be flexible in this role and undertake any such duties assigned to you by the Company from time to time. Such duties may fall outside the remit of your normal working duties.
Commencement Date
Your employment with the Company under the terms of this Contract shall commence on May 4^th^ 2021 (the “Effective Date”).
Probationary Period
Your appointment is subject to the satisfactory completion of a probationary period of 6 months. During the probationary period, one week’s notice is required for the termination of employment from both you to the Company and the Company to you.
Remuneration
Your remuneration hereunder will comprise the following:
| 1. | Base Salary. Your salary shall be one hundred and eighty thousand euros (€180,000) per annum (the “Base Salary”)<br>subject to deduction of statutory income taxes. The Base Salary shall be paid in substantially equal installments monthly or in accordance<br>with the Company’s standard payroll practice. Base Salary will be reviewed on an annual basis at the discretion of the Company and<br>in conjunction with the achievement of satisfactory performance. |
|---|---|
| 2. | Car. In addition to the Base Salary, the Company will provide a car for your personal use up to a value of €90,000. This<br>car must be all-electric and on the Leaseplan Ireland list of vehicles in this category. Under current tax legislation you will be subject<br>to special benefit- in-kind (“BIK”) payments whereby the first €50,000 in value is exempt from BIK. You will be deducted<br>the appropriate BIK amounts via payroll. Should legislation change, any new BIK will be deducted from payroll. A full Company car policy<br>and terms will be agreed before the commencement date. |
| --- | --- |
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
| 3. | Annual Bonus. In addition to the Base Salary, you will<br>be eligible to earn a bonus of up to 75% of Salary based on you achieving certain milestone deliverables and the Company achieving specific<br>operating objective and based on reasonable specific performance targets that shall be defined with the mutual agreement of yourself,<br>the CFO and the CEO as will be agreed on or before June 30, 2021 and annually thereafter. The initial Bonus period will commence<br>on the Effective Date to the end of 2021 and annually thereafter. Any Bonus amount earned for each calendar year will be payable on or<br>before March 31 of the following year or under any other terms agreed in the bonus scheme. Unless otherwise expressly provided herein,<br>whenever any annual amounts payable to you hereunder are to be prorated for any period of service less than a full year ending on December 31,<br>such proration shall be determined by multiplying (x) the amount that would be payable for the full year by (y) a fraction,<br>the denominator of which shall be 365 and the numerator of which shall be the number of days during the applicable year for which you<br>were employed by the Company pursuant to this Contract. |
|---|---|
| 4. | Stock-based Compensation. In addition to the Base Salary and the Annual Bonus, you shall be eligible for stock and/or other<br>stock-based incentive compensation awards, to be determined by the Company in its sole and absolute discretion. You will receive an initial<br>grant of 75,000 of options in the Company. The Company is currently working on the most tax efficient option scheme for these, which will<br>be provided in due course. |
| --- | --- |
Benefits
As of the Effective Date, the Employee shall be entitled to participate in any existing employee benefit plans of the Company available to its employees generally, of which there are none currently, but which may include at some point in the future, health care, life, dental, vision, and disability insurance.
Expenses
Should you be required to incur business expenses, these will be reimbursed by the Company on the production of valid receipts. All such expenditure must have prior written approval from your Manager and be vouched with valid documentation in accordance with the Company’s expense policy.
Manager
You will report to the CEO or any such individual as is expressly communicated to you during the course of your employment.
Hours of Work
Your normal hours of work will be from 9:00am to 5:30pm, Monday through Friday. You may also be required to work such additional hours without payment as may be necessary for the proper performance of your duties. As such, some degree of flexibility may be required, and you will be expected to work appropriate hours in order to carry out your responsibilities. However, it is the policy of the Company that as far as possible, extensive working hours above the norm will not occur in accordance with the European Working Time Directive. Rest breaks will be granted in line with the Organisation of Working Time Act 1997.
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Place of Work
Your normal place of work will be in Dublin from the office located at Blanchardstown and at locations as agreed with your Manager. The Company reserves the right to assign you to carry out your work, either on a temporary or permanent basis, at such other location as the Company may reasonably require, from time to time.
You may also be required to travel as requested, which may also include unsociable hours and/or require travel at weekends.
Holiday Entitlement
The company’s holiday year runs from January 1 to December 31. Your paid holidays will be twenty-four (24) working days per year (not to include Christmas when the office is closed for a period of 1 week) given in accordance with the provisions of Part III of the Organisation of Working Time Act, 1997. Under no circumstances may any holidays be carried forward into the next holiday year without prior arrangement. Employees who commence their employment during the course of the holiday year, will be entitled to a pro-rated proportion of the annual leave entitlement from the date at which the employment commences.
Any employee absent from the workplace by reason of certified sick leave will continue to accrue and retain annual leave entitlement. Should the employee be unable to take annual leave during the relevant leave year, an annual leave carryover period of fifteen (15) months after the leave year will apply. Should the employment be terminated during this time, payment in lieu of untaken annual leave will be provided. After this 15-month carryover period, all unused annual leave will be lost. When a termination of this contract occurs, and the paid holidays already taken exceed the paid holiday entitlement on the date of termination, the Company will be entitled to deduct the excess holiday pay from the final pay amount.
Notice of Holidays
You must give at least one (1) month’s prior notice of any intended holidays that you wish to take, and these may not be taken without the agreement of the Company. Holidays must be taken at times convenient to the running of the Company’s business and must be agreed with your Manager at least one month in advance.
Public Holidays
You are entitled to all public holidays applicable under the Organisation of Working Time Act 1997.
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
If a public holiday falls within the dates of your basic Company holiday entitlement you will be entitled to an additional day’s paid holiday for each public holiday.
The Company reserves the right to require you to work on a public holiday, in return for which you shall be entitled to extra holiday, equal to the period worked, to be taken as agreed with the Company.
Absence
If, for any reason other than exceptional circumstances, you are absent from the Company’s employment or unable to carry out the full duties of your employment, you must contact the Company within 30 minutes of your normal start time on the first day of such absence. Failure to do so will result in your absence being classed as unauthorised.
An original certificate from a qualified Medical Practitioner must be submitted to your Manager on the third day of continuous absence and on a weekly basis thereafter. Copies will not be accepted.
The Company reserves the right to request an employee to attend a Company nominated doctor, at the Company’s expense, at any reasonable time during their employment. You hereby authorise such doctor(s) to disclose and to discuss with the Company and its medical advisors the results of such examinations. Any employee who is absent through unauthorised or uncertified absence will be requested to attend a disciplinary investigation meeting and could face sanctions up to and including dismissal.
While the Company is under no legal obligation to pay employees who are absent due to illness, it is agreed that you will be afforded a maximum one month’s sick pay in any 12-month period. As you are entitled to sick pay, the Company will require you to sign over any Illness Benefit payment from the Department of Employment Affairs and Social Protection for as long as the sick pay continues.
Please refer to the Company’s handbook for information on unacceptable levels of absence.
Grievance Procedure
If you have any grievance, which you consider to be genuine in respect of any aspect of your employment you should raise the matter initially with the CEO or Head of Human Resources, and not with anyone else. You may be required to put any such grievance in writing. Having enquired into your grievance the CEO or Head of Human Resources will discuss it with you and having made such further investigation as he considers appropriate, will notify you of his or her decision. If the decision of the CEO or Head of Human Resources is not acceptable you may then refer the matter in writing to the Board of Directors whose decision will be final and binding.
When stating grievances, you may be accompanied by a fellow employee of your choice, but not by anyone not employed by the Company.
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Disciplinary Procedure
The purpose of the disciplinary procedures is to ensure that the standards established by the Company’s rules are maintained and that any alleged failure to observe the Company’s rules is fairly dealt with. These procedures will only apply to employees who have successfully completed their probationary periods.
A full investigation will be undertaken into the circumstances of any disciplinary offence prior to the implementation of disciplinary action. It may be necessary, depending on the nature of the offence being investigated to suspend you on full pay whilst the necessary investigations are completed. Suspension is not a disciplinary action.
Disciplinary warnings will only be issued following a formal disciplinary meeting with you, at which you may be accompanied by a fellow employee (and not by anyone not employed by the Company unless the CEO should give prior consent.) You will be given an opportunity to respond to any complaint made before any decision on disciplinary action is taken.
Disciplinary action may take the following forms:
| o | A verbal warning, |
|---|---|
| o | A written warning, |
| o | A final written warning, |
| o | Dismissal. |
Dismissal may be with or without notice and may occur with or without any prior warnings depending on the circumstances.
The Company reserves the right in its absolute discretion to waive any of the penalties referred to in the clause above and substitute any one or more of the following penalties, namely: Demotion: The Company may demote you by notice in writing giving details of any consequential changes to your terms and conditions of employment. In particular, the notice will give details of any reduction to your salary and/or any loss of benefits and/or privileges consequent upon such demotion.
Suspension: The Company may suspend you from work with or without pay by notice in writing to this effect. Such notice will specify the dates of your suspension and the conditions applicable to your suspension.
Notice
Either party may terminate this agreement upon giving three month’s notice to the other. The Company reserves the right to pay salary in lieu of three months notice.
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Where the employment is still in the probationary period, one week’s notice will be deemed sufficient. In the event of termination of employment through dismissal, all disciplinary matters will be dealt with in accordance with the Company disciplinary procedure.
Nothing in these terms and conditions of employment shall prevent the Company from terminating your employment without notice or salary in lieu of notice in appropriate circumstances. You may not terminate your employment without giving one month’s notice.
Nothing in this agreement shall prevent the giving of a lesser period of notice by either party where it is mutually agreed.
Restrictions
During the period of this Contract, you will devote the whole of your time and attention to the business of the Company and you undertake that during the period of this Contract you will not engage in any other activity which is likely to prejudice your ability to serve the Company, nor will you engage in any business activity which may cause a conflict of interest with the business of the Company. You will not at any time either during the period of this Contract or after its termination make use of or communicate, any of the trade secrets or confidential information of the Company which you may have obtained whilst in the service of the Company. Any discovery, invention or process made or discovered by you whilst in the employment of the Company and relating to the business of the Company will remain the property of the Company and must be disclosed to the Company, and you undertake to join with the Company at any time in applying for letters, patents or other appropriate licenses for such discovery, invention or process.
Ethos and Commitment
You shall at all times act loyally and in the best interests of the Company, promoting its efficiency and the good reputation of the business with customers, suppliers, other members of staff and all others having dealings with the Company. You shall in all your work encourage and work towards establishing a team spirit with colleagues, promoting a pleasant working atmosphere, and shall not deliberately annoy or antagonize or gossip about your work mates and colleagues or clients of the Company. You shall not on any account harass, whether sexually or otherwise, any of your colleagues, or act in a bullying or intimidating or harassing manner.
You shall demonstrate in your work the skill and aptitude commensurate with the experience and training which you claimed at the time of your interview for the position and shall subsequently demonstrate an improvement and increased ability and aptitude based on your experience with the Company.
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Conflict of Interest
During this Contract you shall not (except as a representative or nominee of the Company or any affiliate of the Company or otherwise with the prior consent in writing of your Manager) be directly or indirectly engaged, concerned or interested in any other business which:
| (a) | is wholly or partly in competition with any business carried on by the Company or any affiliate of the Company by itself or themselves<br>or in partnership, common ownership or as a joint venture with any third party; or |
|---|---|
| (b) | as regards any goods or services, is a supplier to or customer of the Company or any affiliate of the Company. |
| --- | --- |
Inventions
If at any time during your employment you (whether alone or with any other person or persons) make any invention, whether relating directly or indirectly to the business of the Company, you shall promptly disclose to the Company full details, including drawings and models, of such invention to enable the Company to determine whether it is a “Company Invention”. If the invention is a Company Invention you shall hold it in trust for the Company, and at the request and expense of the Company do all things necessary or desirable to enable the Company, or its nominee, to obtain the benefit of the Company Invention and to secure patent or other appropriate forms of protection for it throughout the world. Decisions as to the patenting and exploitation of any Company Invention shall be at the sole discretion of the Company.
Copyright
You shall promptly disclose to the Company all copyright works or designs originated, conceived, written, or made by you alone or with others (except only those works originated, conceived, or written, or made by you outside your normal working hours and wholly unconnected with your employment) and shall until such rights shall be fully and absolutely vested in the Company, hold them in trust for the Company. You also agree that by your signature to this agreement you hereby
| o | Irrevocably assign by way of future assignment all copyright design rights and other proprietary rights,<br>if any, for the full terms thereof throughout the world in respect of all copyright works or designs originated, conceived, written, or<br>made by you alone or with others (except only those works originated, conceived, or written, or made by you outside your normal working<br>hours and wholly unconnected with your employment) during the period of your employment; and |
|---|---|
| o | Irrevocably and unconditionally waive, in favour of the Company, any and all moral rights conferred on<br>you by law for any work in which copyright or design right is vested in the Company. |
| --- | --- |
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Data Protection
As an employee of the Company, your personal details will be stored in order that the Company may effectively administer this employment agreement. It is a term of this contract that you agree to the Company processing such information. Further information, including how you can access this information, will be given to you on commencement.
Confidentiality
You shall not either during your employment or at any time for one year after its termination:
| o | Disclose confidential information to any person or persons (except to those authorised by the Company<br>to know or as otherwise required by law); |
|---|---|
| o | use confidential information for your own purposes or for any purposes other than those of the Company;<br>or otherwise required by law); |
| --- | --- |
| o | through any failure to exercise all due care and diligence cause any unauthorised disclosure of any confidential<br>information of the Company (including in particular any software, schemes, designs, ideas, programmes, calculations, tools, lists or details<br>of customers of the Company or information relating to the working of any process or invention carried on or used by the Company or any<br>Company Invention) or in respect of which the Company is bound by an obligation of confidence to a third party. |
| --- | --- |
These restrictions shall cease to apply to information or knowledge which may (otherwise than through your default) become available to the public generally. All notes, memoranda, records, documents, or computer disks made by you relating to the business of the Company or its Associated companies shall be and remain the property of the Company or an affiliate Company to whose business they relate and shall be delivered by you to the Company to which they belong forthwith upon request.
Acceptance of Gifts
You may not without prior written consent of Executive Management accept gifts of any kind in respect of any sale or purchase of any goods or services effected, or other business transacted by the Company or any associated Company.
Gross misconduct
The following are examples of Gross Misconduct offences and as such may result in summary dismissal. This list is not exhaustive.
| o | Fighting, physical assault; |
|---|---|
| o | Gross insubordination to your supervisor, or the management of the Company or the use of aggressive or<br>abusive behaviour or harassment or bad language, towards any other employee of the Company; |
| --- | --- |
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
| o | Theft, willful damage or negligence which leads to damage to the property belonging to the Company or<br>other employees; |
|---|---|
| o | Fraud or any other offence committed against the Company which would be a breach of the law; |
| --- | --- |
| o | Intoxication while at your place of work or while representing the Company by reason of drink or drugs.<br>Having illegal drugs at your place of work, or the use of such illegal drugs; or |
| --- | --- |
| o | Giving false information or deliberately omitting relevant information on your curriculum vitae or job<br>application form. |
| --- | --- |
Health and Safety
The Company will take all reasonably practicable steps to ensure your health, safety and welfare while at work. However, you are the person primarily responsible for taking care to avoid accidents to yourself. You have a duty while at work to take reasonable care for the health and safety of yourself and of other persons who may be affected by your acts or omissions. You have a duty to cooperate with the Company in complying with any statutory duty or requirements concerning health and safety at work.
Variation of Contract or Company Policies
The Company reserves the right to make reasonable changes to your terms of employment, and Company policies and procedures, and where appropriate, these will be notified to you by way of general notice to take effect immediately.
Any significant changes will be notified to you, in writing, one month in advance. You will be deemed to have accepted these changes if you do not object by the end of the one month period.
Lay-Off / Short-Time
The Company reserves the right to lay you off work or reduce working hours where it is unable to maintain you in employment or in full-time employment. As much notice as possible will be given should these circumstances arise. You will not be paid during a lay-off period, and will only be paid for hours worked during periods of short-time.
Survival
It is the express intention and agreement of the parties hereto that the provisions of this Agreement are intended to survive the term of the Employee’s employment.
Severability
Should any provision of this Agreement be held invalid, void, or unenforceable for any reason, such adjudication shall in no way affect any other provision of this Agreement or the validity or enforcement of the remainder of the Agreement and the provision affected shall be curtailed only to the extent necessary to bring it within the applicable requirements of the law.
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Law
Irish Law shall govern this agreement and disputes arising under or about it should be subject to the exclusive jurisdiction of the Irish Courts.
Entire Agreement.
This Agreement, and the policies and procedures contained in the Company handbook as varied from time to time constitutes the complete understanding between the Employee and Company concerning the terms of the Employee’s employment. All prior representations, agreements, arrangements and understandings between or among the Employee and the Company, whether oral or written, have been fully and completely merged herein and are fully superseded by this Agreement.
The Employee acknowledges that they have read and understands this Agreement and agrees that they have freely and voluntarily entered into this Agreement without duress or undue influence imposed of any kind.
IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement as of the date first set forth above.
| Signed: | /s/<br> Gary Swan | Date: |
|---|---|---|
| For the Employee | ||
| Signed: | /s/<br> Vincent Browne | Date: |
| For the Employer |
| Alternus Energy Group Plc. | |
| --- | --- | | Suite 9-10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 PK64, Ireland | www.alternusenergy.com | | CRN: 642708 | contact@alternusenergy.com |
Exhibit 10.17
PRIVATE AND CONFIDENTIAL
DATED 05October 2021
| (1) | (Alternus Energy Group plc) |
|---|---|
| (2) | (Mr. David Farrell) |
| --- | --- |
Employment Contract
THIS AGREEMENT is made on 05 October 2021
BETWEEN
| (1) | Alternus Energy Group plc of Suites 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 R504 (hereinafter called the “Company”) |
|---|
and
| (2) | Mr. David Farrell of Cross, Ardagh, Co. Longford, N39RR66 (hereinafter called the “Executive”) |
|---|
Together, “the Parties”
and includes the terms of Employment required by the Terms of Employment (Information) Act 1994-2001
OPERATIVE PROVISIONS:
| 1. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 1.1. | In this Agreement the following words and expressions have the following meanings: |
| --- | --- |
| Board | the Board of Directors of the Company from time to time; |
| --- | --- |
| Confidential Information | shall include, but not be limited to, the following (whether recorded in writing, on computer disk<br> or in any other manner) trade secrets; secret manufacturing processes; customer data, including but not limited to, any such<br> information disclosing the names and addresses of customers and suppliers of the Company , the person at such contact or supplier to<br> contact, the requirements of such customer or supplier, discounts offered by the Company ; investment and pricing policies; product<br> performance data; marketing information; technical designs or specifications of the Company’s products; business plans or<br> dealings relating to the current or future activities of the Company including the timing of all or any such matters; know-how;<br> computer passwords; product lines; research activities and results; internal management accounts, any document marked<br> “confidential” or any information which the Executive<br>has been told is confidential or which the Executive might reasonably expect the Company would regard as confidential or which by its<br>very nature is confidential to the Company, or any information which has been given to the Company in confidence by customers, suppliers<br>or other persons, and whether or not recorded in documentary form, computer disk or tape, which the Executive shall acquire at any time<br>during the Executive’s employment but which does not form part of the Executive’s own stock in trade provided that it shall<br>not include any information or knowledge which may subsequently come into the public domain after the Termination Date other than by way<br>of unauthorised disclosure by the Executive; |
| --- | --- |
1
| Termination Date | the<br>date on which the Executive’s employment under this Agreement terminates and<br>references to “from the Termination Date” mean from and including the date of termination. |
|---|---|
| 1.2. | Unless the context otherwise requires words denoting the singular shall include the plural and vice versa and reference to any gender<br>shall include all other genders. |
| --- | --- |
| 1.3. | References to the word “include” or “including” are to be construed without limitation. |
| --- | --- |
| 1.4. | References in this Agreement to statutory provisions include all modifications and re-enactments of them and all subordinate legislation<br>under them. |
| --- | --- |
| 1.5. | Headings in this Agreement are inserted for convenience only and shall not affect its construction. |
| --- | --- |
| 2. | APPOINTMENT, TERM AND NOTICE |
| --- | --- |
| 2.1. | The Company will employ the Executive<br>and the Executive will serve the Company as its Chief Commercial Officer. |
| --- | --- |
| 2.2. | The Executive’s appointment shall<br>be deemed to have commenced on January 31, 2022 (or other such date as agreed between the parties) and the Agreement can be terminated<br>by either party giving to the other not less than 3 (three) calendar months prior notice in writing. |
| --- | --- |
2
| 2.3. | The Executive agrees that at its absolute discretion the Company may terminate the Executive’s employment under this Agreement<br>with immediate effect by paying the Executive in lieu of his notice period or in lieu of the remainder of his notice period if at the<br>Company’s request the Executive has worked during part of the notice period. For this purpose, the Executive agrees that the payment<br>in lieu of notice will be his basic monthly salary for his notice period, after deducting Income Tax and PRSI contributions, and specifically<br>including in such calculation any allowance, fee, bonus, commission, pension contribution or other emolument referable to his employment<br>whether payable under this Agreement or otherwise in respect of that period. |
|---|---|
| 2.4. | The Executive will report to the Company’s Chief Executive Officer. |
| --- | --- |
| 2.5. | No probationary period will apply to the employment. |
| --- | --- |
| 3. | DUTIES |
| --- | --- |
| 3.1. | The Executive will carry out the duties and functions to support and execute the commercial objectives of the Company including but<br>not limited to capital raising, investor and funder relations, strategic planning and PPA negotiations and exercise the powers and comply<br>with the instructions assigned or given to the Executive from time to time by the Chief Executive Officer. Except when prevented by illness,<br>accident or holiday the Executive will devote all of the Executive’s time, attention and skill to the affairs of the Company and<br>where appropriate do his best to promote its interests provided that the Company may at any time for any reason require the Executive<br>to cease performing and exercising all or any of the Executive’s duties, functions or powers. |
| --- | --- |
| 3.2. | The Executive will at all times keep the Chief Executive Officer promptly and fully informed (in writing if so requested) of the conduct<br>of the business or affairs of the Company and provide such explanations and assistance as the Chief Executive Officer may require in connection<br>with such business or affairs and the Executive’s employment under this Agreement. |
| --- | --- |
| 3.3. | The Executive expressly acknowledges that he will draw to the attention of the Company any act by a director, employee or third party<br>that is a breach on their part or may harm the interests of the Company. |
| --- | --- |
| 3.4. | The Company may at any time appoint any person or persons to act jointly with the Executive to discharge the Executive’s duties and functions<br>under this Agreement. |
| --- | --- |
3
| 3.5. | The Executive shall not without the prior written consent of the Chief Executive Officer contract any debt or incur any liability<br>on behalf of the Company exceeding or such other limit as shall be agreed by the Chief Executive Officer and notified to the Executive. |
|---|---|
| 4. | PLACE OF WORK |
| --- | --- |
| 4.1. | The Company’s head office is at Suites 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 R504 but the Executive<br>will be required to perform his duties inside the Republic of Ireland, being his principle place of work, as the Company may require and<br>it is a condition of the Executive’s employment that the Executive complies with any such requirement. |
| --- | --- |
| 4.2. | In the performance of the Executive’s duties, the Executive may be required to travel both throughout and outside the Republic<br>of Ireland. |
| --- | --- |
| 5. | HOURS OF WORK |
| --- | --- |
| 5.1. | The Company’s normal office hours are from 9am to 5pm Monday to Friday but the Executive will work such hours as are needed<br>for the proper performance of his duties including hours outside the Company’s normal office hours without additional remuneration<br>in order to meet the requirements of the business. |
| --- | --- |
| 6. | SALARY |
| --- | --- |
| 6.1. | The Executive’s basic annual salary inclusive of any director’s fees is €200,000 (Two Hundred Thousand Euros) per<br>annum which will accrue from day to day and be payable monthly in arrears on or before the last day of each month. |
| --- | --- |
| 6.2. | The Executive’s salary will be subject to review annually by the Company on or before the 31st March each year. |
| --- | --- |
| 7. | BONUS |
| --- | --- |
| 7.1. | In addition to the Salary, Executive will be eligible to earn a bonus of up to 50% (fifty percent) of annual salary based on achieving<br>certain milestone deliverables and the Company achieving specific operating objectives as set forth in an Exhibit B to be agreed<br>between the Executive and the Chief Executive Officer on or before March 31, 2022 and thereafter attached hereto. |
| --- | --- |
4
| 7.2. | Any Bonus amount earned for each calendar year will be payable on March 31 of the following year. The Parties agree that such<br>Bonus can be paid over a longer period (jointly agreed). Any unpaid amount will be carried forward as a payable to Executive. |
|---|---|
| 7.3. | Unless otherwise expressly provided herein, whenever any annual amounts payable hereunder are to be prorated for any period of service<br>less than a full year ending on December 31, such proration shall be determined by multiplying (x) the amount that would be<br>payable for the full year by (y) a fraction, the denominator of which shall be 365 and the numerator of which shall be the number<br>of days during the applicable year for which you were employed by the Company pursuant to this Contract. |
| --- | --- |
| 8. | PENSION AND OTHER BENEFITS |
| --- | --- |
| 8.1. | The Company will contribute in equal monthly instalments to the Executive’s private pension scheme an amount equal to 8% (eight<br>percent) of your basic annual salary during each year of his employment under this Agreement**.** |
| --- | --- |
| 8.2. | During the Executive’s employment the Company will provide the Executive and his immediate family at the Company’s expense<br>with cover under the [VHI Plan B], subject to and upon the rules of the said scheme from time to time in force and to the Executive<br>and the Executive’s family being eligible to participate in or benefit from the scheme. |
| --- | --- |
| 8.3. | On or before the first anniversary of the employment, the Company will put in place life cover and critical illness cover policies<br>as part of the wider Company scheme. The Company does not yet provide such benefits to its staff and will include the Executive as soon<br>as these benefits are provided |
| --- | --- |
| 8.4. | In respect of the benefits provided to the Executive under this Clause 8 the Company reserves the right to substitute other schemes<br>for them or amend the scale or level of benefits PROVIDED THAT each and every benefit shall not be less favourable than the benefits provided<br>to the Executive under the existing scheme. |
| --- | --- |
| 8.5. | If any scheme provider refuses for any reason (whether based on its own interpretation of the terms of the scheme or otherwise) to<br>provide any benefits to the Executive, the Company shall not be liable to provide any such benefits itself or pay any compensation in<br>lieu to the Executive. |
| --- | --- |
5
| 9. | STOCK BASED COMPENSATION |
|---|---|
| 9.1. | Executive shall<br>also be eligible for stock and/or other stock-based incentive compensation awards as the Company from time to time generally provides<br>to its senior executives, to be determined by the Company in its sole and absolute discretion. |
| --- | --- |
| 9.2. | Executive will<br>receive an initial grant of "incentive options" equal to the equivalent of 270,000 of Company’s common shares. Of this<br>amount, 70,000 options will be immediately vested and 50,000 options will vest per year thereafter. |
| --- | --- |
| 9.3. | Should the Agreement<br>be Terminated for any reason prior to full vesting then the unvested shares will be immediately returned to the company. |
| --- | --- |
| 9.4. | In the event of<br>any Change of Control, being a sale/merger or significant change of control effecting in excess of 50% of voting control of the Company,<br>all unvested stock based compensation held by the Executive shall immediately vest and be fully exercisable and all restrictions shall<br>lapse. |
| --- | --- |
| 9.5. | Details on the<br>incentive compensation will be agreed and documented prior to commencement which for the avoidance of doubt should include appropriate<br>tax advice. |
| --- | --- |
| 9.6. | Additional shares<br>or other such stock based compensation may be granted during the employment at the sole discretion of the Board of the Company. |
| --- | --- |
| 10. | MOTOR CAR AND FUEL CARD |
| --- | --- |
| 10.1. | The Company will provide a car for Executive’s personal use up to a value of €100,000 provided that such car is<br>full electric, which is subject to special benefit-in- kind (“BIK”) payments whereby the first €50,000 in value is exempt<br>from BIK calculations under current legislation. Appropriate BIK amounts will be deducted via payroll. Should legislation change the Company<br>will not be responsible to adjust the net BIK and any new BIK will be deducted from payroll. A full Company car policy and terms will<br>be agreed before commencement date. |
| --- | --- |
| 10.2. | If Executive does not wish to avail of the Company car option, a gross annual payment of €12,000 will be paid with<br>annual salary. |
| --- | --- |
| 11. | EXPENSES |
| --- | --- |
The Company will reimburse to the Executive all business expenses reasonably and properly incurred in the performance of the Executive’s duties under this Agreement on hotel, travelling, entertainment and other similar items provided that the Executive produces to the Company all appropriate receipts or other satisfactory evidence of expenditure.
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| 12. | LAPTOP AND MOBILE TELEPHONES |
|---|---|
| 12.1. | The Company will provide the Executive with a laptop and mobile phone for all business and reasonable personal use. |
| --- | --- |
| 13. | HOLIDAYS |
| --- | --- |
| 13.1. | In this clause “holiday year” means the period from 1^st^ January to 31^st^ December in each<br>year. |
| --- | --- |
| 13.2. | In addition to statutory bank and public holidays the Executive will be entitled to 24 working days’ paid holiday in each holiday<br>year The above excludes days taken for Christmas period when the office is closed. |
| --- | --- |
| 13.3. | All holidays are to be taken at such times as may be approved by the Chief Executive Officer 10 days in advance. |
| --- | --- |
| 13.4. | The Executive will not be entitled to any pay in lieu of holiday except when employment terminates and the Executive has not taken<br>his accrued entitlement as at the Termination Date. On termination, the Executive’s holiday entitlement will be calculated pro-rata<br>for each completed calendar month worked in that holiday year. Where the Executive’s employment is terminated because of misconduct<br>or where the full contractual notice period is not given by the Executive, unused accrued holiday pay over the statutory minimum laid<br>down by law will not be paid. |
| --- | --- |
| 13.5. | Where the Executive has taken more or less than his holiday entitlement in the holiday year in which the employment terminates, a<br>proportionate adjustment will be made by way of addition to or deduction from as appropriate the Executive’s final gross salary<br>calculated on a pro-rata basis. |
| --- | --- |
| 13.6 | The Executive may request time off for reasons other than holiday<br>such as bereavement, jury service, unpaid leave, or attendance for examinations and in these circumstances should apply for permission<br>for time off to the Chief Executive Officer and such permission will not be unreasonably withheld. |
| --- | --- |
7
| 14. | ABSENCE FROM WORK |
|---|---|
| 14.1. | If the Executive is absent from work due to illness injury or other incapacity the Executive must notify the Chief Executive Officer<br>of the Company as soon as possible on the first day of absence that the Executive will be unable to attend. The Executive must then keep<br>the Company informed on a regular basis of his progress and when he expects to return to work. |
| --- | --- |
| 14.2. | If the Executive is absent from work for less than 3 days (including weekends), the Executive is required to complete a self-certification<br>form stating the dates and reason for absence including details of illness, injury or incapacity on non-working days as this information. |
| --- | --- |
| 14.3. | If the Executive is absent from work due to illness or injury which continues for 3 or more consecutive days (including weekends)<br>the Executive must provide the Company with a medical certificate and give or send it immediately to the Company. If absence is prolonged<br>the Executive should continue to submit regular medical certificates, on a weekly basis, to cover the entire period of his absence and<br>to keep the Company informed generally as to the Executive’s condition and the likely date of return to work. |
| --- | --- |
| 14.4. | Failure to comply with the above procedures may disqualify the Executive from receiving Company Sick Pay. |
| --- | --- |
| 14.5. | The Company will be entitled, at its expense, to require the Executive to be examined by an independent medical practitioner of the<br>Company’s choice at any time and the Executive agrees that the Doctor carrying out the examination may disclose to and discuss with<br>the Company the results of the examination. |
| --- | --- |
| 14.6. | Provided that the Executive has complied with the notification and certification procedures above, if the Executive is absent from<br>duties as a result of illness or injury the Executive will be entitled to receive his basic salary for a maximum period of 12 weeks in<br>any period of 12 months to be discussed. Company Sick Pay will be reduced by the amount of any Illness Benefit payments recoverable by<br>the Executive (whether or not recovered) in respect of illness or injury. |
| --- | --- |
| 14.7. | The Company reserves the right to withhold payments of salary and/or any other sum otherwise payable to the Executive under this Agreement<br>in respect of any unauthorised absence from work. The Company may recover from the Executive (by deductions from salary or other sums<br>payable to the Executive by the Company, or otherwise on terms acceptable to the Company) any sums paid to the Executive in respect of<br>any unauthorised absence from work. |
| --- | --- |
8
| 14.8. | If the Executive is absent from work due to an accident which occurred or a condition which was sustained either on or off duty any<br>Company Sick Pay received by the Executive from the Company in respect of the absence will be treated as a loan which the Executive must<br>repay to the Company if the Executive recovers damages in respect of an injury, condition or absence from work. |
|---|---|
| 15. | OBLIGATIONS DURING EMPLOYMENT |
| --- | --- |
| 15.1. | During employment by the Company the Executive shall: |
| --- | --- |
| 15.1.1. | abide by any relevant Company policy, rule or procedure which may be in force from time to time; |
| --- | --- |
| 15.1.2. | not without the Company’s prior written consent hold any Material Interest in any company, business or organisation which: |
| --- | --- |
| 15.1.2.1. | is in competition with the Company or the Group; |
| --- | --- |
| 15.1.2.2. | impairs the Executive’s ability to act at all times in the best interests of the Company; or |
| --- | --- |
| 15.1.2.3. | requires the Executive to disclose Confidential Information in order properly to discharge his duties to or further his interest in<br>such person, firm, company, organisation or business; |
| --- | --- |
| 15.1.3. | not divulge Confidential Information or obtain or seek to obtain any direct or indirect financial advantage from the disclosure of<br>such information provided that this obligation not to divulge Confidential Information does not apply to disclosures made with the prior<br>written consent of the Company or required by a Court Order; |
| --- | --- |
| 15.1.4. | not directly or indirectly receive or obtain in respect of any goods or services sold or purchased or other business transacted (whether<br>or not by the Executive) by or on behalf of the Company any discount, rebate, commission or other inducement (whether in cash or in kind)<br>which is not authorised by the Company’s rules or guidelines from time to time and if the Executive or any company, organisation<br>or business in which the Executive holds any Material Interest shall obtain any such discount, rebate, commission or inducement the Executive<br>shall immediately account to the Company for the amount the Executive or they receive; |
| --- | --- |
9
| 15.1.5. | not introduce to any person, firm or company any business of any kind with which the Company for which the Executive has performed<br>services under this Agreement is able to deal and not have any financial interest in, or derive any financial benefit from, contracts<br>or transactions entered into by the Company with any third party, without first disclosing such interest or benefit to the Board and obtaining<br>its written approval; |
|---|---|
| 15.1.6. | not make any notes or memoranda relating to any matter within the scope of the business dealings or affairs of the Company otherwise<br>than for the benefit of the Company or without the prior written consent of the Board to remove from the Company premises or copy or allow<br>others to copy the contents of any document, disk, tape or other tangible items which contains any Confidential Information or which belongs<br>to the Company; |
| --- | --- |
| 15.1.7. | if so requested by the Company delete all Confidential Information from any computer disks, tapes or other reusable material in the<br>Executive’s possession or under the Executive’s control and destroy all other documents and tangible items in the Executive’s<br>possession or under the Executive’s control which contain or refer to any Confidential Information; |
| --- | --- |
| 15.1.8. | observe the provisions of and procure his spouse and children shall observe any code in relation to dealings in securities and such<br>other codes, guidance or statements which have been or are adopted by the Board or which directors of the Company are required to observe<br>by law or by any recognised stock exchange or other regulatory body or authority. |
| --- | --- |
| 16. | TERMINATION OF EMPLOYMENT |
| --- | --- |
| 16.1. | The Company may terminate the Executive’s employment immediately by notice in writing (even if it has allowed time to elapse<br>or on a former occasion may have waived its rights under this clause) without any entitlement to notice or payment in lieu of notice (under<br>Clause 2.3), any compensation, damages or remuneration for subsequent periods payable by virtue of common law or any statute if the Executive: |
| --- | --- |
| 16.1.1. | commits, repeats or continues (after written warning) any serious breach of this Agreement; |
| --- | --- |
10
| 16.1.2. | is guilty of gross misconduct (including, but not limited to, gross misconduct as defined in the Company’s disciplinary procedure)<br>or gross incompetence in the performance of his duties; |
|---|---|
| 16.1.3. | commits any act of dishonesty relating to the Company or any of its or their employees; |
| --- | --- |
| 16.1.4. | adversely prejudices or does or fails to do anything which in the reasonable opinion of the Board is likely to prejudice adversely<br>the interests or reputation of the Company; |
| --- | --- |
| 16.1.5. | is convicted of any criminal offence (other than an offence which does not in the opinion of the Board affect the Executive’s<br>employment under road traffic legislation in the Republic of Ireland or elsewhere for which the Executive is not sentenced to any term<br>of imprisonment, whether immediate or suspended); |
| --- | --- |
| 16.1.6. | becomes bankrupt or enters into or makes any arrangement or composition with or for the benefit of his creditors generally; or |
| --- | --- |
| 16.1.7. | becomes of unsound mind. |
| --- | --- |
| 16.2. | This Agreement shall automatically terminate on the happening of any of the following events: |
| --- | --- |
| 16.2.1. | on the Executive reaching age 65 (“the Retirement Date”) unless the Company and the Executive agree at any time prior<br>to the Retirement Date that the Agreement should continue after the Retirement Date; or |
| --- | --- |
| 16.2.2. | if the Executive becomes prohibited by law from being a director or being concerned with the management of a company. |
| --- | --- |
| 16.3. | Where either party gives notice to terminate this Agreement under Clause 2.2 or if the Executive resigns without notice and the Company<br>does not accept the resignation the Company may in its absolute discretion for all or part of the notice period under Clause 2.2 exclude<br>the Executive from its premises; and/or require the Executive to resign any offices in the Company; carry out specified duties for the<br>Company other than those referred to in Clause 3 or to carry out no duties; and/or instruct the Executive not to communicate with suppliers,<br>customers, employees, agents or representatives of the Company until the employment has terminated. During the notice period the Executive<br>will be entitled to be paid salary and all other contractual benefits in accordance with this Agreement. |
| --- | --- |
11
| 17. | SALE OR RECONSTRUCTION OF THE COMPANY |
|---|
The Executive will have no claim against the Company in respect of the termination of his employment under this Agreement in connection with the sale of the whole or a substantial part of the business or undertaking of the Company or on or by reason of the liquidation of the Company for the purposes of amalgamation or reconstruction (whether or not by reason of insolvency) if the Executive is offered employment on no less favourable terms than those contained in this Agreement (apart from the identity of the employer) with any person, firm or company as a result of such sale or of such amalgamation or reconstruction.
| 18. | RESTRICTIONS ON THE EXECUTIVE AFTER TERMINATION OF EMPLOYMENT |
|---|---|
| 18.1. | Definitions |
| --- | --- |
| In this Clause<br>17 the following words and expressions have the following meanings: | |
| --- | |
| Businesses | all and any commercial activities of the Company: |
| --- | --- |
| 1. | with which the Executive shall have been concerned or involved to any material extent at any time during the Relevant Period; or |
| --- | --- |
| 2. | which the Company shall at the Termination Date have determined to carry on with a view to profit in the foreseeable future and in<br>relation to which the Executive shall at the Termination Date possess any Confidential Information; |
| --- | --- |
| Critical Person | any<br>person who was an employee, director or consultant employed or engaged by the Company at any time within the Relevant Period and with<br>whom the Executive had direct or indirect contact or frequent dealings with or was responsible for and who by reason of such employment<br>or engagement and in particular his seniority and the expertise or knowledge of trade secrets or Confidential Information of the Company<br>or knowledge of or influence over the clients, customers or suppliers of the Company is likely to be able to assist or benefit the business<br>in or proposing to be in competition with the Company; |
| --- | --- |
12
| Relevant Customer | any person, firm or company who or<br>which at any time during the Relevant Period is or was negotiating with, a client or customer of, or in the habit of dealing with,<br>the Company for the sale or supply of Relevant Products or Services, and with whom the Executive had personal contact or dealings on<br>behalf of the Businesses or of which the Executive had personal knowledge during the Relevant Period in the course of the<br>Executive’s employment under this Agreement; |
|---|---|
| Relevant Period | the<br>period of 6 months immediately before the Termination Date; |
| --- | --- |
| Relevant Products or Services | products or services which are of<br>the same kind as or of a similar kind to or competitive with any products or services sold or supplied by the Company in the<br>ordinary course of the Businesses within the Relevant Period and with which sale or supply the Executive was directly concerned or<br>connected or of which the Executive had personal knowledge during the Relevant Period in the course of the Executive’s<br>employment under this Agreement; |
| --- | --- |
| Restricted Territory | Any<br>area where the Company carries on business during the Relevant Period |
| --- | --- |
| 18.2. | Reasonableness of Restrictions |
| --- | --- |
The Executive acknowledges that in the ordinary course of his employment the Executive will be exposed to Confidential Information and the Company’s, customers, suppliers and employees for the purposes of the Businesses. The Executive acknowledges that such Confidential Information and contact with customers, suppliers and employees may not be readily available to others engaged in a business similar to that of the Company or to the general public and that a disclosure of Confidential Information and or contact with customers, suppliers and/or employees as set out in Clause 17.5 will be liable to cause significant harm to the Company The Executive agrees that the provisions of this Clause 17 are necessary and reasonable to protect the legitimate interests of the Company and customers.
13
| 18.3. | Confidential Information |
|---|
After the termination of employment for whatever reason the Executive will not at any time and in any manner use or divulge or communicate to any person, firm, company or other organisation any Confidential Information except if such disclosure is with the prior written consent of the Company or required by a Court Order.
| 18.4. | Non Competition |
|---|---|
| 18.4.1. | The Executive agrees that he will not, without the prior written consent of the Company, directly or indirectly and whether alone<br>or in conjunction with or on behalf of any other person and whether as principal, shareholder, director, executive, employee, agent, consultant,<br>independent contractor, partner or otherwise for a period of 6 months from the Termination Date: |
| --- | --- |
| 18.4.1.1. | be engaged, concerned or interested in, or provide technical, commercial, or professional advice to, any other business which supplies<br>Relevant Products or Services in competition with the Company in the Restricted Territory; |
| --- | --- |
| 18.4.1.2. | be engaged, concerned or interested in any business which at any time during the Relevant Period has supplied Relevant Products or<br>Services to the Company or is or was at any time during the Relevant Period a Relevant Customer if such engagement, concern or interest<br>causes or would cause a supplier to cease or materially reduce its supplies to the Company or the Relevant Customer to cease or materially<br>reduce its orders or contracts with the Company; |
| --- | --- |
| 18.4.1.3. | hold any Material Interest in any company which requires or might reasonably be thought by the Company to require the Executive to<br>disclose or make use of any Confidential Information in order properly to discharge his duties to or to further the Executive’s<br>interest in such person, firm or company. |
| --- | --- |
| 18.5. | Non-Solicitation/Dealing/Poaching/Interference |
| --- | --- |
| 18.5.1. | The Executive agrees that he will not, without the prior written consent of the Company, directly or indirectly and whether alone<br>or in conjunction with or on behalf of any other person and whether as principal, shareholder, director, executive or employee. |
| --- | --- |
14
| 18.5.1.1. | for a period of 12 months from the Termination Date so as to compete with the Businesses, canvass, solicit or approach or cause to<br>be canvassed, solicited or approached any Relevant Customer for the sale or supply of Relevant Products or Services or endeavour to do<br>so; |
|---|---|
| 18.5.1.2. | for a period of 12 months from the Termination Date so as to compete with the Businesses accept or facilitate the acceptance of any<br>contract with or deal with in competition with the Businesses any Relevant Customer in relation to the sale or supply of any Relevant<br>Products or Services or endeavour to do so; |
| --- | --- |
| 18.5.1.3. | for a period of 12 months from the Termination Date in connection with any business in or proposing to be in competition with the<br>Company, solicit, induce or entice away from the Company, employ, seek to employ, engage or appoint or in any way cause to be employed,<br>engaged or appointed a Critical Person, whether or not such a person would commit any breach of his/her contract of employment or engagement<br>by leaving the service of the Company; |
| --- | --- |
| 18.5.1.4. | at any time after the Termination Date use in connection with any business any name which includes the name of the Company. |
| --- | --- |
| 18.5.1.5. | for a period of 6 months from the Termination Date interfere with the continuance of supplies to the Company from any suppliers who<br>have been supplying materials or services to the Company at any time during the Relevant Period and with whom the Executive has had personal<br>contact. |
| --- | --- |
| 18.6. | Notwithstanding Clause 17.7 each covenant contained in Clauses 17 shall be construed as a separate covenant and, if one or more of<br>the covenants is held to be against the public interest or unlawful or in any way an unreasonable restraint of trade, the remaining covenants<br>shall continue to bind the Executive. |
| --- | --- |
15
| 18.7. | Whilst the covenants in Clause 17 are considered by the parties to be reasonable in all the circumstances as at the date of this Agreement<br>the Company may by notice in writing at any time to the Executive<br>reduce in whole or in part the extent or duration of the restrictions in them in such manner and to such extent as the Company in its<br>absolute discretion determines and the Executive then agrees to be bound by such additional covenants in the form reduced and the validity<br>of any other covenant and provision contained in this Agreement shall not be affected. |
|---|---|
| 18.8. | If the Executive applies for or is offered new employment, or a new engagement, before entering into any related contract the Executive<br>will bring the terms of this Agreement to the attention of the third party proposing, directly or indirectly, to appoint or engage the<br>Executive. |
| --- | --- |
| 18.9. | The Executive’s obligations pursuant to such clause will with respect to each Company, constitute a separate and distinct covenant<br>and the invalidity or enforceability of any such covenant shall not affect the validity or enforceability of the covenants in favour of<br>either Company. |
| --- | --- |
| 19. | COMPANY PROPERTY |
| --- | --- |
On request and in any event of the termination of his employment, the Executive will immediately return to the Company all originals and copies of all documents, computer disks and tapes and other tangible items in the Executive’s possession or under the Executive’s control which belong to the Company or the Group and/or which contain or refer to any Confidential Information or which in any other way relate or belong to the Company or the Group.
| 20. | INTELLECTUAL PROPERTY |
|---|
All present and future copyright, know-how, rights to prevent unauthorised extraction and other intellectual property rights in any product or work developed or partly developed by the Executive during the course of the employment with the Company shall remain the sole and exclusive property of the Company and this Agreement does not purport to grant, assign or transfer any rights in such products or works to the Executive.
| 21. | DISCIPLINARY AND GRIEVANCE PROCEDURES AND SUSPENSION |
|---|---|
| 21.1. | The statutory provisions relating to disciplinary procedures in place from time to time are applicable to the employment. The Company<br>has a disciplinary procedure a copy of which is available on request from the Company. The disciplinary procedure is not incorporated<br>by reference to this Agreement and does not form part of it. |
| --- | --- |
| 21.2. | The statutory provisions relating to grievance procedures in place from time to time are applicable to the employment. If the Executive<br>has a grievance in relation to the employment or is dissatisfied with a disciplinary decision<br>against the Executive, the Executive may apply in writing to the Board in the first instance. |
| --- | --- |
16
| 21.3. | The Company is entitled (without prejudice to its rights consequently to terminate this Agreement on the same or any other ground)<br>to suspend the Executive on full pay for so long as may be reasonably necessary to carry out any investigation, including, but not limited<br>to, any investigation under the disciplinary procedure and hold a disciplinary hearing and may require the Executive during such period: |
|---|---|
| 21.3.1. | not to enter any premises of the Company and; |
| --- | --- |
| 21.3.2. | to abstain from contacting any customers, suppliers or employees of the Company; |
| --- | --- |
provided that the Executive shall not be employed by or provide services to any third party during the period for which he is suspended.
| 22. | DEDUCTIONS |
|---|
The Executive authorises the Company to deduct from his remuneration (including salary, pay in lieu of notice, commission, bonus, holiday pay and Company Sick Pay) at any time during the employment or in any event on termination of employment any monies owed by the Executive to the Company or any Group Company.
| 23. | DIRECTORSHIP |
|---|
On the termination of this Agreement for whatever reason, the Executive will at the request of the Company (without prejudice to any claims which the Executive may otherwise have against the Company) resign from all and any offices which the Executive may hold as a director of the Company or is subsidiaries and from all and any other offices which the Executive holds as trustee, nominee or representative of the Company and if the Executive should fail to do so within 14 days of request the Company is irrevocably authorised to appoint some person in his name and on his behalf to sign any documents or do things necessary or requisite to effect such resignations.
| 24. | DATA PROTECTION |
|---|---|
| 24.1. | The Executive gives the Company permission to collect, retain and process information about him, including but not limited to details<br>of his date of birth, sex and ethnic origin. The Company warrants that this information will only be used in order that the Company can<br>monitor its compliance with the law and best practice in terms of equal opportunities and non-discrimination. |
| --- | --- |
17
| 24.2. | Should the Executive’s personal circumstances change such as to render out the of date the information held by the Company,<br>he should notify the Company immediately. |
|---|---|
| 25. | NOTICES |
| --- | --- |
| 25.1. | Any notice given under this Agreement shall be in writing and shall be served on the party (in the case of the Executive) at the above<br>address or any other address notified by the Executive to the Company or (in the case of the Company) at its registered office. |
| --- | --- |
| 25.2. | Any notice shall be taken to have been received on the date and time of its actual receipt except that if correctly addressed and<br>stamped and sent by first class prepaid letter post it shall be taken to have been received on the third day after posting of it. |
| --- | --- |
| 26. | PREVIOUS AGREEMENTS |
| --- | --- |
| 26.1. | This Agreement constitutes the whole and only entire agreement between the parties in relation to the Executive’s employment<br>with the Company and supersedes and extinguishes any prior drafts, previous agreements, undertakings, representations, warranties and<br>arrangements of any nature whatsoever, whether or not in writing, between the parties relating to the Executive’s employment with<br>the Company. |
| --- | --- |
| 26.2. | The Executive acknowledges that he has no outstanding claim against any Group Company. |
| --- | --- |
| 26.3. | The Company acknowledges that it has no outstanding claim against the executive of any kind save as to any act of fraud by the executive<br>prior to this agreement. |
| --- | --- |
| 27. | WARRANTY |
| --- | --- |
The Executive warrants to the Company that by virtue of entering into this Agreement the Executive will not be in breach of any express or implied terms of any contract with or any obligation to any third party binding upon the Executive.
| 28. | COLLECTIVE AGREEMENTS |
|---|
There are no collective agreements in place which affect the Executive’s employment with the Company.
18
| 29. | LAW AND JURISDICTION |
|---|
The Agreement will be governed by and interpreted in accordance with Irish law and the parties irrevocably agree to submit to the jurisdiction of the Irish courts over any claim or matter or to settle any dispute which may arise out of or in connection with this Agreement and that accordingly any proceedings may be brought in such courts.
| 30. | AMENDMENT |
|---|
All changes to this Agreement (other than an increase in salary) must be agreed between the Company and the Executive in writing.
EXECUTION AND DELIVERY
This document is executed as a deed and delivered on the date set out at the beginning of this Agreement.
| Signed by the Company | |
|---|---|
| /s/ Vincent Browne | |
| Chief Executive Officer | |
| SIGNED by the Executive | /s/<br>David Farrell |
| --- | --- |
| Executive |
19
Exhibit 10.18
EXECUTION VERSION
PRIVATE AND CONFIDENTIAL
DATED 1 September 2022
| (1) | ALTERNUS ENERGY GROUP PLC |
|---|---|
| (2) | SOLIS BOND COMPANY DAC |
| --- | --- |
| (3) | Mr. Larry Farrell |
| --- | --- |
Employment Contract (Agreement)
THIS AGREEMENT is made on 1 September 2022
BETWEEN
| (1) | ALTERNUS ENERGY GROUP PUBLIC LIMITED COMPANY of Suites 9/10, Plaza 212, |
|---|
Blanchardstown Corporate Park 2, Dublin 15, D15 R504 (hereinafter called the “Parent”)
and
| (2) | SOLIS BOND COMPANY DAC of Suites 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15,<br> D15 R504 (hereinafter called the “Company”) |
|---|
and
| (3) | Mr. Larry Farrell of 9 Coill Beag, Ratoath, Co Meath (hereinafter called the “Executive”) |
|---|
Together, “theParties”
and includes the terms of Employment required by the Terms of Employment (Information) Act 1994-2001
OPERATIVE PROVISIONS:
| 1. | DEFINITIONS AND INTERPRETATION |
|---|---|
| 1.1. | In<br> this Agreement the following words and expressions have the following meanings: |
| --- | --- |
| Board | the<br> Board of Directors of the Parent from time to time; |
| --- | --- |
| Confidential Information | shall include,<br> but not be limited to, the following (whether recorded in writing, on computer disk or in<br> any other manner) trade secrets; secret manufacturing processes; customer data, including<br> but not limited to, any such information disclosing the names and addresses of customers<br> and suppliers of the Company , the person at such contact or supplier to contact, the requirements<br> of such customer or supplier, discounts offered by the Company ; investment and pricing policies;<br> product performance data; marketing information; technical designs or specifications of the<br> Company’s products; business plans or dealings relating to the current or future activities<br> of the Company including the timing of all or any such matters; know-how; computer passwords;<br> product lines; research activities and results; internal management accounts, any document<br> marked “confidential” or any information which the Executive has been told is<br> confidential or which the Executive might reasonably expect the Company would regard as confidential<br> or which by its very nature is confidential to the Company, or any information which has<br> been given to the Company in confidence by customers, suppliers or other persons, and whether<br> or not recorded in documentary form, computer disk or tape, which the Executive shall acquire<br> at any time during the Executive’s employment but which does not form part of the Executive’s<br> own stock in trade provided that it shall not include any information or knowledge which<br> may subsequently come into the public domain after the Termination Date other than by way<br> of unauthorised disclosure by the Executive; |
| --- | --- |
| Group | the<br> Parent and each and any of the subsidiaries from time to time; |
| --- | --- |
| Termination Date | the date<br> on which the Executive’s employment under this Agreement terminates and references<br> to “from the Termination Date” mean from and including the date of termination. |
2
| 1.2. | Unless<br> the context otherwise requires words denoting the singular shall include the plural and vice<br> versa and reference to any gender shall include all other genders. |
|---|---|
| 1.3. | References<br> to the word “include” or “including” are to be construed without<br> limitation. |
| --- | --- |
| 1.4. | References<br> in this Agreement to statutory provisions include all modifications and re- enactments of<br> them and all subordinate legislation under them. |
| --- | --- |
| 1.5. | Headings in this Agreement are inserted<br> for convenience only and shall not affect its construction. |
| --- | --- |
| 2. | APPOINTMENT, TERM AND NOTICE |
| --- | --- |
| 2.1. | The Company will employ the Executive<br> and the Executive will serve the Company as its Chief Information Officer. |
| --- | --- |
| 2.2. | The Executive’s appointment shall<br> be deemed to have commenced on 1 September 2022 (or other such date as agreed between<br> the parties) (“Commencement Date”). For the avoidance of doubt, a probation period<br> shall not apply to the Agreement. |
| --- | --- |
| 2.3. | If this Agreement is terminated due<br> to a change of control event of the Company, the Executive’s employment shall be transferred<br> to the Parent. |
| --- | --- |
| 2.4. | The Executive will report to the Chief<br> Executive Officer (CEO) of the Parent. |
| --- | --- |
| 3. | DUTIES |
| --- | --- |
| 3.1. | The Executive will carry out the duties<br> and functions to support and execute the commercial objectives of the Company. |
| --- | --- |
| 3.2. | The Executive will exercise the powers<br> and comply with the instructions assigned or given to the Executive from time to time by<br> the CEO. Except when prevented by illness, accident or holiday the Executive will devote<br> all of the Executive’s time, attention and skill to the affairs of the Company. |
| --- | --- |
| 3.3. | The Executive will at all times keep<br> the CEO promptly and fully informed (in writing if so requested) of the conduct of the business<br> or affairs of the Company and provide such explanations and assistance as the Board may require<br> in connection with such business or affairs and the Executive’s employment under this<br> Agreement. |
| --- | --- |
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| 3.4. | The Executive expressly acknowledges<br> that he will draw to the attention of the Company any act by a director, employee or third<br> party that is a breach on their part or may harm the interests of the Company. The Executive<br> will be included in the Group’s ‘Directors and Officers Insurance Policy’. |
|---|---|
| 4. | PLACE OF WORK |
| --- | --- |
| 4.1. | The Company’s head office is at<br> Suites 9/10, Plaza 212, Blanchardstown Corporate Park 2, Dublin 15, D15 R504 but the Executive<br> will be required to perform his duties inside the Republic of Ireland, being his principle<br> place of work, as the Company may require and it is a condition of the Executive’s<br> employment that the Executive complies with any such requirement. |
| --- | --- |
| 4.2. | In the performance of the Executive’s<br> duties, the Executive will be required to travel both throughout and outside the Republic<br> of Ireland as and when necessary. |
| --- | --- |
| 5. | HOURS OF WORK |
| --- | --- |
| 5.1. | The Company’s normal office hours<br> are from 9am to 5pm Monday to Friday but the Executive will work such hours as are needed<br> for the proper performance of his duties including hours outside the Company’s normal<br> office hours without additional remuneration in order to meet the requirements of the business. |
| --- | --- |
| 6. | SALARY |
| --- | --- |
| 6.1. | The Executive’s basic annual salary<br> is €167,000 (One Hundred Sixty Seven Thousand Euros) per annum which will accrue from<br> day to day and be payable monthly in arrears on or before the last day of each month. |
| --- | --- |
| 6.2. | The Executive’s salary will be<br> subject to review annually by the CEO on or before the 31st March each year. A bench-marking<br> process will govern this process. |
| --- | --- |
| 7. | BONUS |
| --- | --- |
| 7.1. | In addition to his basic annual salary,<br> the Executive will be eligible to earn an annual bonus of €33,000 (Thirty Three Thousand<br> Euros). |
| --- | --- |
| 7.2. | Any bonus amount earned for each calendar<br> year will be payable on March 31 of the following year. The Parties agree that such<br> bonus can be paid over a longer period (jointly agreed). Any unpaid amount will be carried<br> forward as a payable to the Executive. |
| --- | --- |
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| 7.3. | Unless otherwise expressly provided<br> herein, whenever any annual amounts payable hereunder are to be prorated for any period of<br> service less than a full year ending on December 31, such proration shall be determined<br> by multiplying (x) the amount that would be payable for the full year by (y) a<br> fraction, the denominator of which shall be 365 and the numerator of which shall be the number<br> of days during the applicable year for which you were employed by the Company pursuant to<br> this Contract. |
|---|---|
| 8. | PENSION AND OTHER BENEFITS |
| --- | --- |
| 8.1. | From July 1, 2022, the Company<br> will: |
| --- | --- |
| 8.1.1. | contribute in equal monthly instalments<br> to the Executive’s private pension scheme an amount equal to 8% (eight percent) of<br> your basic annual salary during each year of his employment under this Agreement**.** |
| --- | --- |
| 8.1.2. | provide the Executive and his immediate<br> family at the Company’s expense with cover under the following VHI plans (Company Plan<br> Plus Level 1 for Larry Farrell and Company Plan Extra Level 2 (one policy) and One Plan Family<br> (two policies)), subject to and upon the rules of the said scheme from time to time<br> in force and to the Executive and the Executive’s family being eligible to participate<br> in or benefit from the scheme. The Executive will transfer his existing direct debit to the<br> Company. |
| --- | --- |
| 8.1.3. | put in place life cover and income<br> protection cover policies. |
| --- | --- |
| 8.1.3.1. | The life cover insurance policy<br> will cover four times your basic annual salary. |
| --- | --- |
| 8.1.3.2. | The income protection cover insurance<br> policy will be cover an event of absence from work for a specific period because of illness<br> or injury for a period of longer than 26 consecutive weeks, Executive will be entitled to<br> 75% of basic annual salary less any relevant social welfare benefit payment. |
| --- | --- |
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| 8.1.4. | meet costs incurred by Executive in<br> maintaining pre-agreed relevant professional qualifications or memberships of professional<br> bodies including accountancy professional body membership. |
|---|---|
| 8.1.5. | meet the cost of training to achieve<br> a Chartered Directorship with the Institute of Directors. |
| --- | --- |
| 8.1.6. | meet the cost of pre-agreed executive<br> training and coaching as part of the Executive’s on-going professional development. |
| --- | --- |
| 8.2. | In respect of the benefits provided<br> to the Executive under this Clause, the Company reserves the right to substitute other schemes<br> for them or amend the scale or level of benefits provided that each and every benefit shall<br> not be less favourable than the benefits provided to the Executive under the existing scheme. |
| --- | --- |
| 8.3. | If any scheme provider refuses for any<br> reason (whether based on its own interpretation of the terms of the scheme or otherwise)<br> to provide any benefits to the Executive, the Company shall not be liable to provide any<br> such benefits itself. In this circumstance, the Company and the Executive will agree an equitable<br> process where an equivalent compensation may be paid in lieu of the Executive. |
| --- | --- |
| 9. | STOCK BASED COMPENSATION |
| --- | --- |
| 9.1. | The Executive will participate in the<br> stock-option plan of the Parent. |
| --- | --- |
| 9.2. | Options. The Executive will receive<br> an initial grant of 120,000 share options of the Parent’s ordinary shares, subject<br> to the Board’s approval (“Options”). The exercise price for the Basic Options<br> shall be NOK 21.00 per share option. The Basic Options shall vest as follows: 20,000 on the<br> Commencement Date; 20,000 on the first anniversary of the Commencement Date; 20,000 on the<br> second anniversary of the Commencement Date; 20,000 on the third anniversary of the Commencement<br> Date; 20,000 on the fourth anniversary of the Commencement Date and 20,000 on the fifth anniversary<br> date. The Basic Options shall have no other conditions other than time. |
| --- | --- |
| 9.3. | Should the Agreement be Terminated for<br> any reason prior to full vesting then the unvested shares will be immediately returned to<br> the Parent. |
| --- | --- |
| 9.4. | Additional shares or other such stock-based<br> compensation may be granted during the employment at the sole discretion of the Board of<br> the Parent. |
| --- | --- |
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| 10. | MOTOR CAR |
|---|---|
| 10.1. | The Company will provide a car for<br> Executive’s business and minimal private use up to a value of €90,000 provided<br> that such a car is full electric, which is subject to special benefit-in-kind (“BIK”)<br> payments whereby the first €50,000 in value is exempt from BIK calculations under current<br> legislation. If not provided with the car, the Company will cover the cost of a charging<br> unit for the Executive at his principal private residence. Appropriate BIK amounts will be<br> deducted via payroll (subject to car-pooling relief). Should legislation change the Company<br> will not be responsible to adjust the net BIK and any new BIK will be deducted from payroll.<br> The Company will fund the tax and insurance cost of the motor car. A full Company car policy<br> and terms will be agreed before commencement date. |
| --- | --- |
| 10.2. | If Executive does not wish to avail<br> of the Company car option, a gross annual payment of €12,000 will be paid with annual<br> salary. |
| --- | --- |
| 11. | EXPENSES |
| --- | --- |
| 11.1. | The Company will reimburse to the Executive<br> all business expenses reasonably and properly incurred in the performance of the Executive’s<br> duties under this Agreement on hotel, travelling, entertainment and other similar items provided<br> that the Executive produces to the Company all appropriate receipts or other satisfactory<br> evidence of expenditure. |
| --- | --- |
| 12. | LAPTOP AND MOBILE TELEPHONES |
| --- | --- |
| 12.1. | The Company will provide the Executive<br> with a laptop and mobile phone for all business and reasonable personal use. |
| --- | --- |
| 13. | HOLIDAYS |
| --- | --- |
| 13.1. | In<br> this clause “holiday year” means the period from 1st January to 31st<br> December in each year. |
| --- | --- |
| 13.2. | In addition to statutory bank and public<br> holidays the Executive will be entitled to 20 working days’ paid holiday in each holiday<br> year. The above excludes approximately 4 days taken for the Christmas period when the office<br> is closed. |
| --- | --- |
| 13.3. | All holidays are to be taken at such<br> times as may be approved by the CEO in advance. |
| --- | --- |
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| 13.4. | The Executive will not be entitled<br> to any pay in lieu of holiday except when employment terminates, and the Executive has not<br> taken his accrued entitlement as at the Termination Date. On termination, the Executive’s<br> holiday entitlement will be calculated pro-rata for each completed calendar month worked<br> in that holiday year. Where the Executive’s employment is terminated because of misconduct<br> or where the full contractual notice period is not given by the Executive, unused accrued<br> holiday pay over the statutory minimum laid down by law will not be paid. |
|---|---|
| 13.5. | Where the Executive has taken more<br> or less than his holiday entitlement in the holiday year in which the employment terminates,<br> a proportionate adjustment will be made by way of addition to or deduction from as appropriate<br> the Executive’s final gross salary calculated on a pro-rata basis. |
| --- | --- |
| 13.6. | The Executive may request time off<br> for reasons other than holiday such as bereavement, jury service, unpaid leave, or attendance<br> for examinations and in these circumstances should apply for permission for time off to the<br> CEO and such permission will not be unreasonably withheld. |
| --- | --- |
| 14. | ABSENCE FROM WORK |
| --- | --- |
| 14.1. | If the Executive is absent from work<br> due to illness injury or other incapacity the Executive must notify the CEO as soon as possible<br> on the first day of absence that the Executive will be unable to attend. The Executive must<br> then keep the CEO informed on a regular basis of his progress and when he expects to return<br> to work. |
| --- | --- |
| 14.2. | If the Executive is absent from work<br> for less than 3 days (including weekends), the Executive is required to complete a self-certification<br> form stating the dates and reason for absence including details of illness, injury or incapacity<br> on non-working days as this information. |
| --- | --- |
| 14.3. | If the Executive is absent from work<br> due to illness or injury which continues for 3 or more consecutive days (including weekends)<br> the Executive must provide the Company with a medical certificate and give or send it immediately<br> to the Company. If absence is prolonged the Executive should continue to submit regular medical<br> certificates, on a weekly basis, to cover the entire period of his absence and to keep the<br> Company informed generally as to the Executive’s condition and the likely date of return<br> to work. |
| --- | --- |
| 14.4. | Failure to comply with the above procedures<br> may disqualify the Executive from receiving company sick pay. |
| --- | --- |
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| 14.5. | The Company will be entitled, at its<br> expense, to require the Executive to be examined by an independent medical practitioner of<br> the Company’s choice at any time and the Executive agrees that the doctor carrying<br> out the examination may disclose to and discuss with the Company the results of the examination. |
|---|---|
| 14.6. | Provided that the Executive has complied<br> with the notification and certification procedures above, if the Executive is absent from<br> duties as a result of illness or injury the Executive will be entitled to receive his basic<br> salary for a maximum period of 6 (six) weeks in any period of 12 months to be discussed.<br> Company sick pay will be reduced by the amount of any illness benefit payments recoverable<br> by the Executive (whether or not recovered) in respect of illness or injury. |
| --- | --- |
| 14.7. | The Company reserves the right to withhold<br> payments of salary and/or any other sum otherwise payable to the Executive under this Agreement<br> in respect of any unauthorised absence from work. The Company may recover from the Executive<br> (by deductions from salary or other sums payable to the Executive by the Company, or otherwise<br> on terms acceptable to the Company) any sums paid to the Executive in respect of any unauthorised<br> absence from work. |
| --- | --- |
| 14.8. | If the Executive is absent from work<br> due to an accident which occurred or a condition which was sustained either on or off duty<br> any company sick pay received by the Executive from the Company in respect of the absence<br> will be treated as a loan which the Executive must repay to the Company if the Executive<br> recovers damages in respect of an injury, condition or absence from work. |
| --- | --- |
| 15. | OBLIGATIONS DURING EMPLOYMENT |
| --- | --- |
| 15.1. | During employment by the Company the<br> Executive shall: |
| --- | --- |
| 15.1.1. | abide by any relevant Company policy,<br> rule or procedure which may be in force from time to time; |
| --- | --- |
| 15.1.2. | not without the Company’s prior<br> written consent hold any Material Interest (being more than 25% of voting control) in any<br> company, business or organisation which: |
| --- | --- |
| 15.1.2.1. | is in competition with the Company<br> or the Group; |
| --- | --- |
| 15.1.2.2. | impairs the Executive’s ability<br> to act at all times in the best interests of the Company; or |
| --- | --- |
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| 15.1.2.3. | requires the Executive to disclose<br> Confidential Information in order properly to discharge his duties to or further his interest<br> in such person, firm, company, organisation or business; |
|---|---|
| 15.1.3. | not divulge Confidential Information<br> or obtain or seek to obtain any direct or indirect financial advantage from the disclosure<br> of such information provided that this obligation not to divulge Confidential Information<br> does not apply to disclosures made with the prior written consent of the Company or required<br> by a Court Order; |
| --- | --- |
| 15.1.4. | not directly or indirectly receive<br> or obtain in respect of any goods or services sold or purchased or other business transacted<br> (whether or not by the Executive) by or on behalf of the Company any discount, rebate, commission<br> or other inducement (whether in cash or in kind) which is not authorised by the Company’s<br> rules or guidelines from time to time and if the Executive or any company, organisation<br> or business in which the Executive holds any Material Interest shall obtain any such discount,<br> rebate, commission or inducement the Executive shall immediately account to the Company for<br> the amount the Executive or they receive; |
| --- | --- |
| 15.1.5. | not introduce to any person, firm<br> or company any business of any kind with which the Company for which the Executive has performed<br> services under this Agreement is able to deal and not have any financial interest in, or<br> derive any financial benefit from, contracts or transactions entered into by the Company<br> with any third party, without first disclosing such interest or benefit to the Board and<br> obtaining its written approval; |
| --- | --- |
| 15.1.6. | not make any notes or memoranda relating<br> to any matter within the scope of the business dealings or affairs of the Company otherwise<br> than for the benefit of the Company or without the prior written consent of the Board to<br> remove from the Company premises or copy or allow others to copy the contents of any document,<br> disk, tape or other tangible items which contains any Confidential Information or which belongs<br> to the Company; |
| --- | --- |
| 15.1.7. | if so requested by the Company delete<br> all Confidential Information from any computer disks, tapes or other reusable material in<br> the Executive’s possession or under the Executive’s control and destroy all other<br> documents and tangible items in the Executive’s possession or under the Executive’s<br> control which contain or refer to any Confidential Information; |
| --- | --- |
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| 15.1.8. | observe the provisions of and procure<br> his spouse and children shall observe any code in relation to dealings in securities and<br> such other codes, guidance or statements which have been or are adopted by the Board or which<br> directors of the Company are required to observe by law or by any recognised stock exchange<br> or other regulatory body or authority. |
|---|---|
| 16. | TERMINATION OF EMPLOYMENT |
| --- | --- |
| 16.1. | The Company may terminate the Executive’s<br> employment immediately by notice in writing (even if it has allowed time to elapse) without<br> any entitlement to notice or payment in lieu of notice, any compensation, damages or remuneration<br> for subsequent periods payable by virtue of common law or any statute if the Executive: |
| --- | --- |
| 16.1.1. | commits, repeats or continues (after<br> written warnings as defined in the Parent’s disciplinary procedure) any serious breach<br> of this Agreement; |
| --- | --- |
| 16.1.2. | is guilty of gross misconduct (including,<br> but not limited to, gross misconduct as defined in the Company’s disciplinary procedure); |
| --- | --- |
| 16.1.3. | commits any act of dishonesty relating<br> to the Company or any of its employees; |
| --- | --- |
| 16.1.4. | adversely prejudices the interests<br> or reputation of the Company (as determined by an expert body); |
| --- | --- |
| 16.1.5. | is convicted of any criminal offence<br> (other than an offence which does not affect the Executive’s employment under road<br> traffic legislation in the Republic of Ireland or elsewhere for which the Executive is not<br> sentenced to any term of imprisonment, whether immediate or suspended); |
| --- | --- |
| 16.1.6. | becomes bankrupt or enters into or<br> makes any arrangement or composition with or for the benefit of his creditors generally;<br> or |
| --- | --- |
| 16.1.7. | becomes of unsound mind. |
| --- | --- |
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| 16.2. | This Agreement shall automatically<br> terminate on the happening of any of the following events: |
|---|---|
| 16.2.1. | on the Executive reaching age 65<br> (“the Retirement Date”) unless the Company and the Executive agree at any time<br> prior to the Retirement Date that the Agreement should continue after the Retirement Date;<br> or |
| --- | --- |
| 16.2.2. | if the Executive becomes prohibited<br> by law from being a director. |
| --- | --- |
| 16.3. | If the Executive resigns without notice<br> and the Company does not accept the resignation, the Company may in its absolute discretion<br> exclude the Executive from its premises; and/or require the Executive to resign any offices<br> in the Company; carry out specified duties for the Company other than those referred to in<br> Clause 4 or to carry out no duties; and/or instruct the Executive not to communicate with<br> suppliers, customers, employees, agents or representatives of the Company until the employment<br> has terminated. During the notice period the Executive will be entitled to be paid salary<br> and all other contractual benefits in accordance with this Agreement. |
| --- | --- |
| 16.4. | The Company may terminate Executive’s<br> employment for any reason by giving one month’s notice. The Company reserves the right<br> to pay salary in lieu of Executive continuing to work for that month. |
| --- | --- |
| 17. | RESTRICTIONS ON THE EXECUTIVE AFTER TERMINATION OF EMPLOYMENT |
| --- | --- |
| 17.1. | Definitions |
| --- | --- |
In this Clause 18 the following words and expressions have the following meanings:
| Businesses | all and any<br> commercial activities of the Company: |
|---|---|
| 1. | with which the Executive shall have been<br> concerned or involved to any material extent at any time during the Relevant Period; or |
| --- | --- |
| 2. | which the Company shall at the Termination<br> Date have determined to carry on with a view to profit in the foreseeable future and in relation<br> to which the Executive shall at the Termination Date possess any Confidential Information; |
| --- | --- |
| Critical Person | any person<br> who was an employee, director or consultant employed or engaged by the Company at any time<br> within the Relevant Period and with whom the Executive had direct or indirect contact or<br> frequent dealings with or was responsible for and who by reason of such employment or engagement<br> and in particular his seniority and the expertise or knowledge of trade secrets or Confidential<br> Information of the Company or knowledge of or influence over the clients, customers or suppliers<br> of the Company is likely to be able to assist or benefit the business in or proposing to<br> be in competition with the Company ; |
| --- | --- |
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| Relevant Customer | any person, firm or company who or which at any time during the Relevant Period is or was negotiating with, a client or customer of, or in the habit of dealing with, the Company for the sale or supply of Relevant Products or Services, and with whom the Executive had personal contact or dealings on behalf of the Businesses or of which the Executive had personal knowledge during the Relevant Period in the course of the Executive’s employment under this Agreement; |
|---|---|
| Relevant Period | the period of 3 months immediately before the Termination Date; |
| --- | --- |
| Relevant Products or Services | products or services which are of the same kind as or of a similar kind to or competitive with any products or services sold or supplied by the Company in the ordinary course of the Businesses within the Relevant Period and with which sale or supply the Executive was directly concerned or connected or of which the Executive had personal knowledge during the Relevant Period in the course of the Executive’s employment under this Agreement; |
| --- | --- |
| Restricted Territory | Any area where the Company carries on business during the Relevant Period |
| --- | --- |
13
| 17.2. | Reasonableness of Restrictions |
|---|
The Executive acknowledges that in the ordinary course of his employment the Executive will be exposed to Confidential Information and the Company’s, customers, suppliers and employees for the purposes of the Businesses. The Executive acknowledges that such Confidential Information and contact with customers, suppliers and employees may not be readily available to others engaged in a business similar to that of the Company or to the general public and that a disclosure of Confidential Information and or contact with customers, suppliers and/or employees as set out in Clause 18.5 will be liable to cause significant harm to the Company. The Executive agrees that the provisions of this Clause 18 are necessary and reasonable to protect the legitimate interests of the Company and customers.
| 17.3. | Confidential Information |
|---|
After the termination of employment for whatever reason the Executive will not at any time and in any manner use or divulge or communicate to any person, firm, company or other organisation any Confidential Information except if such disclosure is with the prior written consent of the Company or required by a Court Order.
| 17.4. | Non Competition |
|---|---|
| 17.4.1. | The Executive agrees that he will<br> not, without the prior written consent of the Company, directly or indirectly and whether<br> alone or in conjunction with or on behalf of any other person and whether as principal, shareholder,<br> director, executive, employee, agent, consultant, independent contractor, partner or otherwise<br> for a period of 6 months from the Termination Date (so long as this does not restrict the<br> Executive from employment or other similar arrangements in the absence of income): |
| --- | --- |
| 17.4.1.1. | be engaged, concerned or interested<br> in, or provide technical, commercial, or professional advice to, any other business which<br> supplies Relevant Products or Services in competition with the Company in the Restricted<br> Territory; |
| --- | --- |
14
| 17.4.1.2. | be engaged, concerned or interested<br> in any business which at any time during the Relevant Period has supplied Relevant Products<br> or Services to the Company or is or was at any time during the Relevant Period a Relevant<br> Customer if such engagement, concern or interest causes or would cause a supplier to cease<br> or materially reduce its supplies to the Company or the Relevant Customer to cease or materially<br> reduce its orders or contracts with the Company; |
|---|---|
| 17.4.1.3. | hold any Material Interest in any<br> company which requires or might reasonably be thought by the Company to require the Executive<br> to disclose or make use of any Confidential Information in order to properly discharge his<br> duties or to further the Executive’s interest in such person, firm or company. |
| --- | --- |
| 17.5. | Non-Solicitation/Dealing/Poaching/Interference |
| --- | --- |
| 17.5.1. | The Executive agrees that he will<br> not, without the prior written consent of the Company, directly or indirectly and whether<br> alone or in conjunction with or on behalf of any other person and whether as principal, shareholder,<br> director, executive or employee. |
| --- | --- |
| 17.5.1.1. | for a period of 12 months from<br> the Termination Date so as to canvass, solicit or approach or cause to be canvassed, solicited<br> or approached any Relevant Customer for the sale or supply of Relevant Products or Services<br> or endeavour to do so; |
| --- | --- |
| 17.5.1.2. | for a period of 12 months from<br> the Termination Date in connection with any business in or proposing to be in competition<br> with the Company, solicit, induce or entice away from the Company, employ, seek to employ,<br> engage or appoint or in any way cause to be employed, engaged or appointed a Critical Person,<br> whether or not such a person would commit any breach of his/her contract of employment or<br> engagement by leaving the service of the Company; |
| --- | --- |
15
| 17.5.1.3. | at any time after the Termination<br> Date use in connection with any business any name which includes the name of the Company. |
|---|---|
| 17.5.1.4. | for a period of 6 months from the<br> Termination Date interfere with the continuance of supplies to the Company from any suppliers<br> who have been supplying materials or services to the Company at any time during the Relevant<br> Period and with whom the Executive has had personal contact. |
| --- | --- |
| 17.6. | Each covenant contained in Clauses<br> 18 shall be construed as a separate covenant and, if one or more of the covenants is held<br> to be against the public interest or unlawful or in any way an unreasonable restraint of<br> trade, the remaining covenants shall continue to bind the Executive. |
| --- | --- |
| 17.7. | If the Executive applies for or is<br> offered new employment, or a new engagement, before entering into any related contract the<br> Executive will bring the terms of this Agreement to the attention of the third party proposing,<br> directly or indirectly, to appoint or engage the Executive. |
| --- | --- |
| 17.8. | The Executive’s obligations pursuant<br> to such clause will constitute a separate and distinct covenant and the invalidity or enforceability<br> of any such covenant shall not affect the validity or enforceability of the covenants. |
| --- | --- |
| 18. | COMPANY PROPERTY |
| --- | --- |
| 18.1. | On request and in any event of the<br> termination of his employment, the Executive will immediately return to the Company all originals<br> and copies of all documents, computer disks and tapes and other tangible items in the Executive’s<br> possession or under the Executive’s control which belong to the Company or the Group<br> and/or which contain or refer to any Confidential Information or which in any other way relate<br> or belong to the Company or the Group. |
| --- | --- |
16
| 19. | INTELLECTUAL PROPERTY |
|---|---|
| 19.1. | All present and future copyright, know-how,<br> rights to prevent unauthorised extraction and other intellectual property rights in any product<br> or work developed or partly developed by the Executive during the course of the employment<br> with the Company shall remain the sole and exclusive property of the Company and this Agreement<br> does not purport to grant, assign or transfer any rights in such products or works to the<br> Executive. |
| --- | --- |
| 20. | DISCIPLINARY AND GRIEVANCE PROCEDURES AND SUSPENSION |
| --- | --- |
| 20.1. | The statutory provisions relating to<br> disciplinary procedures in place from time to time are applicable to the employment. The<br> Company has a disciplinary procedure, a copy of which is available on request from the Company.<br> The disciplinary procedure is not incorporated by reference to this Agreement and does not<br> form part of it. |
| --- | --- |
| 20.2. | The statutory provisions relating to<br> grievance procedures in place from time to time are applicable to the employment. If the<br> Executive has a grievance in relation to the employment or is dissatisfied with a disciplinary<br> decision against the Executive, the Executive may apply in writing to the Board in the first<br> instance. |
| --- | --- |
| 20.3. | The Company is entitled (without prejudice<br> to its rights consequently to terminate this Agreement on the same or any other ground) to<br> suspend the Executive on full pay on good cause for so long as may be reasonably necessary<br> to carry out any investigation, including, but not limited to, any investigation under the<br> disciplinary procedure and hold a disciplinary hearing and may require the Executive during<br> such period: |
| --- | --- |
| 20.3.1. | not to enter any premises of the<br> Company and; |
| --- | --- |
| 20.3.2. | to abstain from contacting any customers,<br> suppliers or employees of the Company; |
| --- | --- |
provided that the Executive shall not be employed by or provide services to any third party during the period for which he is suspended.
| 21. | DEDUCTIONS |
|---|---|
| 21.1. | The Executive authorises the Company<br> to deduct from his remuneration (including salary, pay in lieu of notice, commission, bonus,<br> holiday pay and company sick pay) at any time during the employment or in any event on termination<br> of employment any monies owed by the Executive to the Company or any Group company. |
| --- | --- |
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| 22. | DATA PROTECTION |
|---|---|
| 22.1. | The Executive gives the Company permission<br> to collect, retain and process information about him, including but not limited to details<br> of his date of birth, sex and ethnic origin. The Company warrants that this information will<br> only be used in order that the Company can monitor its compliance with the law and best practice<br> in terms of equal opportunities and non-discrimination. |
| --- | --- |
| 22.2. | Should the Executive’s personal<br> circumstances change such as to render out the of date the information held by the Company,<br> he should notify the Company immediately. |
| --- | --- |
| 23. | NOTICES |
| --- | --- |
| 23.1. | Any notice given under this Agreement<br> shall be in writing and shall be served on the party (in the case of the Executive) at the<br> above address or any other address notified by the Executive to the Company or (in the case<br> of the Parent) at its registered office. |
| --- | --- |
| 23.2. | Any notice shall be taken to have been<br> received on the date and time of its actual receipt except that if correctly addressed and<br> stamped and sent by registered post. |
| --- | --- |
| 24. | PREVIOUS AGREEMENTS |
| --- | --- |
| 24.1. | This Agreement constitutes the whole<br> and only entire agreement between the parties in relation to the Executive’s employment<br> with the Company and supersedes and extinguishes any prior drafts, previous agreements, undertakings,<br> representations, warranties and arrangements of any nature whatsoever, whether or not in<br> writing, between the parties relating to the Executive’s employment with the Company. |
| --- | --- |
| 24.2. | The Parties acknowledge that they have<br> no outstanding claim against each other. |
| --- | --- |
| 24.3. | This Agreement supersedes any conflicting<br> terms in the Parent’s employee handbook. |
| --- | --- |
| 25. | GUARANTEE |
| --- | --- |
| 25.1. | In consideration of the Executive providing<br> his services to the Company, (which the Parent acknowledges is of benefit to it) and for<br> other good and valuable consideration, the receipt and adequacy of which is acknowledged<br> by the Parent, the Parent undertakes to procure the delivery of all matters relating to this<br> Agreement as they relate to the Parent, and furthermore the Parent acknowledges and irrevocably<br> guarantees the contractual commitments of the Company under this Agreement. If the Company<br> is incapable of providing any or all payments, benefits, and/or remuneration provided for<br> under this Agreement (howsoever described herein), the Parent shall be liable to the Executive<br> for the same. |
| --- | --- |
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| 26. | WARRANTY |
|---|---|
| 26.1. | The Executive warrants to the Company<br> that by virtue of entering into this Agreement the Executive will not be in breach of any<br> express or implied terms of any contract with or any unresolvable obligation to any third-party<br> binding upon the Executive. |
| --- | --- |
| 27. | COLLECTIVE AGREEMENTS |
| --- | --- |
| 27.1. | There are no collective agreements<br> in place which affect the Executive’s employment with the Company. |
| --- | --- |
| 28. | LAW AND JURISDICTION |
| --- | --- |
| 28.1. | The Agreement will be governed by and<br> interpreted in accordance with Irish law and the parties irrevocably agree to submit to the<br> jurisdiction of the Irish courts over any claim or matter or to settle any dispute which<br> may arise out of or in connection with this Agreement and that accordingly any proceedings<br> may be brought in such courts. |
| --- | --- |
| 29. | AMENDMENT |
| --- | --- |
| 29.1. | All changes to this Agreement (other<br> than an increase in salary) must be agreed between the Company and the Executive in writing. |
| --- | --- |
| 30. | EXECUTION AND DELIVERY |
| --- | --- |
This Agreement may be executed by the parties hereto on separate counterparts, each of which when executed, shall constitute the original and all such counterparts together constitute but one and the same instrument.
The parties agree and consent to the signing of this Agreement by electronic signature (whatever form the electronic signature takes) and that this method of signature is as conclusive of the intention of the parties to be bound by this Agreement as if signed by each party’s manuscript signature.
19
This Agreement is sent to you in duplicate. If you agree with the terms and conditions of your employment, I would be obliged if you could sign the attached copy and return it to me as soon as possible. Please also initial each individual page of this Agreement to demonstrate that you have read and understood the content.
| Yours<br> sincerely, |
|---|
| /s/<br> Vincent Browne |
| Vincent Browne |
| Chairman of the Board |
| Date: September 2022 |
I, Larry Farrell, acknowledge receipt of this Agreement and I confirm that I have read, understand and accept the terms and conditions set out herein.
| /s/<br> Larry Farrell |
|---|
| Larry Farrell |
| Executive |
| Date: |
Exhibit 10.20
ALTERNUS CLEAN ENERGY INC.
2023EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: December 22, 2023
APPROVED BY THE STOCKHOLDERS: December 4, 2023
1. Purposesof the Plan. The purposes of this Plan are:
| · | to attract and retain the best available personnel for positions of substantial responsibility, |
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| · | to provide additional incentive to Employees, Directors and Consultants, and |
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| · | to promote the success of the Company’s business. |
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The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Performance Awards.
The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective Date.
2. Definitions. As used herein, the following definitions will apply:
2.1 “AcquiringEntity” means the surviving or acquiring corporation (or its parent company) in connection with a Corporate Transaction.
2.2 “AdoptionDate” means the date the Plan is first approved by the Board or Compensation Committee.
2.3 “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
2.4 “ApplicableLaws” means any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority).
2.5 “Award” means any right to receive Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a RSU Award, a SAR, a Performance Award or any Other Award).
2.6 “AwardAgreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general terms and conditions applicable to the Award and which is provided to a Participant along with the Grant Notice.
2.7 “Board” means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and binding on all Participants.
2.8 “BusinessCombination Agreement” means that certain Business Combination Agreement, dated as of October 12, 2022, by and among (i) Clean Earth Acquisitions Corp., a Delaware corporation, (ii) Alternus Energy Group Plc, a public limited company incorporated under the laws of Ireland (iii) Clean Earth Acquisitions Sponsor, LLC, a Delaware limited liability company.
2.9 “CapitalStock” means each and every class of common stock of the Company, regardless of the number of votes per share.
2.10 “CapitalizationAdjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
2.11 “Cause” has the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) a material breach of any covenant or condition under any material agreement between the Participant and the Company; (ii) any act constituting bad faith, willful misconduct, intentional wrongdoing, gross negligence, recklessness, moral turpitude, dishonesty, fraud, immoral or disreputable conduct; (iii) any conduct which constitutes a felony under applicable law; (iv) material violation of any Company policy (including those pertaining to discrimination or harassment); (v) gross negligence or misconduct; (vi) breach of fiduciary duty to the Company; or (vii) refusal to follow or implement a clear and reasonable directive of Company. For purposes of this definition, the “Company” shall mean and include Subsidiaries and Affiliates. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose, except as expressly specified in the Plan or as otherwise agreed by the parties in a written agreement.
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2.12 “Changein Control” or “Change of Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events; provided, however, to the extent necessary to avoid adverse personal income tax consequences to the Participant in connection with an Award, also constitutes a Section 409A Change in Control:
(a) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding; provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
(b) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(c) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(d) individuals who, on the date the Plan is adopted by the Board, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply.
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2.13 “Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation or other formal guidance of general or direct applicability promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.14 “Committee” means the Compensation Committee and any other committee of Directors to whom authority has been delegated by the Board or Compensation Committee in accordance with the Plan.
2.15 “CommonStock” means the common stock of the Company.
2.16 “Company” means Alternus Clean Energy Inc., a Delaware corporation, or any successor thereto.
2.17 “CompensationCommittee” means the Compensation Committee of the Board.
2.18 “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if (A) a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person and (B) such Consultant is providing services directly to the Company or any Subsidiary.
2.19 “ContinuousService” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).
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2.20 “CorporateTransaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(a) a sale or other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and its Subsidiaries;
(b) a sale or other disposition of at least 50% of the outstanding securities of the Company;
(c) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(d) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
2.21 “Director” means a member of the Board.
2.22 “determine” or “determined” means as determined by the Board or the Committee (or its designee) in its sole discretion.
2.23 “Disability” means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
2.24 “EffectiveDate” means December 22, 2023.
2.25 “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
2.26 “Employer” means the Company or the Affiliate of the Company that employs the Participant.
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2.27 “Entity” means a corporation, partnership, limited liability company or other entity.
2.28 “ExchangeAct” means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
2.29 “ExchangeAct Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
2.30 “FairMarket Value” means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as determined on a per share or aggregate basis, as applicable) determined as follows:
(a) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(b) If there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(c) In the absence of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
2.31 “GovernmentalBody” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any Tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority).
2.32 “GrantNotice” means the notice provided to a Participant that he or she has been granted an Award under the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject to the Award or potential cash payment right, (if any), the vesting schedule for the Award (if any) and other key terms applicable to the Award.
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2.33 “IncentiveStock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
2.34 “MateriallyImpair” means any amendment to the terms of the Award that materially adversely affects the Participant’s rights under the Award. A Participant’s rights under an Award will not be deemed to have been Materially Impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s rights under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option that may be exercised; (ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iv) to clarify the manner of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A; or (v) to comply with other Applicable Laws.
2.35 “Non-EmployeeDirector” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.
2.36 “Non-ExemptAward” means any Award that is subject to, and not exempt from, Section 409A, including as the result of (i) a deferral of the issuance of the shares subject to the Award which is elected by the Participant or imposed by the Company, (ii) the terms of any Non-Exempt Severance Agreement.
2.37 “Non-ExemptDirector Award” means a Non-Exempt Award granted to a Participant who was a Director but not an Employee on the applicable grant date.
2.38 “Non-ExemptSeverance Arrangement” means a severance arrangement or other agreement between the Participant and the Company that provides for acceleration of vesting of an Award and issuance of the shares in respect of such Award upon the Participant’s termination of employment or separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and without regard to any alternative definition thereunder) (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4), 1.409A-1(b)(9) or otherwise.
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2.39 “NonstatutoryStock Option” means any option granted pursuant to Section 4 of the Plan that does not qualify as an Incentive Stock Option.
2.40 “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
2.41 “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
2.42 “OptionAgreement” means a written agreement between the Company and the Optionholder evidencing the terms and conditions of the Option grant. The Option Agreement includes the Grant Notice for the Option and the agreement containing the written summary of the general terms and conditions applicable to the Option and which is provided to a Participant along with the Grant Notice. Each Option Agreement will be subject to the terms and conditions of the Plan.
2.43 “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
2.44 “OtherAward” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6.3.
2.45 “OtherAward Agreement” means a written agreement between the Company and a holder of an Other Award evidencing the terms and conditions of an Other Award grant. Each Other Award Agreement will be subject to the terms and conditions of the Plan.
2.46 “Own,” “Owned,” “Owner,” “Ownership” means that a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
2.47 “Participant” means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
2.48 “PerformanceAwards” means an Award that may vest or may be exercised or a cash award that may vest or become earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions of Section 6.2 pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the Common Stock.
2.49 “PerformanceCriteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any measure of performance selected by the Board.
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2.50 “PerformanceGoals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to expense under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Cash Award.
2.51 “PerformancePeriod” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to vesting or exercise of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
2.52 “Plan” means this Alternus Clean Energy Inc. 2023 Equity Incentive Plan, as may be amended from time to time.
2.53 “PlanAdministrator” means the person, persons, and/or third-party administrator designated by the Company to administer the day to day operations of the Plan and the Company’s other equity incentive programs.
2.54 “Post-TerminationExercise Period” means the period following termination of a Participant’s Continuous Service within which an Option or SAR is exercisable, as specified in Section 5.8.
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2.55 “RestrictedStock Award” or “RSA” means an Award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6.1.
2.56 “RestrictedStock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. The Restricted Stock Award Agreement includes the Grant Notice for the Restricted Stock Award and the agreement containing the written summary of the general terms and conditions applicable to the Restricted Stock Award and which is provided to a Participant along with the Grant Notice. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
2.57 “RSUAward” or “RSU” means an Award of restricted stock units representing the right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6.1.
2.58 “RSUAward Agreement” means a written agreement between the Company and a holder of an RSU Award evidencing the terms and conditions of a RSU Award grant. The RSU Award Agreement includes the Grant Notice for the RSU Award and the agreement containing the written summary of the general terms and conditions applicable to the RSU Award and which is provided to a Participant along with the Grant Notice. Each RSU Award Agreement will be subject to the terms and conditions of the Plan.
2.59 “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.
2.60 “Rule 405” means Rule 405 promulgated under the Securities Act.
2.61 “Section 409A” means Code Section 409A and the U.S. Treasury Regulations and guidance thereunder, and any applicable state law equivalent, as each may be promulgated, amended or modified from time to time.
2.62 “Section 409AChange in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
2.63 “SecuritiesAct” means the U.S. Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.
2.64 “ShareReserve” means the number of shares available for issuance under the Plan as set forth in Section 3.1.
2.65 “StockAppreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.
2.66 “SARAgreement” means a written agreement between the Company and a holder of a SAR evidencing the terms and conditions of a SAR grant. The SAR Agreement includes the Grant Notice for the SAR and the agreement containing the written summary of the general terms and conditions applicable to the SAR and which is provided to a Participant along with the Grant Notice. Each SAR Agreement will be subject to the terms and conditions of the Plan.
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2.67 “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
2.68 “TenPercent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
2.69 “TradingPolicy” means the Company’s policy permitting certain individuals to sell Company shares only during certain “window” periods and/or otherwise restricts the ability of certain individuals to transfer or encumber Company shares, as in effect from time to time.
2.70 “UnvestedNon-Exempt Award” means the portion of any Non-Exempt Award that had not vested in accordance with its terms upon or prior to the date of any Corporate Transaction.
2.71 “VestedNon-Exempt Award” means the portion of any Non-Exempt Award that had vested in accordance with its terms upon or prior to the date of a Corporate Transaction.
3. Shares Subject to the Plan.
3.1 ShareReserve. Subject to adjustment in accordance with Section 3.2 and any adjustments as necessary to implement any Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will not exceed 8,000,000 shares of Common Stock.
3.2 ShareReserve Operation.
3.2.1 LimitApplies to Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at all times the number of shares of Common Stock required to satisfy its obligations to issue shares pursuant to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, NYSE American Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
3.2.2 Actionsthat Do Not Constitute Issuance of Common Stock and Do Not Reduce Share Reserve. The following actions do not result in an issuance of shares under the Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance under the Plan: (1) the expiration or termination of any portion of an Award without the shares covered by such portion of the Award having been issued; (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Common Stock); (3) the withholding of shares that would otherwise be issued by the Company to satisfy the exercise, strike or purchase price of an Award; or (4) the withholding of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Award.
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3.2.3 Reversionof Previously Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock underlying a previously granted Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan: (1) any shares that are forfeited back to or repurchased by the Company because of a failure to meet a contingency or condition required for the vesting of an Award; (2) any shares that are reacquired by the Company to satisfy the exercise, strike or purchase price of an Award; and (3) any shares that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Award.
4. Eligibilityand Limitations.
4.1 EligibleAward Recipients. Subject to the terms of the Plan, Employees, Directors and Consultants are eligible to receive Awards.
4.2 SpecificAward Limitations.
4.2.1 Limitationson Incentive Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
4.2.2 IncentiveStock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).
4.2.3 Limitationson Incentive Stock Options Granted to Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an Incentive Stock Option unless (i) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and (ii) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
4.2.4 Limitationson Nonstatutory Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company (as such term is defined in Rule 405) unless the stock underlying such Awards is treated as “service recipient stock” under Section 409A because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards otherwise comply with the distribution requirements of Section 409A.
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4.3 AggregateIncentive Stock Option Limit. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is the number of shares specified in Section 3.1.
4.4 Non-EmployeeDirector Compensation Limit. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Non-Employee Director with respect to any calendar year, including Awards granted and cash fees paid by the Company to such Non-Employee Director, will not exceed (i) $750,000 in total value or (ii) in the event such Non-Employee Director is first appointed or elected to the Board during such calendar year, $1,200,000 in total value, in each case calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes. The limitations in this Section 4.4 shall apply commencing with the first calendar year that begins following the Effective Date.
5. Optionsand Stock Appreciation Rights.
Each Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock Option at the time of grant; provided, however, that if an Option is not so designated, then such Option will be a Nonstatutory Stock Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. Each SAR will be denominated in shares of Common Stock equivalents. The terms and conditions of separate Options and SARs need not be identical; provided, however, that each Option Agreement and SAR Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
5.1 Term. Subject to Section 4.2 regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of grant of such Award or such shorter period specified in the Award Agreement.
5.2 Exerciseor Strike Price. Subject to Section 4.2 regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
5.3 ExerciseProcedure and Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan Administrator in accordance with the procedures specified in the Option Agreement or otherwise provided by the Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the Option Agreement:
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5.3.1 by cash or check, bank draft or money order (or an electronic equivalent thereof) payable to the Company;
5.3.2 pursuant to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
5.3.3 by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) at the time of exercise the Common Stock is publicly traded, (2) any remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares are endorsed or accompanied by an executed assignment separate from certificate, and (5) such shares have been held by the Participant for any minimum period necessary to avoid adverse accounting treatment as a result of such delivery;
5.3.4 if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) such shares used to pay the exercise price will not be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash or other permitted form of payment; or
5.3.5 in any other form of consideration that may be acceptable to the Board and permissible under Applicable Law.
5.4 ExerciseProcedure and Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide notice of exercise to the Plan Administrator in accordance with the SAR Agreement. The appreciation distribution payable to a Participant upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised under such SAR, over (ii) the aggregate strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the SAR Agreement.
5.5 Transferability. Options and SARs may not be transferred to third party financial institutions for value. The Board may impose such additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability of Options and SARs will apply, provided that except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer:
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5.5.1 Restrictionson Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.
5.5.2 DomesticRelations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to a domestic relations order.
5.6 Vesting. The Board may impose such restrictions on or conditions to the vesting and/or exercisability of an Option or SAR as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Options and SARs will cease upon termination of the Participant’s Continuous Service.
5.7 Terminationof Continuous Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options and SARs, whether vested or unvested, will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
5.8 Post-TerminationExercise Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 5.9, if a Participant’s Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested and exercisable, but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 5.1):
5.8.1 three months following the date of such termination if such termination is a termination without Cause (other than any termination due to the Participant’s Disability or death);
5.8.2 12 months following the date of such termination if such termination is due to the Participant’s Disability;
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5.8.3 18 months following the date of such termination if such termination is due to the Participant’s death; or
5.8.4 18 months following the date of the Participant’s death if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in 5.8.1 or 5.8.2 above).
Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right, title or interest in the terminated Award, the shares of Common Stock subject to the terminated Award, or any consideration in respect of the terminated Award.
5.9 Restrictionson Exercise; Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable Law, or (ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate the Company’s Trading Policy, then the applicable Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions); provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 5.1).
5.10 Non-ExemptEmployees. No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted, (iii) a Change in Control, or (iv) such Participant’s retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company’s then current employment policies and guidelines). This Section 5.10 is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.
5.11 WholeShares. Options and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
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6. AwardsOther Than Options and Stock Appreciation Rights.
6.1 RestrictedStock Awards and RSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined by the Board; provided, however, that each Restricted Stock Award Agreement and RSU Award Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
6.1.1 Form ofAward.
(a) RSAs: To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock subject to a Restricted Stock Award may be (i) held in book entry form subject to the Company’s instructions until such shares become vested or any other restrictions lapse, or (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting and other rights as a stockholder of the Company (including with respect to dividends as set forth in Section 6.1.5 below) with respect to any shares subject to a Restricted Stock Award.
(b) RSUs: A RSU Award represents a Participant’s right to be issued on a future date the number of shares of Common Stock that is equal to the number of restricted stock units subject to the RSU Award. As a holder of a RSU Award, a Participant is an unsecured creditor of the Company with respect to the Company’s unfunded obligation, if any, to issue shares of Common Stock in settlement of such Award and nothing contained in the Plan or any RSU Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award unless and until shares are actually issued in settlement of a vested RSU Award (including with respect to dividend equivalents as set forth in Section 6.1.4 below).
6.1.2 Consideration.
(a) RSA: A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of consideration (including future services) as the Board may determine and permissible under Applicable Law.
(b) RSU: Unless otherwise determined by the Board at the time of grant, a RSU Award will be granted in consideration for the Participant’s services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form other than the Participant’s services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law.
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6.1.3 Vesting. The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participant’s Continuous Service.
6.1.4 Terminationof Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, (i) the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant under his or her Restricted Stock Award that have not vested as of the date of such termination as set forth in the Restricted Stock Award Agreement and (ii) any portion of his or her RSU Award that has not vested will be forfeited upon such termination and the Participant will have no further right, title or interest in the RSU Award, the shares of Common Stock issuable pursuant to the RSU Award, or any consideration in respect of the RSU Award.
6.1.5 Dividendsand Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement).
6.1.6 Settlementof RSU Awards. A RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof) or in any other form of payment, as determined by the Board and specified in the RSU Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
6.2 Numberof Shares. The Administrator will have complete discretion to determine the number of Shares subject to any Award of Stock Appreciation Rights.
6.3 PerformanceAwards. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance Goals have been attained will be determined by the Board.
6.4 OtherAwards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of grant) or that may be convertible or exchangeable for Common Stock may be granted either alone or in addition to Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan and Applicable Law, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.
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**7.**AdjustmentsUpon Changes In Common Stock; Other Corporate Events.
7.1 CapitalizationAdjustments. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust, for the purpose of preventing dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan: (i) the class(es) and maximum number of shares of Common Stock subject to the Plan and the maximum number of shares by which the Share Reserve may annually increase pursuant to Section 3.1; (ii) the class(es) and maximum number of shares that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3.1; and (iii) the class(es) and number of securities and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no fractional shares or rights for fractional shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate equivalent benefit, if any, for any fractional shares or rights to fractional shares that might be created by the adjustments referred to in the preceding provisions of this Section.
7.2 Dissolutionor Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service; provided, however, that the Board may determine to cause some or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
7.3 CorporateTransaction. The following provisions will apply to Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award.
7.3.1 AwardsMay Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume or continue the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by the Board.
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7.3.2 AwardsHeld by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Current Participants”), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection 7.3.2 and that have multiple vesting levels depending on the level of performance, unless otherwise provided in the Award Agreement or unless otherwise provided by the Board, the vesting of such Performance Awards will accelerate at 100% of the target level upon the occurrence of the Corporate Transaction. With respect to the vesting of Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection 7.3.2 and are settled in the form of a cash payment, such cash payment will be made no later than 30 days following the occurrence of the Corporate Transaction.
7.3.3 AwardsHeld by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
7.3.4 Paymentfor Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise.
7.4 Appointmentof Stockholder Representative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the Participant’s behalf with respect to any escrow, indemnities and any contingent consideration.
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7.5 NoRestriction on Right to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares pursuant to any Award does not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
8. Administration.
8.1 Administrationby Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in subsection 8.3 below.
8.2 Powersof Board. The Board (or its delegated Committee(s)) will have the power, subject to, and within the limitations of, the express provisions of the Plan:
8.2.1 To determine from time to time (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be identical), including the time or times when a person will be permitted to receive an issuance of Common Stock or other payment pursuant to an Award; (5) the number of shares of Common Stock or cash equivalent with respect to which an Award will be granted to each such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole or in part by reference to, or otherwise based on, the Common Stock, including the amount of cash payment or other property that may be earned and the timing of payment.
8.2.2 To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board (or its delegated Committee(s)), in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective.
8.2.3 To settle all controversies regarding the Plan and Awards granted under it.
8.2.4 To accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
8.2.5 To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Corporate Transaction, for reasons of administrative convenience.
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8.2.6 To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
8.2.7 To amend the Plan in any respect the Board deems necessary or advisable; provided, however, that stockholder approval will be required for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted before amendment of the Plan will not be Materially Impaired by any amendment of the Plan unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
8.2.8 To submit any amendment to the Plan for stockholder approval.
8.2.9 To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that, a Participant’s rights under any Award will not be Materially Impaired by any such amendment unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
8.2.10 Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.
8.2.11 To adopt such procedures and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees, Directors or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement to ensure or facilitate compliance with the laws of the relevant foreign jurisdiction).
8.2.12 To effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding Option or SAR; (2) the cancellation of any outstanding Option or SAR and the grant in substitution therefor of (A) a new Option, SAR, Restricted Stock Award, RSU Award or Other Award, under the Plan or another equity plan of the Company, covering the same or a different number of shares of Common Stock, (B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles.
8.3 Delegationto Committee.
8.3.1 General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each Committee may retain the authority to concurrently administer the Plan with Committee or subcommittee to which it has delegated its authority hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority to concurrently administer the Plan with any Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
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8.3.2 Rule 16b-3Compliance. To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two or more Non-Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or modifying the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available.
8.4 Effectof Board’s Decision. All determinations, interpretations and constructions made by the Board or any Committee in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
8.5 Delegationto an Officer. The Board or any Committee may delegate to one or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by Applicable Law, other types of Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such Awards granted to such Employees; provided, however, that the resolutions or charter adopted by the Board or any Committee evidencing such delegation will specify the total number of shares of Common Stock that may be subject to the Awards granted by such Officer and that such Officer may not grant an Award to himself or herself. Any such Awards will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine the Fair Market Value.
9. TaxWithholding.
9.1 WithholdingAuthorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll and any other amounts payable to such Participant, and otherwise agrees to make adequate provision for (including), any sums required to satisfy any U.S. federal, state, local and/or foreign tax or social insurance contribution withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise, vesting or settlement of such Award, as applicable. Accordingly, a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue shares of Common Stock subject to an Award, unless and until such obligations are satisfied.
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9.2 Satisfactionof Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local and/or foreign tax or social insurance withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) by allowing a Participant to effectuate a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; or (vi) by such other method as may be set forth in the Award Agreement.
9.3 NoObligation to Notify or Minimize Taxes; No Liability to Claims. Except as required by Applicable Law the Company has no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award and will not be liable to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from such Award or other Company compensation and (ii) acknowledges that such Participant was advised to consult with his or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
9.4 WithholdingIndemnification. As a condition to accepting an Award under the Plan, in the event that the amount of the Company’s and/or its Affiliate’s withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure by the Company and/or its Affiliates to withhold the proper amount.
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10. Miscellaneous.
10.1 Sourceof Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
10.2 Useof Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general funds of the Company.
10.3 CorporateAction Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
10.4 StockholderRights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to such Award is reflected in the records of the Company.
10.5 NoEmployment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate at will and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
10.6 Changein Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
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10.7 Executionof Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional documents or instruments necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrator’s request.
10.8 ElectronicDelivery and Participation. Any reference herein or in an Award Agreement to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in the Plan through any on-line electronic system established and maintained by the Plan Administrator or another third party selected by the Plan Administrator. The form of delivery of any Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
10.9 Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntarily terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.
10.10 SecuritiesLaw Compliance. A Participant will not be issued any shares in respect of an Award unless either (i) the shares are registered under the Securities Act; or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Each Award also must comply with other Applicable Law governing the Award, and a Participant will not receive such shares if the Company determines that such receipt would not be in material compliance with Applicable Law.
10.11 Transferor Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued, or in the case of Restricted Stock and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein, the terms of the Trading Policy and Applicable Law.
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10.12 Effecton Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
10.13 Deferrals. To the extent permitted by Applicable Law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may also establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements of Section 409A.
10.14 Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule. If an Award includes a “series of installment payments” (within the meaning of Treasury Regulations Section 1.409A-2(b)(2)(iii)), a Participant’s right to such series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment, and if an Award includes “dividend equivalents” (within the meaning of Treasury Regulations Section 1.409A-3(e)), a Participant’s right to such dividend equivalents shall be treated separately from the right to other amounts under the Award.
10.15 Choiceof Law. This Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
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11. Covenantsof the Company.
11.1 Compliancewith Law. The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary, having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting of such Awards unless and until such authority is obtained. A Participant is not eligible for the grant of an Award or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable Law.
12. AdditionalRules For Awards Subject To Section 409A.
12.1 Application. Unless the provisions of this Section of the Plan are expressly superseded by the provisions in the form of Award Agreement, the provisions of this Section shall apply and shall supersede anything to the contrary set forth in the Award Agreement for a Non-Exempt Award.
12.2 Non-ExemptAwards Subject to Non-Exempt Severance Arrangements. To the extent a Non-Exempt Award is subject to Section 409A due to application of a Non-Exempt Severance Arrangement, the following provisions of this subsection 12.2 apply.
12.2.1 If the Non-Exempt Award vests in the ordinary course during the Participant’s Continuous Service in accordance with the vesting schedule set forth in the Award Agreement, and does not accelerate vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the shares be issued in respect of such Non-Exempt Award any later than the later of: (i) December 31st of the calendar year that includes the applicable vesting date, or (ii) the 60th day that follows the applicable vesting date.
12.2.2 If vesting of the Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with the Participant’s Separation from Service, and such vesting acceleration provisions were in effect as of the date of grant of the Non-Exempt Award and, therefore, are part of the terms of such Non-Exempt Award as of the date of grant, then the shares will be earlier issued in settlement of such Non-Exempt Award upon the Participant’s Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60th day that follows the date of the Participant’s Separation from Service. However, if at the time the shares would otherwise be issued the Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of such Participant’s Separation from Service, or, if earlier, the date of the Participant’s death that occurs within such six month period.
12.2.3 If vesting of a Non-Exempt Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with a Participant’s Separation from Service, and such vesting acceleration provisions were not in effect as of the date of grant of the Non-Exempt Award and, therefore, are not a part of the terms of such Non-Exempt Award on the date of grant, then such acceleration of vesting of the Non-Exempt Award shall not accelerate the issuance date of the shares, but the shares shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the ordinary course during the Participant’s Continuous Service, notwithstanding the vesting acceleration of the Non-Exempt Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4).
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12.3 Treatmentof Non-Exempt Awards Upon a Corporate Transaction for Employees and Consultants. The provisions of this subsection 12.3 shall apply and shall supersede anything to the contrary set forth in the Plan with respect to the permitted treatment of any Non-Exempt Award in connection with a Corporate Transaction if the Participant was either an Employee or Consultant upon the applicable date of grant of the Non-Exempt Award.
12.3.1 VestedNon-Exempt Awards. The following provisions shall apply to any Vested Non-Exempt Award in connection with a Corporate Transaction:
(a) If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Vested Non-Exempt Award. Upon the Section 409A Change in Control the settlement of the Vested Non-Exempt Award will automatically be accelerated, and the shares will be immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the Company may instead provide that the Participant will receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control.
(b) If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue or substitute each Vested Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of the Fair Market Value of the shares made on the date of the Corporate Transaction.
12.3.2 UnvestedNon-Exempt Awards. The following provisions shall apply to any Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to subsection 12.5 of this Section.
(a) In the event of a Corporate Transaction, the Acquiring Entity shall assume, continue or substitute any Unvested Non-Exempt Award. Unless otherwise determined by the Board, any Unvested Non-Exempt Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of any Unvested Non-Exempt Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value of the shares made on the date of the Corporate Transaction.
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(b) If the Acquiring Entity will not assume, substitute or continue any Unvested Non-Exempt Award in connection with a Corporate Transaction, then such Award shall automatically terminate and be forfeited upon the Corporate Transaction with no consideration payable to any Participant in respect of such forfeited Unvested Non-Exempt Award. Notwithstanding the foregoing, to the extent permitted and in compliance with the requirements of Section 409A, the Board may in its discretion determine to elect to accelerate the vesting and settlement of the Unvested Non-Exempt Award upon the Corporate Transaction, or instead substitute a cash payment equal to the Fair Market Value of such shares that would otherwise be issued to the Participant, as further provided in subsection 12.5.2 below. In the absence of such discretionary election by the Board, any Unvested Non-Exempt Award shall be forfeited without payment of any consideration to the affected Participants if the Acquiring Entity will not assume, substitute or continue the Unvested Non-Exempt Awards in connection with the Corporate Transaction.
(c) The foregoing treatment shall apply with respect to all Unvested Non-Exempt Awards upon any Corporate Transaction, and regardless of whether or not such Corporate Transaction is also a Section 409A Change in Control.
12.4 Treatmentof Non-Exempt Awards Upon a Corporate Transaction for Non-Employee Directors. The following provisions of this subsection 12.4 shall apply and shall supersede anything to the contrary that may be set forth in the Plan with respect to the permitted treatment of a Non-Exempt Director Award in connection with a Corporate Transaction.
12.4.1 If the Corporate Transaction is also a Section 409A Change in Control then the Acquiring Entity may not assume, continue or substitute the Non-Exempt Director Award. Upon the Section 409A Change in Control the vesting and settlement of any Non-Exempt Director Award will automatically be accelerated, and the shares will be immediately issued to the Participant in respect of the Non-Exempt Director Award. Alternatively, the Company may provide that the Participant will instead receive a cash settlement equal to the Fair Market Value of the shares that would otherwise be issued to the Participant upon the Section 409A Change in Control pursuant to the preceding provision.
12.4.2 If the Corporate Transaction is not also a Section 409A Change in Control, then the Acquiring Entity must either assume, continue or substitute the Non-Exempt Director Award. Unless otherwise determined by the Board, the Non-Exempt Director Award will remain subject to the same vesting and forfeiture restrictions that were applicable to the Award prior to the Corporate Transaction. The shares to be issued in respect of the Non-Exempt Director Award shall be issued to the Participant by the Acquiring Entity on the same schedule that the shares would have been issued to the Participant if the Corporate Transaction had not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of shares, the Acquiring Entity may instead substitute a cash payment on each applicable issuance date, equal to the Fair Market Value of the shares that would otherwise be issued to the Participant on such issuance dates, with the determination of Fair Market Value made on the date of the Corporate Transaction.
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12.5 If the RSU Award is a Non-Exempt Award, then the provisions in this Section 12.5 shall apply and supersede anything to the contrary that may be set forth in the Plan or the Award Agreement with respect to the permitted treatment of such Non-Exempt Award:
12.5.1 Any exercise by the Board of discretion to accelerate the vesting of a Non-Exempt Award shall not result in any acceleration of the scheduled issuance dates for the shares in respect of the Non-Exempt Award unless earlier issuance of the shares upon the applicable vesting dates would be in compliance with the requirements of Section 409A.
12.5.2 The Company explicitly reserves the right to earlier settle any Non-Exempt Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix).
12.5.3 To the extent the terms of any Non-Exempt Award provide that it will be settled upon a Change in Control or Corporate Transaction, to the extent it is required for compliance with the requirements of Section 409A, the Change in Control or Corporate Transaction event triggering settlement must also constitute a Section 409A Change in Control. To the extent the terms of a Non-Exempt Award provides that it will be settled upon a termination of employment or termination of Continuous Service, to the extent it is required for compliance with the requirements of Section 409A, the termination event triggering settlement must also constitute a Separation From Service. However, if at the time the shares would otherwise be issued to a Participant in connection with a “separation from service” such Participant is subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued before the date that is six months following the date of the Participant’s Separation From Service, or, if earlier, the date of the Participant’s death that occurs within such six month period.
12.5.4 The provisions in this subsection 12.5 for delivery of the shares in respect of the settlement of a RSU Award that is a Non-Exempt Award are intended to comply with the requirements of Section 409A so that the delivery of the shares to the Participant in respect of such Non-Exempt Award will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted.
13. Severability.
If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
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14. Terminationof the Plan.
The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of: (i) the Adoption Date, or (ii) the date the Plan is approved by the Company’s stockholders. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
* * *
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Exhibit 10.22
Execution Version
NON-REDEMPTION AGREEMENT
This NON-REDEMPTION AGREEMENT (this “Agreement”), dated as of December 18, 2023, is made by and among Clean Earth Acquisitions Corp., a Delaware corporation (“SPAC” and after the Closing (defined below), “Pubco”), the undersigned investor (collectively, the “Investor”), and Clean Earth Acquisitions Sponsor LLC, a Delaware limited liability company (the “Sponsor”). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Business Combination Agreement (as defined below).
RECITALS
WHEREAS, on October 12, 2022, the SPAC and Alternus Energy Group Plc (“Alternus”) entered into a Business Combination Agreement, as amended by that certain First Amendment to the Business Combination Agreement, dated as of April 12, 2023, by and among the SPAC, Alternus and the Sponsor (as so amended, and as may be further amended or restated from time to time, the “Business Combination Agreement”).
WHEREAS, as of the date hereof, SPAC is authorized to issue 110,000,000 shares of Class A common stock of SPAC, of which 3,686,554 shares are issued and outstanding (the “SPAC Shares”);
WHEREAS, the Sponsor is the record and beneficial owner of 7,666,667 shares of Class B common stock of SPAC (the “Founder Shares”) and 890,000 private units (the “Private Units” (together with the Founder Shares, the “Sponsor Equity”), each Private Unit being composed of one unregistered SPAC Share (a “Private Shares”) and one half of one private warrant (a “Private Warrant”);
WHEREAS, in connection with the Business Combination, the Investor (i) elected to redeem certain SPAC Shares and now desires to withdraw such election to redeem with respect to such SPAC Shares and (ii) will purchase SPAC Shares solely from shareholders of SPAC who have elected to redeem their shares (rather than on the open market), such that the total number of SPAC Shares held of record by the Investor immediately prior to the Closing shall be the number of such SPAC Shares set forth on the Investor’s signature page hereto (the “Shares”); and
WHEREAS, in consideration of the Investor’s commitment to not redeem the Shares pursuant to this Agreement, SPAC and the Sponsor desire to guarantee that the Investor’s Shares will convert into a minimum number of SPAC Shares at the Closing, by virtue of the Business Combination, as further set forth in this Agreement.
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AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
AGREEMENTS OF THE INVESTOR
1.1 The Investor covenants and agrees to reverse and revoke any prior redemption elections made with respect to the Shares and that, prior to the Termination Date, neither it nor any of its affiliates shall (a) directly or indirectly Transfer (other than to any fund or account managed by the same investment manager as the Investor) any of the Shares, or any voting or economic interest therein, as of and following the date hereof through the earlier of (i) the Closing of the Business Combination and (ii) the termination of the Business Combination Agreement in accordance with its terms, or (b) exercise any redemption rights under the Second Amended and Restated Certificate of Incorporation of SPAC, as may be further amended or restated from time to time (the “Charter”), in connection with (i) the Business Combination or (ii) any meeting of SPAC at which SPAC shareholders may ordinarily exercise redemption rights pursuant to the Charter, with respect to the Shares (collectively, the “Redemption Rights”). For purposes hereof, “Transfer” shall mean, with respect to the Shares, the transfer, sale, offer, exchange, assignment, pledge (other than pursuant to standardized pledge arrangements with the Investor’s prime brokers) or other disposition. For the avoidance of doubt, nothing in this Agreement shall limit or restrict Investor’s right to conduct any transfer, sale, offer, exchange, assignment, pledge (other than pursuant to standardized pledge arrangements with the Investor’s prime brokers) or other disposition of any SPAC Shares on or after the Closing Date.
1.2 In furtherance of the foregoing: (a) through the Termination Date, the Investor hereby irrevocably waives, on behalf of itself and its affiliates, the Redemption Rights and irrevocably constitutes and appoints SPAC and its respective designees, with full power of substitution, as its (and its affiliates) true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, to revoke any redemption election made in contravention of Section 1.1 above with respect to any Shares and to cause SPAC’s transfer agent to fail to redeem such Shares in connection with the Business Combination, and (b) in the event of a breach of Section 1.1 with respect to any Shares (the “Transferred/Redeemed Shares”), the Investor unconditionally and irrevocably agrees to, or to cause one or more of its affiliates to, subscribe for and purchase from SPAC (or from its permitted assignee(s) or designee(s)) a number of ordinary shares of SPAC equal to the number of such Transferred/Redeemed Shares, for a per share purchase price equal to the amount to be received by public shareholders of SPAC exercising their Redemption Rights in connection with the Business Combination.
1.3 The Investor hereby agrees that neither the Investor nor any person or entity acting on behalf of the Investor or pursuant to any understanding with the Investor has engaged nor, from the date of this Agreement until the Closing Date, will engage in any hedging transactions or Short Sales with respect to securities of SPAC. For purposes of this Section 1.3, “Short Sales” shall include, without limitation, (a) all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, (b) all types of direct and indirect stock pledges (other than pledges in the ordinary course of business as part of prime brokerage or other similar financing arrangements), forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and (c) sales and other transactions through non-U.S. broker dealers or foreign regulated brokers.
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1.4 The obligations of the Investor set forth in Sections 1.1, 1.2 and 1.3 of this Agreement shall be subject to the satisfaction, or valid waiver by the Investor, of the conditions that:
(a) all representations and warranties of the Sponsor and SPAC contained in this Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true and correct in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true and correct in all respects) as of such date); and
(b) the Sponsor and SPAC shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied, or complied with by it at or prior to the Closing.
1.5 For the avoidance of doubt, the Investors agree and acknowledge that any currently existing or new subsidiary directly or indirectly owned or controlled by Pubco (i) may obtain project financing for projects owned or developed by that subsidiary and, as part of such project financing, (ii) may encumber, mortgage or grant a security interest in its shares and/or assets. The term “project financing” shall refer to long-term debt or equity financing for a project to be repaid from the cash flow generated by that project.
ARTICLE II
AGREEMENTS OF THE SPONSOR AND SPAC
2.1 In consideration of the Investor’s performance of its obligations described herein and upon satisfaction (or, if applicable, waiver) of the conditions set forth in Section 2.2 of this Agreement, the Sponsor and the SPAC will cause to be delivered at the Closing 1,589,000 Founder Shares and 145,000 Private Warrants (the “Investor Company Securities”) to be listed and admitted to trading on the Nasdaq Stock Market LLC. The Investor Company Securities shall be issued to the Investor and the managed accounts or fund entities for which the Investor exercises investment discretion, as designated in writing to SPAC. The Investor Company Securities will contain the same legends and be restricted in the same manner as applicable to Sponsor on the date hereof. The Investor will not sell, pledge, gift or otherwise transfer, or cause to be sold, pledged, gifted or otherwise transferred, any of the Investor Company Securities until after the Closing has occurred.
2.2 Upon the Closing of the Business Combination, if there is not an effective registration statement covering all the Founder Shares and the SPAC Shares underlying the Private Warrants, then the Sponsor shall cause Pubco be filed, within 30 days of the Closing of the Business Combination, a registration statement, and Pubco will use its reasonable best efforts to cause such registration statement to be promptly declared effective under the Securities Act, in compliance with such registration request.
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2.3 The obligations of the Sponsor and SPAC set forth in Section 2.1 of this Agreement shall be subject to the satisfaction, or valid waiver by the Sponsor and SPAC, of the conditions that:
(a) all representations and warranties of the Investor contained in this Agreement shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true and correct in all respects) at and as of the Closing Date (except for representations and warranties made as of a specific date, which shall be true and correct in all material respects (other than representations and warranties that are qualified as to materiality, which representations and warranties shall be true and correct in all respects) as of such date); and
(b) the Investor shall have performed, satisfied, and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied, or complied with by it at or prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of SPAC. SPAC represents and warrants as of the date hereof to the Investor as follows:
(a) SPAC is duly organized, validly existing and in good standing under the laws of the State of Delaware, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within SPAC’s corporate powers and have been duly authorized by all necessary exempted company actions on the part of SPAC. This Agreement has been duly executed and delivered by SPAC and, assuming due authorization, execution and delivery by the Investor, this Agreement constitutes a legally valid and binding obligation of SPAC, enforceable against SPAC in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Law, other similar Law affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies).
(b) The execution and delivery of this Agreement by SPAC does not, and the performance by SPAC of its obligations hereunder will not, (i) conflict with or result in a violation of the organizational documents of SPAC or (ii) require any consent or approval that has not been given or other action that has not been taken by any person, in each case to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by SPAC of its obligations under this Agreement. SPAC has full right and power to enter into and execute this Agreement.
(c) SPAC management and its representatives and advisors have undertaken customary and commercially reasonable efforts in its business, legal, accounting, and other due diligence investigation in determining that Alternus was and continues to be an appropriate target for a business combination.
(d) No event or series of related events that has caused or would reasonably be expected to cause, individually or in the aggregate, a Purchaser Material Adverse Effect, has occurred or is continuing.
(e) No broker or finder is entitled to any brokerage or finder’s fee or commission solely in connection with this Agreement.
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(f) There is no action pending against the SPAC or, to the SPAC’s knowledge, threatened against the SPAC, before any court, arbitrator or governmental authority, which in any manner challenges or seeks to prevent, enjoin or materially delay the performance by SPAC of its obligations under this Agreement.
(g) SPAC understands and acknowledges that Investor is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of SPAC set forth in this Agreement.
3.2 Representations and Warranties of the Sponsor. The Sponsor represents and warrants as of the date hereof to the Investor as follows:
(a) The Sponsor is duly organized, validly existing and in good standing under the laws of the state of Delaware, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within the Sponsor’s powers and have been duly authorized by all necessary company actions on the part of SPAC. This Agreement has been duly executed and delivered by the Sponsor and, assuming due authorization, execution and delivery by the Investor, this Agreement constitutes a legally valid and binding obligation of the Sponsor, enforceable against the Sponsor in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Law, other similar Law affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies).
(b) There are no securities or instruments issued by or to which Sponsor or SPAC is a party containing anti-dilution or similar provisions that will be triggered by the issuance of the Investor Company Securities. As of the date hereof, Sponsor has no subsidiaries, other than SPAC, and, other than in respect of any Working Capital Loans, does not own, directly or indirectly, interests or investments (whether equity or debt) in any person, whether incorporated or unincorporated.
(c) Other than Founder Shares owing to service providers of SPAC, at the Closing, the Sponsor shall be the record and beneficial owner of, and have good and marketable title to, the Sponsor Equity and will, immediately prior to the conversion of the Investor’s Shares for Investor Company Securities, be the record and beneficial owner of the Sponsor Equity, in each case, free and clear of all liens, pledges, security interests, charges, claims, encumbrances, agreements, options, voting trusts, proxies and other arrangements or restrictions of any kind (other than transfer restrictions pursuant to applicable securities laws). The Founder Shares are fully paid and are non-assessable. The Sponsor Equity to be transferred to the Investor, when transferred to Investor as provided herein, will be free and clear of all liens, pledges, security interests, charges, claims, encumbrances, agreements, options, voting trusts, proxies and other arrangements or restrictions of any kind (other than transfer restrictions pursuant to applicable securities laws). The Sponsor Equity is duly authorized, fully paid, and non-assessable.
(d) The Sponsor has not offered the Investor Company Securities by means of any general solicitation or general advertising within the meaning of Regulation D of the Securities Act, including but not limited to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or the internet or broadcast over television, radio or the internet or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
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(e) The Sponsor is not entering into the transactions contemplated by this Agreement to create actual or apparent trading activity in the SPAC Shares (or any security convertible into or exchangeable for SPAC Shares) or to raise or depress or otherwise manipulate the price of the SPAC Shares (or any security convertible into or exchangeable for SPAC Shares) or otherwise in violation of the Exchange Act. The Sponsor has not entered into or altered, and agrees that the Sponsor will not enter into or alter, any corresponding or hedging transaction or position with respect to the SPAC Shares.
(f) The execution and delivery of this Agreement by the Sponsor does not, and the performance by the Sponsor of its obligations hereunder will not, (i) conflict with or result in a violation of the organizational documents of the Sponsor or (ii) require any consent or approval that has not been given or other action that has not been taken by any person, in each case to the extent such consent, approval or other action would prevent, enjoin or materially delay the performance by the Sponsor of its obligations under this Agreement. The Sponsor has full right and power to enter into and execute this Agreement.
(g) There is no action pending against the Sponsor or, to the Sponsor’s knowledge, threatened against the Sponsor, before any court, arbitrator or governmental authority, which in any manner challenges or seeks to prevent, enjoin or materially delay the performance by Sponsor of its obligations under this Agreement.
3.3 Representations and Warranties of the Investor. The Investor represents and warrants as of the date hereof to the Sponsor and SPAC as follows:
(a) This Agreement has been duly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Sponsor and SPAC, this Agreement constitutes a legally valid and binding obligation of the Investor, enforceable against the Investor in accordance with the terms hereof (except as enforceability may be limited by bankruptcy Law, other similar Law affecting creditors’ rights and general principles of equity affecting the availability of specific performance and other equitable remedies).
(b) The Investor acknowledges that it is aware that there are substantial risks incident to the ownership of the SPAC Shares. The Investor has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the SPAC Shares, and the Investor has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as the Investor has considered necessary to make an informed investment decision.
(c) The Investor has adequately analyzed and fully considered the risks of an investment in the SPAC Shares and determined that the SPAC Shares are a suitable investment for the Investor and that the Investor is able at this time and in the foreseeable future to bear the economic risk of a total loss of the Investor’s investment in the SPAC Shares. The Investor acknowledges specifically that a possibility of total loss exists.
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ARTICLE IV
MISCELLANEOUS
4.1 Termination. This Agreement shall terminate and be void and of no further force and effect, and all rights and obligations of the parties hereunder shall terminate without any further liability on the part of any party in respect thereof, upon the earliest to occur of (such date, the “Termination Date”): (a) such date and time as the Business Combination Agreement is validly terminated in accordance with its terms without being consummated, (b) upon the mutual written agreement of all parties hereto to terminate this Agreement, (c) November 14, 2023, if the Closing of the Business Combination has not occurred by such date and the terminating party’s breach was not the primary reason the Closing failed to occur by such date, or (d) the liquidation of SPAC (each of the termination events described in clauses (a)–(d) above, a “Termination Event”); provided, that nothing herein will relieve any party from liability for any willful breach hereof prior to the time of termination or common law intentional fraud in the making of any representation or warranty hereunder, and each party will be entitled to any remedies at law or in equity to recover losses, liabilities or damages arising from such breach or fraud. SPAC shall notify the Investor of the termination of the Business Combination Agreement promptly after the termination thereof. Upon the occurrence of any Termination Event, except as set forth in the proviso to the first sentence of this Section 4.1, this Agreement shall be void and of no further effect.
4.2 Trust Account Waiver. Reference is made to the definitive proxy statement filed with the U.S. Securities and Exchange Commission (“SEC”) on November 13, 2023 (the “Proxy Statement”). The Investor has reviewed the Proxy Statement and acknowledges that SPAC has established the trust account described in the Proxy Statement (the “Trust Account”) for the benefit of the public shareholders (the “Public Shareholders”) and the underwriter (“Underwriter”) of SPAC’s initial public offering (“IPO”) and that, except for certain exceptions described in the Proxy Statement, SPAC may disburse monies from the trust account only: (i) to the Public Shareholders in the event of the redemption of their shares or the liquidation of SPAC; (ii) to SPAC and the Underwriters after the consummation of a business combination, as described in the Proxy Statement (a “Business Combination”), (iii) to the Public Shareholders in the event SPAC does not consummate a Business Combination prior to May 28, 2024 (assuming the exercise of all available extensions), or (iv) with respect to any interest earned on the amounts held in the Trust Account, amounts necessary to pay any taxes and up to $100,000 in dissolution expenses. The Investor hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the Trust Account (a “Claim”) and hereby waives any Claim it may have now or in the future as a result of, or arising out of, any negotiations, contracts or agreements with SPAC or makes any Claim against the Trust Account for any reason whatsoever. The Investor agrees and acknowledges that such irrevocable waiver is material to this Agreement and specifically relied upon by SPAC and its representatives to induce SPAC to enter into this Agreement, and the Investor further intends and understands such waiver to be valid, binding and enforceable against the Investor and each of its representatives under applicable law.
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To the extent the Investor or any of its affiliates commences any action or proceeding based upon, in connection with, relating to or arising out of any matter relating to SPAC or its representatives, which proceeding seeks, in whole or in part, monetary relief against SPAC or its representatives, the Investor hereby acknowledges and agrees that its and its representatives and affiliates’ sole remedy shall, except (i) as may be set forth in any definitive agreement or (ii) in connection with any rights or claims of the Investor or any of its related parties as a shareholder of SPAC to the extent related to or arising from any shares of the SPAC, including for the avoidance of doubt, any right to redeem its shares, be against funds held outside of the Trust Account and that such Claim shall not permit the Investor, or its representatives or affiliates or shareholders (or any person claiming on any of their behalves or in lieu of any of them) to have any claim against the Trust Account or any amounts contained therein.
4.3 Disclosure; Waiver. As of the date hereof, to the Sponsor and SPAC’s knowledge, Investor is not in possession of any material non-public information received from the Sponsor, Alternus, SPAC or any of their respective officers, directors or employees. SPAC shall, by 9:00 a.m., New York City time, within four (4) Business Days following the date of this Agreement, file with the Commission a Current Report on Form 8-K disclosing all material terms of the transactions contemplated hereby. The parties to this Agreement shall cooperate with one another to assure that such disclosure is accurate. Each of the Sponsor and SPAC agrees that the name of Investor shall not be included in any public disclosures related to this Agreement unless required by applicable law, regulation or stock exchange rule. Investor acknowledges that the Sponsor and SPAC may possess or have access to material non-public information which has not been communicated to Investor. The Sponsor and SPAC shall not deliver, and shall cause Alternus and their respective officers, directors or employees not to deliver, to Investor any material non-public information relating to the Sponsor, Alternus or SPAC without Investor’s prior written consent. The Sponsor, Alternus and SPAC shall, by 9:00 a.m., New York City time, on the date following the Closing of the Business Combination, file with the Commission a Current Report on Form 8-K disclosing any material non-public information delivered to Investor after the date of this Agreement.
4.4 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the principles of conflicts of laws that would otherwise require the application of the law of any other state.
The parties agree that all disputes, legal actions, suits and proceedings arising out of or relating to this Agreement must be brought exclusively in the United States District Court for the Southern District of New York, the Supreme Court of the State of New York and the federal courts of the United States of America located in the State of New York (collectively the “Designated Courts”). Each party hereby consents and submits to the exclusive jurisdiction of the Designated Courts. No legal action, suit or proceeding with respect to this Agreement may be brought in any other forum. Each party hereby irrevocably waives all claims of immunity from jurisdiction, and any objection which such party may now or hereafter have to the laying of venue of any suit, action or proceeding in any Designated Court, including any right to object on the basis that any dispute, action, suit or proceeding brought in the Designated Courts has been brought in an improper or inconvenient forum or venue. Each of the parties also agrees that delivery of any process, summons, notice or document to a party hereof in compliance with Section 4.10 of this Agreement shall be effective service of process for any action, suit or proceeding in a Designated Court with respect to any matters to which the parties have submitted to jurisdiction as set forth above.
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4.5 Waiver of Jury Trial. EACH PARTY AND ANY PERSON ASSERTING RIGHTS AS A THIRD-PARTY BENEFICIARY HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A TRIALBY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATEDHEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY OR ANY AFFILIATE OFANY OTHER SUCH PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES AGREE THAT ANY SUCH CLAIM ORCAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIRRESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDINGWHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THISWAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
4.6 Assignment. Neither this Agreement nor any rights that may accrue to the Investor hereunder may be transferred or assigned. Neither this Agreement nor any rights that may accrue to the Sponsor or SPAC hereunder may be transferred or assigned. Notwithstanding the foregoing, the Investor may assign its rights and obligations under this Agreement to one or more of its affiliates or equity holders (including other investment funds or accounts managed or advised by the Investor or investment manager who acts on behalf of the Investor or an affiliate thereof) or, with SPAC’s prior written consent, to another person, provided that (i) such assignee(s) agrees in writing to be bound by the terms hereof, and upon such assignment by the Investor, the assignee(s) shall become the Investor hereunder and have the rights and obligations and be deemed to make the representations and warranties of the Investor provided for herein to the extent of such assignment and (ii) no such assignment shall relieve the Investor of its obligations hereunder if any such assignee fails to perform such obligations.
4.7 Specific Performance. The parties hereto acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that money or other legal remedies would not be an adequate remedy for such damage. It is accordingly agreed that the parties shall be entitled to equitable relief, including in the form of an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which such party is entitled at law, in equity, in contract, in tort or otherwise. The parties hereto acknowledge and agree that SPAC shall be entitled to specifically enforce the Investor’s obligations and the provisions of the Agreement, in each case, on the terms and subject to the conditions set forth herein. The parties hereto further acknowledge and agree: (a) to waive any requirement for the security or posting of any bond in connection with any such equitable remedy; (b) not to assert that a remedy of specific enforcement pursuant to this Section 4.7 is unenforceable, invalid, contrary to applicable law or inequitable for any reason; and (c) to waive any defenses in any action for specific performance, including the defense that a remedy at law would be adequate. In connection with any proceeding for which SPAC is being granted an award of money damages, the Investor agrees that such damages, to the extent payable by the Investor, shall include, without limitation, damages related to the consideration that is or was to be paid to SPAC under this Agreement and such damages are not limited to an award of out-of-pocket fees and expenses related to this Agreement.
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4.8 Amendment. This Agreement may not be amended, modified or waived except by an instrument in writing, signed by each of the parties hereto.
4.9 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby and shall continue in full force and effect.
4.10 Notices. All notices, requests, demands, claims, and other communications hereunder shall be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) when sent by electronic mail, on the date of transmission to such recipient, (iii) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) four (4) Business Days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and, in each case, addressed to the intended recipient at its address or electronic mail address, as applicable, listed below (or, in the case of the Investor, as set forth on the Investor’s signature page) or to such electronic mail address or address as subsequently modified by written notice given in accordance with this Section 3.10.
If to Sponsor:
Clean Earth Acquisitions Sponsor LLC
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
Attention: Alexander Greystroke
Email: AlexHSC2@gmail.com
with a copy (which shall not constitute notice) to:
Winston & Strawn LLP
800 Capitol St., Suite 2400
Houston, Texas 77002
Attention: Michael J. Blankenship
Email: MBlankenship@winston.com
If to SPAC:
Clean Earth Acquisitions Corp.
12600 Hill Country Blvd, Building R, Suite 275
Bee Cave, Texas 78738
Attention: Aaron Ratner
Email: aaron@carbonfoundry.com
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with a copy (which shall not constitute notice) to:
Winston & Strawn LLP
800 Capitol St., Suite 2400
Houston, Texas 77002
Attention: Michael J. Blankenship
Email: MBlankenship@winston.com
4.11 Counterparts. This Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic mail or in .pdf) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document. All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
4.12 Entire Agreement. This Agreement and the agreements referenced herein constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto to the extent they relate in any way to the subject matter hereof.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the date first written above.
| SPAC: | |
|---|---|
| CLEAN EARTH ACQUISITIONS CORP. | |
| By: | /s/ Aaron T. Ratner |
| Name: | Aaron T. Ratner |
| Title: | Chief Executive Officer |
| SPONSOR: | |
| CLEAN EARTH ACQUISITIONS SPONSOR LLC | |
| By: | /s/ Martha Ross |
| Name: | Martha Ross |
| Title: | Director |
[Signature Page to Non-Redemption Agreement]
| INVESTOR: | |
|---|---|
| ANTARA TOTAL RETURN SPAC MASTER FUND, LP | |
| By: | /s/ Himanshu Gulati |
| Name: | Himanshu Gulati |
| Title: | Chief Investment Officer |
| NUMBER OF SPAC SHARES: 300,000 |
[Signature Page to Non-Redemption Agreement]
Exhibit 10.23
FORM OF INDEMNIFICATION AGREEMENT
THISINDEMNIFICATION AGREEMENT (this “Agreement”) is made as of [●], 2023, by and between ALTERNUSCLEAN ENERGY INC., a Delaware corporation (the “Company”), and [●] (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or officers unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of such corporations;
WHEREAS, the board of directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals as directors and officers, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect such persons serving the Company and its subsidiaries from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions. At the same time, directors and officers are being increasingly subjected to expensive and time-consuming litigation. The Third Amended and Restated Certificate of Incorporation (the “Charter”) and the Amended and Restated Bylaws (the “Bylaws”) of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to applicable provisions of the Delaware General Corporation Law (“DGCL”). The Charter, Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification, hold harmless, exoneration, advancement and reimbursement rights;
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, hold harmless, exonerate and to advance Expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so protected against liabilities;
WHEREAS, this Agreement is a supplement to and in furtherance of the Charter and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity. Indemnitee is willing to serve or continue to serve for or on behalf of the Company on the condition that Indemnitee be so indemnified.
NOW,THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
TERMS AND CONDITIONS
SERVICES TO THE COMPANY. In consideration of the Company’s covenants and obligations hereunder, Indemnitee will serve or continue to serve as an officer or director of the Company for so long as Indemnitee is duly elected or appointed or until Indemnitee tenders Indemnitee’s resignation or until Indemnitee is removed. The foregoing notwithstanding, this Agreement shall continue in full force and effect after Indemnitee has ceased to serve as a director or officer of the Company, as provided in Section 18 of this Agreement. This Agreement, however, shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any period otherwise required by law or by other agreements or commitments of the parties, if any.
DEFINITIONS. As used in this Agreement:
(a) References to “agent” shall mean any person who is or was a director, officer or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.
(b) The terms “Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth in Rule 13d-3 promulgated under the Exchange Act (as defined below) as in effect on the date hereof.
(c) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:
(i) Acquisition of Stock by Third Party. Any Person (as defined below), other than Alternus Energy Group Plc., is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors, unless (1) the change in the relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved in advance by the Continuing Directors (as defined below) and such acquisition would not constitute a Change in Control under part (iii) of this definition;
(ii) Change in Board of Directors. Individuals who, as of the date hereof, constitute the Board, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still in office who were directors on the date hereof or whose election for nomination for election was previously so approved (collectively, the “ContinuingDirectors”), cease for any reason to constitute at least a majority of the members of the Board;
(iii) Corporate Transactions. The effective date of a reorganization, merger, asset acquisition, stock (or other equity interest) purchase or exchange, consolidation or other business combination involving the Company (a “Business Combination”), in each case, unless, following such Business Combination: (1) all or substantially all of the individuals and entities who were the Beneficial Owners of securities entitled to vote generally in the election of directors immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty-one percent (51%) of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries (as defined below)) in substantially the same proportions as their ownership immediately prior to such Business Combination, of the securities entitled to vote generally in the election of directors; (2) no Person (excluding any corporation resulting from such Business Combination and excluding Alternus Energy Group Plc.) is the Beneficial Owner, directly or indirectly, of 50% or more of the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the surviving corporation except to the extent that such ownership existed prior to the Business Combination; and (3) at least a majority of the Board of Directors of the corporation resulting from such Business Combination were Continuing Directors at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination;
(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than factoring the Company’s current receivables or escrows due (or, if such stockholder approval is not required, the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions); or
(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or any successor rule) (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.
(d) “Corporate Status” describes the status of a person who is or was a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person is or was Serving at the Request of the Company (as defined below).
(e) “Delaware Court” shall mean the Court of Chancery of the State of Delaware.
(f) “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding (as defined below) in respect of which indemnification is sought by Indemnitee.
(g) “Enterprise” shall mean the Company and any other corporation, constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was Serving at the Request of the Company (as defined below) as a director, officer, trustee, manager, general partner, managing member, fiduciary, employee or agent.
(h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(i) “Expenses” shall include all reasonable direct and indirect costs, fees and expenses of any type or nature whatsoever, including, without limitation, all reasonable attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, fax transmission charges, secretarial services and all other disbursements, obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settlement or appeal of, or otherwise participating in, a Proceeding (as defined below), including reasonable compensation for time spent by Indemnitee for which he or she is not otherwise compensated by the Company or any third party. “Expenses” also shall include expenses incurred in connection with any appeal resulting from any Proceeding (as defined below), including without limitation the principal, premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. “Expenses,” however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or Fines (as defined below) against Indemnitee.
(j) “Fines” shall include all fines, including without limitation any excise tax assessed on Indemnitee with respect to any employee benefit plan and any fines imposed on Indemnitee by any governmental authority.
(k) “Independent Counsel” shall mean a law firm or a member of a law firm with significant experience in matters of corporation law and that neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding (as defined below) giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(l) The term “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act as in effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries (as defined below) of the Company; (iii) any employment benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
(m) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative, legislative or investigative nature, in which Indemnitee was, is, will or might be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action (or failure to act) taken by Indemnitee or of any action (or failure to act) on Indemnitee’s part while acting as a director or officer of the Company, or by reason of the fact that Indemnitee is or was Serving at the Request of the Company (as defined below) as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement or advancement of Expenses can be provided under this Agreement.
(n) The term “Serving at the Request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.
(o) The term “Subsidiary,” with respect to any Person, shall mean any corporation, limited liability company, partnership, joint venture, trust or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by that Person.
INDEMNITY IN THIRD-PARTY PROCEEDINGS. To the fullest extent permitted by applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section 3 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 3, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses, judgments, liabilities, Fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, Fines, penalties and amounts paid in settlement) actually, and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.
INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section 4 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this Section 4, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. Notwithstanding the foregoing, no indemnification, hold harmless or exoneration for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court of competent jurisdiction to be liable to the Company, unless and only to the extent that any court in which the Proceeding was brought or the Delaware Court shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification, to be held harmless or to exoneration.
INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY ORPARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or deponent in any Proceeding to which Indemnitee was or is not a party or threatened to be made a party, Indemnitee shall, to the fullest extent permitted by applicable law, be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
CONTRIBUTION IN THE EVENT OF JOINT LIABILITY.
(a) To the fullest extent permissible under applicable law, if the indemnification, hold harmless and/or exoneration rights provided for in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying, holding harmless or exonerating Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments, liabilities, Fines, penalties, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.
(b) The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(c) The Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.
- ADDITIONAL INDEMNIFICATION.
(a) Notwithstanding any limitation in Sections 3, 4, or 5 of this Agreement, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Losses incurred by Indemnitee or on his or her behalf in connection with the Proceeding or any claim, issue or matter therein.
(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to: (i) the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and (ii) the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
- EXCLUSIONS. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification, advance of Expenses, hold harmless or exoneration payment in connection with any claim made against Indemnitee:
(a) for which payment has actually been received by or on behalf of Indemnitee under any insurance policy, contract, agreement or other indemnity or advancement provision or otherwise, except (i) with respect to any excess beyond the amount actually received under any insurance policy, contract, agreement, other indemnity or advancement provision or otherwise and (ii) as provided in Section 10 of this Agreement;
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law or common law; or
(c) except as otherwise provided in Sections 15(f)-(g) of this Agreement, prior to a Change in Control, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, advance of Expenses, hold harmless or exoneration payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law. Indemnitee shall seek payments or advances from the Company only to the extent that such payments or advances are unavailable from any insurance policy of the Company covering Indemnitee.
INDEMNITOR OF FIRST RESORT. The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated (collectively, the “Alternative Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Alternative Indemnitors to advance Expenses or to provide indemnification for the same Expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, Fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Charter or Bylaws (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Alternative Indemnitors, and (iii) that it irrevocably waives, relinquishes and releases the Alternative Indemnitors from any and all claims against the Alternative Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Alternative Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing, and the Alternative Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Alternative Indemnitors are express third party beneficiaries of the terms of this Section 10.
ADVANCES OF EXPENSES; DEFENSE OF CLAIM.
(a) Notwithstanding any provision of this Agreement to the contrary, and to the fullest extent not prohibited by applicable law, the Company shall pay the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee within three months) in connection with any Proceeding within ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time, prior to the final disposition of any Proceeding. Advances shall, to the fullest extent permitted by law, be unsecured and interest free. Advances shall, to the fullest extent permitted by law, be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to be indemnified, held harmless or exonerated under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing a Proceeding to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. To the fullest extent required by applicable law, such payments of Expenses in advance of the final disposition of the Proceeding shall be made only upon the Company’s receipt of an undertaking, by or on behalf of Indemnitee, to repay the advanced amounts to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified, held harmless or exonerated by the Company under the provisions of this Agreement, the Charter, the Bylaws, applicable law or otherwise. This Section 11(a) shall not apply to any claim made by Indemnitee for which an indemnification, advance of Expenses, hold harmless or exoneration payment is excluded pursuant to Section 9 of this Agreement.
(b) The Company will be entitled to participate in the Proceeding at its own expense.
(c) The Company shall not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment, liability, Fine, penalty or limitation on Indemnitee without Indemnitee’s prior written consent.
- PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.
(a) Indemnitee agrees to promptly notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding, claim, issue or matter therein which may be subject to indemnification, hold harmless or exoneration rights, or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement, or otherwise.
(b) Indemnitee may deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance with this Agreement. Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification shall be determined according to Section 13(a) of this Agreement.
- PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.
(a) A determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made in the specific case by one of the following methods, which shall be at the election of Indemnitee: (i) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board or (ii) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee. The Company will promptly advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied. If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby agrees to indemnify and to hold Indemnitee harmless therefrom.
(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 13(a) of this Agreement, the Independent Counsel shall be selected as provided in this Section 13(b). The Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the requirements of “Independent Counsel” as defined in Section 2 of this Agreement. If the Independent Counsel is selected by the Board, the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the requirements of “Independent Counsel” as defined in Section 2 of this Agreement. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person or law firm so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 12(a) of this Agreement, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person or law firm selected by the Delaware Court, and the person or law firm with respect to whom all objections are so resolved or the person or law firm so appointed shall act as Independent Counsel under Section 13(a) of this Agreement. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 15(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
(c) The Company agrees to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless such Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or such Independent Counsel’s engagement pursuant hereto.
- PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 12(b) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by the Disinterested Directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by the Disinterested Directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) If the person, persons or entity empowered or selected under Section 13 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a final judicial determination that any or all such indemnification is expressly prohibited under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.
(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors, managers, or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise, the Board, any committee of the Board or any director, trustee, general partner, manager or managing member of the Enterprise, or on information or records given or reports made to the Enterprise, the Board, any committee of the Board or any director, trustee, general partner, manager or managing member of the Enterprise, by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise, the Board, any committee of the Board or any director, trustee, general partner, manager or managing member of the Enterprise. The provisions of this Section 14(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable standard of conduct set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other director, officer, trustee, partner, manager, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
- REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to Section 13 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 12 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 13(a) of this Agreement within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or the last sentence of Section 13(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) a contribution payment is not made in a timely manner pursuant to Section 7 of this Agreement, (vi) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vii) payment to Indemnitee pursuant to any hold harmless or exoneration rights under this Agreement or otherwise is not made in accordance with this Agreement, Indemnitee shall be entitled to an adjudication by the Delaware Court to such indemnification, hold harmless, exoneration, contribution or advancement rights. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Except as set forth herein, the provisions of Delaware law (without regard to its conflict of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 13(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 15 shall be conducted in all respects as a de novo trial, or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of that adverse determination.
(c) In any judicial proceeding or arbitration commenced pursuant to this Section 15, Indemnitee shall be presumed to be entitled to be indemnified, held harmless, exonerated and to receive advancement of Expenses under this Agreement, and the Company shall have the burden of proving Indemnitee is not entitled to be indemnified, held harmless, exonerated and to receive advancement of Expenses, as the case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 13(a) of this Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 15, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 11 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed).
(d) If a determination shall have been made pursuant to Section 13(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 15, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(e) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 15 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.
(f) The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if requested by Indemnitee, shall (within ten (10) days after the Company’s receipt of such written request) pay to Indemnitee, to the fullest extent permitted by applicable law, such Expenses which are incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee: (i) to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement or any other indemnification, hold harmless, exoneration, advancement or contribution agreement or provision of the Charter or the Bylaws now or hereafter in effect; or (ii) for recovery or advances under any insurance policy maintained by any person for the benefit of Indemnitee, regardless of the outcome and whether Indemnitee ultimately is determined to be entitled to such indemnification, hold harmless or exoneration right, advancement, contribution or insurance recovery, as the case may be (unless such judicial proceeding or arbitration was not brought by Indemnitee in good faith).
(g) Interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies, holds harmless or exonerates, or advances, or is obliged to indemnify, hold harmless or exonerate or advance for the period commencing with the date on which Indemnitee requests indemnification, to be held harmless, exonerated, contribution, reimbursement or advancement of any Expenses and ending with the date on which such payment is made to Indemnitee by the Company.
SECURITY. Notwithstanding anything herein to the contrary, to the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.
NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any Proceeding (regardless of when such Proceeding is first threatened, commenced or completed) or claim, issue or matter therein arising out of, or related to, any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision, permits greater indemnification, hold harmless or exoneration rights or advancement of Expenses than would be afforded currently under the Charter, the Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The DGCL, the Charter and the Bylaws permit the Company to purchase and maintain insurance or furnish similar protection or make other arrangements including, but not limited to, providing a trust fund, letter of credit, or surety bond (“Indemnification Arrangements”) on behalf of Indemnitee against any liability asserted against Indemnitee or incurred by or on behalf of Indemnitee or in such capacity as a director, officer, employee or agent of the Company, or arising out of Indemnitee’s status as such, whether or not the Company would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement or under the DGCL, as it may then be in effect. The purchase, establishment and maintenance of any such Indemnification Arrangement shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company or the other party or parties thereto under any such Indemnification Arrangement.
(c) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners, managers, managing members, fiduciaries, employees or agents of the Company or of any other Enterprise which such person is or was Serving at the Request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent under such policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to which Indemnitee is a party or a participant (as a witness, deponent or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d) In the event of any payment under this Agreement, the Company, to the fullest extent permitted by law, shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(e) The Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or was Serving at the Request of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless or exoneration payments or advancement of Expenses from such Enterprise. Notwithstanding any other provision of this Agreement to the contrary, (i) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any indemnification, hold harmless, exoneration, advancement, contribution or insurance coverage among multiple parties possessing such duties to Indemnitee prior to the Company’s satisfaction and performance of all its obligations under this Agreement, and (ii) the Company shall perform fully its obligations under this Agreement without regard to whether Indemnitee holds, may pursue or has pursued any indemnification, advancement, hold harmless, exoneration, contribution or insurance coverage rights against any person or entity other than the Company.
DURATION OF AGREEMENT. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which Indemnitee is Serving at the Request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 15 of this Agreement) by reason of Indemnitee’s Corporate Status, whether or not Indemnitee is acting in any such capacity at the time any liability or Expense is incurred for which indemnification or advancement can be provided under this Agreement.
SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
ENFORCEMENT AND BINDING EFFECT.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.
(b) Without limiting any of the rights of Indemnitee under the Charter or the Bylaws as they may be amended from time to time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The indemnification, hold harmless, exoneration and advancement of Expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer employee or agent of the Company or a director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise at the Company’s request, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.
(d) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
(e) The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult to prove, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may, to the fullest extent permitted by law, enforce this Agreement by seeking, among other things, injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. The Company and Indemnitee further agree that Indemnitee shall, to the fullest extent permitted by law, be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court of competent jurisdiction. The Company hereby waives any such requirement of such a bond or undertaking to the fullest extent permitted by law.
MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the Company and Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.
NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (b) mailed by certified or registered mail with postage prepaid, on the third (3rd) business day after the date on which it is so mailed:
(i) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide in writing to the Company.
(ii) If to the Company, to:
Alternus Clean Energy.
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or to any other address as may have been furnished to Indemnitee in writing by the Company.
APPLICABLE LAW AND CONSENT TO JURISDICTION. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 15(a) of this Agreement, to the fullest extent permitted by law, the Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in the United States of America or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court; and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum, or is subject (in whole or in part) to a jury trial. To the fullest extent permitted by law, the parties hereby agree that the mailing of process and other papers in connection with any such action or proceeding in the manner provided by Section 21 of this Agreement or in such other manner as may be permitted by law, shall be valid and sufficient service thereof.
IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts (including by electronic delivery of a counterpart in pdf format), each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
MISCELLANEOUS. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate and vice versa. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
PERIOD OF LIMITATIONS. No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.
ADDITIONAL ACTS. If for the validation of any of the provisions in this Agreement any act, resolution, approval or other procedure is required to the fullest extent permitted by law, the Company undertakes to cause such act, resolution, approval or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this Agreement.
[SIGNATURE PAGE FOLLOWS]
INWITNESS WHEREOF, the parties hereto have caused this Indemnification Agreement to be signed as of the day and year first above written.
| ALTERNUS CLEAN ENERGY INC.. | |
|---|---|
| By: | |
| --- | --- |
| Name: | Vincent<br> Browne |
| Title: | Chairman<br> and Chief Executive Officer |
| INDEMNITEE | |
| --- | |
| By: | |
| --- | |
| Name: | |
| Address: |
S**IGNATUREPAGE TO INDEMNIFICATION AGREEMENT
Exhibit 14.1
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Table of Contents
| Introduction | 3 |
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| Chief Executive Officer Statement | 3 |
| Our Mission | 4 |
| Our Vision | 4 |
| Purpose | 4 |
| Ethics | 4 |
| Human Rights | 5 |
| Safety and the Environment | 5 |
| Culture and Communication | 6 |
| Conflicts of Interest | 6 |
| Equal Employment Opportunity | 7 |
| Loyalty | 7 |
| Kickbacks and Gratuities | 7 |
| Generally Accepted Accounting Principles (GAAP) | 8 |
| Improper Influence on Conduct of Audits | 8 |
| Insider Trading and Selective Disclosure | 8 |
| Confidential Information | 9 |
| Team Member Privacy | 9 |
| Computing Resources, Email, and the Internet | 9 |
| Political Activities | 9 |
| Drugs and Alcohol | 10 |
| Anti-Trust | 10 |
| Timeliness | 10 |
| Compliance Procedures | 10 |
| Code of Conduct Review | 11 |
| Conclusion | 11 |
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Introduction
Alternus Clean Energy Inc. (“Alternus”, or the “Company”) has developed a culture that focuses on an environment of integrity, trust, transparency, and respect. Our Code of Conduct for Business and Ethics (‘‘Code of Conduct’’) has been created to guide our team members, contractors, suppliers and relevant third parties on how we as a Company conduct our business. It has been curated to meet or exceed the legislation and standards set by the relevant regulatory bodies and to align with internationally recognized standards such as, but not limited to, the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
As a transatlantic clean energy independent power producer (IPP) we understand our impact on the environment and the importance of people. We are committed to creating an organisation that holds true to our values, mission, and vision.
As a global corporate citizen we are dedicated to the highest levels of integrity in our operations to encourage diversity, equity, and equality across our organisation. We will exercise the principles of our mission statement to commit to change and to foster an open, transparent, and ethical environment.
Chief ExecutiveOfficer Statement
Ethics and integrity are the cornerstones of our success. This Code of Conduct not only outlines our commitment to these principles but also reinforces our dedication to conducting business in a responsible and ethical manner.
At Alternus we recognize that our actions have far-reaching consequences, impacting not only our team members, shareholders, and clients but also the communities we serve and the world at large. Our commitment to ethical conduct is not just a moral imperative; it is a strategic imperative that underpins our long-term sustainability and growth.
This Code of Conduct represents more than just words on paper; it is a pledge we make to ourselves and to all stakeholders. It is a commitment to uphold the highest standards of honesty, fairness, and respect in every aspect of our operations. It serves as a guidepost for our team, reminding them of the values that define our corporate culture and the behaviors expected of them.
In this Code of Conduct, you will find guidelines and principles that touch upon a wide array of topics, from conflicts of interest and financial integrity to workplace diversity and environmental stewardship. These principles reflect our core values and the ethical compass that should guide our decisions and actions.
A Code of Conduct is not static; it evolves with us as we adapt to changing business landscapes and societal expectations. It is a living document that will require continuous attention, reflection, and improvement. We must hold ourselves accountable for our actions and strive for continual growth in the pursuit of ethical excellence.
As we embark on this journey, I call upon each and every team member to embrace this Code of Conduct as your own. Let it be a source of inspiration and guidance in all your interactions, both within our organisation and in your dealings with external partners. Let us work together to foster a culture of trust, integrity, and accountability that sets us apart as a beacon of ethical leadership in our industry.
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I have utmost confidence in our collective ability to live up to these high standards, and I am excited about the positive impact we can make in the world by upholding these principles. Thank you for your commitment to our shared vision of a more sustainable, better and more ethical future.
Our Mission
Deliveringa sustainable future of renewable power with people and planet in harmony
We think globally and act locally working towards a clean energy future by developing, installing, and operating renewable assets across America and Europe that positively benefits both biodiversity and our business while creating value for society as a whole.
We are committed to the highest levels of integrity in our operations and with our partnerships to encourage diversity, equity and inclusion across our industry. We believe economic, social, and climate benefits are not mutually exclusive. Therefore, along with financial returns, we offer investors and stakeholders the opportunity to choose a better future today.
Our Vision
Become a leadingprovider of 24/7 clean energy
Our vision is to provide our future generations with a cleaner, more sustainable world. Our flexible structure and entrepreneurial ethos enable us to accelerate this journey as we strive forward in service of our long-term vision of a greener future. Our intention is to reach this destination through sustainable means, protecting the planet as well as powering it.
Purpose
This Code of Conduct applies to all members of the Company, including directors, officers and team members. It has been curated to provide guidance to all individuals on appropriate conduct within the Company encompassing policies, procedures and laws that help us operate as an ethical organisation. It provides the principles necessary to support our people within their role, whilst upholding our core values.
Failure to adhere to the Code of Conduct, may result in disciplinary action, including termination of employment. Our Company handbooks outline the relevant disciplinary procedures.
Ethics
Alternus expects that our people will undertake their roles with uncompromising honesty and integrity. Our ethical principles center on the pursuit of what is morally correct, adhering to proper procedures, and taking a stand against anything that challenges our ethical values. In particular our leadership team is committed and has a duty to promote ethical business and exhibit the values we aim to uphold as an organisation of integrity, trust, transparency and respect.
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We have an expectation that our people will be honest and ethical in dealing with all internal and external stakeholders. Each person should engage with fellow team members and third parties with respect. We must conduct ourselves as an organisation and individuals free from discrimination, libel, slander, or harassment. Everyone we engage with must be afforded equal opportunity, regardless of age, race, sex, sexual preference, color, creed, gender, nationality, marital or civil status, veteran status, or disability.
As a Company we have curated an open-door policy, where our people can feel free to engage with senior management, should they encounter an instance of unethical conduct. Should a member of our team report on an instance of unethical conduct, our senior management team should engage in the process outlined in our relevant handbook. As an organisation we also have a Whistleblowing Policy, which outlines the process, should a team member feel the need to escalate the instance of unethical conduct.
A team member that believes they have discovered a matter that appears to be in violation of the Code of Conduct has a duty to report the matter. This matter may be reported to the team member’s manager or other management level personnel.
Human Rights
As a responsible global corporate citizen, we are committed to respecting and upholding internationally recognized human rights such as the International Bill of Human Rights and related conventions and labor standards such as those outlined in the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work.
We recognize the inherent dignity and worth of every individual, and we strive to ensure that our actions promote and project human rights wherever we operate. All members of the Company should become familiar with our forthcoming Human Rights Commitment Statement scheduled for publication in Q1 2024. This statement will be rooted in our core values and mission to deliver a sustainable future of renewable power with people and planet in harmony.
Safety and theEnvironment
The Company is committed to creating a safe and compliant work environment for all team members and aim to remain fully compliant with all safety and environmental regulations and legislation and international standards in the countries in which we operate.
We have Health and Safety policies in place across the organisation to ensure that we are actively managing the health and safety of all of our team members.
As care takers of the planet, we are committed to creating policy and establishing standards to safeguard our environment. Our dedicated Chief Sustainability Officer is collaborating across the organisation to monitor and implement continuous improvement plans when it comes to ESG and sustainability.
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As a Company specializing in renewable energy, we recognize our responsibility to ensure we are protecting our people and the planet.
Culture andCommunication
In order to enhance our Company culture across the Company and to ensure that we are maintaining the highest possible standards regarding business and ethics, the way in which we communicate and engage with each other as team members is vital. The company prides itself on its open-door policy between team members and senior management, in order to create an open and transparent organisation.
We can only grow and succeed as an organisation if each team member takes responsibility for their own actions and remains responsible for their ethical decisions. The leadership should set an example through their conduct business. They should ensure that they remain approachable and are actively communicating with members of the Company.
Our interactions with one another should consistently uphold a standard of respect. Within our diverse Company, we encompass various nationalities, cultures and personalities. To foster transparency and effective communication, it is essential that we approach our interactions with team members respectfully while being considerate of one another’s perspectives.
We have a number of policies in place across the Company that support a positive work environment and culture. Team members should refer to their Company Handbook and become familiar with the policies of the Company.
Conflicts ofInterest
A conflict of interest may arise when personal interests clash with ethical, financial, or other responsibilities. The way we as individuals and as an organisation operate impacts our reputation and the trust of all stakeholders and investors. By recognizing conflicts of interests and having a policy in place to support our team members, officers, and directors we ensure that the Integrity of the Company is upheld.
As part of our Code of Conduct, every team member, officer, or director must avoid any actual, potential, or perceived conflicts of interest, influence, or relationships that could compromise the organizations best interests.
Team members may not serve as an officer, director, manager, team member or agent of any company that is seen as a competitor, supplier, or client of the organisation.
In their course of employment team members should refrain from pursuing external interests that detract from their ability to effectively focus on organisation matters.
In order to prevent conflicts of interest in relation to financial gain the Company does not provide loans to company officers and directors or assume responsibility for their financial obligations.
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Equal EmploymentOpportunity
Across the Company we pride ourselves in being an equal opportunity employer. In order to support our commitment for ED&I (Equality, Diversity, and Inclusion) a number of our policies have been curated to support an environment centered on equality. Our handbooks support our mission to be a fair and equitable employer. The Company will not tolerate any form of discrimination or harassment within our organisation and will take all matters relating to discrimination seriously.
All team members of the Company have been appointed to their roles based off their qualifications, experience, industry knowledge and merit. Respect is a right for all team members and we will continuously strive to ensure that we as a Company are upholding the highest standards as employers. It is our responsibility to create a workplace that is safe, equitable and fair for all.
Loyalty
Every team member and director is required to maintain the organization’s loyalty and is prohibited from personally benefiting from any opportunity that rightfully belongs to the organisation.
Kickbacks andGratuities
The organisation strictly prohibits any team member from engaging in unethical or illegal practices, including accepting or offering payments, gifts, gratuities, or employment to or from vendors, suppliers, contractors, consultants, or government officials in exchange for preferential treatment. Any offers related to kickbacks or gratuities must be promptly reported to internal management.
The Company does not categorize the exchange of modest gifts, such as branded t-shirts etc., occasional lunches, games of golf, or similar gestures with non-government officials as kickbacks, gifts, or gratuities under this policy.
Commonplace activities encompassing modest acts of hospitality, such as lunches or dinners, as well as occasional gifts of minimal value are not considered to exert any influence over financial or business decisions.
While it may be challenging to precisely define what is 'commonplace' or 'modest,' the recommended approach is to exercise sound judgment. If you are presented with anything exceeding a nominal value, it is advisable to consult with your manager.
Activities that verge on excessiveness or become habitual should be avoided. For instance, if receiving a gift or service would lead an impartial observer to believe that it influenced your judgment, it should be considered excessive and declined.
Please refer to our Foreign Corrupt Practices Policy for further information on this topic.
| 7 |
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Generally AcceptedAccounting Principles (GAAP)
Generally Accepted Accounting Principles are accounting principles that are considered to have substantial authoritative support. Pronouncements made by the Financial Accounting Standards Board (FASB) are considered GAAP. You can learn more about GAAP and FASB at https://www.fasb.org/. All company records are to be in compliance with Generally Accepted Accounting Principles and Securities and Exchange Commission laws and regulations.
The relevant team members are expected to maintain accurate and reliable corporate records that comply with GAAP, the SEC, and Company policies and procedures.
The CEO, CFO and others identified by the CEO have specific legal obligations to ensure the organisation provides full, fair, accurate, timely, and understandable financial reports and internal controls.
Improper Influenceon Conduct of Audits
No officer, director, or any individual acting under their direction shall engage in any fraudulent actions to exert pressure, coerce, manipulate, or deceive any independent public or certified accountant conducting an audit of the organization’s financial statements with the intention of making those financial statements significantly deceptive. Such misconduct encompasses, but is not restricted to, the following examples:
| • | Offering<br> or paying bribes or other financial incentives, including offering future employment or contracts<br> for non-audit services; |
|---|---|
| • | Providing<br> an auditor with an inaccurate or misleading legal analysis; |
| --- | --- |
| • | Threatening<br> to cancel or cancelling existing non-audit or audit engagements if the auditor objects to<br> the organization’s accounting; |
| --- | --- |
| • | Seeking<br> to have a partner removed from the audit engagement because the partner objects to the organization’s<br> accounting; |
| --- | --- |
| • | Blackmailing,<br> and making physical threats. |
| --- | --- |
Insider Tradingand Selective Disclosure
Inside information is company information that is not known or disclosed to the public. It is illegal to make stock trades based on inside information (insider trading). Federal securities laws prohibit the buying or selling of stock in the presence of “inside information”.
Directors, officers and team members may not engage in the trading of company stock or advise others on the trading of company stock on the basis of, or in the presence of, inside information.
Directors, officers and team members may also not engage in “selective disclosure” with individuals who may benefit from, or may advise others to benefit from, the disclosure.
| 8 |
| --- |
Please refer to our Inside Information Policy for further information on this topic.
You can learn more about Securities and Exchange Commission Final Rule:
Selective Disclosure and Insider Trading at: https://www.sec.gov/rule-release/33-7881
ConfidentialInformation
Core values for the Company are trust and integrity, and it is expected that these values are upheld in the conduct of business within the organisation.
Members of the Company, including team members and directors have access to certain confidential or proprietary information, which they are not prohibited to divulge without expressed authorisation by the Chief Executive Officer.
Team MemberPrivacy
The organisation is dedicated to safeguarding the privacy of its team members, including the data it holds. Team member data will be utilized to facilitate operations, administer benefits, and adhere to legal requirements. The Company, along with all team members, is required to adhere to all relevant data protection laws, regulations, and Company policies.
Computing Resources,Email, and the Internet
Company provided internet related services, including mobile phones, are to be used for company business. All information on the organization’s computer systems, including electronic mail, is the property of the Company. Management may inspect and disclose company property; this includes the contents of electronic messages. Therefore, personal information should not be stored on any company device.
The use of company resources to access or transmit illegal or offensive content, or to offend, harass or bully others is strictly prohibited.
Team members should refer to the relevant handbook to better understand our Internet code of conduct.
Political Activities
The organisation defines itself as a politically neutral organisation. Consequently, no company funds or assets shall be donated or utilized to influence any election without prior approval from the organizations Board of Directors.
This policy does not restrict the Company from participating in trade or special interest organizations.
Please refer to our Anti-Corruption Policy for further information.
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| --- |
Drugs and Alcohol
We are committed to protecting the safety, health and well-being of all stakeholders in our workplace and at any company-sponsored activity. All team members should be aware that the use of illegal drugs is strictly prohibited.
The use of alcohol during work is also prohibited in order to promote a healthy, safe, and positive working environment. All team members should be cautious of the alcohol that they consume at events, as the over consummation of alcohol can lead to inappropriate behavior and is a safety concern to others.
Each handbook outlines guidelines for appropriate conduct for team members in regards to drug and alcohol use. Team members should ensure they are familiar with this policy.
Anti-Trust
Any planning or acting together with competitors about the nature, extent, or means of competition is a violation of Company policy and anti-trust laws. This includes, but is not limited to, price fixing, sales or production quotas, geographic competition, and boycotts.
Timeliness
In order to ensure that we are meeting our obligations as a Company we expect project timelines, tasks, and responsibilities to be carried out in a timely manner by all team members.
If as a team member you feel as though you are struggling to adhere to and meet deadlines, we would encourage you to speak with your reporting manager, so we can better support you and your role.
Compliance Procedures
General business-related concerns regarding a violation or breach of the Code of Conduct and other company policies can be reported directly to the reporting line that you might have within our organisation i.e. your manager or other management level employees
Should a person feel uncomfortable making an internal disclosure or complaint, they are encouraged to consult our Whistleblowing Policy. Within this Policy there is a mechanism for reporting violations anonymously by getting in contact with the Audit Committee Chair or the Chief Legal Officer at:
Role: Audit Committee Chair
Name: Tone Bjornov
Address: Alternus Clean Energy Inc., 360 Kingsley Park Drive, Suite 250 Fort Mill South Carolina, 29715 United States
Email: tb@alternusenergy.com
Role: Chief Legal Officer
Name: Taliesin Durant
| 10 |
| --- |
Address: Alternus Clean Energy Inc., 360 Kingsley Park Drive, Suite 250 Fort Mill South Carolina, 29715 United States
Email: td@alternusenergy.com
Reporting may be anonymous. No team member will be subject to retaliation, discrimination, or other adverse treatment for reporting known or suspected violations of this and other policies and procedures.
Each year, company officers are required to state in writing that they have no knowledge of material violations to this and other policies other than those that may have been previously reported, if any.
As part of its regular auditing procedures, the Company’s Audit and Disclosure committee will periodically review internal policies and procedures and report their finding to executive management.
The Company’s external auditors are also expected to report in writing any known or suspected violations of this and other policies.
Code of ConductReview
This Code of Conduct will be reviewed periodically to ensure its effectiveness and compliance with relevant laws, regulations and internationally recognized standards.
Conclusion
In summary our Code of Conduct serves as a guiding light for our organisation. It reflects our commitment to responsible, sustainable and ethical business practices. By adhering to these principles, we ensure that not only do we excel in the renewable energy sector, but we also positively contribute to society and the environment. Together we empower our team to thrive in an atmosphere of integrity, transparency and respect fostering trust amongst our stakeholders and building a brighter, cleaner future for all.
| 11 |
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| 1 |
| --- |
Tableof Contents
| Introduction | 3 |
|---|---|
| Chief Executive Officer Statement | 3 |
| Our Mission | 4 |
| Our Vision | 4 |
| Purpose | 4 |
| Ethics | 4 |
| Conflicts Of Interest | 5 |
| Kickbacks And Gratuities | 6 |
| Generally Accepted Accounting Principles (Gaap) | 6 |
| Improper Influence On Conduct Of Audits | 7 |
| Insider Trading And Selective Disclosure | 7 |
| Confidential Information | 8 |
| Political Activities | 8 |
| Accurate Periodic Reports | 8 |
| Timeliness | 8 |
| Compliance Procedures | 9 |
| Code Of Ethics For Principal Executive Officers And<br> Senior Finance Personnel Review | 10 |
| Conclusion | 10 |
| 2 |
| --- |
Introduction
Alternus Clean Energy Inc. (“Alternus”, or the “Company”) has developed a culture that focuses on an environment of integrity, trust, transparency, and respect. Our Code of Conduct for Business and Ethics (‘‘Code of Conduct’’) has been created to guide our team members, contractors, suppliers and relevant third parties on how we as a Company conduct our business. This Code of Ethics for Principal Executive Officers and Senior Finance Personnel has been developed to support our ‘Code of Conduct’. This policy has been created to help guide those in the organization that hold a Leadership or Senior Finance position. We recognize that it is the responsibility of the Leadership and Senior Finance Personnel to demonstrate strong ethical working standards, and to harness an environment of honesty and transparency in the way in which we conduct ourselves at this level. By putting in place high standards of operating we exemplify the type of working environment we expect within our organization.
This document has been curated to meet or exceed the legislation and standards set by the relevant regulatory bodies and to align with internationally recognized standards such as, but not limited to, the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
As a transatlantic clean energy independent power producer (IPP) we understand our impact on the environment and the importance of people. We are committed to creating an organization that holds true to our values, mission, and vision.
ChiefExecutive Officer Statement
The way in which we conduct ourselves in how we practice our business is in direct correlation with the high standard of ethics that we have instilled within our organization. This policy has been created with the idea that it will support our existing Code of Conduct; an important policy that was created to provide guidance to the members of our organization on how vital ethics are, and that we operate with honesty, transparency, and integrity at the core of our business.
Business standards are set by the leaders of an organization. It is our responsibility to not only demonstrate to our team members the importance of operating ethically, but to instill strong working practices within each of our departments. Those in the organization with Senior Finance responsibilities have an obligation to report on our financial position accurately and honestly. As the CEO I respect each individual with this responsibility and encourage them to remain confident in their position to come forward with any concerns they might have.
It is important to me that as an organization we are operating under the knowledge that we are ethically doing the right thing. We have a responsibility to our team members, investors, suppliers and engaged third parties to have a sustainable and safe working environment and practices. This policy along with our Code of Conduct clearly iterates our position as a Company. it is now our responsibility to ensure this is a living document that is consistently reviewed and updated to ensure that we are abiding by best practice and that we are respecting the ethos set forward in our mission and vision statements.
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OurMission
Delivering asustainable future of renewable power with people and planet in harmony
We think globally and act locally working towards a clean energy future by developing, installing, and operating renewable assets across America and Europe that positively benefits both biodiversity and our business while creating value for society as a whole.
We are committed to the highest levels of integrity in our operations and with our partnerships to encourage diversity, equity and inclusion across our industry. We believe economic, social, and climate benefits are not mutually exclusive. Therefore, along with financial returns, we offer investors and stakeholders the opportunity to choose a better future today.
OurVision
Become a leadingprovider of 24/7 clean energy
Our vision is to provide our future generations with a cleaner, more sustainable world. Our flexible structure and entrepreneurial ethos enable us to accelerate this journey as we strive forward in service of our long-term vision of a greener future. Our intention is to reach this destination through sustainable means, protecting the planet as well as powering it.
Purpose
This Code of Ethics for Principal Executive Officer and Senior Finance Personnel applies to those who hold a Leadership position within the organization and those responsible for the accounting function within the organization at a Senior Finance Personnel level.
This document has been curated in conjunction with our Code of Conduct to provide guidance to Officers of the Company on appropriate and expected conduct within the organization, encompassing policies, procedures and laws that help us operate as an ethical and honest organization.
Failure to adhere to this policy, along with the Code of Conduct, may result in disciplinary action, including termination of employment. Our Company handbooks outline the relevant disciplinary procedures.
Ethics
Alternus expects that our people will undertake their roles with uncompromising honesty and integrity. Our ethical principles center on the pursuit of what is morally correct, adhering to proper procedures, and taking a stand against anything that challenges our ethical values. In particular our leadership team is committed and has a duty to promote ethical business and exhibit the values we aim to uphold as an organization of integrity, trust, transparency and respect.
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| --- |
We have an expectation that our people will be honest and ethical in dealing with all internal and external stakeholders. Each person should engage with fellow team members and third parties with respect. We must conduct ourselves as an organization and individuals free from discrimination, libel, slander, or harassment. Everyone we engage with must be afforded equal opportunity, regardless of age, race, sex, sexual preference, color, creed, gender, nationality, marital or civil status, veteran status, or disability.
As a Company we have curated an open-door policy, where our people can feel free to engage with senior management, should they encounter an instance of unethical conduct. Should a member of our team report on an instance of unethical conduct, our senior management team should engage in the process outlined in our relevant handbook. As an organization we also have a Whistleblowing Policy, which outlines the process, should a team member feel the need to escalate the instance of unethical conduct.
A team member that believes they have discovered a matter that appears to be in violation of this Code or our Code of Conduct has a duty to report the matter. This matter may be reported to the team member’s manager or other management level personnel.
Conflictsof Interest
A conflict of interest may arise when personal interests clash with ethical, financial, or other responsibilities. The way we as individuals and as an organization operate impacts our reputation and the trust of all stakeholders and investors. By recognizing conflicts of interests and having a policy in place to support our team members, officers, and directors we ensure that the Integrity of the Company is upheld.
As part of our Code of Conduct, every team member, officer, or director must avoid any actual, potential, or perceived conflicts of interest, influence, or relationships that could compromise the organizations best interests. This Code of Ethics for Principal Executive Officers and Senior Finance Personnel requires an additional layer of responsibility to be upheld by these individuals. As leaders within the organization and individuals with access to important financial information, it is paramount that these individuals have a high standard of integrity and practice their business with honesty and transparency.
For avoidance of doubt and to provide guidance the below examples would constitute a conflict of interest:
| • | Cause<br> the organization to engage in business transactions with relatives or friends: |
|---|---|
| • | Use<br> non-public business, client, or vendor information for personal gain by you, relatives or<br> friends (including securities transactions based on such information); |
| --- | --- |
| • | Have<br> more than a modest financial interest in the organization’s vendors, clients or competitors; |
| --- | --- |
| • | Receive<br> a loan, or guarantee of obligations, from the organization, or a third party as a result<br> of your position; |
| --- | --- |
| • | Compete,<br> or prepare to compete, with the organization whilst still employed by Alternus; |
| --- | --- |
| • | There<br> are a variety of other situations in which a conflict of interest may arise. If you have<br> concerns about any situation, follow the steps outlined in the Section on "Reporting<br> Violations." |
| --- | --- |
| 5 |
| --- |
As Alternus Principal Executive Officers or Senior Finance Personnel, it is imperative that you avoid any investment, interest or association that interferes, might interfere, or might appear to interfere, with your independent exercise of judgment in the organization’s best interests. Engaging in any conduct that represents a conflict of interest is strictly prohibited.
Principal Executive Officers and Senior Finance Personnel may not serve as an officer, director, manager, team member or agent of any company that is seen as a competitor, supplier, or client of the organization.
In their course of employment Principal Executive Officers and Senior Finance Personnel should refrain from pursuing external interests that detract from their ability to effectively focus on organization matters.
In order to prevent conflicts of interest in relation to financial gain the Company does not provide loans to company officers and directors or assume responsibility for their financial obligations.
Kickbacksand Gratuities
The organization strictly prohibits any team member from engaging in unethical or illegal practices, including accepting or offering payments, gifts, gratuities, or employment to or from vendors, suppliers, contractors, consultants, or government officials in exchange for preferential treatment. Any offers related to kickbacks or gratuities must be promptly reported to internal management.
The Company does not categorize the exchange of modest gifts, such as branded t-shirts etc., occasional lunches, games of golf, or similar gestures with non-government officials as kickbacks, gifts, or gratuities under this policy.
Commonplace activities encompassing modest acts of hospitality, such as lunches or dinners, as well as occasional gifts of minimal value are not considered to exert any influence over financial or business decisions.
While it may be challenging to precisely define what is 'commonplace' or 'modest,' the recommended approach is to exercise sound judgment. If you are presented with anything exceeding a nominal value, it is advisable to consult with your manager.
Activities that verge on excessiveness or become habitual should be avoided. For instance, if receiving a gift or service would lead an impartial observer to believe that it influenced your judgment, it should be considered excessive and declined.
Please refer to our Foreign Corrupt Practices Policy for further information on this topic.
GenerallyAccepted Accounting Principles (GAAP)
Generally Accepted Accounting Principles are accounting principles that are considered to have substantial authoritative support. Pronouncements made by the Financial Accounting Standards Board (FASB) are considered GAAP. You can learn more about GAAP and FASB at https://www.fasb.org/. All company records are to be in compliance with Generally Accepted Accounting Principles and Securities and Exchange Commission laws and regulations.
| 6 |
| --- |
The relevant team members are expected to maintain accurate and reliable corporate records that comply with GAAP, the SEC, and Company policies and procedures.
The Chief Executive Officer, Chief Financial Officer and others identified by the Chief Executive Officer have specific legal obligations to ensure the organization provides full, fair, accurate, timely, and understandable financial reports and internal controls.
ImproperInfluence on Conduct of Audits
No officer, director, or any individual acting under their direction shall engage in any fraudulent actions to exert pressure, coerce, manipulate, or deceive any independent public or certified accountant conducting an audit of the organization’s financial statements with the intention of making those financial statements significantly deceptive. Such misconduct encompasses, but is not restricted to, the following examples:
| • | Offering<br> or paying bribes or other financial incentives, including offering future employment or contracts<br> for non-audit services; |
|---|---|
| • | Providing<br> an auditor with an inaccurate or misleading legal analysis; |
| --- | --- |
| • | Threatening<br> to cancel or cancelling existing non-audit or audit engagements if the auditor objects to<br> the organization’s accounting; |
| --- | --- |
| • | Seeking<br> to have a partner removed from the audit engagement because the partner objects to the organization’s<br> accounting; |
| --- | --- |
| • | Blackmailing,<br> and making physical threats. |
| --- | --- |
InsiderTrading and Selective Disclosure
Inside information is company information that is not known or disclosed to the public. It is illegal to make stock trades based on inside information (insider trading). Federal securities laws prohibit the buying or selling of stock in the presence of “inside information”.
Directors, officers and team members may not engage in the trading of company stock or advise others on the trading of company stock on the basis of, or in the presence of, inside information.
Directors, officers and team members may also not engage in “selective disclosure” with individuals who may benefit from, or may advise others to benefit from, the disclosure.
Please refer to our Inside Information Policy for further information on this topic.
You can learn more about Securities and Exchange Commission Final Rule:
Selective Disclosure and Insider Trading at: https://www.sec.gov/rule-release/33-7881
| 7 |
| --- |
ConfidentialInformation
Core values for the Company are trust and integrity, and it is expected that these values are upheld in the conduct of business within the organization.
Members of the Company, including team members and directors have access to certain confidential or proprietary information, which they are not prohibited to divulge without expressed authorisation by the Chief Executive Officer.
PoliticalActivities
The organization defines itself as a politically neutral organization. Consequently, no company funds or assets shall be donated or utilized to influence any election without prior approval from the organizations Board of Directors.
This policy does not restrict the Company from participating in trade or special interest organizations.
Please refer to our Anti-Corruption Policy for further information.
AccuratePeriodic Reports
There are certain reporting obligations that are pertinent to operating companies. Full, fair, accurate, timely and understandable disclosures in the organizations periodic reports is a legal requirement and is also essential to the success and integrity of the business. The highest standard of care should be upheld in regard to these obligations.
Reports should be prepared following the below guidelines, along with the reporting and accounting guidelines and procedures that are currently in place within the organization. If you are unfamiliar with these procedures, please contact a member of the Senior Leadership Team so that they can best support you.
| • | All<br> accounting records, as well as reports produced from those records, must be in accordance with the laws of<br>each applicable jurisdiction. |
|---|---|
| • | All<br> records must fairly and accurately reflect the transactions or occurrences to which they<br> relate. |
| --- | --- |
| • | All<br> records must fairly and accurately reflect, in reasonable detail, assets, liabilities, revenues and expenses. |
| --- | --- |
| • | Accounting<br> records must not contain any false or intentionally misleading entries. |
| --- | --- |
| • | No<br> transactions should be intentionally misclassified as to accounts, departments, or accounting<br> periods. |
| --- | --- |
| • | All<br> transactions must be supported by accurate documentation in reasonable detail and recorded<br> in the proper account and in the proper accounting period. |
| --- | --- |
| • | No<br> information should be concealed from the internal auditors or the independent auditors. |
| --- | --- |
| • | Compliance<br> with system of internal accounting controls is required. |
| --- | --- |
| 8 |
| --- |
Timeliness
In order to ensure that we are meeting our obligations as a Company we expect project timelines, tasks, and responsibilities to be carried out in a timely manner by all team members.
There are certain reporting obligations that must be conducted within a certain timeframe when it comes to accounting practices. It is imperative that we as an organization are meeting these deadlines and are delivering working of a high standard to the relevant reporting bodies. The reports submitted should be an accurate reflection of the business and stay true to the requirements of the aforementioned reporting body.
If as a team member you feel as though you are struggling to adhere to and meet deadlines, we would encourage you to speak with your reporting manager, so we can better support you and your role.
ComplianceProcedures
General business-related concerns regarding a violation or breach of the Code of Conduct, this Code of Ethics for Principal Executive Officers and Senior Finance Personnel, and other Company policies can be reported directly to the reporting line that you might have within our organization i.e. your manager or other management level employees.
Should a person feel uncomfortable making an internal disclosure or complaint, they are encouraged to consult our Whistleblowing Policy. Within this Policy there is a mechanism for reporting violations anonymously by getting in contact with the Audit Committee Chair or the Chief Legal Officer at:
Role: Audit Committee Chair
Name: Tone Bjornov
Address: Alternus Clean Energy Inc., 360 Kingsley Park Drive, Suite 250 Fort Mill South Carolina, 29715 United States
Email: tb@alternusenergy.com
Role: Chief Legal Officer
Name: Taliesin Durant
Address: Alternus Clean Energy Inc., 360 Kingsley Park Drive, Suite 250 Fort Mill South Carolina, 29715 United States
Email: td@alternusenergy.com
Reporting may be anonymous. No team member will be subject to retaliation, discrimination, or other adverse treatment for reporting known or suspected violations of this and other policies and procedures.
Each year, company officers are required to state in writing that they have no knowledge of material violations to this and other policies other than those that may have been previously reported, if any.
As part of its regular auditing procedures, the Company’s Audit and Disclosure committee will periodically review internal policies and procedures and report their finding to executive management.
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The Company’s external auditors are also expected to report in writing any known or suspected violations of this and other policies.
Codeof Ethics for Principal Executive Officers and Senior Finance Personnel Review
This Code of Conduct will be reviewed periodically to ensure its effectiveness and compliance with relevant laws, regulations and internationally recognized standards.
Conclusion
In summary our Code of Ethics for Principal Executive Officers and Senior Finance Personnel, in conjunction with our Code of Conduct serves as a guiding light for our organization and those in a leadership position. It reflects our commitment to responsible, sustainable and ethical business practices. By adhering to these principles, we ensure that not only do we excel in the renewable energy sector, but we also positively contribute to society and the environment. Together we empower our team to thrive in an atmosphere of integrity, transparency and respect fostering trust amongst our stakeholders and building a brighter, cleaner future for all.
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| --- |
Exhibit 16.1
December 22, 2023
Securities and Exchange Commission
100 F Street N.E.
Washington, D.C. 20549
We have been furnished with a copy of the response to Item 4.01 of Form 8-K for the event that occurred on December 22, 2023, to be filed by our former client, Clean Earth Acquisitions Corp. We agree with the statements made in response to that Item insofar as they relate to our Firm.
Very truly yours,
/s/ BDO USA P.C.
Exhibit 21.1
| Alternus Lux 01 S.a.r.l. | Luxembourg |
|---|---|
| AEG MH 01 Limited | Ireland |
| AEG MH 02 Limited | Ireland |
| AEG MH 03 Limited | Ireland |
| AEG MH 04 Limited | Ireland |
| AEG JD 01 Limited | Ireland |
| AEG JD 03 Limited | Ireland |
| Solis Bond Company DAC | Ireland |
| BI.MA. SRL | Italy |
| CIC Rooftop 2 S.r. l. | Italy |
| CIC RT Treviso S.r.l. | Italy |
| CTS Power 2 S.r.l. | Italy |
| KKSOL S.r.l. | Italy |
| MABI S.R.L. | Italy |
| PC-Italia-02 S.P.A. | Italy |
| Petriolo Fotovoltaica S.r.l | Italy |
| Sant’Angelo Energia S.r.l. | Italy |
| Solarpark Serre 1 S.r.l. | Italy |
| SPV White One S.r.l. | Italy |
| AED Italia-01 S.R.L. | Italy |
| AED Italia-02 S.R.L. | Italy |
| AED Italia-03 S.R.L. | Italy |
| AED Italia-04 S.R.L. | Italy |
| AED Italia-05 S.R.L. | Italy |
| AED Italia-06 S.R.L. | Italy |
| AED Italia-07 S.R.L. | Italy |
| AED Italia-08 S.R.L. | Italy |
| PC-Italia-01 S.R.L. | Italy |
| PC-Italia-03 S.R.L. | Italy |
| PC-Italia-04 S.R.L. | Italy |
| Risorse Solari I S.R.L. | Italy |
| Risorse Solari III S.R.L. | Italy |
| Ecosfer Energy S.r.l. | Romania |
| F.R.A.N. Energy Investment S.R.L. | Romania |
| LJG Green Source Energy Beta Srl | Romania |
| Lucas EST S.r.l | Romania |
| Power Clouds S.R.L. | Romania |
| Elektrownia PV Komorowo Sp. z o.o. | Poland |
| Gardno PV Sp. z o.o. | Poland |
| Gardno2 PV Sp. z o.o. | Poland |
| RA 01 Sp. z o.o. | Poland |
| PV Zachod Sp. z o.o. | Poland |
| Solarpark Samas Sp. z o.o. | Poland |
| Zonnepark Rilland B.V. | Netherlands |
| Alternus Iberia S.L. | Spain |
| Alt Spain Holdco S.L.U. | Spain |
| Alt Spain 03 S.L.U. | Spain |
| ALT Spain04 S.L.U. | Spain |
| New Frog Projects S.L. | Spain |
| Alt Spain Development Holdco | Spain |
| Alternus Energy Americas Inc. | USA |
| --- | --- |
| ALT US 01 LLC | USA |
| ALT US 02 LLC | USA |
| LightWave Renewables LLC | USA |
| ALT US 03 LLC | USA |
| ALT US 04 LLC | USA |
| Dancing Horse LLC | USA |
| Alt Alliance LLC | USA |
| ALT US 05 LLC | USA |
| ALT US 06 LLC | USA |
| ALT US 07 LLC | USA |
| River Song Solar LLC | USA |
Exhibit 99.1
MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of Alternus Energy Group Plc “Company” financial condition and results of operations for the three- and nine-month periods ended September 30, 2023 and 2022. You should read this discussion and analysis together with the Company consolidated financial statements and related notes and the other financial information included elsewhere in this prospectus. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” and elsewhere in this prospectus, the Company’s actual results may differ materially from those anticipated in these forward-looking statements.
Overview
The Company is a transatlantic integrated independent power producer. The Company develops, builds, owns and operates a diverse portfolio of utility scale solar photo-voltaic (PV) parks that connect directly to national power grids. As of September 30, 2023, the Company’s revenue streams are generated from long-term, government-mandated, fixed price supply contracts with terms of between 15-20 years in the form of government feed in tariffs (FIT) and other energy incentives. Of the Company’s current annual revenues, approximately 61% are generated from long-term contracts, 32% are derived from revenues generated under contracted power purchase agreements (PPAs) with energy operators that are renewed on an annual basis and 7% by sales to the general energy market in the countries the Company operates. In general, these contracts generate an average sales rate for every kilowatt hour (kWh) of green energy produced by the Company’s solar parks. Having started in 2016 with two parks with a 6 mega-watt peak (MWp) capacity, the Group’s current operational portfolio now consists of 49 parks across Poland, Romania, Italy, the Netherlands, the United States and Germany, totaling 166.2 MWp. The Company’s goal is to own and operate over 3.0 giga-watts (GWs) of solar parks by the end of 2026.
Alternus Energy Group Plc was incorporated in Dublin, Ireland on January 31, 2019 under the name Alternus Energy International Limited. On October 20, 2020, the Company re-registered as a Plc and changed its name to Alternus Energy Group Plc.
The Company is a former subsidiary of the previous parent company of the Group, Alternus Energy Inc. On December 2, 2020, the Group completed the last step of a reorganization, which resulted in the Company becoming the parent company of the Group (the “Reorganization”). The Reorganization included the following main steps:
| · | Alternus Energy International Ltd registered as an Irish Plc and changed its name to Alternus Energy Group<br>Plc (previously defined as the “Company”); |
|---|---|
| · | The Company incorporated Solis Bond Company, a Designated Activity Company (“Solis Bond Company<br>DAC”); |
| --- | --- |
| · | Alternus Energy Inc. (US) merged with and became a subsidiary of Altam Inc., a U.S.-based entity; |
| --- | --- |
| · | Alternus Energy Inc. spun out Alternus Energy Plc to the existing shareholders of Altam Inc. in a 1:1.5<br>share dividend transaction; and |
| --- | --- |
| · | In a 1:4.5 share exchange transaction, Altam Inc. shareholders exchanged their shares for a pro-rata number<br>of shares of Alternus Energy Group Plc, thus becoming a subsidiary of the Alternus Energy Group Plc as it became the surviving parent<br>company. |
| --- | --- |
The Company is not a manufacturer of solar panels or other related equipment but generates 100% of its revenues from energy sales under long-term contracts as described above. By design, the Company currently focuses exclusively on energy generation and, as a result, the Company is technology agnostic and can customize its solar parks based on local environmental and regulatory requirements and continue to take advantage of falling component prices over time.
1
The Company uses annual recurring revenues as a key metric in its financial management and believes this method better reflects the long-term stability of operations. Annual recurring revenues are defined as the estimated future revenue based on the remaining term, price and estimated production of the offtake contract of the solar park. It should be noted that the actual revenues reported by the Company in a particular year may be lower than the annual recurring revenues because not all parks may be revenue generating for the full year in their first year of operation. The Company must also account for the timing of acquisitions that take place throughout the financial year.
Impacts of the Ukraine/Russia conflict
The geopolitical situation in Eastern Europe intensified on February 24, 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity proceeds and additional sanctions are imposed. In addition to the human toll and impact of the events on entities that have operations in Russia, Ukraine, or neighboring countries (e.g., Belarus, Poland, Romania) or that conduct business with their counterparties, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. These events have not impacted the physical operations of our facilities in Poland or Romania. However, the Company has seen fluctuations in energy rates due to inflation, increased interest rates, and other macro-economic factors.
Impacts of the 2023 Bank Failures and Banking Risk
On May 1, 2023, First Republic Bank became the second largest bank failure to date. This was preceded by the third largest bank failure on March 10, 2023 of Silicon Valley Bank, and the March 12, 2023 failure of Signature Bank, the fourth largest bank failure in U.S history. These bank failures were the first three in a banking crisis that included Credit Suisse and Deutsche Bank, a bank that has extended a warehouse loan to the Company. The Company maintains cash balances in financial institutions which may exceed federally insured limits and is monitoring these events for both current and future liquidity.
Known trends or Uncertainties
The Company has a working capital deficiency and negative equity, and management has determined there is doubt about the Company’s ability to continue as a going concern. Refer to Footnote 2 of the accompanying financial statements.
Competitive Strengths
The Company believes that the following competitive strengths contribute to its success and differentiate the Company from its competitors:
| · | The Company is an Independent Power Producer and is comfortable operating across all aspects of the solar<br>PV value chain from development through long-term operational ownership – as opposed to simply buying operating parks where the<br>high levels of competition from investment companies tend to be. The Company’s flexibility makes it a more attractive partner to<br>local developers who benefit from having a single trusted and flexible customer that allows them to plan effectively and grow faster; |
|---|---|
| · | The Company’s history of identifying and entering into new solar PV markets coupled with its on-the-ground<br>capabilities and pan-European platform gives the Company potential competitive advantages in developing and operating solar parks across<br>Europe; |
| --- | --- |
| · | The Company’s existing pipeline of contracted solar PV projects provides it with clear and actionable<br>opportunities as well as the ability to cultivate power generation and earnings as these are required; |
| --- | --- |
| · | The Company is technology and supplier agnostic and as such has the flexibility to choose from a broad<br>range of leading manufacturers, operations and maintenance (O&M) experts, top tier suppliers, and engineering, procurement, and construction<br>(EPC) vendors across the globe and can benefit from falling component and service costs; and |
| --- | --- |
2
| · | The Company is led by a highly experienced management team and has strong, localized execution capabilities<br>across all key functions and locations. |
|---|
Vision and Strategy
The Company aims to become one of the leading producers of clean energy in Europe and the U.S. by 2030 and to have commenced delivery of 24/7 clean energy to national power grids. The Company’s business strategy of developing to own and operate a diverse portfolio of solar PV assets that generate stable long-term incomes, in countries which currently have unprecedented positive market forces, positions us for sustained growth in the years to come.
To achieve its goals, the Company intends to pursue the following strategies:
| · | Continue our growth strategy which targets acquiring independent solar PV projects that are in development, in construction, newly<br>installed or already operational, in order to build a diversified portfolio across multiple geographies; |
|---|---|
| · | Developer and Agent Relationships: long term relationships with high-quality developer partners, both local and international, can<br>reduce competition in acquisition pricing and provide the Company with exclusive rights to projects at varying stages of development.<br>Additionally, the Company works with established agents across Europe. Working with both groups provides the Company with an understanding<br>of the market and in some cases enables it to contract projects at the pre-market level. This allows the Company to build a structured<br>pipeline of projects in each country where it currently operates or intends to operate; |
| --- | --- |
| · | Expand our transatlantic IPP portfolio in regions with attractive returns on investments, and increase the Company’s long-term<br>recurring revenue and cash flow; |
| --- | --- |
| · | Long-term FIT (feed-in tariff) contracts combined with the Company’s efficient operations are expected to provide for strong<br>and predictable cash flows from projects and allow for high leverage capacity and flexibility of debt structuring. Our strategy is to<br>reinvest of project cash flows into additional solar PV projects to provide non-dilutive capital for Alternus to “self-fund”<br>organic growth; |
| --- | --- |
| · | Optimization of financing sources to support long-term growth and profitability in a cost-efficient manner; |
| --- | --- |
| · | As a renewable energy company, we are committed to growing our portfolio of clean energy parks in the most sustainable way possible.<br>The Company is highly aware and conscious of the ever growing need to mitigate the effects of climate change, which is evident by its<br>core strategy. As the Company grows, it intends to establish a formal sustainability policy framework in order to ensure that all project<br>development is carried out in a sustainable manner mitigating any potential localized environmental impacts identified during the development,<br>construction and operational process. |
| --- | --- |
Given the long-term nature of our business, the Company does not operate its business on a quarter-by-quarter basis, but rather, with long-term shareholder value creation as a priority. The Company aims to maximize return for its shareholders by developing its own parks from the ground up — via Altnua — and/or acquiring projects during the development cycle, installation stage, or already operational.
On some projects, the Company will look to provide construction (EPC) services in-house — via Unisun — where the margins normally paid to third parties can be retained in the group and reinvested into new projects reducing the need for additional equity issuances.
3
We intend that the parks we own and operate will have a positive cash flow with long-term income streams at the lowest possible risk. To this end we use Levelized Cost of Energy (“LCOE”) as a key criterion to ranking the projects we consider for development and/or acquisition. The LCOE calculates the total cost of ownership of the parks over their expected life reflected as a rate per megawatt hour (MWh). Once the income rates for the selected projects are higher than this rate, the project will be profitable for its full life — including initial capex costs. The Company will continue to operate with this priority as we continue to invest in internal infrastructure and additional solar PV power plants to increase installed power and resultant stable long-term revenue streams.
Key Factors that Significantly Affect Company Results of Operationsand Business
The Company expects the following factors will affect its results of operations – inflation and energy rate fluctuations.
Offtake Contracts
Company revenue is primarily a function of the volume of electricity generated and sold by its renewable energy facilities as well as, where applicable, the sale of green energy certificates and other environmental attributes related to energy generation. The Company’s current portfolio of renewable energy facilities is generally contracted under long-term FIT programs or PPAs with creditworthy counterparties. As of September 30, 2023, the average remaining life of its FITs and PPAs was 10.7 years. Pricing of the electricity sold under these FITs and PPAs is generally fixed for the duration of the contract, although some of its PPAs have price escalators based on an index (such as the consumer price index) or other rates specified in the applicable PPA.
The Company also generates Renewable Energy Credit (RECs) as the Company produces electricity. RECs are accounted for as government incentives and are considered operational revenue as part of the solar facilities.
Project Operations and Generation Availability
The Company revenue is a function of the volume of electricity generated and sold by Company renewable energy facilities. The volume of electricity generated and sold by the Company’s renewable energy facilities during a particular period is impacted by the number of facilities that have achieved commercial operations, as well as both scheduled and unexpected repair and maintenance required to keep its facilities operational.
The costs the Company incurs to operate, maintain and manage renewable energy facilities also affect the results of operations. Equipment performance represents the primary factor affecting the Company’s operating results because equipment downtime impacts the volume of the electricity that the Company can generate from its renewable energy facilities. The volume of electricity generated and sold by the Company’s facilities will also be negatively impacted if any facilities experience higher than normal downtime as a result of equipment failures, electrical grid disruption or curtailment, weather disruptions, or other events beyond the Company’s control.
Seasonality and Resource Variability
The amount of electricity produced, and revenues generated by the Company’s solar generation facilities is dependent in part on the amount of sunlight, or irradiation, where the assets are located. As shorter daylight hours in winter months result in less irradiation, the electricity generated by these facilities will vary depending on the season. Irradiation can also be variable at a particular location from period to period due to weather or other meteorological patterns, which can affect operating results. As most of the Company’s solar power plants are in the Northern Hemisphere (Europe), the Company expects its current solar portfolio’s power generation to be at its lowest during the first and fourth quarters of each year. Therefore, the Company expects first and fourth quarter solar revenue to be lower than in other quarters. As a result, on average, each solar park generates approximately 15% of its annual revenues in Q1 every year, 35% in each of Q2 and Q3, and the remaining 15% in Q4. The Company’s costs are relatively flat over the year, and so the Company will always report lower profits in Q1 and Q4 as compared to the middle of the year.
4
Interest Rates on Company Debt
Interest rates on the Company’s senior debt are mostly variable for the full term of the finance at interest rates ranging from 1.6% to 18%. The relative certainty of cash flows provides sufficient coverage ratios.
In addition to the project specific senior debt, the Company uses a small number of promissory notes in order to reduce, and in some cases eliminate, the requirement for the Company to provide equity in the acquisition of the projects. As of September 30, 2023, 87% of the Company’s total liabilities were project-related debt.
Cash Distribution Restrictions
In certain cases, the Company, through its subsidiaries, obtain project-level or other limited or non-recourse financing for Company renewable energy facilities which may limit these subsidiaries’ ability to distribute funds to the Company for corporate operational costs. These limitations typically require that the project-level cash is used to meet debt obligations and fund operating reserves of the operating subsidiary. These financing arrangements also generally limit the Company’s ability to distribute funds generated from the projects if defaults have occurred or would occur with the giving of notice or the lapse of time, or both.
Renewable Energy Facility Acquisitions and Investments
The Company’s long-term growth strategy is dependent on its ability to acquire additional renewable power generation assets. This growth is expected to be comprised of additional acquisitions across the Company’s scope of operations both in its current focus countries and new countries. Our operating revenues are insufficient to fund our operations and our assets already are pledged to secure our indebtedness to various third party secured creditors, respectively. The unavailability of additional financing could require us to delay, scale back or terminate our acquisition efforts as well as our own business activities, which would have a material adverse effect on the Company and its viability and prospects.
Management believes renewable power has been one of the fastest growing sources of electricity generation globally over the past decade. The Company expects the renewable energy generation segment to continue to offer growth opportunities driven by:
| · | The continued reduction in the cost of solar and other renewable energy technologies, which the Company<br>believes will lead to grid parity in an increasing number of markets; |
|---|---|
| · | Distribution charges and the effects of an aging transmission infrastructure, which enable renewable energy<br>generation sources located at a customer’s site, or distributed generation, to be more competitive with, or cheaper than, grid-supplied<br>electricity; |
| --- | --- |
| · | The replacement of aging and conventional power generation facilities in the face of increasing industry<br>challenges, such as regulatory barriers, increasing costs of and difficulties in obtaining and maintaining applicable permits, and the<br>decommissioning of certain types of conventional power generation facilities, such as coal and nuclear facilities; |
| --- | --- |
| · | The ability to couple renewable energy generation with other forms of power generation and/or storage,<br>creating a hybrid energy solution capable of providing energy on a 24/7 basis while reducing the average cost of electricity obtained<br>through the system; |
| --- | --- |
| · | The desire of energy consumers to lock in long-term pricing for a reliable energy source; |
| --- | --- |
| · | Renewable energy generation’s ability to utilize freely available sources of fuel, thus avoiding<br>the risks of price volatility and market disruptions associated with many conventional fuel sources; |
| --- | --- |
5
| · | Environmental concerns over conventional power generation; and |
|---|---|
| · | Government policies that encourage the development of renewable power, such as country, state or provincial<br>renewable portfolio standard programs, which motivate utilities to procure electricity from renewable resources. |
| --- | --- |
Access to Capital Markets
The Company’s ability to acquire additional clean power generation assets and manage its other commitments will likely be dependent on its ability to raise or borrow additional funds and access debt and equity capital markets, including the equity capital markets, the corporate debt markets, and the project finance market for project-level debt. The Company accessed the capital markets several times in 2022 and 2023, in connection with long-term project debt, and corporate loans and equity. Limitations on the Company’s ability to access the corporate and project finance debt and equity capital markets in the future on terms that are accretive to its existing cash flows would be expected to negatively affect its results of operations, business, and future growth.
Foreign Exchange
The Company’s operating results are reported in United States (USD) Dollars. The Company’s current project revenue and expenses are generated in other currencies, including the Euro (EUR), the Polish Zloty (PLN), the Romanian Lei (RON), and the Norwegian Krone (NOK). This mix may continue to change in the future if the Company elects to alter the mix of its portfolio within its existing markets or elect to expand into new markets. In addition, the Company’s investments (including intercompany loans) in renewable energy facilities in foreign countries are exposed to foreign currency fluctuations. As a result, the Company expects revenue and expenses will be exposed to foreign exchange fluctuations in local currencies where the Company’s renewable energy facilities are located. To the extent the Company does not hedge these exposures, fluctuations in foreign exchange rates could negatively impact profitability and financial position.
Key Metrics
Operating Metrics
The Company regularly reviews several operating metrics to evaluate its performance, identify trends affecting its business, formulate financial projections and make certain strategic decisions. The Company considers a solar park operating when it has achieved connection and begins selling electricity to the energy grid.
Operating Nameplate capacity
The Company measures the electricity-generating production capacity of its renewable energy facilities in nameplate capacity. The Company expresses nameplate capacity in direct current (DC), for all facilities. The size of the Company’s renewable energy facilities varies significantly among the assets comprising its portfolio.
The Company believes the combined nameplate capacity of its portfolio is indicative of its overall production capacity and period to period comparisons of its nameplate capacity are indicative of the growth rate of its business. The table below outlines the Company’s operating renewable energy facilities as of September 30, 2023 and 2022.
6
| Nine Months Ended<br> September 30 | ||||
|---|---|---|---|---|
| MW (DC) Nameplate capacity by country | 2023 | 2022 | ||
| Romania | 40.1 | 40.1 | ||
| Italy | 10.5 | 10.5 | ||
| Germany | 0.7 | 1.3 | ||
| Netherlands | 25.4 | 25.4 | ||
| Poland | 88.4 | 88.4 | ||
| United States | 1.1 | 0.4 | ||
| Total | 166.2 | 166.1 |
Megawatt hours sold
Megawatt hours sold refers to the actual volume of electricity sold by the Company’s renewable energy facilities during a particular period. The Company tracks MWh sold as an indicator of its ability to realize cash flows from the generation of electricity at its renewable energy facilities. The Company’s MWh sold for renewable energy facilities for the three and nine-months ended September 30, 2023 and 2022, were as follows:
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||
|---|---|---|---|---|---|---|---|---|
| MWh (DC) Sold by country | 2023 | 2022 | 2023 | 2022 | ||||
| Romania | 17,545 | 16,337 | 42,019 | 44,093 | ||||
| Italy | 3,621 | 3,452 | 8,557 | 9,728 | ||||
| Germany | 185 | 391 | 474 | 993 | ||||
| Netherlands | 8,057 | 9,367 | 21,182 | 22,553 | ||||
| Poland | 34,972 | 34,441 | 84,076 | 88,596 | ||||
| United States | 589 | 189 | 1,019 | 295 | ||||
| Total | 64,969 | 64,177 | 157,327 | 166,258 |
7
Consolidated Results of Operations
The following table illustrates the consolidated results of operations for the three and nine-months ended September 30, 2023 and 2022:
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenues | $ | 10,478 | $ | 12,372 | $ | 27,799 | $ | 30,483 | ||||
| Operating Expenses | ||||||||||||
| Cost of revenues | (2,157 | ) | (4,596 | ) | (6,545 | ) | (9,631 | ) | ||||
| Selling, general and administrative | (3,128 | ) | (2,276 | ) | (10,122 | ) | (6,429 | ) | ||||
| Depreciation, amortization, and accretion | (1,966 | ) | (2,041 | ) | (5,586 | ) | (6,723 | ) | ||||
| Development costs | (218 | ) | (216 | ) | (1,223 | ) | (216 | ) | ||||
| Loss on disposal of asset | - | 107 | - | 28 | ||||||||
| Total operating expenses | $ | (7,469 | ) | $ | (9,022 | ) | $ | (23,476 | ) | $ | (22,971 | ) |
| Income from operations | 3,009 | 3,350 | 4,323 | 7,512 | ||||||||
| Other income/(expense): | ||||||||||||
| Interest expense | (7,455 | ) | (4,380 | ) | (19,253 | ) | (13,120 | ) | ||||
| Other income | 74 | 1,507 | 318 | 1,934 | ||||||||
| Solis bond waiver fee | (11,113 | ) | - | (11,113 | ) | - | ||||||
| Other expense | (863 | ) | (943 | ) | (1,047 | ) | (1,129 | ) | ||||
| Total other expense | $ | (19,357 | ) | $ | (3,816 | ) | $ | (31,095 | ) | $ | (12,315 | ) |
| Income/(loss) before provision for income taxes | (16,348 | ) | (466 | ) | (26,772 | ) | (4,803 | ) | ||||
| Income taxes | - | - | - | - | ||||||||
| Net income (loss) | $ | (16,348 | ) | $ | (466 | ) | $ | (26,772 | ) | $ | (4,803 | ) |
| Net income/(loss) attributable to non-controlling interest | (415 | ) | (35 | ) | (660 | ) | (330 | ) | ||||
| Net income/(loss) attributable to Alternus Energy Group | $ | (15,933 | ) | $ | (431 | ) | $ | (26,112 | ) | $ | (4,473 | ) |
| Basic gain/(loss) per share | $ | (0.61 | ) | $ | (0.02 | ) | $ | (0.99 | ) | $ | (0.17 | ) |
| Weighted average shares outstanding: | ||||||||||||
| Basic shares | 26,325,738 | 26,358,375 | 26,325,738 | 26,358,375 | ||||||||
| Comprehensive loss: | ||||||||||||
| Net income/(loss) | (15,933 | ) | (431 | ) | (26,112 | ) | (4,473 | ) | ||||
| Foreign currency translation adjustment | (2,246 | ) | (2,199 | ) | 586 | (3,755 | ) | |||||
| Comprehensive income/(loss) | $ | (18,719 | ) | $ | (2,630 | ) | $ | (25,526 | ) | $ | (8,228 | ) |
8
Nine Months Ended September 30, 2023 compared to September 30,2022.
The Company generates its revenue from the sale of electricity from its solar parks. The revenue is from a FIT program, PPA or REC in the day-ahead-market or spot market.
Revenue
Revenue for the three and nine-months ended September 30, 2023 and 2022 were as follows:
| Three Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue by Country | 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | |||||||||
| Italy | 1,228 | 1,018 | 21 | % | |||||
| Romania | 5,161 | 4,216 | 22 | % | |||||
| Germany | 8 | 44 | ) | (82 | )% | ||||
| Netherlands | 1,096 | 1,673 | ) | (34 | )% | ||||
| Poland | 2,952 | 5,411 | ) | (45 | )% | ||||
| United States | 33 | 10 | 230 | % | |||||
| Total | 10,478 | 12,372 | ) | (15 | )% |
All values are in US Dollars.
| Nine Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||
| (in thousands) | |||||||||
| Italy | 2,924 | 2,847 | 3 | % | |||||
| Romania | 13,271 | 14,061 | ) | (6 | )% | ||||
| Germany | 22 | 142 | ) | (85 | )% | ||||
| Netherlands | 4,378 | 3,759 | 16 | % | |||||
| Poland | 7,121 | 9,659 | ) | (26 | )% | ||||
| United States | 83 | 15 | 453 | % | |||||
| Total | 27,799 | 30,483 | ) | (9 | )% |
All values are in US Dollars.
Revenue decreased by $1.9 million for the three months ended September 30, 2023 compared to the same period in 2022, primarily due to lower electricity pricing in Poland and actual irradiation due to seasonal weather conditions in Poland and the Netherlands. This decrease is partially offset by an increase in production in the US compared to the same period in 2022.
Revenue decreased by $2.7 million for the nine months ended September 30, 2023 compared to the same period in 2022, primarily due to lower electricity pricing in Poland and actual irradiation due to seasonal weather conditions in Poland. This decrease is partially offset by an increase in production in the US compared to the prior year.
| Three Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue by Offtake Type | 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | |||||||||
| Country Renewable Programs | 3,690 | 9,184 | ) | (60 | )% | ||||
| Green Certificates | 3,212 | 1,155 | 178 | % | |||||
| Energy Offtake Agreements | 3,572 | 2,020 | 77 | % | |||||
| Other Revenue | 4 | 13 | ) | (69 | )% | ||||
| Total | 10,478 | 12,372 | ) | (15 | )% |
All values are in US Dollars.
9
| Nine Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||
| (in thousands) | |||||||||
| Country Renewable Programs | 8,812 | 16,550 | ) | (47 | )% | ||||
| Green Certificates | 8,170 | 6,970 | 17 | % | |||||
| Energy Offtake Agreements | 10,355 | 6,808 | 52 | % | |||||
| Other Revenue | 462 | 155 | 198 | % | |||||
| Total | 27,799 | 30,483 | ) | (9 | )% |
All values are in US Dollars.
Cost of Revenues
The Company capitalizes its equipment costs, development costs, engineering and construction related costs, that are deemed recoverable. The Company’s cost of revenues with regards to its IPP solar parks is primarily a result of the asset management, operations and maintenance, as well as tax, insurance, and lease expenses. Certain economic incentive programs, such as FIT regimes, generally include mechanisms that ratchet down incentives over time. As a result, the Company seeks to connect its IPP solar parks to the local power grids and commence operations in a timely manner to benefit from more favorable existing incentives. Therefore, the Company generally seeks to make capital investments during times when incentives are most favorable.
Cost of revenues for the three and six-months ended September 30, 2023 and 2022 were as follows:
| Three Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Cost of Revenues by Country | 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | |||||||||
| Italy | 250 | 161 | 55 | % | |||||
| Romania | 657 | 2,427 | ) | (73 | )% | ||||
| Germany | 25 | 16 | 56 | % | |||||
| Netherlands | 249 | 268 | ) | (7 | )% | ||||
| Poland | 955 | 1,724 | ) | (45 | )% | ||||
| United States | 21 | - | 100 | % | |||||
| Total | 2,157 | 4,596 | ) | (53 | )% |
All values are in US Dollars.
| Nine Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||
| (in thousands) | |||||||||
| Italy | 732 | 469 | 56 | % | |||||
| Romania | 2,193 | 5,868 | ) | (63 | )% | ||||
| Germany | 30 | 30 | 0 | % | |||||
| Netherlands | 619 | 632 | ) | (2 | )% | ||||
| Poland | 2,924 | 2,632 | 11 | % | |||||
| United States | 47 | - | 100 | % | |||||
| Total | 6,545 | 9,631 | ) | (32 | )% |
All values are in US Dollars.
Cost of revenues decreased by $2.4 million for the three months ended 2023 compared to 2022. The decrease was primarily due to a drop in operational costs for Romanian and Polish parks for the three months ending September 30, 2023.
Cost of revenues decreased by $3.1 million for the nine-months ended 2023 compared to 2022. The decrease was primarily due to a drop in operational costs for Romanian parks for the nine months ending September 30, 2023. This decrease was partially offset by a full six-month operation of the three Polish parks purchased in March 2022 compared to the same period in 2022.
10
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three- and nine months ended September 30, 2023 and 2022 were as follows:
| Three Months Ended<br> September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | ||||||||
| Selling, general and administrative | 3,128 | 2,276 | 37 | % | ||||
| Total | 3,128 | 2,276 | 37 | % |
All values are in US Dollars.
| Nine Months Ended<br> September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | ||||||||
| Selling, general and administrative | 10,122 | 6,429 | 57 | % | ||||
| Total | 10,122 | 6,429 | 57 | % |
All values are in US Dollars.
Selling, general and administrative expenses increased by $0.9 million for the three months ended September 30, 2023 compared to 2022. This increase was due to increased compensation related expenses compared to the third quarter of 2022.
Selling, general and administrative expenses increased by $3.7 million for the nine months ended September 30, 2023 compared to 2022. This increase was primarily due to increased compensation related expenses, audit, and legal fees in the nine months ended September 30, 2023 compared to the three quarters of 2022.
Acquisition Costs
As discussed in Note 5 – Business Combinations and Acquisitions of Assets to its consolidated financial statements, the Company acquired three SPVs in March 2022 in Poland, all accounted for as asset acquisitions under ASC 805. Refer to Footnote 4 Business Combination and Acquisitions of Assets for more information.
Development Cost
| Three Months Ended<br> September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | ||||||||
| Development Cost | 218 | 216 | 1 | % | ||||
| Total | 218 | 216 | 1 | % |
All values are in US Dollars.
| Nine Months Ended<br> September 30 | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | |||||
| (in thousands) | ||||||||
| Development Cost | 1,223 | 216 | 466 | % | ||||
| Total | 1,223 | 216 | 466 | % |
All values are in US Dollars.
11
Development cost was $1.2 million for the period ended September 30, 2023, due to final work performed for projects abandoned for the development of renewable energy projects. The Company depends heavily on government policies that support our business and enhance the economic feasibility of developing and operating solar energy projects in regions in which we operate or plan to develop and operate renewable energy facilities. The Company can decide to abandon a project if there is material change in budgetary constraints, political factors or otherwise, governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Refer to Footnote 18 to the accompanying financial statements for more detail of development cost.
Depreciation, Amortization and Accretion Expense
Depreciation, amortization and accretion expenses for the three- and nine-months ended September 30, 2023 and 2022 were as follows:
| Three Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||
| (in thousands) | |||||||||
| Depreciation, Amortization and Accretion expense | 1,966 | 2,041 | ) | (4 | )% | ||||
| Total | 1,966 | 2,041 | ) | (4 | )% |
All values are in US Dollars.
| Nine Months Ended<br> September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||
| (in thousands) | |||||||||
| Depreciation, Amortization and Accretion expense | 5,586 | 6,723 | ) | (17 | )% | ||||
| Total | 5,586 | 6,723 | ) | (17 | )% |
All values are in US Dollars.
Depreciation, amortization and accretion expenses decreased by $75 thousand for the three months ended September 30, 2023, compared to 2022, primarily due to FX variations affecting the fixed assets balances in Poland and across Europe. The Company also disposed of two German assets in 2022. This was partially offset by the addition of one solar park in the US.
Depreciation, amortization and accretion expenses decreased by $1.1 million for the nine-months ended September 30, 2023, compared to 2022, primarily due to FX variations affecting the fixed assets balances in Poland and across Europe. The Company also disposed of two German assets in 2022. This was partially offset by the addition of one solar park in the US.
12
Interest Expense, Development Cost, Other Income, and Other Expense
| Three Months Ended<br> September 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||||
| (in thousands) | |||||||||||
| Interest Expense | (7,455 | ) | (4,380 | ) | ) | 70 | % | ||||
| Other Income | 74 | 1,507 | ) | (95 | )% | ||||||
| Solis bond waiver fee | (11,113 | ) | - | ) | 100 | % | |||||
| Other Expense | (863 | ) | (943 | ) | (8.5 | )% | |||||
| Total | (19,357 | ) | (3,816 | ) | ) | 407 | % |
All values are in US Dollars.
| Nine Months Ended<br> September 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | Change (%) | ||||||||
| (in thousands) | |||||||||||
| Interest Expense | (19,253 | ) | (13,120 | ) | ) | 47 | % | ||||
| Other Income | 318 | 1,934 | ) | (84 | )% | ||||||
| Solis bond waiver fee | (11,113 | ) | - | ) | 100 | % | |||||
| Other Expense | (1,047 | ) | (1,129 | ) | (7.3 | )% | |||||
| Total | (31,095 | ) | (12,315 | ) | ) | 152 | % |
All values are in US Dollars.
Total other expenses increased by $15.5 million for the three-month period ended September 30, 2023 compared to the same period in 2022. The primary driver was increased interest expense due to the increase in the effective interest rate of the Solis bond from 6.5% to 9.6%. There was also a recognition of a $11.1 million bond waiver fee for the Solis bond.
Total other expenses increased by $18.8 million for the nine-month period ended September 30, 2023 compared to the same period in 2022. The primary driver was increased interest expense due to the increase in the effective interest rate of the Solis bond from 6.5% to 9.6%. There was also a recognition of a $11.1 million bond waiver for the Solis bond. The exchange rates of the EUR to USD were less favorable in third quarter 2023 compared to the same period in 2022.
Net Loss
Net loss increased by $15.9 million for the three-month period ended September 30, 2023 compared to the same period 2022. This is primarily due to a decrease in revenue of $1.9 million and other income of $1.4 million, increased SG&A expense of $0.9 million, interest expense of $3.1 million, and other expense of $11.0 million. This was partially offset by a decrease in cost of revenues of $2.4 million.
Net loss increased by $21.9 million for the period ended September 30, 2023 compared to the same period 2022. This is primarily due to a decrease in revenue of $2.7 million and other income of $1.6 million, increased SG&A expense of $3.7 million, development costs of $1.0 million, interest expense of $6.1 million, and other expense of $11.0 million. This was partially offset by a decrease in cost of revenues of $3.1 million, and depreciation expense of $1.1 million.
Liquidity and Capital Resources
Capital Resources
A key element to the Company’s financing strategy is to raise much of its debt in the form of project specific non-recourse borrowings at its subsidiaries with investment grade metrics. Going forward, the Company intends to primarily finance acquisitions or growth capital expenditures using long-term non-recourse debt that fully amortizes within the asset’s contracted life, as well as retained cash flows from operations and issuance of equity securities through public markets.
13
The following table summarizes certain financial measures that are not calculated and presented in accordance with U.S. GAAP, along with the most directly comparable U.S. GAAP measure, for each period presented below. In addition to its results determined in accordance with U.S. GAAP, the Company believes the following non-U.S. GAAP financial measures are useful in evaluating its operating performance. The Company uses the following non-U.S. GAAP financial information, collectively, to evaluate its ongoing operations and for internal planning and forecasting purposes.
The following non-U.S. GAAP table summarizes the total capitalization and debt as of September 30, 2023 and December 31, 2022:
| As of September 30 | As of December 31 | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| (in thousands) | ||||||
| Green Bonds | 159,291 | 149,481 | ||||
| Convertible Debt, secured | 11,483 | 9,609 | ||||
| Senior Secured debt and prom notes | 40,521 | 33,500 | ||||
| Total debt | 211,295 | 192,590 | ||||
| Less current maturities | (197,112 | ) | (21,631 | ) | ||
| Long term debt, net of current maturities | 14,183 | 170,959 | ||||
| Current Maturities | 197,112 | 21,631 | ||||
| Less current debt discount | (2,194 | ) | (4,335 | ) | ||
| Current Maturities net of debt discount | 194,918 | 17,296 | ||||
| Long-term maturities | 14,183 | 170,959 | ||||
| Less long-term debt discount | (2,707 | ) | (197 | ) | ||
| Long-term maturities net of debt discount | 11,476 | 170,762 | ||||
| As of September 30 | As of December 31 | |||||
| --- | --- | --- | --- | --- | ||
| 2023 | 2022 | |||||
| (in thousands) | ||||||
| Cash and cash equivalents | 3,886 | 2,987 | ||||
| Restricted cash | 5,027 | 6,598 | ||||
| Available capital | 8,913 | 9,585 |
Restricted Cash relates to balances that are in the bank accounts for specific defined purposes and cannot be used for any other undefined purposes. Refer to Footnote 3 – Summary of Significant Accounting Policies for further discussion of restricted cash.
Liquidity Position
Our consolidated financial statements for the three- and nine-months ended September 30, 2023 and for the year ended December 31, 2022 identifies the existence of certain conditions that raise substantial doubt about our ability to continue as a going concern for twelve months from the issuance of this report. Refer to Footnote 2 of the accompanying financial statements for more information.
In January 2021, the Company approved the issuance by one of its subsidiaries, Solis, of a series of 3-year senior secured green bonds in the maximum amount of $242.0 million (€200 million) with a stated coupon rate of 6.5% + EURIBOR and quarterly interest payments. The bond agreement is for repaying existing facilities of approximately $40 million (€33 million), and funding acquisitions of approximately $87.2 million (€72.0 million). The bonds are secured by the Solis Bond Company’s underlying assets. The Company raised approximately $125.0 million (€110.0 million) in the initial funding. In November 2021, Solis Bond Company DAC, completed an additional issue of $24 million (€20 million). The additional issue was completed at an issue price of 102% of par value, corresponding to a yield of 5.5%. The Company raised $11.1 million (€10 million) in March 2022 at 97% for an effective yield of 9.5%. In connection with the bond agreement the Company incurred approximately $11.8 million in debt issuance costs. The Company recorded these as a discount on the debt and they are being amortized as interest expense over the contractual period of the bond agreement. As of December 31, 2022 and 2021, there was $149.5 million and $147.2 million outstanding on the Bond, respectively. As of September 30, 2023 and 2022 there was $148.2 million and $136.3 million outstanding on the Bond, respectively.
14
As of December 31, 2022, the Company’s wholly owned subsidiary, Solis Bond Company DAC, was in breach of the three financial covenants under Solis’ Bond terms: (i) the minimum Liquidity Covenant that requires the higher of EUR 5.5 million or 5% of the outstanding Nominal Amount, (ii) the minimum Equity Ratio covenant of 25%, and (iii) the Leverage Ratio of NIBD/EBITDA to not be higher than 6.5 times for the year ended December 2021, 6.0 times for the year ended December 31, 2022 and 5.5 times for the period ending on the maturity date of the Bond, January 6, 2024. The Solis Bond carries a 3 months EURIBOR plus 6.5% per annum interest rate, and has quarterly interest payments, with a bullet payment to be paid on January 6, 2024. The Solis Bond is senior secured through a first priority pledge on the shares of Solis and its subsidiaries, a parent guarantee from Alternus Energy Group Plc, and a first priority assignment over any intercompany loans.
In April 2023 the bond holders approved a temporary waiver and an amendment to the bond terms to allow for a change of control in Solis (which allows for the transfer of Solis and its subsidiaries underneath Clean Earth Acquisitions Corp. on Closing). In addition, bondholders received a preference share in an Alternus Midco, which will hold certain development projects in Spain and Italy. The shares will have preference on any distribution from Midco to Alternus up to €10 million, and Midco will divest assets to ensure repayment of the €10 million should the bonds not have been fully repaid at maturity (January 6, 2024). Finally, bondholders will receive a 1% amendment fee, which equates to €1.4 million.
On June 5, 2023 the bondholders approved an extension to the waiver to September 30, 2023 and the bond trustee was granted certain additional information rights and the right to appoint half of the members of the board of directors of Solis, in addition to the members of the board appointed by Alternus. Under the waiver agreement, as extended, Solis must fully repay the Bonds by September 30, 2023. If Solis is unable to fully repay the Solis Bonds by September 30, 2023, Solis’ bondholders have the right to immediately transfer ownership of Solis and all of its subsidiaries to the bondholders and proceed to sell Solis’ assets to recoup the full amount owed to the bondholders, which as of September 30, 2023 is currently €150,000,000 (approximately $159,000,000). If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated.
On October 16 2023, bondholders approved to further extend the temporary waiver to December 16, 2023. As such, the Solis bond debt is currently recorded as short-term debt.
Solis has engaged Pareto Securities AS to explore a refinancing of the bond. The Company has also engaged a leading global firm to support a potential sale of some or all of the assets. The refinancing may be completed in conjunction with a potential sale of certain assets in Solis. We are in advanced discussions with numerous third parties around both the potential refinancing and/or sale of the Solis assets. There are no definitive refinancing or sale agreements executed as of the date of this report and there is no guarantee that these processes will complete by the Solis extension date or at all.
Financing Activities
On December 21, 2022, Alternus Energy Group’s wholly owned Irish subsidiaries, AEG JD 01 LTD and AEG MH 03 LTD entered in a financing facility with Deutsche Bank AG (“Lender”). This is a committed revolving debt financing of EUR 80,000,000 to finance eligible project costs for the acquisition, construction, and operation of installation/ready to build solar PV plants across Europe, including the capacity for the financing to be upsized via a EUR 420,000,000 uncommitted accordion facility to finance a pipeline of further projects across Europe (the “Warehouse Facility”). The Warehouse Facility, which matures on the third anniversary of the closing date of the Credit Agreement (the “Maturity Date”), bears interest at Euribor plus an aggregate margin at a market rate for such facilities, which steps down by 0.5% once the underlying non-Euro costs financed reduces below 33.33% of the overall costs financed. The Warehouse Facility is not currently drawn upon, but a total of approximately EUR 1,800,000 in arrangement and commitment fees is currently owed to the Lender. Once drawn, the Warehouse Facility capitalizes interest payments until projects reach their commercial operations dates through to the Maturity Date; it also provides for mandatory prepayments in certain situations.
15
In January 2023, Alternus Fundco, a subsidiary of AEG, Plc, entered into a $1.1 million convertible promissory note with a 10% interest maturing in January 2025. The holders of the notes will have the option, beginning 90 days after the close of the business combination between the Company and Clean Earth Acquisitions Corp. and until such note is fully paid, to convert the full principal balance and any accrued but unpaid interest into common stock of Clean Earth Acquisitions Corp. The conversion price for these shares is the per share market price on the date the noteholder informs the Company of his intention to convert the debt. The outstanding balance was $1.1 million as of September 30, 2023.
On February 28, 2023, Alt US 03, a subsidiary of Alternus Energy Americas, entered into an agreement as part of the transaction with Sunrise Development, LLC to acquire rights to develop a solar park in Tennessee. The Company entered into a construction promissory note of $920 thousand with a variable interest rate of prime plus 2.5% and due February 29, 2024. The Company had principal outstanding of $715 thousand as of June 30, 2023.
In March 2023, the Company approved the issuance of $922 thousand of secured convertible debt in three tranches of $271 thousand, $271 thousand and $380 thousand, carrying a 14% annual interest rate. The holder of the notes will have the option, beginning 90 days after the close of the business combination between the Company and Clean Earth Acquisitions Corp. and until (i) the maturity date and (ii) such note is fully paid, to convert the full principal balance and any accrued but unpaid interest into 1,320,000 shares of common stock of Clean Earth Acquisitions Corp. Alternatively, should the business combination not complete by April of 2024, the holder has the right to convert the full principal balance and any accrued but unpaid interest into the Company’s ordinary shares at a conversion price of 9 NOK per share.
In July 2023, one of the Company’s US subsidiaries acquired a 32 MWp solar PV project in Tennessee, known as “Dancing Horse” for $2.4 million financed through a bank loan having a six-month term, 24% APY, and maturity date of January 1, 2024. Dancing Horse is expected to start operating in Q1 2025. 100% of offtake is already secured by 30-year power purchase agreements with two regional utilities. The Company had a principal outstanding balance of $3.7 million as of September 30, 2023.
In July 2023, one of the Company’s Spanish subsidiaries acquired a 32 MWp portfolio of Solar PV projects in Valencia, Spain, known as the “NF Projects” with an initial payment of $1.9 million, financed through a bank loan having a six-month term and accruing ‘Six Month Euribor’ plus 2% margin, currently 5.9% interest. The portfolio consists of six projects in total: five of which, totaling 24.4 MWp, are expected to reach operation in Q2 2024, with the remaining project expected to achieve operation in Q1 2025. The Company had a principal outstanding balance of $1.9 million as of September 30, 2023.
Material Cash Requirements from Known Contractual Obligations
The Company’s contractual obligations consist of operating leases generally related to the rent of office building space, as well as land upon which the Company’s solar parks are built. These leases include those that have been assumed in connection with the Company’s asset acquisitions and business combinations. The Company’s leases are for varying terms and expire between 2027 and 2055.
For the period ending September 30, 2023 and 2022, the Company incurred operating lease expenses of $823 thousand and $738 thousand, respectively. The following table summarizes the Company’s future minimum contractual operating lease payments as of September 30, 2023.
16
Maturities of lease liabilities as of September 30, 2023 were as follows:
| Five-year lease schedule: | (in thousands) | ||
|---|---|---|---|
| 2023 Oct 1 – Dec 31 | $ | 213 | |
| 2024 | 845 | ||
| 2025 | 868 | ||
| 2026 | 893 | ||
| 2027 | 918 | ||
| Thereafter | 16,336 | ||
| Total lease payments | 20,073 | ||
| Less imputed interest | (10,728 | ) | |
| Total | $ | 9,345 |
The Company had no finance leases as of September 30, 2023.
As a part of the Komorowo acquisition, the Company acquired two operating leases to the land where the solar parks are located. The combined estimated annual cost of the leases is $75 thousand. The leases commenced in 2021 and run through 2046.
As a part of the Rakowic acquisition, the Company acquired an operating lease for the land where the solar parks are located. The combined estimated annual cost of the leases is $6 thousand. The leases commenced in 2022 and run through 2046.
In March 2022, the Company entered a new lease for additional office space in Ireland with a term of 9 years. The estimated annual cost of the lease is $136 thousand.
In April 2022, the Company entered a new lease for additional office space in Fort Mill, South Carolina with a term of 7.5 years. The estimated annual cost of the lease is $147 thousand.
Cash Flow Discussion
The Company uses traditional measures of cash flow, including net cash flows from operating activities, investing activities and financing activities to evaluate its periodic cash flow results.
For the Nine-months Ended September 30, 2023 compared to September 30,2022
The following table reflects the changes in cash flows for the comparative periods:
| Nine-months Ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change () | ||||||
| (in thousands) | ||||||||
| Net cash provided by operating activities | 693 | 5,881 | ) | |||||
| Net cash (used in) investing activities | (9,408 | ) | (36,073 | ) | ) | |||
| Net cash provided by financing activities | 8,071 | 23,930 | ) | |||||
| Effect of exchange rate on cash | (28 | ) | (2,187 | ) | ) |
All values are in US Dollars.
Net Cash Used in Operating Activities
Net cash provided by operating activities for the nine-months ended September 30, 2023 compared to 2022 decreased by $5.2 million. The net loss increased by $21.9 million in 2023, which was mainly due to an increase of interest expense and the recognition of the $11.1 million bond waiver for the Solis bond. This was partially offset by a decrease in cost of revenues and depreciation expense.
17
Net Cash Used in Investing Activities
Net cash used in investing activities for the nine-months ended September 30, 2023 compared to 2022 decreased by $26.7 million. This was a result of a decrease in acquisition costs in 2023 compared to the $12.3 million of acquisitions in Poland and a $16.1 million decrease in cash paid for the development of assets compared to the first three quarters of 2022.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the nine-months ended September 30, 2023 compared to 2022 decreased by $15.9 million due to no issuances of debt for acquisition purposes.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions in certain circumstances that affect amounts reported in its consolidated financial statements and related footnotes. In preparing these consolidated financial statements, the Company has made its best estimates of certain amounts included in the consolidated financial statements. Application of accounting policies and estimates, however, involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In arriving at the Company’s critical accounting estimates, factors the Company considers include how accurate the estimate or assumptions have been in the past, how much the estimate or assumptions have changed and how reasonably likely such change may have a material impact. The Company’s critical accounting policies are discussed below.
JOBS Act Accounting Election
The Company is an emerging growth company pursuant to the provisions of the Jumpstart Our Business Start-ups (JOBS) Act. For as long as the Company is an emerging growth company, the Company may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The JOBS Act also permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. The Company has elected to use the extended transition period until the Company is no longer an emerging growth company or until the Company chooses to affirmatively and irrevocably opt out of the extended transition period. As a result, Company financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.
Business Combinations
The Company acquires assets which operate in nature with existing revenue streams and assets which are constructed for the purpose of being sold. The Company applies the screen test per ASC 805 to determine an asset acquisition versus business combination and accounts for business combinations by recognizing in the financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in the acquiree at fair value at the acquisition date. The Company also recognizes and measures the goodwill acquired or a gain from a bargain purchase in the business combination and determine what information to disclose to enable users of an entity’s financial statements to evaluate the nature and financial effects of the business combination. In addition, acquisition costs related to business combinations are expensed as incurred. Cost directly attributed to an asset acquisition are capitalized to the asset per ASC 805 Business combinations is a critical accounting policy as there are significant judgments involved in the allocation of acquisition costs and determining the fair value of the net assets acquired. Refer to Footnote 2 to the accompanying financial statements for more information.
When the Company acquires renewable energy facilities, the Company allocates the purchase price to; (i) the acquired tangible assets and liabilities assumed, primarily consisting of plant equipment and long-term debt, (ii) the identified intangible assets and liabilities, primarily consisting of the value of favorable and unfavorable rate PPAs and REC agreements and the in-place value of market rate PPAs, (iii) non-controlling interests, and (iv) other working capital items based in each case on their fair values in accordance with ASC 805.
18
The Company performs the analysis of the acquisition using income approach valuation methodology. Factors considered by management in its analysis include considering current market conditions and costs to construct similar facilities. The Company also considers information obtained about each facility as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets and liabilities acquired or assumed. In estimating the fair value, the Company also establishes estimates of energy production, current in-place and market power purchase rates, tax credit arrangements and operating and maintenance costs. A change in any of the assumptions above, which are subjective, could have a significant impact on the results of operations.
The allocation of the purchase price directly affects the following items in the Company consolidated financial statements:
| · | The amount of purchase price allocated to the various tangible and intangible assets, liabilities and<br>non-controlling interests on the Company balance sheet; |
|---|---|
| · | The amounts allocated to current assets or current liabilities are allocated at the acquisition value.<br>The amounts allocated to long term tangible assets and intangibles are amortized to depreciation or amortization expense, and |
| --- | --- |
| · | The period over which tangible and intangible assets and liabilities are depreciated or amortized varies,<br>and thus, changes in the amounts allocated to these assets and liabilities will have a direct impact on Company results of operations. |
| --- | --- |
Impairment of Renewable Energy Facilities and Intangibles
Renewable energy facilities and intangibles that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. An impairment loss is recognized if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured as the difference between an asset’s carrying amount and its fair value. Fair values are determined by a variety of valuation methods, including appraisals, sales prices of similar assets and present value techniques.
Impairment of Goodwill
A qualitative assessment of Goodwill is performed annually for impairment at the individual project level during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances. If it is determined that an impairment has occurred, the Company adjusts the carrying value accordingly, and charges the impairment as an operating expense in the period the determination is made. Although the Company believes goodwill is appropriately stated in the consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance. The Company did not have any impairment of goodwill or long-lived intangible assets.
In assessing goodwill for impairment, the Company may elect to use a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of its reporting units are less than their carrying amounts. If the Company determines that it is not more-likely-than-not that the fair values of its reporting units are less than their carrying amounts, the Company are not required to perform any additional tests in assessing goodwill for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then the Company is required to perform the quantitative impairment test. The qualitative assessment performed in 2022 did not indicate an impairment of Goodwill, thus no quantitative assessment was performed.
Depreciable lives of Long-lived Assets
The Company has significant investments in renewable energy facility assets. These assets are generally depreciated on a straight-line basis over the lower of their estimated useful lives of the and lease expiry for the Company’s solar generation facilities.
19
The estimation of asset useful lives requires significant judgment. Changes in Company estimated useful lives of renewable energy facilities could have a significant impact on its future results of operations. See Note 3. Summary of Significant Accounting Policies to Company consolidated financial statements regarding depreciation and estimated service lives of its renewable energy facilities.
Recently Issued Accounting Standards
See Note 3 Summary of Significant Accounting Policies to Company consolidated financial statements for its year end audited financial statements for disclosures concerning recently issued accounting standards.
Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The Company has no derivative financial instruments or derivative commodity instruments.
Foreign Currency Risk
The Company is exposed to foreign currency risk as a result of certain transactions and borrowings which are denominated in foreign currencies. The Company’s current asset portfolio generates revenue and incurs expenses in other currencies, including the Euro, the Polish Zloty the Romanian Lei and the Norwegian Krone.
In addition, the Company is exposed to currency risk associated with translating its functional currency financial statements into its reporting currency, which is the U.S. dollar. As a result, the Company is exposed to movements in the exchange rates of various currencies against the U.S. dollar.
The Company manages its exposure to currency risk by commercially transacting in the currencies in which the Company materially incurs operating expenses. The Company limits the extent to which it incurs operating expenses in other currencies, wherever possible, thereby minimizing the realized and unrealized foreign exchange gain/ loss. The currency of the Company’s borrowing is, in part, matched to the currencies expected to be generated from the Company’s operations. Intercompany funding is typically undertaken in the functional currency of the operating entities or undertaken to ensure offsetting currency exposures.
Interest Rate Risk
Fluctuations in interest rates can impact the value of investments and financing activities, giving rise to interest rate risk. The debt of the Company is comprised of different instruments, which bear interest at either fixed or floating interest rates. The ratio of fixed and floating rate instruments in the loan portfolio is monitored and managed. Refer to Footnote 13 – Green Bonds, Convertible and Non-convertible Promissory Notes for more information.
The Company believes that the interest rates on all borrowings compare favorably with those rates available in the market.
Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure
The Company has not had any disagreements with its accountants on accounting and financial disclosure reportable under Item 16-F of Form 20-F.
20
INDEX****TO FINANCIAL STATEMENTS
ALTERNUS****ENERGY GROUP PLC AND SUBSIDIARIES
Index to the Unaudited Consolidated Financial Statements
| Consolidated Financial Statements (Unaudited) | Page(s) |
|---|---|
| Consolidated Balance Sheet | F-2 |
| Consolidated Statement of Operations and Comprehensive Income/(Loss) | F-3 |
| Consolidated Statement of Statement of Changes in Shareholders’ Equity/(Deficit) | F-4 |
| Consolidated Statement of Cash Flow | F-5 |
| Notes to the Consolidated Financial Statements | F-7 |
F-1
ALTERNUS ENERGY GROUP PUBLIC LIMITED COMPANYAND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
(Unaudited)
| As of September 30, | As of December 31, | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash and cash equivalents | $ | 3,886 | $ | 2,987 | ||
| Accounts receivable, net | 4,597 | 5,916 | ||||
| Unbilled energy incentives earned | 5,883 | 4,954 | ||||
| Prepaid expenses and other current assets | 6,144 | 4,409 | ||||
| Taxes recoverable | 2,620 | 1,876 | ||||
| Total Current Assets | 23,130 | 20,142 | ||||
| Property and equipment, net | 163,131 | 161,793 | ||||
| Right of use asset | 9,377 | 9,700 | ||||
| Goodwill | 1,743 | 1,758 | ||||
| Restricted cash | 5,027 | 6,598 | ||||
| Other receivable | - | 1,272 | ||||
| Capitalized development cost and other long-term assets, net | 9,308 | 7,266 | ||||
| Total Assets | $ | 211,716 | $ | 208,529 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 11,854 | $ | 14,438 | ||
| Accrued liabilities | 22,521 | 9,884 | ||||
| Taxes payable | 1,200 | 1,135 | ||||
| Deferred income | 5,883 | 4,954 | ||||
| Right of use liability - Short Term | 635 | 556 | ||||
| Green bonds, Convertible and non-convertible promissory notes, net | 194,918 | 17,296 | ||||
| Total Current Liabilities | 237,011 | 48,263 | ||||
| Green bonds | - | 149,481 | ||||
| Convertible and non-convertible promissory notes, net | 11,476 | 21,281 | ||||
| Right of use liability - long term | 8,710 | 8,872 | ||||
| Asset retirement obligations | 1,534 | 1,461 | ||||
| Total Liabilities | $ | 258,731 | $ | 229,358 | ||
| Shareholders’ Equity/(Deficit) | ||||||
| Ordinary shares, $0.012 par value, 100,000,000 authorized as of September 30, 2023 and December 31, 2022; 26,325,738 issued and outstanding as of September 30, 2023. Preferred shares, $0.011 par value, 100,000,000 authorized as of September 30, 2023. | $ | 305 | $ | 305 | ||
| Additional paid in capital | 52,006 | 52,006 | ||||
| Foreign Currency Translation Reserve | (26 | ) | (612 | ) | ||
| Accumulated deficit | (98,140 | ) | (72,028 | ) | ||
| Non-controlling interest | (1,160 | ) | (500 | ) | ||
| Total Shareholders’ (Deficit) | $ | (47,015 | ) | $ | (20,829 | ) |
| Total Liabilities and Shareholders' Deficit | $ | 211,716 | $ | 208,529 |
The accompanying notes are an integral part of these consolidated financial statements
F-2
ALTERNUS ENERGY GROUP PUBLIC LIMITED COMPANYAND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVELOSS
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenues | $ | 10,478 | $ | 12,372 | $ | 27,799 | $ | 30,483 | ||||
| Operating Expenses | ||||||||||||
| Cost of revenues | (2,157 | ) | (4,596 | ) | (6,545 | ) | (9,631 | ) | ||||
| Selling, general and administrative | (3,128 | ) | (2,276 | ) | (10,122 | ) | (6,429 | ) | ||||
| Depreciation, amortization, and accretion | (1,966 | ) | (2,041 | ) | (5,586 | ) | (6,723 | ) | ||||
| Development Costs | (218 | ) | (216 | ) | (1,223 | ) | (216 | ) | ||||
| Loss on disposal of asset | - | 107 | - | 28 | ||||||||
| Total operating expenses | $ | (7,469 | ) | $ | (9,022 | ) | $ | (23,476 | ) | $ | (22,971 | ) |
| Income from operations | 3,009 | 3,350 | 4,323 | 7,512 | ||||||||
| Other income/(expense): | ||||||||||||
| Interest expense | (7,455 | ) | (4,380 | ) | (19,253 | ) | (13,120 | ) | ||||
| Other income | 74 | 1,507 | 318 | 1,934 | ||||||||
| Solis bond waiver fee | (11,113 | ) | - | (11,113 | ) | |||||||
| Other expense | (863 | ) | (943 | ) | (1,047 | ) | (1,129 | ) | ||||
| Total other expense | $ | (19,357 | ) | $ | (3,816 | ) | $ | (31,095 | ) | $ | (12,315 | ) |
| Income/(Loss) before provision for income taxes | (16,348 | ) | (466 | ) | (26,772 | ) | (4,803 | ) | ||||
| Income taxes | - | - | - | - | ||||||||
| Net income/(loss) | $ | (16,348 | ) | $ | (466 | ) | $ | (26,772 | ) | $ | (4,803 | ) |
| Net income/(loss) attributable to non-controlling interest | (415 | ) | (35 | ) | (660 | ) | (330 | ) | ||||
| Net income/(loss) attributable to Alternus Energy Group | $ | (15,933 | ) | $ | (431 | ) | $ | (26,112 | ) | $ | (4,473 | ) |
| Basic (loss) per share | $ | (0.61 | ) | $ | (0.02 | ) | $ | (0.99 | ) | $ | (0.17 | ) |
| Weighted average shares outstanding: | ||||||||||||
| Basic shares | 26,325,738 | 26,358,375 | 26,325,738 | 26,358,375 | ||||||||
| Comprehensive loss: | ||||||||||||
| Net loss | (15,933 | ) | (431 | ) | (26,112 | ) | (4,473 | ) | ||||
| Foreign currency translation adjustment | (2,246 | ) | (2,199 | ) | 586 | (3,755 | ) | |||||
| Comprehensive income/(loss) | $ | (18,719 | ) | $ | (2,630 | ) | $ | (25,526 | ) | $ | (8,228 | ) |
The accompanying notes are an integral part of these consolidated financial statements
F-3
ALTERNUS ENERGY GROUP PUBLIC LIMITED COMPANYAND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’EQUITY/ (DEFICIT)
(in thousands, except share amounts)
(Unaudited)
| **** | Ordinary Shares | **** | Foreign Currency | **** | **** | Total Shareholders' | **** | Non-Controlling | **** | **** | **** | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| **** | Shares | Amount | Paid-In Capital | Translation Reserve | **** | Accumulated Deficit | **** | Equity | **** | Interest | **** | Total | **** | ||||||||
| Balance at June 30, 2022 | 26,365,738 | $ | 305 | $ | 52,006 | $ | (968 | ) | $ | (40,270 | ) | $ | 11,073 | $ | (311 | ) | $ | 10,762 | |||
| Foreign currency translation adjustment | (2,199 | ) | (2,199 | ) | (2,199 | ) | |||||||||||||||
| Net Loss | (431 | ) | (431 | ) | (35 | ) | (466 | ) | |||||||||||||
| Balance at September 30, 2022 | 26,365,738 | $ | 305 | $ | 52,006 | $ | (3,167 | ) | $ | (40,701 | ) | $ | 8,443 | $ | (346 | ) | $ | 8,097 | |||
| **** | Ordinary Shares | **** | Foreign Currency | **** | **** | Total Shareholders' | **** | Non-Controlling | **** | **** | **** | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **** | Shares | Amount | Paid-In Capital | Translation Reserve | **** | Accumulated Deficit | **** | Equity | **** | Interest | **** | Total | **** | ||||||||
| Balance at December 31, 2021 | 26,335,738 | $ | 305 | $ | 51,943 | $ | 588 | $ | (36,228 | ) | $ | 16,608 | $ | (16 | ) | $ | 16,592 | ||||
| Issue of shares - Cloudfield | 30,000 | 63 | 63 | 63 | |||||||||||||||||
| Foreign currency translation adjustment | (3,755 | ) | (3,755 | ) | (3,755 | ) | |||||||||||||||
| Net Loss | (4,473 | ) | (4,473 | ) | (330 | ) | (4,803 | ) | |||||||||||||
| Balance at September 30, 2022 | 26,365,738 | $ | 305 | $ | 52,006 | $ | (3,167 | ) | $ | (40,701 | ) | $ | 8,443 | $ | (346 | ) | $ | 8,097 | |||
| **** | Ordinary Shares | **** | Foreign Currency | **** | **** | Total Shareholders' | **** | Non-Controlling | **** | **** | **** | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **** | Shares | Amount | Paid-In Capital | Translation Reserve | **** | Accumulated Deficit | **** | Equity | **** | Interest | **** | Total | **** | ||||||||
| Balance at June 30, 2023 | 26,365,738 | $ | 305 | $ | 52,006 | $ | 2,220 | $ | (82,207 | ) | $ | (27,676 | ) | $ | (745 | ) | $ | (28,421 | ) | ||
| Foreign currency translation adjustment | (2,246 | ) | (2,246 | ) | (2,246 | ) | |||||||||||||||
| Net Loss | (15,933 | ) | (15,933 | ) | (415 | ) | (16,348 | ) | |||||||||||||
| Balance at September 30, 2023 | 26,365,738 | $ | 305 | $ | 52,006 | $ | (26 | ) | $ | (98,140 | ) | $ | (45,855 | ) | $ | (1,160 | ) | $ | (47,015 | ) | |
| **** | Ordinary Shares | **** | Foreign Currency | **** | **** | Total Shareholders' | **** | Non-Controlling | **** | **** | **** | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| **** | Shares | Amount | Paid-In Capital | Translation Reserve | **** | Accumulated Deficit | **** | Equity | **** | Interest | **** | Total | **** | ||||||||
| Balance at December 31, 2022 | 26,365,738 | $ | 305 | $ | 52,006 | $ | (612 | ) | $ | (72,028 | ) | $ | (20,329 | ) | $ | (500 | ) | $ | (20,829 | ) | |
| Foreign currency translation adjustment | 586 | 586 | 586 | ||||||||||||||||||
| Net Loss | (26,112 | ) | (26,112 | ) | (660 | ) | (26,772 | ) | |||||||||||||
| Balance at September 30, 2023 | 26,365,738 | $ | 305 | $ | 52,006 | $ | (26 | ) | $ | (98,140 | ) | $ | (45,855 | ) | $ | (1,160 | ) | $ | (47,015 | ) |
The accompanying notes are an integral part of these consolidated financial statements
F-4
ALTERNUS ENERGY GROUP PUBLIC LIMITED COMPANYAND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
(in thousands, except share and per share data)
(unaudited)
| Nine-months Ended<br> September 30, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Net income/(loss) | $ | (26,772 | ) | $ | (4,803 | ) |
| Adjustments to reconcile net income/(loss) to net cash provided by operations: | ||||||
| Depreciation, amortization and accretion | 5,586 | 6,723 | ||||
| Non-cash right of use asset amortization | 309 | 251 | ||||
| Amortization of debt discount | 3,409 | 3,188 | ||||
| Impairment of assets | — | (28 | ) | |||
| Solis bond waiver fee | 11,113 | — | ||||
| Changes in assets and liabilities, net of effects of acquisitions: | ||||||
| Accounts receivable and other short-term receivables | (355 | ) | (861 | ) | ||
| Prepaid expenses and other assets | (462 | ) | (2,859 | ) | ||
| Accounts payable and accrued liabilities | 8,459 | 5,206 | ||||
| Operating lease liabilities | (594 | ) | (936 | ) | ||
| Net Cash provided by Operating Activities | $ | 693 | $ | 5,881 | ||
| Cash Flows from Investing Activities: | ||||||
| Capital expenditures | (5,196 | ) | (2,632 | ) | ||
| Payments to acquire renewable energy facilities from third parties, net of cash acquired | (2,524 | ) | (17,356 | ) | ||
| Cash paid for development of assets | (1,688 | ) | (16,085 | ) | ||
| Net Cash Used in Investing Activities | $ | (9,408 | ) | $ | (36,073 | ) |
| Cash Flows from Financing Activities: | ||||||
| Payments of debt principal, senior debt | (1,792 | ) | (2,586 | ) | ||
| Proceeds from debt, senior debt | 9,863 | 26,516 | ||||
| Net Cash Provided by Financing Activities | $ | 8,071 | $ | 23,930 | ||
| Effect of exchange rate on cash | (28 | ) | (2,187 | ) | ||
| Net decrease in cash, cash equivalents and restricted cash | $ | (672 | ) | $ | (8,449 | ) |
| Cash, cash equivalents, and restricted cash beginning of the year | 9,585 | 26,580 | ||||
| Cash, cash equivalents, and restricted cash end of the year | $ | 8,913 | $ | 18,131 | ||
| Cash Reconciliation | ||||||
| Cash and cash equivalents | 3,886 | 12,381 | ||||
| Restricted cash | 5,027 | 5,750 | ||||
| Cash, cash equivalents, and restricted cash end of the year | $ | 8,913 | $ | 18,131 |
The accompanying notes are an integral part of these consolidated financial statements
F-5
ALTERNUS ENERGY GROUP PUBLIC LIMITED COMPANYAND SUBSIDIARIES
CONSOLIDATED SUPPLEMENTAL STATEMENT OF CASHFLOW
(unaudited)
| Nine-months Ended September 30, | ||||
|---|---|---|---|---|
| Supplemental Cash Flow Disclosure | 2023 | 2022 | ||
| (in thousands) | ||||
| Cash paid during the period for: | ||||
| Interest | 10,537 | 6,757 | ||
| Taxes | - | - |
The accompanying notes are an integral part of these consolidated financial statements
F-6
ALTERNUS ENERGYGROUP PUBLIC LIMITED COMPANY AND SUBSIDIARIES
NOTES TO THECONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
| 1. | Organization and Formation |
|---|
Alternus Energy Group Plc (“We”, “ALTN” or the “Company” and together with its consolidated subsidiaries, the “Group”) was incorporated in Dublin, Ireland on January 31, 2019 under the name Alternus Energy International Limited. On October 20, 2020 the Company re-registered as a Plc and changed its name to Alternus Energy Group Public Limited Company.
The Company is a former subsidiary of the previous parent company of the Group, Alternus Energy Inc. On December 2, 2020, the Group completed the last step of a reorganization, which resulted in the Company becoming the parent company of the Group (the "Reorganization"). The Reorganization included the following main steps:
| · | Alternus<br> Energy International Ltd registered as an Irish Plc and changed its name to Alternus Energy<br> Group Plc (previously defined as the “Company”); |
|---|---|
| · | The<br> Company incorporated Solis Bond Company, a Designated Activity Company (“Solis Bond<br> Company DAC”); |
| --- | --- |
| · | Alternus<br> Energy Inc. (US) merged with and became a subsidiary of Altam Inc., a U.S.-based entity; |
| --- | --- |
| · | Alternus<br> Energy Inc. spun out Alternus Energy Plc to the existing shareholders of Altam Inc. in a<br> 1:1.5 share dividend transaction; and |
| --- | --- |
| · | In<br> a 1:4.5 share exchange transaction, Altam Inc. shareholders exchanged their shares for a<br> pro-rata number of shares of Alternus Energy Group Plc, thus becoming a subsidiary of the<br> Alternus Energy Group Plc as it became the surviving parent company. |
| --- | --- |
The impact of the Reorganization has been retroactively reflected in the Company’s financial statements as of the earliest period presented and is utilized for calculating earnings per share in all periods presented.
Consolidated subsidiaries as of September 30, 2023 and December 31, 2022 are as follows:
Solis Bond Company Designated Activity Company (DAC)
In October 2020, a new wholly owned subsidiary, Solis Bond Company DAC, was incorporated in Ireland to issue a series of bonds and hold the Group’s European operating companies that are financed through those bonds. The SPV was incorporated with the purpose of facilities management and bond issuance for the Group. During the quarter ended March 31, 2021, Solis refinanced its Italian, Netherlands, and Romanian operating companies: PC-Italia-02 SpA, CTS Power 2 S.R.L., CIC Rooftop 2 S.R.L., SPV White One S.R.L., CIC RT Treviso S.R.L., Zonnepark Rilland B.V., FRAN Energy Investments S.R.L., and Power Clouds S.R.L. Also, during the quarter ended March 31, 2021, Solis acquired 100% of the share capital of the following Romanian companies: Ecosfer Energy S.R.L., Lucas EST S.R.L. During the quarter ended March 31, 2021, Solis acquired 100% of the share capital of another Italian company, Solarpark Serre 1 S.R.L. Subsequently, in April 2021, Solis acquired 100% of the share capital of another Romanian company, LJG Green Source Energy Beta S.R.L. In May 2021, Solis refinanced another Italian subsidiary, Sant”Angelo Energia S.R.L. and in June of 2021, Solis acquired 100% of the share capital of the following Italian companies: KKSOL S.R.L., Petriolo Fotovoltaica S.R.L., MABI S.R.L. and BIMA S.R.L. In August of 2021, Solis acquired 100% of the share capital of a Polish company, Solarpark Samas Sp. Z.O.O. In March of 2022, Solis acquired 3 additional Polish companies: RAO1 Sp. Z.o.o., Gardno Sp. Z.O.O. and Gardno 2 Sp. Z.O.O. In December 2021, Solis acquired 100% of the share capital of two additional Polish companies Elektrownia PV Komorowo Sp. Z.O.O and PV Zachod Sp. Z.O.O.
F-7
PC-Italia-03 S.R.L.
In July 2020, a new wholly owned subsidiary in Italy, PC-Italia-03 S.R.L., was incorporated. This company was incorporated to acquire Italian special purpose vehicles, power plants and/or other assets located in Italy. During the quarter ended March 31, 2021, this company completed the acquisition of 100% of the share capital of two Italian SPVs, KKSOL S.r.l. and Petriolo Fotovoltaica S.R.L. During the quarter ended June 30, 2021, this company completed the acquisition of 100% of the share capital of two Italian SPVs, MABI S.r.l. and BIMA S.r.l. During the six-months ended June 30, 2021 the 4 SPVs owned by PC-Italia-03 were transferred to Solis Bond Company DAC as part of Solis’s bond financing. In July and August 2021, PC-03 acquired 100% of the shares of 2 Italian entities Risore Solari 1 S.R.L and Risore Solari III S.R.L respectively, with the purpose of developing solar parks. As of December 2022, PC-Italia-03 S.R.L. is held directly by AEG MH 02 Limited, which owns all of our entities used for the development of solar parks (more details of AEG MH 02 are described below).
AEG MH 02 Limited
In March 2022, AEG MH 02 Limited was incorporated. This company was incorporated to own, finance and support our development assets and entities, as follows: .AED Italia-01 S.R.L., AED Italia-02 S.R.L.; AED Italia-03 S.R.L.; AED Italia-04 S.R.L.; AED Italia-05 S.R.L.; AED Italia-06 S.R.L.; AED Italia-07 S.R.L.; AED Italia-08 S.R.L.; PC-Italia-01 S.R.L., PC-Italia-03 S.R.L., PC-Italia-04 S.R.L., Risorse Solari I S.R.L., Risorse Solaris III, S.R.L., Altnua Limited, Alt Spain Holdco S.L.U., Alternus Iberia S.L. and indirectly owns Alt Spain 02 S.L.U, Alt Spain 03 S.L.U., Alt Spain 04 S.L.U., and NF Projects S.L.
Unisun Energy Holding B.V
In April 2021, Alternus Energy Group acquired 60% of the share capital in Unisun Energy Holding B.V. (Unisun), a Netherlands based developer, engineering, procurement and construction (EPC) and operations and maintenance (O&M) service provider of renewable energy solutions across Europe. Unisun owns 100% of the following special purpose vehicles and other holding and operating companies in the Netherlands: Unisun Energy B.V., UPER Energy Europe B.V., Unisun Energy Poland Investment B.V. and Blue Sky Energy I B.V.
Alternus Energy Americas Inc.
In May 2021, a new wholly owned subsidiary in the U.S. was incorporated, named Alternus Energy Americas Inc. (AEA). This company was incorporated to support the finance and legal functions for the group. AEA also owns 100% of the following special purpose vehicles and other holding and operating companies in the United States: ALT US 01 LLC, ALT US 02 LLC, ALT US 03 LLC, ALT US 04 LLC, and ALT Alliance LLC, and indirectly owns Lightwave Renewables, LLC, Walking Horse Solar, LLC, and Dancing Horse, LLC.
Altnor AS
In August 2021, a new wholly owned holding company in Norway was incorporated. Altnor was dissolved in November 2022.
AEG MH 01 Limited
In March 2022, a new wholly owned subsidiary in Ireland was incorporated to support EPC for the group. AEG MH 01 Limited owns the following other holding companies which were incorporated to facilitate the use of the Deutsche Bank Facility: AEG MH 03 Limited, AEG JD 01 Limited and ALT POL HC 01 Sp. Z.o.o.
GHFG Limited
In September 2021, a new subsidiary in Ireland was incorporated, and is 55% owned by AEG.
F-8
Alternus Fundco Limited
In December 2022, a new wholly owned subsidiary in Ireland was incorporated to support the Group’s finance and legal functions.
ALTERNUS LUX 01 S.A.R.L.
In October 2022, a new wholly owned holding company in Luxembourg was incorporated to support the finance and legal functions of the group. ALTERNUS LUX 01 S.A.R.L. also owns AEG JD 03 Limited, ALT GR 01, AEG MH 01 Limited and AEG MH 02 Limited, and all of those entities’ subsidiaries as well, as described above.
In summary, Alternus Energy Group Plc is a holding company that operates through the following eighty-two operating subsidiaries as of September 30, 2023.
| Subsidiary | Principal Activity | Date Acquired / Established | ALTN Ownership | Country of Operations |
|---|---|---|---|---|
| Power<br> Clouds S.r.l. | SPV | 31<br> March 2015 | Solis<br> Bond Company DAC | Romania |
| F.R.A.N.<br> Energy Investment S.r.l. | SPV | 31<br> March 2015 | Solis<br> Bond Company DAC | Romania |
| PC-Italia-01<br> S.r.l. | Sub-Holding<br> SPV | 15<br> May 2015 | AEG<br> MH 02 Limited | Italy |
| AE<br> Europe B.V. | Holding<br> Company | 18<br> August 2016 | Altam<br> Inc. | Netherlands |
| PC-Italia-02<br> S.p.a. | SPV | 2<br> September 2016 | Solis<br> Bond Company DAC | Italy |
| Sant’Angelo<br> Energia S.r.l. | SPV | 19<br> May 2021 | Solis<br> Bond Company DAC | Italy |
| PCG_HoldCo<br> GmbH | Holding<br> Company | 6<br> July 2018 | Altam<br> Inc. | Germany |
| PCG_GP<br> UG | General<br> Partner (Management Company) | 30<br> August 2018 | PCG_HoldCo<br> GmbH | Germany |
| PSM<br> 20 UG | SPV | 14<br> November 2018 | PCG_HoldCo<br> GmbH | Germany |
| ALTN<br> HoldCo UG | SPV | 14<br> December 2018 | PCG_HoldCo<br> GmbH | Germany |
| GRT<br> 1.1 GmbH & Co KG | SPV | 21<br> December 2018 | PCG_HoldCo<br> GmbH | Germany |
| PSM<br> 40 UG | SPV | 28<br> December 2018 | PCG_HoldCo<br> GmbH | Germany |
| CIC<br> Rooftop 2 S.r.l. | SPV | 24<br> April 2019 | Solis<br> Bond Company DAC | Italy |
| CIC<br> RT Treviso S.r.l. | SPV | 24<br> April 2019 | Solis<br> Bond Company DAC | Italy |
| SPV<br> White One S.r.l. | SPV | 24<br> April 2019 | Solis<br> Bond Company DAC | Italy |
| CTS<br> Power 2 S.r.l. | SPV | 30<br> April 2019 | Solis<br> Bond Company DAC | Italy |
| Zonnepark<br> Rilland B.V. | SPV | 20<br> December 2019 | Solis<br> Bond Company DAC | Netherlands |
| Unisun<br> Energy Holding B.V. | Holding<br> Company | 28<br> May 2020 | Alternus<br> Energy Group Plc | Netherlands |
| PC-Italia-03<br> S.r.l. | SPV | 1<br> July 2020 | AEG<br> MH 02 Limited | Italy |
| PC-Italia-04<br> S.r.l. | SPV | 15<br> July 2020 | AEG<br> MH 02 Limited | Italy |
| Altam<br> Inc. | Holding<br> Company | 1<br> October 2020 | Alternus<br> Energy Group Plc | USA |
F-9
| Solis<br> Bond Company DAC | Holding<br> Company | 16<br> October 2020 | AEG<br> JD 03 Limited | Ireland |
|---|---|---|---|---|
| ALT US 03, LLC<br><br> <br>(Walking Horse<br> Solar, LLC) | LLC | Acquired 15<br> December 2020<br><br> <br>(Est. 30 March 2023) | ALT<br> US 03 LLC | USA |
| KKSOL<br> S.r.l. | SPV | February 2021 | Solis<br> Bond Company DAC | Italy |
| Petriolo<br> Fotovoltaica S.r.l. | SPV | March 2021 | Solis<br> Bond Company DAC | Italy |
| Solarpark<br> Serre 1 S.r.l. | SPV | March 2021 | Solis<br> Bond Company DAC | Italy |
| Unisun<br> Energy B.V. | SPV | April 2021 | Unisun<br> Energy Holding B.V. | Netherlands |
| UPER<br> Energy Europe B.V. | Services<br> Company | April 2021 | Unisun<br> Energy Holding B.V. | Netherlands |
| Unisun<br> Energy Poland Investment B.V. | SPV | April 2021 | Unisun<br> Energy Holding B.V. | Netherlands |
| Blue<br> Sky Energy I B.V. | SPV | April 2021 | AEG<br> JD 02 Limited | Netherlands |
| BI.MA.<br> S.r.l. | SPV | March 2021 | Solis<br> Bond Company DAC | Italy |
| MABI<br> S.r.l. | SPV | June 2021 | Solis<br> Bond Company DAC | Italy |
| Alternus<br> Energy Americas Inc. | Holding<br> Company | 10<br> May 2021 | Alternus<br> Energy Group Pl | USA |
| LJG<br> Green Source Energy Beta S.r.l | SPV | 29<br> July 2021 | Solis<br> Bond Company DAC | Romania |
| Ecosfer<br> Energy S.r.l. | SPV | 30<br> July 2021 | Solis<br> Bond Company DAC | Romania |
| Lucas<br> EST S.r.l. | SPV | 30<br> July 2021 | Solis<br> Bond Company DAC | Romania |
| Risorse<br> Solari I S.r.l. | SPV | 28<br> September 2019 | AEG<br> MH 02 Limited | Italy |
| Risorse<br> Solari III S.r.l. | SPV | 3<br> August 2021 | AEG<br> MH 02 Limited | Italy |
| Alternus<br> Iberia S.L. | SPV | 4<br> August 2021 | AEG<br> MH 02 Limited | Spain |
| Altnua<br> Limited | Services<br> Company | 11<br> August 2021 | AEG<br> MH 02 Limited | Ireland |
| Solarpark<br> Samas Sp. z o.o. | SPV | 31<br> August 2021 | Solis<br> Bond Company DAC | Poland |
| GHFG<br> Limited | Holding<br> Company | 14<br> September 2021 | Alternus<br> Energy Group plc | Ireland |
| AEG<br> JD 02 Limited | Holding<br> Company | 30<br> September 2021 | Alternus<br> Energy Group plc | Ireland |
| AED<br> Italia-01 S.r.l. | SPV | 22<br> October 2021 | AEG<br> MH 02 Limited | Italy |
| AED<br> Italia-02 S.r.l. | SPV | 22<br> October 2021 | AEG<br> MH 02 Limited | Italy |
| AED<br> Italia-03 S.r.l. | SPV | 22<br> October 2021 | AEG<br> MH 02 Limited | Italy |
| AED<br> Italia-04 S.r.l. | SPV | 22<br> October 2021 | AEG<br> MH 02 Limited | Italy |
| AED<br> Italia-05 S.r.l. | SPV | 22<br> October 2021 | AEG<br> MH 02 Limited | Italy |
| ALT<br> US 01 LLC | SPV | 6<br> December 2021 | Alternus<br> Energy Americas Inc. | USA |
| Elektrownia<br> PV Komorowo Sp. z o.o. | SPV | 22<br> December 2021 | Solis<br> Bond Company DAC | Poland |
| PV<br> Zachod Sp. z o.o. | SPV | 22<br> December 2021 | Solis<br> Bond Company DAC | Poland |
| UPER<br> Energy Romania S.r.l. | SPV | 28<br> February 2022 | Uper<br> Energy Europe B.V. | Romania |
F-10
| ALT<br> POL HC 01 Sp. z o.o. | SPV | 8<br> March 2022 | AEG<br> JD 01 Limited | Poland |
|---|---|---|---|---|
| AEG<br> MH 01 Limited | Holding<br> Company | 8<br> March 2022 | Alternus<br> Lux 01 S.a.r.l. | Ireland |
| AEG<br> MH 02 Limited | Holding<br> Company | 8<br> March 2022 | AEG<br> JD 03 Limited | Ireland |
| ALT<br> US 02 LLC | Holding<br> Company | 8<br> March 2022 | Alternus<br> Energy Americas Inc. | USA |
| AEG<br> JD 01 Limited | Holding<br> Company | 16<br> March 2022 | AEG<br> MH 03 Limited | Ireland |
| AEG<br> JD 03 Limited | Holding<br> Company | 21<br> March 2022 | Alternus<br> Lux 01 S.a.r.l. | Ireland |
| RA01<br> Sp. z o.o. | SPV | 24<br> March 2022 | Solis<br> Bond Company DAC | Poland |
| Gardno<br> Sp. z o.o. | SPV | 24<br> March 2022 | Solis<br> Bond Company DAC | Poland |
| Gardno2<br> Sp. z o.o. | SPV | 24<br> March 2022 | Solis<br> Bond Company DAC | Poland |
| ALT<br> US 03 LLC | SPV | 4<br> May 2022 | Alternus<br> Energy Americas Inc. | USA |
| Alt<br> Spain 03, S.L.U. | SPV | 31<br> May 2022 | Alt<br> Spain Holdco S.L. | Spain |
| AEG<br> MH 03 Limited | Holding<br> Company | 10<br> June 2022 | AEG<br> MH 01 Limited | Ireland |
| UPER<br> Energy Italia S.r.l. | SPV | 27<br> June 2022 | Uper<br> Energy Europe B.V. | Italy |
| Lightwave<br> Renewables, LLC | SPV | Acquired 29<br> June 2022<br><br> <br>(Est. 17 December 2020) | ALT<br> US 02 LLC | USA |
| Alt<br> Spain Holdco, S.L.U. (NF Projects S.L) | Holding<br> Company | Acquired 14<br> July 2022<br><br> <br>(Est. 31 July 2023) | AEG<br> MH 02 Limited | Spain |
| Alt<br> Spain 02, S.L.U. | SPV | 14<br> July 2022 | Alt<br> Spain Holdco, S.L.U. | Spain |
| AED<br> Italia-06 S.r.l. | SPV | 2<br> August 2022 | AEG<br> MH 02 Limited | Italy |
| AED<br> Italia-07 S.r.l. | SPV | 2<br> August 2022 | AEG<br> MH 02 Limited | Italy |
| AED<br> Italia-08 S.r.l. | SPV | 5<br> August 2022 | AEG<br> MH 02 Limited | Italy |
| UPER<br> Energy Poland Sp. z o.o. | SPV | 18<br> August 2022 | Uper<br> Energy Europe B.V. | Poland |
| ALT US 04 LLC<br><br> <br>(Dancing Horse,<br> LLC) | Holding<br> Company | 14 September 2022<br><br> <br>(Est. 31 July 2023) | Alternus<br> Energy Americas Inc. | USA |
| Alt<br> GR 01 | Holding<br> Company | 5<br> October 2022 | Alternus<br> Lux 01 S.a.r.l. | Greece |
| Alternus<br> LUX 01 S.a.r.l. | Holding<br> Company | 5<br> October 2022 | Alternus<br> Energy Group Plc | Luxembourg |
| Alternus<br> FundCo Limited | Funding<br> Company | 7<br> December 2022 | Alternus<br> Energy Group plc | Ireland |
| ALT<br> POL HC 02 Sp. z o.o. | Holding<br> Company | 20<br> January 2023 | Alternus<br> Lux 01 S.a.r.l. | Poland |
| Alt<br> Spain 04, S.L.U. | SPV | May 2022 | Alt<br> Spain Holdco, S.L.U. | Spain |
| Alt<br> Alliance LLC | Holding<br> Company | September 2023 | Alternus<br> Energy Amercias Inc. | USA |
| ALT<br> US 05 LLC | Holding<br> Company | September 2023 | Alternus<br> Energy Americas Inc. | USA |
*Non-controlling interest is not material
F-11
| 2. | Going Concern and Management’s Plans |
|---|
Our consolidated financial statements for the period ended September 30, 2023, identifies the existence of certain conditions that raise substantial doubt about our ability to continue as a going concern for twelve months from the issuance of this report:
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements during the period ended September 30, 2023, the Company had net loss of ($26.8) million and a net loss of ($36.2) million for the year ended December 31, 2022. The Company was in breach of three financial covenants under Solis’ Bond terms as of December 31, 2022 and September 30, 2023. The Company had total shareholders’ equity/(deficit) of ($47.0) million as of September 30, 2023 and ($20.8) million at December 31, 2022 The Company had $3.9 million of unrestricted cash on hand as of September 30, 2023.
Our operating revenues are insufficient to fund our operations and our assets already are pledged to secure our indebtedness to various third party secured creditors, respectively. The unavailability of additional financing could require us to delay, scale back or terminate our acquisition efforts as well as our own business activities, which would have a material adverse effect on the Company and its viability and prospects.
The terms of our indebtedness, including the covenants and the dates on which principal and interest payments on our indebtedness are due, increases the risk that we will be unable to continue as a going concern. To continue as a going concern over the next twelve months, we must make payments on our debt as they come due and comply with the covenants in the agreements governing our indebtedness or, if we fail to do so, to (i) negotiate and obtain waivers of or forbearances with respect to any defaults that occur with respect to our indebtedness, (ii) amend, replace, refinance or restructure any or all of the agreements governing our indebtedness, and/or (iii) otherwise secure additional capital. However, we cannot provide any assurances that we will be successful in accomplishing any of these plans.
As of December 31, 2022, the Company’s wholly owned subsidiary, Solis Bond Company DAC, was in breach of the three financial covenants under Solis’ Bond terms: (i) the minimum Liquidity Covenant that requires the higher of EUR 5.5 million or 5% of the outstanding Nominal Amount, (ii) the minimum Equity Ratio covenant of 25%, and (iii) the Leverage Ratio of NIBD/EBITDA to not be higher than 6.5 times for the year ended December 2021, 6.0 times for the year ended December 31, 2022 and 5.5 times for the period ending on the maturity date of the Bond, January 6, 2024. The Solis Bond carries a 3 months EURIBOR plus 6.5% per annum interest rate, and has quarterly interest payments, with a bullet payment to be paid on January 6, 2024. The Solis Bond is senior secured through a first priority pledge on the shares of Solis and its subsidiaries, a parent guarantee from Alternus Energy Group Plc, and a first priority assignment over any intercompany loans.
In April 2023 the bond holders approved a temporary waiver and an amendment to the bond terms to allow for a change of control in Solis (which allows for the transfer of Solis and its subsidiaries underneath Clean Earth Acquisitions Corp. on Closing). In addition, bondholders received a preference share in an Alternus Midco, which will hold certain development projects in Spain and Italy. The shares will have preference on any distribution from Midco to Alternus up to €10.0 million, and Midco will divest assets to ensure repayment of the €10.0 million should the bonds not have been fully repaid at maturity (January 6, 2024). Finally, bondholders will receive a 1% amendment fee, which equates to €1.4 million.
On June 5, 2023, the bondholders approved an extension to the waiver to September 30, 2023 and the bond trustee was granted certain additional information rights and the right to appoint half of the members of the board of directors of Solis, in addition to the members of the board appointed by Alternus. Under the waiver agreement, as extended, Solis must fully repay the Solis Bond by September 30, 2023. If Solis is unable to fully repay the Solis Bond by September 30, 2023, Solis’ bondholders have the right to immediately transfer ownership of Solis and all of its subsidiaries to the bondholders and proceed to sell Solis’ assets to recoup the full amount owed to the bondholders, which as of September 30, 2023 is $159.0 million (approximately €$150.0). If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated.
F-12
On October 16 2023, bondholders approved to further extend the temporary waiver to December 16, 2023. As such, the Solis bond debt is currently recorded as short-term debt.
Solis has engaged Pareto Securities AS to explore a refinancing of the bond. The Company has also engaged a leading global firm to support a potential sale of some or all of the assets. The refinancing may be completed in conjunction with a potential sale of certain assets in Solis. We are in advanced discussions with numerous third parties around both the potential refinancing and/or sale of the Solis assets. There are no definitive refinancing or sale agreements executed as of the date of this report and there is no guarantee that these processes will be complete by the Solis Extension date or at all.
| 3. | Summary of Significant Accounting Policies |
|---|
Basis of Presentation
The Consolidated Financial Statements include the Consolidated Balance Sheet, Consolidated Statements of Operations and Comprehensive Income (Loss), Consolidated Statements of Changes in Shareholders’ Equity/ (Deficit) and Consolidated Statements of Cash Flows of the Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) from records maintained by the Company.
These unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the results of operations for the interim periods presented. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the condensed consolidated financial statements.
The accounting policies used in the preparation of these Condensed Consolidated Financial Statements are the same as those disclosed in the audited Consolidated Financial Statements for the year ended December 31, 2022, included in the Form 10-K/A, except as described below. Our annual reporting period is the calendar year. The results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year
Certain monetary amounts, percentages, and other figures included elsewhere in these financial statements have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.
Basis of Consolidation
The consolidated financial statements as of September 30, 2023 and 2022 and for the periods then ended include the financial statements of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The results of subsidiaries acquired or disposed of during the respective periods are included in the consolidated financial statements from the effective date of acquisition or up to the effective date of disposal, as appropriate. Ownership interests in subsidiaries represented by other parties are presented in the consolidated financial statements as activities and balances attributable to non-controlling interest.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Significant items subject to such estimates include, but are not limited to, the assumptions utilized in the valuation of the assets acquired and liabilities assumed, determine a business combination or asset acquisition, useful life of property and equipment, impairment of long-lived assets and recovery of capitalized cost. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustment when facts and circumstance dictate. These estimates are based on information available as of the date of financial statements; therefore, actual results could differ from these estimates.
F-13
Segments
The Company has one operating segment, and the decision-making group is the senior executive management team. The Company manages the segment by focusing on revenue and cost of revenue by country.
Cash and Cash Equivalents
The Company considers cash and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company maintains cash and cash equivalents with major financial institutions, the largest concentration in JP Morgan in the U.S, Ireland and Italy and with ING in Poland and the Netherlands. The Company may at times exceed federally insured limits or statutorily insured limits in a foreign jurisdiction. The Company periodically assesses the financial condition and due to the size and stability of the institutions believes the risk of loss to be remote.
Restricted Cash
Restricted cash relates to balances that are in the bank accounts for specific defined purposes and cannot be used for any other undefined purposes. Restricted cash is primarily restricted stemming from requirements under the Green Bond terms. The balance has a debt service reserve account, per the requirements from the Bond Trustee, that issues quarterly coupons to the Bond holders. There is an account that has the residual balance of bond tap that must be used for permitted acquisitions as per Green Bond terms. The balance also has an account for a bank guarantee in Italy that hold escrow balances.
Accounts Receivable
Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within that period. Accounts receivables are presented net of allowance for doubtful accounts. The Company establishes an allowance for doubtful customer accounts, through a review of historical losses, customer balances, and industry economic conditions. The Company extends credit based on an evaluation of customers’ financial condition and determines any additional collateral requirements. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company considers invoices past due when they are outstanding longer than the stated term. The Company monitors its exposure to credit losses and maintains allowances for anticipated losses. Management considers the carrying value of accounts receivable to be fully collectible. If amounts become uncollectible, they are charged to operations in the period in which that determination is made. At September 30, 2023 and 2022, there was no allowance for doubtful accounts recorded.
Concentration of Credit Risk
At times, the Company maintains cash balances in financial institutions which may exceed federally insured limits. The Company maintains cash balances in all countries in which it operates and in Ireland where the Company is headquartered. Government coverage for the Company’s cash balances are as follows:
| · | European<br> Union - $105,841 (€100,000) per account is covered for operations in Romania, Poland, Italy,<br> the Netherlands and the Company’s headquarters in Ireland. |
|---|---|
| · | United<br> States - $250,000 |
| --- | --- |
F-14
The Company has 8 cash accounts across the European countries and a net of $6.5 million above government insurance amounts. The Company has not experienced any losses relating to such accounts and believes it is not exposed to significant credit risk on its cash and cash equivalents or restricted cash.
Economic Concentrations
The Company and its subsidiaries own and operate solar generating facilities installed on buildings and land located across Europe. Future operations could be affected by changes in the economy, other conditions in those geographic areas or by changes in the demand for renewable energy.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation, amortization and impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Depreciation is computed on a straight-line basis over the estimated useful lives. The useful lives per asset class are as follows:
| · | Solar<br> Energy Facilities carry a useful life of the lesser of 35 years from the original placed<br> in-service date or the lease term of the land on which they are built. |
|---|---|
| · | Leasehold<br> improvements are amortized over the shorter of the lease term or their estimated useful file. |
| --- | --- |
| · | Furniture<br> and fixtures carry a useful life of 7 years. |
| --- | --- |
| · | Software<br> and computer equipment carry a useful life of 7 years. |
| --- | --- |
Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. Expenditures for maintenance and repairs, which do not materially extend the useful lives of assets, are charged to expense as incurred. Upon retirement, sale or other disposition of equipment, the cost and accumulated depreciation are removed from the respective accounts and a gain or loss, if any, is recognized in income/(loss) from operations in the Consolidated Statements of Operations and Comprehensive Income/(Loss) during the year of disposal. When the Company abandons the anticipated construction of a new solar energy facility during the development phase, costs previously capitalized to development in progress are written off at the parent company.
Goodwill
The Company reports goodwill that has been recorded in connection with the acquisition of businesses. Goodwill is not amortized, but instead is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is tested annually for impairment at the individual reporting unit level in the fourth quarter, or earlier upon the occurrence of certain events or substantive changes in circumstances. In assessing goodwill for impairment, the Company may elect to use a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of the Company’s reporting units are less than their carrying amounts. If the Company determines that it is more likely than not that the fair value of its reporting units is less than their carrying amounts, no additional assessment is required, and no impairment is recognized. If the Company concludes an impairment is probable or elects not to perform the qualitative assessment, a quantitative impairment test is performed. If it is determined that an impairment has occurred, the Company adjusts the carrying value of goodwill and charges the impairment as an operating expense in the period the determination is made. The Company did not recognize any impairment of goodwill for the periods presented. Although the Company believes that goodwill is appropriately stated in the consolidated financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance.
F-15
Impairment of Solar Energy Facilities
The Company reviews its investments in property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is evaluated at the asset group level, which is determined based upon the lowest level of separately identifiable cash flows. When evaluating for impairment, if the estimated undiscounted cash flows from the use of the asset group are less than the asset group’s carrying amount, then the asset group is deemed to be impaired and is written down to its fair value. Fair value is determined by net realizable value of the assets using ASC 820. The amount of the impairment loss is equal to the excess of the asset group’s carrying value over its estimated fair value. During the period ended September 30, 2022 the Company recorded an impairment loss of $79 thousand in the Consolidated Statement of Operations and Comprehensive Income/(Loss) related to the 2021 write down for $4.2 million of certain assets that were held in construction in progress for which the Company no longer intended to complete and certain solar park assets for which there was a change in the Company future intended use. This impairment loss is included in Other Expense on the Consolidated Statement of Operations and Comprehensive Income/(Loss).
There were no impairment losses for the three months and nine months ended September 30, 2023.
Deferred Financing Costs and DebtDiscount Amortization
The Company incurs expenses related to debt arrangements. These deferred financing costs and debt discount costs are capitalized and amortized over the term of the related debt or revolving credit facilities and netted against the related debt.
Asset Retirement Obligations
In connection with the acquisition or development of solar energy facilities, the Company may have the legal requirement to remove long-lived assets constructed on leased property and to restore the leased property to its condition prior to the construction of the long-lived assets. This legal requirement is referred to as an asset retirement obligation (ARO). If the Company determines that an ARO is required for a specific solar energy facility, the Company records the present value of the estimated future liability when the solar energy facility is placed in service as an ARO liability. The discount rate used to estimate the present value of the expected future cash flows for the period ended September 30, 2023 and 2022 was 7.1% . The Company accretes the ARO liability to its future value over the solar energy facility’s useful life and records the related interest expense to amortization expense on the consolidated statement of operations. Solar facilities that require AROs are recorded as part of the carrying value of property and depreciated over the solar energy facility’s useful life.
Leases
In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. The Company adopted the new standard on January 1, 2022 and used the effective date as our date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.
The Company adopted ASC 842 as of January 1, 2022. Lease assets and liabilities are recognized based on the present value of the future lease payments over the lease term at the lease commencement date and are presented on the consolidated statements of financial condition. The Company estimates its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. For additional information, see Note 14 - Leases.
F-16
Operating lease expense attributable to site leases is reported within cost of revenues in the Company’s Statement of Operations and Comprehensive Income/ (Loss); whereas lease expense attributable to all other operating leases is reported within selling, general, and administrative expense in the Company’s Statement of Operations and Comprehensive Income/ (Loss).
Revenue Recognition
The Company follows the guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle underlying revenue recognition under ASC 606 is that revenue should be recognized as goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled. ASC 606 defines a five-step process to achieve this core principle. ASC 606 also mandates additional disclosure about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts, including significant judgments, and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.
The Company derives revenues through its subsidiaries from the sale of electricity and the sale of solar renewable energy credits (RECs) in Romania and guarantees of origin certificates (GoOs) in Poland. The Company receives Green Certificates based on the amount of energy produced in Romania. Energy generation revenue and solar renewable energy credits revenue are recognized as electricity generated by the Company’s solar energy facilities is delivered to the grid, at which time all performance obligations have been delivered. Revenues are based on actual output and contractual sale prices set forth its customer contracts.
The Company’s current portfolio of renewable energy facilities is generally contracted under long-term Country Renewable Programs (FIT programs) or Energy Offtake Agreements (PPAs/VPPAs) with creditworthy counterparties. Pricing of the electricity sold under these FITs and PPAs is generally fixed for the duration of the contract, although some of its PPAs have price escalators based on an index (such as the consumer price index) or other rates specified in the applicable PPA.
One solar park in the Netherlands receives pre-payments calculated at the beginning of the year and based on the previous years’ production (MWhs produced) multiplied by a calculated average price per MWh for the year and divided by twelve. The Company books revenue monthly by multiplying actual production per the Company’s meters by the average price provided by the Offtaker at the beginning of the year to estimate revenue for the month. There is a true-up performed in June of the following year using actual power produced for the previous year multiplied by the average EPEX price (average actual market price per KWh for the year) less the prepayment for the year. If the true-up calculation is positive, The Offtaker settles with a payment to the Company. If the true-up is negative, the Company settles with a payment to Offtaker.
F-17
Disaggregated Revenues
The following table shows the Company’s revenues disaggregated by country and contract type:
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| Revenue by Country | ||||||||
| Italy | 1,228 | 1,018 | 2,924 | 2,847 | ||||
| Romania | 5,161 | 4,216 | 13,271 | 14,061 | ||||
| Germany | 8 | 44 | 22 | 142 | ||||
| Netherlands | 1,096 | 1,673 | 4,378 | 3,759 | ||||
| Poland | 2,952 | 5,411 | 7,121 | 9,659 | ||||
| United States | 33 | 10 | 83 | 15 | ||||
| Total | 10,478 | 12,372 | 27,799 | 30,483 | ||||
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | 2023 | 2022 | |||||
| Revenue by Offtake Type | ||||||||
| Country Renewable Programs | 3,690 | 9,184 | 8,812 | 16,550 | ||||
| Green Certificates | 3,212 | 1,155 | 8,170 | 6,970 | ||||
| Energy Offtake Agreements | 3,572 | 2,020 | 10,355 | 6,808 | ||||
| Other Revenue | 4 | 13 | 462 | 155 | ||||
| Total | 10,478 | 12,372 | 27,799 | 30,483 |
Three customers represented 69% of revenues during the period ended September 30, 2023 compared to four customers that represented 71% for the period ended September 30, 2022. The revenues from these customers accounted for $18.4 million of revenue and $20.8 million for the periods ended September 30, 2023 and 2022 respectively.
One customer represented 63% of the Company’s accounts receivable for the period ended September 30, 2023. Two customers accounted for 74% of accounts receivable for the period ended September 30, 2022.
Unbilled Energy Incentives Earned
The Company derives revenues from the sale of green certificates for the Romania projects. The green certificates revenues are recognized in the month they are generated by the solar project and registered with the local authority. The Company considers them unbilled at the end of the period if they have not been invoiced to a third-party customer.
Cost of Revenue
Cost of revenue primarily consists of operations and maintenance expense, insurance premiums, property taxes and other miscellaneous costs associated with the operations of solar energy facilities. Costs are charged to expense as incurred.
Taxes Recoverable and Payable
The Company records taxes recoverable when there has been an overpayment of taxes due to timing of the Value Added Tax (VAT) between vendors and customers. The VAT tax can also be offset against a Country’s income taxes where the VAT was registered.
F-18
Development Cost
Development costs are incurred when the Company abandons the development or acquisition of renewable energy projects. The Company depends heavily on government policies that support our business and enhance the economic feasibility of developing and operating solar energy projects in regions in which we operate or plan to develop and operate renewable energy facilities. The Company can decide to abandon a project if it becomes uneconomic due to various factors, for example, a change in market conditions leading to higher costs of construction, lower energy rates, or other factors that change the expected returns on the project. In addition, political factors or otherwise where governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, a loss of our investments in the projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Risks and Uncertainties
The Company's operations are subject to significant risks and uncertainties including financial, operational, technological, and regulatory risks and the potential risk of business failure. See Note 2 regarding going concern matters.
Fair Value of Financial Instruments
The Company measures its financial instruments at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
U.S. GAAP establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy are described below:
Level 1 – Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2 – Pricing inputs other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable as of the reporting date. Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Level 3 – Pricing inputs that are unobservable. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques, and at least one significant model assumption or input is unobservable.
The Company holds various financial instruments that are not required to be measured at fair value. For cash and cash equivalents, restricted cash, accounts receivable, various debt instruments, prepayments and other current assets, accounts payable, accrued liabilities and other current liabilities, the carrying value approximated their fair values due to the short-term maturity of these instruments.
F-19
Business Combinations and Acquisitionof Assets
The Company applies the definition of a business in ASC 805, Business Combinations, to determine whether it is acquiring a business or a group of assets. When the Company acquires a business, the purchase price is allocated to; (i) the acquired tangible assets and liabilities assumed, primarily consisting of solar energy facilities and land, (ii) the identified intangible assets and liabilities, primarily consisting of favorable and unfavorable rate Power Purchase Agreements (PPAs) and Renewable Energy Credit (REC) agreements, (iii) asset retirement obligations, (iv) non-controlling interest, and (v) other working capital items based in each case on their estimated fair values. The excess of the purchase price, if any, over the estimated fair value of net assets acquired is recorded as goodwill. The fair value measurements of the assets acquired, and liabilities assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs, and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation. In addition, acquisition costs related to business combinations are expensed as incurred.
When an acquired group of assets does not constitute as a business, the transaction is accounted for as an asset acquisition. The cost of assets acquired, and liabilities assumed in asset acquisitions is allocated based upon relative fair value. The fair value measurements of the solar facilities acquired, and asset retirement obligations assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs, and appropriate discount rates. These inputs require significant judgments and estimates at the time of the valuation. Transaction costs incurred on an asset acquisition are capitalized as a component of the assets acquired.
The allocation of the purchase price directly affects the following items in the Company’s consolidated financial statements:
| · | The<br> amount of purchase price allocated to the various tangible and intangible assets, liabilities<br> and non-controlling interests on the Company Balance Sheet, |
|---|---|
| · | The<br> amounts allocated to all other tangible assets and intangibles are amortized to depreciation<br> or amortization expense, with the exception of favorable and unfavorable rate land leases<br> and unfavorable rate Operation and Maintenance (O&M) contracts which are amortized to<br> cost of revenue; and |
| --- | --- |
The period of time over which tangible and intangible assets and liabilities are depreciated or amortized varies, and thus, changes in the amounts allocated to these assets and liabilities will have a direct impact on the Company’s results of operations.
Income Taxes
Deferred taxes are determined using the asset and liability method; whereby, deferred tax assets are recognized for deductible temporary differences, operating loss and tax credit carry forwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between the positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing-authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.
F-20
As a result of the Tax Cuts and Jobs Act (TCJA) of 2017, the Company analyzed if a liability needed to be recorded for the deemed repatriation of undistributed earnings. It was determined that there is no outstanding liability associated with this based on overall negative undistributed earnings (accumulated deficit) in the consolidated foreign group. An additional provision of the TCJA is the implementation of the Global Intangible-Low Taxed Income Tax, or “GILTI.” The Company has elected to account for the impact of GILTI in the period in which the tax actually applies to the Company. During the fiscal years 2022 and 2021, the Company had overall net foreign losses and thus, there was no impact on the US taxable income calculations.
The Company is an inverted Company and treated as a US entity for all US income tax purposes. As a result, the Company will be obligated to comply with all U.S. income tax obligations applicable to domestic entities. Accordingly, the income tax provision has been prepared consistent with that of a U.S. entity.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718. Stock-based compensation expense for equity instruments issued to employees and non-employees is measured based on the grant-date fair value of the awards. The fair value of each stock unit is determined based on the valuation of the Company’s stock on the date of grant. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton stock option pricing valuation model. The Company uses the simplified method for calculating the expected term of their options. The Company recognizes compensation costs using the straight-line method for equity compensation awards over the requisite service period of the awards, which is generally the awards’ vesting period. The Company accounts for forfeitures of awards in the period they occur.
Use of the Black-Scholes-Merton option-pricing model requires the input of highly subjective assumptions, including (1) the expected terms of the option, (2) the expected volatility of the price of the Company’s ordinary shares, and (3) the expected dividend yield of our ordinary shares. The assumptions used in the option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgments. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future. Additional inputs to the Black-Scholes-Merton option-pricing model include the risk-free interest rate and the fair value of the Company’s ordinary shares. The Company determines the risk-free interest rate by using the U.S. Treasury Rates of the same period as the expected term of the stock-option.
Net Loss PerShare
Net loss per share is computed pursuant to ASC 260, Earnings per Share. Basic net loss per share attributable to common shareholders is computed by dividing net loss attributable to common shareholders by the weighted average number of ordinary shares outstanding for the period. Diluted net loss per share attributable to common shareholders is computed by dividing net loss attributable to common shareholders by the weighted average number of ordinary shares outstanding for the period plus the number of ordinary shares that would have been outstanding if all potentially dilutive ordinary shares had been issued, using the treasury stock method or if-converted method, as applicable. Potentially dilutive shares related to stock options, warrants, and convertible notes were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect due to losses in each period. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their inclusion would be anti-dilutive:
| September 30, | September 30, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| (in thousands) | ||||
| Stock options | 40,000 | - | ||
| Warrants | 43,500 | 538,146 | ||
| Total | 83,500 | 538,146 |
F-21
Foreign CurrencyTransactions and Other Comprehensive Loss
Foreign currency transactions are those transactions whose terms are denominated in a currency other than the currency of the primary economic environment in which the Company operates, which is referred to as the functional currency. The functional currency of the Company’s foreign subsidiaries is typically the applicable local currency which is Romanian Lei (RON), Polish Zloty (PLN) or European Union Euros (EUR). Transactions denominated in foreign currencies are remeasured to the functional currency using the exchange rate prevailing at the balance sheet date for balance sheet accounts and using an average exchange rate during the period, which approximates the daily exchange rate, for income statement accounts. Foreign currency gains or losses resulting from such remeasurement are included in the Consolidated Statement of Operations in the period in which they arise.
Transaction gains and losses are recognized in the Company’s Results of Operations based on the difference between the foreign exchange rates on the transaction date and on the reporting date. The Company had an immaterial net foreign exchange loss for the period ended September 30, 2023 and 2022.
The translation from functional foreign currency to United States Dollars (U.S. Dollar) is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and using an average exchange rate during the period, which approximates the daily exchange rate, for income statement accounts. The effects of translating financial statements from functional currency to reporting currency are recorded in other comprehensive income. For the periods ended September 30, 2023 and 2022 the increase/(decrease) in comprehensive loss related to foreign currency translation gains was $0.6 million and ($3.8) million, respectively.
Recent AccountingPronouncements Adopted
In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments-Credit losses (Topic 326), subsequently amended by ASU 2020-2. This new guidance will change how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments held at amortized cost. The update will replace the current incurred loss model with an expected loss model. Under the incurred loss model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to believe that a loss is probable (that is has been “incurred”). Under the expected loss model, a loss (or allowance) is recognized upon initial recognition of the asset that reflects all future events that may lead to a loss being realized, regardless of whether it is probable that the future event will occur. The incurred loss model considers past events and conditions, while the expected loss model includes expectations for the future which have yet to occur. ASU 2018-19 was issued in November 2018 and excludes operating leases from the new guidance. The standard will require entities to record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. For public business entities that meet the definition of a U.S. Securities and Exchange (SEC) filer, the update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an Emerging Growth Company, the standard is effective for the Company’s annual reporting period and interim periods beginning first quarter of 2023. The Company has adopted this standard as of January 1, 2023 and the adoption did not have a material impact on the consolidated financial statements.
In August 2020, the FASB issued Accounting Standards Update 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815040). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. In addition, the FASB amended the derivative guidance for the “own stock” scope exception and certain aspects of EPS guidance. For public business entities that meet the definition of a SEC filer, excluding entities eligible to be a smaller reporting company as defined by the SEC, the guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the guidance is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has adopted this standard as of January 1, 2023 and the adoption did not have a material impact on the condensed consolidated financial statements.
F-22
| 4. | Business Combination and Acquisitions of Assets |
|---|
The Company applies the definition of a business in ASC 805, Business Combinations, to determine whether it is acquiring a business or a group of assets. When the Company acquires a business, the purchase price is allocated to (I) the acquired tangible assets and liabilities assumed, primarily consisting of solar energy facilities and land, (ii) the identified intangible assets and liabilities, primarily consisting of favorable and unfavorable rate PPAs and REC agreements, (iii) asset retirement obligations, (iv) non-controlling interests, and (v) other working capital items based in each case on their estimated fair values. The excess of the purchase price, if any, over the estimated fair value of net assets acquired is recorded as goodwill. The fair value measurements of the assets acquired, and liabilities assumed were derived utilizing an income approach and based, in part, on significant inputs not observable in the market. These inputs include, but are not limited to, estimates of future power generation, commodity prices, operating costs, and appropriate discount rates. These inputs required significant judgments and estimates at the time of the valuation. In addition, acquisition costs related to business combinations are expensed as incurred.
Acquisitionof RA01 Sp. Z.O.O.
On March 24, 2022, the Company acquired a solar park portfolio located in Poland from a third party for a total purchase price, net of cash received, of $1.1 million. The transaction was accounted for as an acquisition of assets, whereby the Company acquired $1.0 million of property and equipment and $0.1 million of other assets.
Acquisitionof Gardno Sp. Z.O.O.
On March 24, 2022, the Company acquired a solar park portfolio located in Poland from a third party for a total purchase price, net of cash received, of $6.6 million. The transaction was accounted for as an acquisition of assets, whereby the Company acquired $6.4 million of property and equipment, and $0.2 million of other assets.
Acquisitionof Gardno 2 Sp. Z.O.O.
On March 24, 2022, the Company acquired a solar park portfolio located in Poland from a third party for a total purchase price, net of cash received, of $4.4 million. The transaction was accounted for as an acquisition of assets, whereby the Company acquired $4.3 million of property and equipment, and $0.1 million of other assets.
| 5. | Accounts Receivable |
|---|
Accounts receivable relate to amounts due from customers for services that have been performed and invoices that have been sent. Unbilled energy incentives relate to services that have been performed for the customer but have yet to be invoiced. Accounts receivables, and unbilled energy incentives consist of the following (in thousands):
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Accounts receivable | 4,597 | 5,916 | ||
| Unbilled energy incentives earned | 5,883 | 4,954 | ||
| Total | 10,480 | 10,870 |
F-23
| 6. | Prepaid Expenses and Other Current Assets |
|---|
Prepaid and other current expenses generally consist of amounts paid to vendors for services that have not yet been performed. Other receivable, prepaid expenses and other current assets consist of the following (in thousands):
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Prepaid expenses and other current assets | 1,326 | 2,871 | ||
| Accrued Revenue | 1,631 | 591 | ||
| Other Receivable | 3,187 | 947 | ||
| Total | 6,144 | 4,409 | ||
| 7. | Property and Equipment, Net | |||
| --- | --- |
As of September 30, 2023, the Company had $163 million of net investment in property and equipment, as outlined in the table below (in thousands):
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Solar energy facilities | 169,334 | 168,336 | ||||
| Building | 1,077 | 1,076 | ||||
| Land | 490 | 497 | ||||
| Leasehold improvements | 120 | 118 | ||||
| Software and computers | 456 | 335 | ||||
| Furniture and fixtures | 435 | 281 | ||||
| Vehicle and other | 34 | - | ||||
| Asset retirement | 1,340 | 1,345 | ||||
| Construction in progress | 10,489 | 5,227 | ||||
| Total property and equipment | 183,775 | 177,215 | ||||
| Less: Accumulated depreciation | (20,644 | ) | (15,422 | ) | ||
| Total | 163,131 | 161,793 |
There was $1.9 million transferred from construction in progress to solar energy facilities during the nine-month period through September 30, 2023.
Depreciation and Amortization expense for the nine-months ended September 30, 2023 was $5.6 million.
| 8. | Capitalized development cost and other long-term assets |
|---|
Capitalized project costs are amounts paid to vendors that are related to the purchase and construction of solar energy facilities. Notes receivables and prepaids consist of amounts owed to the Company as well as amounts paid to vendors for services that have yet to be received by the Company. Capitalized cost and other long-term assets consisted of the following (in thousands):
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Capitalized development cost and other long-term assets | 9,308 | 7,266 | ||
| Other receivables | - | 1,272 | ||
| Total | 9,308 | 8,538 |
Capitalized development cost relates to various projects that are under development for the period. As the Company closes either a purchase or development of new solar parks, these development costs are added to the final asset displayed in Property, and Equipment. If the Company does not close on the prospective project, these costs are written off to Development Cost on the Consolidated Statement Operations and Comprehensive Income/(Loss).
F-24
Notes receivable and other long term prepaids relates to various notes outstanding, security deposits and various smaller prepayments issued for the period.
| 9. | Goodwill |
|---|
There were no business combinations for the period ended September 30, 2023. The goodwill was partially offset by a foreign exchange loss of $15 thousand, resulting in a total balance of goodwill of $1.7 million. Goodwill activity consisted of the following during the period ended September 30, 2023:
| Activity | |||
|---|---|---|---|
| (in thousands) | |||
| Goodwill - Balance January 1, 2022 | $ | 1,903 | |
| Additions | - | ||
| Impairment | - | ||
| Foreign currency translation adjustment | (145 | ) | |
| Goodwill - Balance December 31, 2022 | $ | 1,758 | |
| Additions | - | ||
| Impairment | - | ||
| Foreign currency translation adjustment | (15 | ) | |
| Goodwill - Balance September 30, 2023 | $ | 1,743 | |
| 10. | Accounts Payable | ||
| --- | --- |
Accounts payable represent amounts owed to suppliers of goods and services that the Group has consumed through operations. Accounts payable consist of the following (in thousands):
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Accounts payable | 11,854 | 14,438 | ||
| Total | 11,854 | 14,438 | ||
| 11. | Deferred Income | |||
| --- | --- |
Deferred income relates to income related to Green Certificates from Romania that have been received but not sold. Deferred income consist of the following (in thousands):
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Deferred income | 5,883 | 4,954 | ||
| Total | 5,883 | 4,954 |
F-25
| 12. | Accrued Liabilities |
|---|
Accrued expenses relate to various accruals for the entire group. Accrued interest represents the interest in debt not paid in the period ended September 30, 2023. Accrued liabilities consist of the following (in thousands):
| September 30, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Accrued expenses - other | 11,931 | 4,265 | ||
| Accrued interest | 8,731 | 5,269 | ||
| Accrued payroll | 1,859 | 350 | ||
| Total | 22,521 | 9,884 | ||
| 13. | Taxes Recoverable and Payable | |||
| --- | --- |
Taxes recoverable and payable consist of VAT taxes payable and receivable from various European governments through group transactions in these countries. Taxes recoverable consist of the following (in thousands):
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Taxes recoverable | 2,620 | 1,876 | ||||
| Less: Taxes payable | (1,200 | ) | (1,135 | ) | ||
| Total | 1,420 | 741 | ||||
| 14. | Green Bonds, Convertible and Non-convertible Promissory Notes | |||||
| --- | --- |
The following table reflects the total debt balances of the Company as September 30, 2023 and December 31, 2022. (in thousands):
| As of September 30 | As of December 31 | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| (in thousands) | ||||||
| Green bonds | 159,291 | 149,481 | ||||
| Convertible debt, secured | 11,483 | 9,609 | ||||
| Senior secured debt and promissory notes | 40,521 | 33,500 | ||||
| Total debt | 211,295 | 192,590 | ||||
| Less current maturities | (197,112 | ) | (21,631 | ) | ||
| Long term debt, net of current maturities | 14,183 | 170,959 | ||||
| Current maturities | 197,112 | 21,631 | ||||
| Less current debt discount | (2,194 | ) | (4,335 | ) | ||
| Current maturities net of debt discount | 194,918 | 17,296 | ||||
| Long-term maturities | 14,183 | 170,959 | ||||
| Less long-term debt discount | (2,707 | ) | (197 | ) | ||
| Long-term maturities net of debt discount | 11,476 | 170,762 |
During the period ended December 31, 2022, the Company incurred approximately $200 thousand of debt issuance cost related to the green bonds discussed below. The Company incurred debt issuance costs of $4.9 million during the period ended September 30, 2023. Debt issuance costs are recorded as a debt discount and are amortized to interest expense over the life of the debt, upon the close of the related debt transaction, in the Consolidated Balance Sheet. Interest expense stemming from amortization of debt discounts for the nine-months ended September 30, 2023 was $3.4 million and for the year ending December 31, 2022 was $4.4 million.
F-26
Five-year debt maturities schedule
| (in thousands) | 2023 Sep 1 - Dec 31 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Debt | $ | 178,002 | $ | 22,482 | $ | 2,848 | $ | 890 | $ | 890 | $ | 6,183 | $ | 211,295 |
| Total | $ | 178,002 | $ | 22,482 | $ | 2,848 | $ | 890 | $ | 890 | $ | 6,183 | $ | 211,295 |
Senior secured debt:
In January 2020, GRT 1.1 GmbH entered into a senior secured loan of approximately $825 thousand with DKB Bank in Germany. The relates to and is secured by the acquisition of 1 photovoltaic installation as part of the GRT GmbH acquisition, with a stated interest rate of 2.05% and payments of principal and interest due quarterly. This loan matures in September 2039. The principal outstanding was $592 thousand and $660 thousand as of September 30, 2023 and December 31, 2022, respectively.
In January 2020, ALTN HoldCo UG entered into a construction financing loan with the opportunity to borrow up to $3.6 million from DKB Bank in Germany. During 2020 the Company made draws from the loan totaling $1.3 million. The loan relates to and is secured by the construction of 6 photovoltaic installations in Germany with a stated interest rate of 1.74%. This loan matures in September 2039. The principal outstanding was $1.2 million and $1.2 million as of September 30, 2023 and December 31, 2022, respectively.
In May 2022, AEG MH02 entered into a loan agreement with a group of private lenders of approximately $10.8 million with an initial stated interest rate of 8% and a maturity date of May 31, 2023. In February 2023, the loan agreement was amended stating a new interest rate of 16% retroactive to the date of the first draw in June 2022. In May 2023, the loan was extended and the interest rate was revised to 18% from June 1, 2023. In July 2023, the loan agreement was further extended to October 31, 2023. Due to these addendums, $551 thousand of interest was recognized in the period ended September 30, 2023. The Company had principal outstanding of $10.6 million and $10.7 million as of September 30, 2023 and December 31, 2022, respectively.
In June 2022, Alt US 02, a subsidiary of Alternus Energy Americas entered into an agreement as part of the transaction with Lightwave Renewables, LLC to acquire rights to develop a solar park in Tennessee. The Company entered into a construction promissory note of $5.9 million with a variable interest rate of prime plus 2.5% and an extended maturity date of September 29, 2023. The Company had principal outstanding of $4.3 million and $2.8 million as of September 30, 2023 and December 31, 2022, respectively.
On February 28, 2023, Alt US 03, a subsidiary of Alternus Energy Americas, entered into an agreement as part of the transaction with Sunrise Development, LLC to acquire rights to develop a solar park in Tennessee. The Company entered into a construction promissory note of $920 thousand with a variable interest rate of prime plus 2.5% and due February 29, 2024. The Company had principal outstanding of $715 thousand as of September 30, 2023.
In July 2023, one of the Company’s US subsidiaries acquired a 32 MWp solar PV project in Tennessee, known as “Dancing Horse” for $2.4 million financed through a bank loan having a six-month term, 24% APY, and maturity date of January 1, 2024. Dancing Horse is expected to start operating in Q1 2025. 100% of offtake is already secured by 30-year power purchase agreements with two regional utilities. The Company had a principal outstanding balance of $3.7 million as of September 30, 2023.
F-27
In July 2023, one of the Company’s Spanish subsidiaries acquired a 32 MWp portfolio of Solar PV projects in Valencia, Spain, known as the “NF Projects” with an initial payment of $1.9 million, financed through a bank loan having a six-month term and accruing ‘Six Month Euribor’ plus 2% margin, currently 5.9% interest. The portfolio consists of six projects in total: five of which, totaling 24.4 MWp, are expected to reach operation in Q2 2024, with the remaining project expected to achieve operation in Q1 2025. The Company had a principal outstanding balance of $1.9 million as of September 30, 2023.
Promissory Note:
On September 30, 2015, AEG Plc entered into an agreement as part of the transaction with World Global Assets Pte. Ltd. $492 thousand was assigned to various third parties as non-convertible promissory notes, with stated interest rate of 7.5% and a maturity date of December 31, 2020. The holder agreed to extend the maturity date of the debt through December 2022 and the principal balance continues to accrue interest at a stated rate of 7.5%. The Company had principal outstanding of $102 thousand as of September 30, 2023 and December 31, 2022, respectively.
In October 2018, in order to complete additional solar park acquisitions in Germany, one of the Company’s subsidiaries, Altam Inc., entered into a debt agreement with a third-party accredited investor, in connection with one of the Company’s indirect German subsidiaries, PCG_HoldCo UG (PCG). The debt carries a stated interest rate of 12%, with principal and interest due at maturity, and a term of 2 years. The principal outstanding was $3.8 million and $3.62 million as of December 31, 2022 and 2021, respectively. The debt is currently past due. The Company began accruing interest at the default interest rate of 18% in October 2020 and accrued additional interest penalties in 2021 and 2022. The penalty interest is included in the Accrued Liabilities on the consolidated balance sheet.
In October 2022, the Company entered into a loan agreement with the Bank of Ireland of approximately $2.0 million with an interest rate of 5.44%. The Company had a principal outstanding balance of $2.1 million as of September 30, 2023 and December 31, 2022.
Convertible Promissory Notes:
In March 2021, the Company approved the issuance of $10.2 million (€9 million) of secured convertible loan notes. The notes have a 3-year term, accrue annual interest at a 10% stated rate and require interest payments every nine months during the term. The notes are secured by a floating charge security over all property and assets of the Company, excluding the AEG ownership of Solis Bond Company DAC. All outstanding principal plus a premium of 120% is due 3 years from the date of issuance. The Company is entitled, at its sole option, to prepay the notes at a reduced premium of 110% on the second anniversary of the issuance. The principal balance outstanding was $9.5 million and $9.6 million at September 30, 2023 and December 31, 2022 respectively.
In March 2023, the Company approved the issuance of $922 thousand of secured convertible debt in three tranches of $271 thousand, $271 thousand and $380 thousand, carrying a 14% annual interest rate. The holder of the notes will have the option, beginning 90 days after the close of the business combination between the Company and Clean Earth Acquisitions Corp. and until (i) the maturity date and (ii) such note is fully paid, to convert the full principal balance and any accrued but unpaid interest into 1,320,000 shares of common stock of Clean Earth Acquisitions Corp. Alternatively, should the business combination not complete by April of 2024, the holder has the right to convert the full principal balance and any accrued but unpaid interest into the Company’s ordinary shares at a conversion price of 9 NOK per share.
In January 2023, Alternus Fundco, a subsidiary of AEG, Plc, entered into a $1.1 million (€1 million) convertible promissory note with a 10% interest maturing in January 2025. The holders of the notes will have the option, beginning 90 days after the close of the business combination between the Company and Clean Earth Acquisitions Corp. and until such note is fully paid, to convert the full principal balance and any accrued but unpaid interest into common stock of Clean Earth Acquisitions Corp. The conversion price for these shares is the per share market price on the date the noteholder informs the Company of his intention to convert the debt. The outstanding balance was $1.1 million (€1 million) as of September 30, 2023.
There were no conversions of debt to equity in 2022 or for the period ended September 30, 2023.
F-28
Other Debt:
In January 2021, the Company approved the issuance by one of its subsidiaries, Solis, of a series of 3-year senior secured green bonds in the maximum amount of $242.0 million (€200.0 million) with a stated coupon rate of 6.5% + EURIBOR and quarterly interest payments. The bond agreement is for repaying existing facilities of approximately $40.0 million (€33 million), and funding acquisitions of approximately $87.2 million (€72.0 million). The bonds are secured by the Solis Bond Company’s underlying assets. The Company raised approximately $125.0 million (€110.0 million) in the initial funding. In November 2021, Solis Bond Company DAC, completed an additional issue of $24.0 million (€20.0 million). The additional issue was completed at an issue price of 102% of par value, corresponding to a yield of 5.5%. The Company raised $11.1 million (€10.0 million) in March 2022 at 97% for an effective yield of 9.5%. In connection with the bond agreement the Company incurred approximately $11.8 million in debt issuance costs. The Company recorded these as a discount on the debt and they are being amortized as interest expense over the contractual period of the bond agreement. As of December 31, 2022 and 2021, there was $149.5 million and $147.2 million outstanding on the Bond, respectively. As of September 30, 2023 and 2022 there was $148.2 million and $136.3 million outstanding on the Bond, respectively.
As of December 31, 2022, the Company’s wholly owned subsidiary, Solis Bond Company DAC, was in breach of the three financial covenants under Solis’ Bond terms: (i) the minimum Liquidity Covenant that requires the higher of EUR 5.5 million or 5% of the outstanding Nominal Amount, (ii) the minimum Equity Ratio covenant of 25%, and (iii) the Leverage Ratio of NIBD/EBITDA to not be higher than 6.5 times for the year ended December 2021, 6.0 times for the year ended December 31, 2022 and 5.5 times for the period ending on the maturity date of the Bond, January 6, 2024. The Solis Bond carries a 3 months EURIBOR plus 6.5% per annum interest rate, and has quarterly interest payments, with a bullet payment to be paid on January 6, 2024. The Solis Bond is senior secured through a first priority pledge on the shares of Solis and its subsidiaries, a parent guarantee from Alternus Energy Group Plc, and a first priority assignment over any intercompany loans.
In April 2023 the bond holders approved a temporary waiver and an amendment to the bond terms to allow for a change of control in Solis (which allows for the transfer of Solis and its subsidiaries underneath Clean Earth Acquisitions Corp. on Closing). In addition, bondholders received a preference share in an Alternus Midco, which will hold certain development projects in Spain and Italy. The shares will have preference on any distribution from Midco to Alternus up to €10.0 million, and Midco will divest assets to ensure repayment of the €10.0 million should the bonds not have been fully repaid at maturity (January 6, 2024). Finally, bondholders will receive a 1% amendment fee, which equates to €1.4 million.
On June 5, 2023, the bondholders approved an extension to the waiver to September 30, 2023 and the bond trustee was granted certain additional information rights and the right to appoint half of the members of the board of directors of Solis, in addition to the members of the board appointed by Alternus. Under the waiver agreement, as extended, Solis must fully repay the Solid Bond by September 30, 2023. If Solis is unable to fully repay the Solis Bond by September 30, 2023, Solis’ bondholders have the right to immediately transfer ownership of Solis and all of its subsidiaries to the bondholders and proceed to sell Solis’ assets to recoup the full amount owed to the bondholders, which as of September 30, 2023 is currently €150,000,000 (approximately $159,000,000). If the ownership of Solis and all of its subsidiaries were to be transferred to the Solis bondholders, the majority of Alternus’ operating assets and related revenues and EBIDTA would be eliminated.
On October 16 2023, bondholders approved to further extend the temporary waiver to December 16, 2023. As such, the Solis bond debt is currently recorded as short-term debt. In consideration for the extension the Company agreed to repay the bonds at 107.5 of par value. This incremental par value amount of $11.1 million is recognized as the “Solis bond waiver fee” on the Company’s Statement of Operations and Comprehensive Income and is an increase to the Green Bonds in Current Liabilities in the Company’s Consolidated Balance Sheet. This was a non-cash transaction that resulted in an increase to the Company’s debt balance, and is treated as reconciling item to Net Loss on the Company’s Consolidated Statement of Cash Flows.
F-29
Solis has engaged Pareto Securities AS to explore a refinancing of the bond. The Company has also engaged a leading global firm to support a potential sale of some or all of the assets. The refinancing may be completed in conjunction with a potential sale of certain assets in Solis. We are in advanced discussions with numerous third parties around both the potential refinancing and/or sale of the Solis assets. There are no definitive refinancing or sale agreements executed as of the date of this report and there is no guarantee that these processes will complete by the Solis Extension date or at all.
In April 2021, the Company acquired 60% of the share capital of a Netherlands company, Unisun Energy Holding B.V. Unisun owns a building with an outstanding mortgage loan of $488 thousand (€432 thousand) as of December 31, 2022. The mortgage loan on the building carries an interest rate of 6.5%, principal and interest is due monthly through December 2039.
In August 2021, the Company’s subsidiary, Blue Sky Energy, entered into an agreement with ING Bank, Netherlands for financing the Rotterdam Airport Project for approximately $9.5 million (€8.4 million). The loan has an interest rate of 1.55% per year for the first 10 years and increases to 2.19% per year for the remainder of the term. The loan matures in September 2036. The loan is secured by the airport project. The loan has an outstanding balance of $9.94 million as of December 31, 2022.
In December 2021, the Company’s subsidiary, Alternus Energy Construction Holdings, entered into a $1.8 million (€1.6 million) secured note which matures in June 2023. The note proceeds were used to refund equity and costs associated with the Unisun acquisition and the Rotterdam Development Project Equity and is secured by the Rotterdam airport project. The note has an interest rate of 9%. The outstanding balance was $1.71 and $1.81 million at December 31, 2022 and 2021 respectively.
On December 21, 2022, Alternus Energy Group’s wholly owned Irish subsidiaries, AEG JD 01 LTD and AEG MH 03 LTD entered in a financing facility with Deutsche Bank AG (“Lender”). This is a committed revolving debt financing of EUR 80,000,000 to finance eligible project costs for the acquisition, construction, and operation of installation/ready to build solar PV plants across Europe, including the capacity for the financing to be upsized via a EUR 420,000,000 uncommitted accordion facility to finance a pipeline of further projects across Europe with a total combined capacity of 600 MWp (the “Warehouse Facility”). The Warehouse Facility, which matures on the third anniversary of the closing date of the Credit Agreement (the “Maturity Date”), bears interest at Euribor plus an aggregate margin at a market rate for such facilities, which steps down by 0.5% once the underlying non-Euro costs financed reduces below 33.33% of the overall costs financed. The Warehouse Facility is not currently drawn upon, but a total of approximately EUR 1,800,000 in arrangement and commitment fees is currently owed to the Lender. Once drawn, the Warehouse Facility capitalizes interest payments until projects reach their commercial operations dates through to the Maturity Date; it also provides for mandatory prepayments in certain situations.
| 15. | Leases |
|---|
The Company determines if an arrangement is a lease or contains a lease at inception, or acquisition when the Company acquires a new park. The Company has operating leases for corporate offices and land with remaining lease terms of 5 to 28 years.
Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company estimates its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. Lease expense related to the net present value of payments is recognized on a straight-line basis over the lease term.
F-30
The key components of the company’s operating leases were as follows (in thousands):
| September 30, | December 31, | |||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Operating Lease - Operating Cash Flows (Fixed Payments) | 594 | 1,121 | ||||
| Operating Lease - Operating Cash Flows (Liability Reduction) | 429 | 932 | ||||
| New ROU Assets - Operating Leases | - | 10,551 | ||||
| Weighted Average Lease Term - Operating Leases (years) | 21.05 | 21.54 | ||||
| Weighted Average Discount Rate - Operating Leases | 7.10 | % | 7.10 | % |
The Company’s operating leases generally relate to the rent of office building space, as well as land and rooftops upon which the Company’s solar parks are built. These leases include those that have been assumed in connection with the Company’s asset acquisitions and business combinations. The Company’s leases are for varying terms and expire between 2027 and 2051.
As a part of the Rakowic acquisition, the Company acquired an operating lease to the land where the solar parks are located. The combined estimated annual cost of the leases is $6 thousand. The leases commenced in 2022 and run through 2046.
In March 2022, the Company entered a new lease for additional office space in Ireland with a term of 9 years. The estimated annual cost of the lease is $136 thousand.
In April 2022, the Company entered a new lease for office space in the US with a term of 7.5 years. The estimated annual cost of the lease is $147 thousand.
Maturities of lease liabilities as of September 30, 2023 were as follows:
| Five-year lease schedule: | (in thousands) | ||
|---|---|---|---|
| 2023 Oct 1 – Dec 31 | $ | 213 | |
| 2024 | 845 | ||
| 2025 | 868 | ||
| 2026 | 893 | ||
| 2027 | 918 | ||
| Thereafter | 16,336 | ||
| Total lease payments | 20,073 | ||
| Less imputed interest | (10,728 | ) | |
| Total | $ | 9,345 |
The Company had no finance leases as of September 30, 2023.
| 16. | Commitments and Contingencies |
|---|
Litigation
From time to time, we are subject to various legal proceedings and claims that arise in the ordinary course of our business activities. In connection with such litigation, the Company may be subject to significant damages. We may also be subject to equitable remedies and penalties. Such litigation could be costly and time-consuming and could divert or distract Company management and key personnel from its business operations. Although the results of litigation and claims cannot be predicted with certainty, as of the date of this proxy statement, we do not believe we are party to any claim or litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business. However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows.
F-31
On May 4, 2023 Alternus received notice that Solartechnik filed an arbitration claim against Alternus Energy Group PLC, Solis Bond Company DAC and ALT POL HC 01 SP. Z.o.o. in the Court of Arbitration at the Polish Chamber of Commerce, claiming that PLN 24,980,589 (approximately $5.8 million) is due and owed to Solartechnik pursuant to a preliminary share purchase agreement by and among the parties that did not ultimately close, plus costs, expenses, legal fees and interest. The Company has accrued a liability for this loss contingency in the amount of approximately $5.8 million, which represents the contractual amount allegedly owed. It is reasonably possible that the potential loss may exceed our accrued liability due to costs, expenses, legal fees and interest that are also alleged by Solartechnik as owed, but at the time of filing this report we are unable to determine an estimate of that possible additional loss in excess of the amount accrued. The arbitration is in its early stages, and the Company intends to vigorously defend this action.
| 17. | Asset Retirement Obligations |
|---|
The Company’s AROs mostly relate to the retirement of solar park land or buildings. The discount rate used to estimate the present value of the expected future cash flows for the year ended September 30, 2023 and December 31, 2022 was 7.1%.
| Activity | |||
|---|---|---|---|
| ARO Liability - Balance January 1, 2022 | $ | 625 | |
| Additional obligations incurred | 733 | ||
| Accretion expense | 76 | ||
| Foreign exchange loss (gain) | 27 | ||
| ARO Liability - Balance December 31, 2022 | $ | 1,461 | |
| Additional obligations incurred | - | ||
| Accretion expense | 81 | ||
| Foreign exchange loss (gain) | (8 | ) | |
| ARO Liability -- September 30, 2023 | $ | 1,534 | |
| 18. | Shareholders’ Equity | ||
| --- | --- |
On September 28, 2023, the Company held its annual general meeting and all agenda items were adopted, including an amendment to the share capital, such that the authorized capital was increased to €2,000,000 divided into 100,000,000 ordinary shares of €0.01 each and 100,000,000 preferred shares of €0.01 each.
Preferred Shares
As of September 30, 2023, the Company had 100,000,000 preferred shares authorized, with no preferred shares issued and outstanding. There were no preferred share issuances for the period ended September 30, 2023.
Ordinary Shares
As of September 30, 2023, the Company had 100,000,000 ordinary shares authorized, with 26,325,738 ordinary shares issued and outstanding. There were no ordinary share issuances for the period ended September 30, 2023 and 2022 respectively.
Warrants
As of September 30, 2023, warrants to purchase up to 43,500 shares of ordinary shares were issued and outstanding. These warrants related to financing activities and were recorded as a debt discount using the relative fair value method, which is amortized to using the effective interest method to interest expense over the term of the related debt instrument. The Company did not issue any additional warrants in 2023 and 16,884 warrants expired during the third quarter of 2023.
F-32
| Warrants | Weighted Average<br> Exercise Price | Weighted Average<br> Remaining Contractual <br> Term (Years) | |||||
|---|---|---|---|---|---|---|---|
| Outstanding - December 31, 2022 | 220,182 | $ | 2.45 | 0.55 | |||
| Issued during the year | - | - | - | ||||
| Expired during the year | (176,682 | ) | - | - | |||
| Outstanding - September 30, 2023 | 43,500 | 2.45 | 0.87 | ||||
| Exercisable - September 30, 2023 | 43,500 | $ | 2.45 | $ | 0.87 | ||
| 19. | Stock-Based Compensation | ||||||
| --- | --- |
Stock Options
The Company recorded no stock compensation expense for the nine-months ended September 30, 2023 and the year ended December 31, 2022 related to stock options. All stock-based compensation expense is included in selling, general and administrative expense in the consolidated statements of operations.
The Company did not grant any stock options during the nine-month period ended September 30, 2023.
The following table summarizes stock option activity for the period ended September 30, 2023 and the year ended December 31, 2022:
| Number of<br> <br>Options | Weighted-<br> <br>Average<br> <br>Exercise Price | Weighted-<br> <br>Average<br> <br>Remaining<br> <br>Contractual<br> <br>Term (Years) | Aggregate<br> <br>Intrinsic<br> <br>Value | ||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | |||||||||
| Outstanding, December 31,2021 | 43,000 | $ | 2.98 | ||||||
| Granted | — | — | |||||||
| Exercised | — | — | |||||||
| Expired or Forfeited | — | — | |||||||
| Outstanding, December 31, 2022 | 43,000 | $ | 2.98 | 8.9 | 15 | ||||
| Granted | — | — | — | — | |||||
| Exercised | — | — | — | — | |||||
| Expired or Forfeited | (3,000 | ) | 2.98 | — | — | ||||
| Outstanding - September 30, 2023 | 40,000 | $ | 2.98 | 8.2 | 28 | ||||
| Exercisable - September 30, 2023 | 40,000 | $ | 2.98 | 8.2 | 28 |
There was no unrecognized compensation cost related to stock options.
Restricted Stock Awards
No RSA were issued by the Company in as of September 30, 2023 or in the year 2022.
The Company recorded no stock-based compensation expense for the period ended September 30, 2023 and 2022. All stock-based compensation expense is included in selling, general and administrative expense in the consolidated statements of operations.
F-33
| 20. | Geographical Information |
|---|
The Company has one reportable segment, reflecting the aggregation of the Company’s operating segments that consist of PV operations by geographical region. The decision-making group is the senior executive management team which consists of Vincent Browne, Chief Executive Officer, Joseph Duey, Chief Financial Officer, and Taliesin Durant, Chief Legal Officer. The following tables present geographic information related to the Company’s single reportable segment.
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| Revenue by Country | ||||||||
| Italy | 1,228 | 1,018 | 2,924 | 2,847 | ||||
| Romania | 5,161 | 4,216 | 13,271 | 14,061 | ||||
| Germany | 8 | 44 | 22 | 142 | ||||
| Netherlands | 1,096 | 1,673 | 4,378 | 3,759 | ||||
| Poland | 2,952 | 5,411 | 7,121 | 9,659 | ||||
| United States | 33 | 10 | 83 | 15 | ||||
| Total | 10,478 | 12,372 | 27,799 | 30,483 | ||||
| Three Months Ended<br> September 30 | Nine Months Ended<br> September 30 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | 2023 | 2022 | |||||
| Cost of Revenue by Country | ||||||||
| Italy | 250 | 161 | 732 | 469 | ||||
| Romania | 657 | 2,427 | 2,193 | 5,868 | ||||
| Germany | 25 | 16 | 30 | 30 | ||||
| Netherlands | 249 | 268 | 619 | 632 | ||||
| Poland | 955 | 1,724 | 2,924 | 2,632 | ||||
| United States | 21 | - | 47 | - | ||||
| Total | 2,157 | 4,596 | 6,545 | 9,631 | ||||
| 21. | Related Party | |||||||
| --- | --- |
Related party transactions are a transfer of resources, services, or obligations between the Company and a related party, regardless of whether a price is charged. Parties are considered related if one party has control, joint control, or a significant influence over the other party in making financial and operating decisions. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.
| Nine-months Ended September 30, | ||||
|---|---|---|---|---|
| Transactions with Directors | 2023 | 2022 | ||
| (in thousands) | ||||
| Loan from Vestco, a related party to Board member and CEO Vincent Browne | $ | 60 | $ | - |
| Total | $ | 60 | $ | - |
| Nine-months Ended September 30, | ||||
| --- | --- | --- | --- | --- |
| Director's remuneration | 2023 | 2022 | ||
| (in thousands) | ||||
| Remuneration in respect of services as directors | $ | 489 | $ | 486 |
| Remuneration in respect to long term incentive schemes | - | - | ||
| Total | $ | 489 | $ | 486 |
F-34
| 22. | Subsequent Events |
|---|
Management has evaluated subsequent events that have occurred through November 10, 2023, which is the date the financial statements were available to be issued and has determined that there were no subsequent events that required recognition or disclosure in the financial statements as of and for the period ended September 30, 2023, except as disclosed below.
In October 2023, the Company approved the issuance by one of its US subsidiaries of secured debt in the principal amount of $3,150,000 for an original purchase price of $2,205,000 and having a maturity date of no later than June 30, 2024. The holder of the note has also been granted the right to receive warrants, conditional upon, and only issued at, the close of the business combination between the Company and Clean Earth Acquisitions Corp. (CLIN) to purchase up to (i) 100,000 shares of common stock of CLIN at an exercise price of $11.50 per share and having a 5 year term, and (ii) 300,000 shares of common stock of CLIN at an exercise price of $0.01 per share and having a 3 year term. Alternatively, should the business combination not be complete by the expiry date, the holder will be issued warrants to purchase up to 394,819 ordinary shares of Alternus Energy Group at an exercise price of NOK 5.00 per share and having a 10-year term. The debt is secured by a parent company guarantee and Chief Executive Officer and primary insider, Vincent Browne, has pledged certain shares.
Also in October of 2023, the bondholders voted to approve the resolutions for the extension of the waivers to the Solis Bond Terms to December 16, 2023.
In November 2023, the Company approved the issuance by one of its US subsidiaries of secured debt in the principal amount of $3,302,810 for an original purchase price of $2,972,529 and having a maturity date of no later than April 28, 2024.
F-35
Exhibit 99.2
CLEAN EARTH ACQUISITIONS CORP.
UNAUDITED CONDENSED BALANCE SHEETS
| December<br> 31, 2022 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets | |||||
| Cash | 9,266 | $ | 630,460 | ||
| Prepaid expenses | 259,034 | 298,172 | |||
| Other receivable | — | 7,462 | |||
| Marketable securities held in Trust Account | 86,038,091 | 235,586,028 | |||
| Total current assets | 86,306,391 | 236,522,122 | |||
| Total Assets | 86,306,391 | $ | 236,522,122 | ||
| LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | |||||
| Current liabilities | |||||
| Accrued expenses | 688,939 | $ | 613,653 | ||
| Income and franchise taxes payable | 31,215 | 849,331 | |||
| Accrued legal expenses | 992,045 | 572,307 | |||
| Accounts payable | 171,267 | 47,919 | |||
| Accrued offering costs | 542,981 | 542,981 | |||
| Promissory note – related party | 1,703,500 | 806,170 | |||
| Deferred underwriter fee payable | 805,000 | 4,427,500 | |||
| Total current liabilities | 4,934,947 | 7,859,861 | |||
| Total Liabilities | 4,934,947 | 7,859,861 | |||
| Commitments and Contingencies | |||||
| Class A Common Stock Subject to Possible Redemption | |||||
| Class A common stock subject to possible redemption; 0.0001 par value; 100,000,000 shares authorized; 8,147,563 and 23,000,000 shares issued and outstanding at redemption value as of September 30, 2023 and December 31, 2022, respectively | 86,038,091 | 235,586,028 | |||
| Stockholders’ Deficit | |||||
| Preferred shares, 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | — | |||
| Class A common stock, 0.0001 par value, 100,000,000 shares authorized; 890,000 shares issued and outstanding (excluding 8,147,563 and 23,000,000 shares subject to possible redemption as of September 30, 2023 and December 31, 2022, respectively) | 89 | 89 | |||
| Class B common stock, 0.0001 par value, 10,000,000 shares authorized; 7,666,667 shares issued and outstanding | 767 | 767 | |||
| Additional paid-in capital | — | — | |||
| Accumulated deficit | (4,667,503 | ) | (6,924,623 | ) | |
| Total Stockholders’ Deficit | (4,666,647 | ) | (6,923,767 | ) | |
| TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT | 86,306,391 | $ | 236,522,122 |
All values are in US Dollars.
The accompanying notes are an integral partof these unaudited condensed financial statements.
1
CLEAN EARTH ACQUISITIONS CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Franchise tax expense | $ | 50,000 | 50,000 | $ | 150,000 | $ | 150,000 | |||||
| Bank fees | — | 390 | 7,462 | 767 | ||||||||
| Insurance expense | 106,518 | 106,521 | 319,559 | 253,621 | ||||||||
| Dues and subscriptions | 8,766 | 5,900 | 169,314 | 62,831 | ||||||||
| Marketing and advertising expenses | 21,627 | 58,387 | 37,422 | 71,331 | ||||||||
| Legal and accounting expenses | 672,962 | 334,967 | 1,049,820 | 1,016,032 | ||||||||
| Placement services fee | — | 500,000 | — | 500,000 | ||||||||
| Listing fee, general and administrative expenses | 18,084 | — | 52,971 | — | ||||||||
| Loss from operations | (877,957 | ) | (1,056,165 | ) | (1,786,548 | ) | (2,054,582 | ) | ||||
| Other income: | ||||||||||||
| Dividend income on marketable securities held in Trust Account | 1,107,180 | 261,381 | 4,216,253 | 596,440 | ||||||||
| Realized gains on marketable securities held in Trust Account | — | 877,634 | 1,663,187 | 877,634 | ||||||||
| Interest income on operating account | 2 | — | 40 | — | ||||||||
| Other income | 1,107,182 | 1,139,015 | 5,879,480 | 1,474,074 | ||||||||
| Income (loss) before provision for income taxes | 229,225 | 82,850 | 4,092,932 | (580,508 | ) | |||||||
| Provision for income taxes | (222,009 | ) | (228,946 | ) | (853,922 | ) | (278,308 | ) | ||||
| Net income (loss) | $ | 7,216 | $ | (146,096 | ) | $ | 3,239,010 | $ | (858,816 | ) | ||
| Basic and diluted weighted average shares outstanding, redeemable Class A common stock | 8,147,563 | 23,000,000 | 16,036,220 | 18,113,553 | ||||||||
| Basic and diluted net income (loss) per share, redeemable Class A common stock | $ | 0.07 | $ | 0.01 | $ | 0.23 | $ | 0.58 | ||||
| Basic and diluted weighted average shares outstanding, non-redeemable Class A and Class B common stock | 8,556,667 | 8,556,667 | 8,556,667 | 8,107,815 | ||||||||
| Basic and diluted net (loss) income per share, non-redeemable Class A and Class B common stock | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (1.40 | ) |
The accompanying notes are an integral partof these unaudited condensed financial statements.
2
CLEAN EARTH ACQUISITIONS CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGESIN COMMON STOCK SUBJECT TO POSSIBLE
REDEMPTION AND STOCKHOLDERS’ DEFICIT
| Class A | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock<br> Subject to | Class<br> A Common | Class B | Additional | Total | ||||||||||||||||||
| Possible<br> Redemption | Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||
| Balance<br> – December 31, 2022 | 23,000,000 | $ | 235,586,028 | 890,000 | $ | 89 | 7,666,667 | $ | 767 | $ | — | $ | (6,924,623 | ) | $ | (6,923,767 | ) | |||||
| Remeasurement<br> of Class A common stock to redemption value | — | 2,409,648 | — | — | — | — | — | (2,409,648 | ) | (2,409,648 | ) | |||||||||||
| Net<br> income | — | — | — | — | — | — | — | 1,873,417 | 1,873,417 | |||||||||||||
| Balance<br> – March 31, 2023 | 23,000,000 | 237,995,676 | 890,000 | 89 | 7,666,667 | 767 | — | (7,460,854 | ) | (7,459,998 | ) | |||||||||||
| Redemption<br> of Class A common stock | (14,852,437 | ) | (154,152,327 | ) | — | — | — | — | — | — | — | |||||||||||
| Deferred<br> underwriter fee payable forfeiture | — | — | — | — | — | — | — | 3,622,500 | 3,622,500 | |||||||||||||
| Remeasurement<br> of Class A common stock to redemption value | — | 1,097,561 | — | — | — | — | — | (1,097,561 | ) | (1,097,561 | ) | |||||||||||
| Net<br> income | — | — | — | — | — | — | — | 1,358,377 | 1,358,377 | |||||||||||||
| Balance<br> – June 30, 2023 | 8,147,563 | 84,940,910 | 890,000 | 89 | 7,666,667 | 767 | — | (3,577,538 | ) | $ | (3,576,682 | ) | ||||||||||
| Remeasurement<br> of Class A common stock to redemption value | — | 1,097,181 | — | — | — | — | — | (1,097,181 | ) | (1,097,181 | ) | |||||||||||
| Net<br> income | — | — | — | — | — | — | — | 7,216 | 7,216 | |||||||||||||
| Balance<br> – September 30, 2023 | 8,147,563 | $ | 86,038,091 | 890,000 | $ | 89 | 7,666,667 | $ | 767 | $ | — | $ | (4,667,503 | ) | $ | (4,666,647 | ) | |||||
| Class A | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Common Stock<br> Subject to | Class<br> A Common | Class B | Additional | Total | ||||||||||||||||||
| Possible Redemption | Stock | Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||
| Balance —<br> December 31, 2021 | — | $ | — | — | $ | — | 7,666,667 | $ | 767 | $ | 24,233 | $ | (2,546 | ) | $ | 22,454 | ||||||
| Issuance<br> of Class A common stock in initial public offering | 23,000,000 | 192,766,854 | — | — | — | — | 23,227,765 | — | 23,227,765 | |||||||||||||
| Sale<br> of private placement units | — | — | 890,000 | 89 | — | — | 8,899,911 | — | 8,900,000 | |||||||||||||
| Remeasurement<br> of Class A common stock to redemption value | — | 39,554,524 | — | — | — | — | (32,151,909 | ) | (7,402,615 | ) | (39,554,524 | ) | ||||||||||
| Net<br> loss | — | — | — | — | — | — | — | (240,003 | ) | (240,003 | ) | |||||||||||
| Balance —<br> March 31, 2022 | 23,000,000 | 232,321,378 | 890,000 | 89 | 7,666,667 | 767 | — | (7,645,164 | ) | (7,644,308 | ) | |||||||||||
| Remeasurement<br> of Class A common stock to redemption value | — | 313,681 | — | — | — | — | — | (313,681 | ) | (313,681 | ) | |||||||||||
| Net<br> loss | — | — | — | — | — | — | — | (472,717 | ) | (472,717 | ) | |||||||||||
| Balance<br> – June 30, 2022 | 23,000,000 | 232,635,059 | 890,000 | 89 | 7,666,667 | 767 | — | (8,431,562 | ) | (8,430,706 | ) | |||||||||||
| Remeasurement<br> of Class A common stock to redemption value | — | 1,139,015 | — | — | — | — | — | (1,139,015 | ) | (1,139,015 | ) | |||||||||||
| Net<br> loss | — | — | — | — | — | — | — | (146,096 | ) | (146,096 | ) | |||||||||||
| Balance<br> – September 30, 2022 | 23,000,000 | $ | 233,774,074 | 890,000 | $ | 89 | 7,666,667 | $ | 767 | $ | — | $ | (9,716,673 | ) | $ | (9,715,817 | ) |
The accompanying notes are an integral partof these unaudited condensed financial statements.
3
CLEAN EARTH ACQUISITIONS CORP.
UNAUDITED CONDENSED STATEMENTS OF CASHFLOWS
| Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2023 | 2022 | |||||
| Cash Flows from Operating Activities: | ||||||
| Net income (loss) | $ | 3,239,010 | $ | (858,816 | ) | |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||
| Dividend income | — | (596,440 | ) | |||
| Realized gains on marketable securities held in Trust Account | (1,663,187 | ) | (877,634 | ) | ||
| Gain on extinguishment of liabilities | — | (4,000 | ) | |||
| Changes in operating assets and liabilities: | ||||||
| Prepaid expenses | 39,138 | (393,588 | ) | |||
| Accounts payable | 123,348 | 17,171 | ||||
| Accrued expenses | 75,286 | 504,108 | ||||
| Income and franchise taxes payable | (818,116 | ) | 428,308 | |||
| Accrued legal expenses | 419,738 | 515,356 | ||||
| Other receivables | 7,462 | (19,189 | ) | |||
| Net cash provided by (used in) operating activities | 1,422,679 | (1,284,724 | ) | |||
| Cash Flows from Investing Activities: | ||||||
| Proceeds from marketable securities held in Trust Account | 629,455,679 | 233,355,939 | ||||
| Purchase of marketable securities held in Trust Account | (474,775,971 | ) | (233,355,939 | ) | ||
| Dividends reinvested in marketable securities held in Trust Account | (3,629,603 | ) | — | |||
| Investment of cash in Trust Account | — | (232,300,000 | ) | |||
| Contributions to Trust Account | 161,019 | — | ||||
| Net cash provided by (used in) investing activities | 151,211,124 | (232,300,000 | ) | |||
| Cash Flows from Financing Activities: | ||||||
| Payment of Class A common stock redemptions | (154,152,327 | ) | — | |||
| Proceeds from promissory note – related party | 897,330 | 450,000 | ||||
| Proceeds from issuance of units | — | 230,000,000 | ||||
| Proceeds from sale of private placement units | — | 8,900,000 | ||||
| Payment of underwriting discount | — | (4,600,000 | ) | |||
| Payment of promissory note – related party | — | (225,000 | ) | |||
| Proceeds from related party receivable | — | 189 | ||||
| Payment of deferred offering costs | — | (628,714 | ) | |||
| Net cash (used in) provided by financing activities | (153,254,997 | ) | 233,896,475 | |||
| Net Change in Cash | (621,194 | ) | 311,751 | |||
| Cash – Beginning | 630,460 | 33,912 | ||||
| Cash – Ending | $ | 9,266 | $ | 345,663 | ||
| Non-Cash Investing and Financing Activities: | ||||||
| Remeasurement of Class A common stock subject to possible redemption | $ | 4,604,390 | $ | 41,007,220 | ||
| Deferred underwriter fee payable | $ | — | $ | 8,050,000 | ||
| Waiver of deferred underwriter fee payable | $ | 3,622,500 | $ | — | ||
| Deferred offering costs included in accrued offering costs | $ | — | $ | 23,588 | ||
| Supplemental Cash Flow Information: | ||||||
| Cash paid for taxes | $ | 1,855,000 | $ | — |
The accompanying notes are an integral partof these unaudited condensed financial statements.
4
CLEAN EARTH ACQUISITIONSCORP.
NOTES TOTHE UNAUDITED CONDENSED FINANCIAL STATEMENTS
| 1) | Note 1. Description<br> of Organization and Business Operations |
|---|
Clean Earth Acquisitions Corp. (the “Company”) was incorporated in Delaware on May 14, 2021. The Company is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).
As of September 30, 2023, the Company had not commenced any operations. All activity through September 30, 2023, relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and following the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of dividend income and realized gains from the proceeds derived from the Initial Public Offering placed in the Trust Account (described below).
The registration statement for the Company’s Initial Public Offering was declared effective on February 23, 2022 (the “Effective Date”). On February 28, 2022, the Company consummated the Initial Public Offering of 23,000,000 Units at $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 890,000 Private Placement Units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement with Clean Earth Acquisitions Sponsor, LLC (the “Sponsor”) generating proceeds of $8,900,000 from the sale of the Private Units.
Following the closing of the Initial Public Offering on February 28, 2022, $232,300,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (“Trust Account”), located in the United States which have been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds selected by the Company meeting the conditions of Rule 2a-7(d) of the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation, and (iii) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination by the Termination Date (defined below).
On October 12, 2022, we entered into a Business Combination Agreement (the “Business Combination Agreement”) with Alternus Energy Group Plc (the “Seller” or “Alternus”). Pursuant to the Business Combination Agreement, we will acquire certain subsidiaries of the Seller, for up to 90,000,000 shares. Initially, we will issue 55,000,000 shares at closing (subject to a working capital adjustment capped at 1,000,000 additional shares) plus up to 35,000,000 shares subject to certain earn-out provisions, which will be deposited in escrow and will be released if certain conditions are met.
On April 12, 2023, the Company entered into the First Amendment to the Business Combination Agreement (the “First Amendment”), which amends certain provisions of the Business Combination Agreement.
The Business Combination Agreement had contemplated that the Company would issue to the Seller a number of shares of Class A common stock valued at $10 per share equal to $550,000,000 plus or minus an estimated working capital adjustment (which will be not greater or less than $10,000,000), of which 1,000,000 shares of Class A common stock will be deposited into a working capital escrow account to satisfy any post-closing working capital adjustments. The First Amendment amended the Business Combination Agreement by reducing the $550,000,000 amount to $275,000,000.
5
In addition, the Business Combination Agreement had contemplated that 35,000,000 shares of Class A common stock would be deposited into an earnout escrow account and will be released, in whole or part, to the Seller if certain earnout milestones are met. The First Amendment amended the Business Combination Agreement by (i) reducing the 35,000,000 shares to 20,000,000 shares and (ii) modifying the earnout milestones as provided in the First Amendment.
The closing of the transactions contemplated by the Business Combination Agreement is subject to customary closing conditions as set forth in the Business Combination Agreement.
Concurrently with the execution of the Business Combination Agreement, we entered into (A) a Sponsor Support Agreement with the sponsor and the Seller pursuant to which the sponsor agreed to vote in favor of the Business Combination, waive its redemption rights, agree to not transfer securities of the Company, and waive any anti-dilution or similar protections with respect to founder shares; and (B) an Investor Rights Agreement with the sponsor and the Seller, which provides for certain governance requirements, registration rights and a lockup agreement. The closing of the transactions contemplated by the Business Combination Agreement is subject to the satisfaction or waiver of certain customary closing conditions of the respective parties.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target, the Company’s stockholders prior to the Business Combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and the Company in the Business Combination transaction.
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. Except as required by law or the rules of Nasdaq, the decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares, Private Shares and any Public Shares purchased during or after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.
6
The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares, Private Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Private Shares if the Company fails to consummate a Business Combination, and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect the public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
If the Company is unable to complete a Business Combination by the Termination Date, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s rights or warrants, which will expire worthless if the Company fails to complete a Business Combination by the Termination Date.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.10 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
On May 25, 2023, the Company and Alternus executed a mutual written consent pursuant to which the Company and Alternus agreed to extend the Termination Date (as defined in the Business Combination Agreement) to November 28, 2023 (the “Termination Date”).
On May 25, 2023, the Company held a special meeting of stockholders (the “Special Meeting”), during which the Company’s stockholders approved the proposal (the “Charter Amendment Proposal”) to amend the Company’s amended and restated certificate of incorporation to give the Company the right to extend the date by which it has to consummate a business combination up to six times, from May 28, 2023 to November 28, 2023, composed of six one-month extensions (each an “Extension,” and the end date of each Extension, the “Extended Date”), by depositing into the Trust Account on the then-applicable Extension Date, for each Extension, the lesser of (i) $195,000 and (ii) $0.04 for each share of the Company’s Class A common stock not redeemed in connection with the Charter Amendment Proposal until November 28, 2023, or such earlier date as determined by the Board (assuming the Company’s business combination has not occurred) in exchange for a non-interest bearing, convertible unsecured promissory note payable upon consummation of a business combination.
7
In connection with the Special Meeting, stockholders properly elected to redeem an aggregate of 14,852,437 shares of Class A common stock at a redemption price of approximately $10.38 per share (the “Redemption”), for an aggregate redemption amount of $154,152,327. Following the Redemption, $84,562,944 remained in the Company’s Trust Account, not including any Extension Payments, as described above.
| (1) | Risks<br> and Uncertainties |
|---|
The credit and financial markets have experienced extreme volatility and disruptions due to the current conflict between Ukraine and Russia and Hamas’ attack on Israel. These conflicts are expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our common shares to be adversely affected.
The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
| (2) | Going<br> Concern |
|---|
(3) As of September 30, 2023, the Company had $9,266 of operating cash and a working capital deficit of $3,861,647. At September 30, 2023, working capital deficit excludes the amount of marketable securities held in Trust Account and deferred underwriting fees payable. The Company classified the Marketable Securities held in Trust Account as a current asset as the Company has less than 12 months from the balance sheet date to consummate a Business Combination, at which point, if the Company did not find a Business Combination partner, the Company would cease to exist and the funds would be liquidated from the Trust Account. The Company classified the deferred underwriting fees payable as current liabilities as the Company has less than 12 months from the balance sheet date to consummate a Business Combination, at which point, if the Company did not find a Business Combination partner, the Company would cease to exist and the deferred underwriting fees would not be paid as the fees owed are contingent upon a successful Business Combination.
(4) The Company’s liquidity needs through September 30, 2023 had been satisfied through a payment from the Sponsor of $25,000 for Class B common stock, par value $0.0001 per share (“Class B common stock” and shares thereof, “founder shares”), the Initial Public Offering and the issuance of the Private Units (see Note 3 and Note 4). Additionally, the Company drew on unsecured promissory notes to pay certain offering costs and convertible promissory notes with the Sponsor to provide working capital and to fund the Company’s extension payments (see Note 4).
(5) The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans to complete the Business Combination with Alternus. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. The initial stockholders, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required. The Company cannot assure that its plans to consummate an initial Business Combination will be successful.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date the financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
8
| 2) | Note 2. Summary<br>of Significant Accounting Policies |
|---|---|
| (1) | Basis<br> of Presentation |
| --- | --- |
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair statement of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 30, 2023, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2022 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future interim periods.
| (2) | Emerging<br> Growth Company |
|---|
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
| b) | Use<br> of Estimates |
|---|
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
9
| (1) | Cash<br> Equivalents |
|---|
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of September 30, 2023 or December 31, 2022.
| (2) | Marketable<br> Securities Held in Trust Account |
|---|
The Company accounts for marketable securities held in the Trust Account in accordance with Accounting Standards Codification (“ASC”) 320, “Investments – Debt Securities” (“ASC 320”). Trading securities are measured at fair value with holding gains and losses included in earnings. The estimated fair values of the marketable securities held in the Trust Account are determined using available market information.
The Company has invested in U.S. Treasury Bills and money market funds invested in U.S. government securities for the nine months ended September 30, 2023 and 2022. Income generated from the U.S. Treasury Bills was recorded to realized gains on marketable securities held in Trust Account on the condensed statements of operations and presented as an adjustment to reconcile net income to net cash used in operating activities on the condensed statements of cash flows. Income generated from money market funds invested in U.S. government securities was recorded to dividend income on marketable securities held in Trust Account and presented within cash flows from investing activities on the condensed statements of cash flows. Sales of money market funds, redemptions of U.S. Treasury Bills, and purchases of U.S. Treasury Bills and money market securities held in Trust Account are presented within cash flows from investing activities on the condensed statements of cash flows.
| (3) | Offering<br> Costs Associated with the Initial Public Offering |
|---|
The Company complies with the requirements of the ASC 340-10-S99-1, “Other Assets and Deferred Costs” and SEC Staff Accounting Bulletin (“SAB”) Topic 5A, “Expenses of Offering”. Offering costs consist principally of incentives to Anchor Investor (as defined in Note 4) and professional and registration fees that are related to the Initial Public Offering. The Company incurred offering costs from the Initial Public Offering of $18,678,975, consisting of $4,600,000 of underwriting discounts, $8,050,000 of deferred underwriting fee (of which $7,245,000 has subsequently been waived by the underwriters), $1,292,649 of actual offering costs, and $4,736,326 excess fair value of Founder Shares as a result of the Anchor Investor transaction. The Company recorded the $18,678,975 of offering costs as a reduction of the carrying value of Class A common stock in temporary equity and additional paid-in capital.
| (4) | Fair<br> Value of Financial Instruments |
|---|
ASC 820, “Fair Value Measurement” (“ASC 820”), defines fair value as the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants. Fair value measurements are classified on a three-tier hierarchy as follows:
Level 1 — defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3 — defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC 820 approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
10
| (5) | Warrants<br> and Rights |
|---|
The Company accounts for the public and private warrants and rights as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). Pursuant to the Company’s evaluation, the Company concluded that the public and private warrants and rights do not meet the criteria to be accounted for as liability under ASC 480. The Company further evaluated the public and private warrants and rights under ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” (“ASC 815-40”) and concluded that the public warrants, private warrants and rights are indexed to the Company’s own stock and meet the criteria to be classified in stockholders’ deficit.
| (6) | Common<br> Stock Subject to Possible Redemption |
|---|
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480. Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. On May 25, 2023, holders of Class A common stock properly elected to redeem an aggregate of 14,852,437 shares of Class A common stock at a redemption price of $10.38 per share, for an aggregate redemption amount of $154,152,327. Accordingly, at September 30, 2023, and December 31, 2022, 8,147,563 and 23,000,000 shares of Class A common stock subject to possible redemption are presented, at redemption value equal to the amount held in the Trust Account, as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet, respectively.
The Class A common stock subject to possible redemption are subject to the subsequent measurement guidance in ASC 480-10-S99. Under such guidance, the Company must subsequently measure the shares to their redemption amount because, as a result of the allocation of net proceeds to transaction costs, the initial carrying amount of the common stock is less than $10.00 per share. In accordance with the guidance, the Company has elected to measure the common stock subject to possible redemption to their redemption amount (i.e., $10.10 per share) immediately as if the end of the first reporting period after the Initial Public Offering, February 28, 2022, was the redemption date. Such changes are reflected in additional paid-in capital, or in the absence of additional paid-in capital, in accumulated deficit.
The Class A common stock subject to possible redemption is reflected on the balance sheet as of September 30, 2023 as follows:
| Gross proceeds from initial public offering | $ | 230,000,000 | |
|---|---|---|---|
| Less: | |||
| Fair value allocated to public warrants | (4,390,700 | ) | |
| Fair value allocated to rights | (15,741,200 | ) | |
| Offering costs allocated to Class A common stock subject to possible redemption | (17,038,513 | ) | |
| Plus: | |||
| Re-measurement on Class A common stock subject to possible redemption | 42,756,441 | ||
| Class A common stock subject to possible redemption, December 31, 2022 | 235,586,028 | ||
| Re-measurement on Class A common stock subject to possible redemption | 2,409,648 | ||
| Class A common stock subject to possible redemption, March 31, 2023 | 237,995,676 | ||
| Redemption of Class A common stock | (154,152,327 | ) | |
| Re-measurement on Class A common stock subject to possible redemption | 1,097,561 | ||
| Class A common stock subject to possible redemption, June 30, 2023 | 84,940,910 | ||
| Re-measurement on Class A common stock subject to possible redemption | 1,097,181 | ||
| Class A common stock subject to possible redemption, September 30, 2023 | $ | 86,038,091 |
11
The proceeds of the Initial Public Offering were allocated to the Class A common stock and the Public Warrants and Rights based on their relative fair values. The Company recognizes changes in redemption value of Class A common stock subject to possible redemption immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit.
| (7) | Promissory<br> Note – Related Party |
|---|
The Company accounts for its WC Promissory Note and Extension Note (see Note 4) in accordance with ASC 470, “Debt” and ASC 815. The Company accounts for the WC Promissory Note and Extension Note at amortized cost and does not bifurcate and separately account for the embedded conversion feature as it does not meet the definition of a derivative instrument.
| (8) | Stock-Based<br> Compensation |
|---|
The Company accounts for its stock-based compensation arrangements in accordance with ASC 718, “Compensation-Stock Compensation”. The awards have a performance condition that requires the consummation of an initial business combination to fully vest. As the performance condition is not probable and will likely not become probable until the consummation of an initial business combination, the Company will defer recognition of the compensation costs until the consummation of an initial business combination.
| (9) | Net<br> Income (Loss) per Common Stock |
|---|
The condensed statements of operations includes a presentation of net income (loss) per Class A redeemable common stock and net income (loss) per non-redeemable common stock following the two-class method of income per common stock. In order to determine the net income (loss) attributable to both the Class A redeemable common stock and non-redeemable common stock, the Company first considered the total net income (loss) allocable to both sets of stock. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the Class A common stock subject to possible redemption was treated as dividends paid to the public stockholders.
Net income (loss) per common stock is computed by dividing net income (loss) by class by the weighted average number of common stock outstanding during the period. The Company has not considered the effect of the 11,500,000 Public Warrants in the calculation of diluted net income (loss) per share, since the exercise of such warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
12
The following tables reflect the calculation of basic and diluted net income (loss) per common stock for the three and nine months ended September 30, 2023 (in dollars, except share amounts):
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2023 | ||||||
| Net income | $ | 7,216 | ||||
| Remeasurement of temporary equity to redemption value | (1,097,181 | ) | ||||
| Net loss including remeasurement of temporary equity to redemption value | $ | (1,089,965 | ) | |||
| Three Months Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| September 30, | ||||||
| 2023 | ||||||
| Class A | Class A & Class B | |||||
| Redeemable | Non-redeemable | |||||
| Basic and diluted net income (loss) per share: | ||||||
| Numerator: | ||||||
| Allocation of net income (loss) including accretion of temporary equity | $ | (531,636 | ) | $ | (558,329 | ) |
| Deemed dividend for remeasurement of temporary equity to redemption value | 1,097,181 | — | ||||
| Allocation of net income (loss) | $ | 565,545 | $ | (558,329 | ) | |
| Weighted average shares outstanding | 8,147,563 | 8,556,667 | ||||
| Net income (loss) per share | $ | 0.07 | $ | (0.07 | ) | |
| Nine Months Ended | ||||||
| --- | --- | --- | --- | |||
| September 30, | ||||||
| 2023 | ||||||
| Net income | $ | 3,239,010 | ||||
| Remeasurement of temporary equity to redemption value | (4,604,390 | ) | ||||
| Net loss including remeasurement of temporary equity to redemption value | $ | (1,365,380 | ) | |||
| Nine Months Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| September 30, | ||||||
| 2023 | ||||||
| Class A | Class A & Class B | |||||
| Redeemable | Non-redeemable | |||||
| Basic and diluted net income (loss) per share: | ||||||
| Numerator: | ||||||
| Allocation of net income (loss) including accretion of temporary equity | $ | (890,320 | ) | $ | (475,060 | ) |
| Deemed dividend for remeasurement of temporary equity to redemption value | 4,604,390 | — | ||||
| Allocation of net income (loss) | $ | 3,714,070 | $ | (475,060 | ) | |
| Weighted average shares outstanding | 16,036,220 | 8,556,667 | ||||
| Net income (loss) per share | $ | 0.23 | $ | (0.06 | ) |
The following tables reflect the calculation of basic and diluted net income (loss) per common stock for the three and nine months ended September 30, 2022 (in dollars, except share amounts):
| Three Months Ended | |||
|---|---|---|---|
| September 30, | |||
| 2022 | |||
| Net loss | $ | (146,096 | ) |
| Remeasurement of temporary equity to redemption value | (1,139,015 | ) | |
| Net loss including remeasurement of temporary equity to redemption value | $ | (1,285,111 | ) |
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| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | ||||||
| 2022 | ||||||
| Class A | Class A & Class B | |||||
| Redeemable | Non-redeemable | |||||
| Basic and diluted net income (loss) per share: | ||||||
| Numerator: | ||||||
| Allocation of net income (loss) including accretion of temporary equity | $ | (936,650 | ) | $ | (348,461 | ) |
| Deemed dividend for remeasurement of temporary equity to redemption value | 1,139,015 | — | ||||
| Allocation of net income (loss) | $ | 202,365 | $ | (348,461 | ) | |
| Weighted average shares outstanding | 23,000,000 | 8,556,667 | ||||
| Net income (loss) per share | $ | 0.01 | $ | (0.04 | ) | |
| Nine Months Ended | ||||||
| --- | --- | --- | --- | |||
| September 30, | ||||||
| 2022 | ||||||
| Net loss from beginning of year through date of initial public offering | $ | (37,034 | ) | |||
| Net loss from date of initial public offering through September 30, 2022 | (821,782 | ) | ||||
| Total loss year to date | (858,816 | ) | ||||
| Remeasurement of temporary equity to redemption value | (41,007,220 | ) | ||||
| Net loss including remeasurement of temporary equity to redemption value | $ | (41,866,036 | ) | |||
| Nine Months Ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| September 30, | ||||||
| 2022 | ||||||
| Class A | Class A & Class B | |||||
| Redeemable | Non-redeemable | |||||
| Basic and diluted net income (loss) per share: | ||||||
| Numerator: | ||||||
| Allocation of net income (loss) including accretion of temporary equity | $ | (30,486,966 | ) | $ | (11,379,070 | ) |
| Deemed dividend for remeasurement of temporary equity to redemption value | 41,007,220 | — | ||||
| Allocation of net income (loss) | $ | 10,520,254 | $ | (11,379,070 | ) | |
| Weighted average shares outstanding | 18,113,553 | 8,107,815 | ||||
| Net income (loss) per share | $ | 0.58 | $ | (1.40 | ) | |
| c) | Income<br> taxes | |||||
| --- | --- |
The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”). Under the asset and liability method, as required by this accounting standard, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities in the financial statement and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to the period when assets are realized or liabilities are settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of September 30, 2023 or December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
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ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
Excise Tax
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from whom shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022.
The Company expects new stock issuances related to the business combination with Alternus will offset the fair market value of the Class A stockholder redemptions that occurred on May 25, 2023. While no assurances can be provided, as the business combination is anticipated to close before December 31, 2023, which is the same year in which the new stock issuances are expected to occur, the Company believes that it is probable that no excise tax will be due or payable. As such, the Company has not recognized an excise tax liability on its condensed balance sheets as of September 30, 2023.
| (1) | Concentration<br> of Credit Risk |
|---|
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit. At September 30, 2023 and December 31, 2022, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
| (2) | Recent<br> Accounting Pronouncements |
|---|
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on the results of operations, financial condition, or cash flows, based on the current information.
15
| 3) | Note 3. Initial Public Offering |
|---|
Pursuant to the Initial Public Offering on February 28, 2022, the Company sold 23,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock, one right and one-half of one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment.
An aggregate of $10.10 per Unit sold in the Initial Public Offering is held in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in money market funds meeting the conditions of Rule 2a-7(d) of the Investment Company Act, as determined by the Company.
| 4) | Note 4. Related Party Transactions |
|---|---|
| (1) | Founder Shares |
| --- | --- |
On August 17, 2021, our sponsor purchased an aggregate of 5,750,000 shares of the Company’s Class B common stock for an aggregate purchase price of $25,000 or approximately $0.004 per share (the “Founder Shares”). On February 7, 2022, we effected a 1:1.33333339 stock split of our Class B common stock, resulting in our initial stockholders holding 7,666,667 Founder Shares. All share and per-share amounts have been retroactively restated to reflect the stock split. The Founder Shares collectively represent the Sponsor’s 25% ownership of the Company’s issued and outstanding shares after the Initial Public Offering (excluding the Private Shares).
b) The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until after the completion of a Business Combination.
c) The Founder Shares will convert into shares of Class A common stock after the initial Business Combination.
| (1) | Unvested Founder Shares |
|---|
Pursuant to the letter agreement, a total of 2,167,000 Founder Shares then held by the Sponsor will be considered newly unvested shares upon the completion of the Business Combination, which shall vest only if the closing price of the Class A common stock equals or exceeds $12.50 for any 20 trading days within a 30 day trading period after the Business Combination, but before the tenth anniversary of the Business Combination. In the event such price level is achieved before the first anniversary of the closing of the Business Combination, such unvested Founder Shares will not vest until the first anniversary of such closing. In the event that the Company enters into a binding agreement on or before the tenth anniversary of the Business Combination with respect to a Sale (as defined in the agreement), all unvested shares shall vest on the day prior to the closing of such Sale. Founder Shares, if any, that remain unvested at the tenth anniversary of the closing of the Business Combination will be forfeited.
| (2) | Private Placement |
|---|
The Sponsor purchased an aggregate of 890,000 Private Units at a price of $10.00 per Private Unit for an aggregate purchase price of $8,900,000 in a private placement that occurred simultaneously with the closing of the Initial Public Offering, the proceeds of which were recorded in additional paid in capital. Each Private Unit consists of one share of Class A common stock (“Private Share”) and one-half of one warrant (“Private Warrant”). Each Private Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per full share, subject to adjustment. The proceeds from the Private Units were added to the proceeds from the Initial Public Offering and are held in the Trust Account. If the Company does not complete a Business Combination by the Termination Date, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law).
| (3) | Related Party Loans |
|---|
In addition, in order to finance transaction costs in connection with a Business Combination, the Initial Stockholders, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into units of the post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units.
16
On September 26, 2022, the Company issued an unsecured promissory note to the Sponsor (the “WC Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $850,000. The WC Promissory Note is non-interest bearing and payable upon the consummation of the initial Business Combination. At the election of the Sponsor and at any time prior to payment in full of the principal balance, the WC Promissory Note can be converted into conversion units comprised of one Class A common stock and one-half of one warrant that are identical to those issued in the private placement (“Conversion Units”). The number of convertible Conversion Units is calculated as the outstanding principal balance divided by $10. As of September 30, 2023 and December 31, 2022, the WC Promissory Note balance was $850,000 and $806,170, respectively.
| (4) | The Company’s Extension Payments will be made in exchange for a $1,170,000 non-interest bearing,<br>convertible unsecured promissory note payable upon consummation of a business combination (the “Extension Notes”). At the<br>election of the Sponsor and at any time prior to payment in full of the principal balance, the Extension Note can be converted into Conversion<br>Units comprised of one Class A common stock and one-half of one warrant that are identical to those issued in the private placement<br>(“Conversion Units”). The number of convertible Conversion Units is calculated as the outstanding principal balance divided<br>by $10. The Company had $780,000 and $0 outstanding under the Extension Notes as of September 30, 2023 and December 31, 2022,<br>respectively. |
|---|
On August 8, 2023, the Company issued an unsecured promissory note to the Sponsor (the “Second WC Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $650,000. The Second WC Promissory Note is non-interest bearing and payable upon the consummation of the initial Business Combination. At the election of the Sponsor and at any time prior to payment in full of the principal balance, the Second WC Promissory Note can be converted into Conversion Units comprised of one Class A common stock and one-half of one warrant that are identical to those issued in the private placement (“Conversion Units”). The number of convertible Conversion Units is calculated as the outstanding principal balance divided by $10. As of September 30, 2023 and December 31, 2022, the Second WC Promissory Note balance was $73,500 and $0, respectively.
As of September 30, 2023 and December 31, 2022 there is an aggregate of $1,703,500 and $806,170 outstanding under the WC Promissory Note, Extension Notes, and Second WC Promissory Note.
| (5) | Anchor Investor Agreement |
|---|
A third-party investor (the “Anchor Investor”) (who is also not affiliated with our Sponsor or any member of our management team) purchased 2,277,000 of the units issued in the Initial Public Offering pursuant to a November 2021 Subscription Agreement between our Sponsor and the Anchor Investor, wherein the Anchor Investor also purchased membership interests in our Sponsor. The excess fair value of the Sponsor membership units over the price paid by the Anchor Investor of $4,736,326 was determined to be an offering cost in accordance with SAB Topic 5A and a corresponding contribution by our Sponsor recorded in additional paid in capital.
The Sponsor retains voting and dispositive power over the Anchor Investor’s allocated Founder Shares and shares purchased by the Sponsor in the private placement until the consummation of the Business Combination, following which time the Sponsor will distribute such securities to the Anchor Investor (subject to applicable lock-up or escrow restrictions).
| (6) | Related Party Consulting Agreement |
|---|
In April 2022, the Company entered into a consulting agreement with a related party. During the term of the agreement, the consultant (“Related Party Consultant”) will be responsible for financial modeling, compiling presentations, data room management, and research. The Company will pay the Related Party Consultant compensation in the form of $7,500 per month in cash, as well as $5,000 per month in the form of newly issued Class B common stock with an exercise price of $10.00 per share paid in arrears. The grant date of the stock-based compensation award under the agreement was April 1, 2022. The performance condition required for vesting is a successful business combination, the outcome of which is not considered probable until the event occurs. In November 2022, the Company executed an amendment to the consulting agreement with the related party. The Amendment changed the compensation structure to pay the Related Party Consultant $5,000 per month in cash and no additional compensation in the form of stock. The commencement date for the updated compensation structure was December 1, 2022. As such, as of September 30, 2023, no stock-based compensation expense has been recorded and will not be accrued for or recognized until a successful business combination occurs. Additionally, the agreement will conclude upon the completion of a successful business combination. The Company incurred $15,000 and $45,000 for the three and nine months ended September 30, 2023, respectively, related to this agreement. The Company had $5,000 outstanding and payable to the Related Party Consultant as of September 30, 2023 and December 31, 2022, which were recorded to accounts payable.
17
| 5) | Note 5. Commitments and Contingencies |
|---|---|
| (1) | Registration and Stockholder Rights |
| --- | --- |
The holders of the Founder Shares, as well as the holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to the Company, will be entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of a majority of the Private Units and units issued in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
| (2) | Underwriting Agreements |
|---|
The Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discount. The underwriters exercised the option in full on February 28, 2022.
The underwriters were entitled to a cash underwriting discount of 2.00% of the gross proceeds of the Initial Public Offering, or $4,600,000, which was paid upon the closing of the Initial Public Offering.
The underwriters are also entitled to a cash deferred underwriting fee of 3.50% of the gross proceeds of the Initial Public Offering, or $8,050,000, payable to the underwriters for deferred underwriting fees. The full amount was placed in the Trust Account and will be released to the underwriters only on, and concurrently with, completion of an initial business combination. In October 2022, one of the Company’s underwriters waived their right to 50% of the deferred underwriting fee, forfeiting $3,622,500 of their deferred underwriting fee. On April 17, 2023, the Company and one of the underwriters executed a revised Underwriting Agreement to forfeit the remaining portion of their deferred underwriting fee, or $3,622,500, resulting in a deferred underwriting fee of $805,000 payable upon consummation of a successful business combination. The one underwriter has forfeited an aggregate $7,245,000 of the deferred underwriting fee. As the Termination Date expires on November 28, 2023, the remaining deferred underwriter fee payable is classified as a current liability as of September 30, 2023.
For the three and nine months ended September 30, 2023, the Company recorded a $3,622,500 reduction of the deferred underwriter fee payable to accumulated deficit.
Placement Services Agreement
In August 2022, the Company entered into an agreement with a Placement Agent to serve as a non-exclusive capital markets advisor and placement agent for the Company in connection with a proposed private placement of the Company’s equity or equity-linked, preferred, debt or debt-like, securities. The Placement Agent will receive a nonrefundable cash fee of $500,000 and an additional cash fee of $450,000 that is contingent upon the closing of the Business Combination. On August 10, 2022, the Company recorded the $500,000 nonrefundable cash fee within accrued expenses on the condensed balance sheets and as placement services fee expense on the condensed statements of operations. The Company has not incurred any amounts related to the $450,000 cash fee as of September 30, 2023 and payment of such amounts are contingent upon the closing of the Business Combination.
Consulting Agreement
In June 2022, the Company entered into a consulting agreement. During the term of the agreement, the consultant (“Consultant”) will advise the Company concerning matters related to qualifying business combinations, including services such as de-SPAC readiness assessment, post transaction close preparation advisory, the overall capital markets climate related to global macroeconomic conditions, world leading exchanges, potential competitors, and general advice with respect to the business. The Company will pay the Consultant compensation in the form of $15,000 per month. Upon closing of an initial business combination, the Company will pay the Consultant a one-time success fee cash bonus of $25,000. Additionally, at the successful close of a business combination, the Company will pay a cash bonus of $50,000 if certain criteria are met for redemptions. Payment to the Consultant for any cash bonus fee is dependent upon the closing of an initial business combination. In November 2022, the Company terminated the agreement with the Consultant in accordance with the terms of the agreement. For the three and nine months ended September 30, 2023, the Company incurred $0, under this agreement. $0 and $15,000 was accrued for within accounts payable as of September 30, 2023 and December 31, 2022, respectively.
18
| 6) | Note 6. Stockholders’ Deficit |
|---|
On February 23, 2022, the Company adopted the Second Amended and Restated Certificate of Incorporation of the Company (the “Certificate of Incorporation”). Under the Certificate of Incorporation, the total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Company is authorized to issue is 111,000,000 shares, consisting of (a) 110,000,000 shares of common stock (the “Common Stock”), including (i) 100,000,000 shares of Class A common stock (the “Class A Common Stock”), and (ii) 10,000,000 shares of Class B common stock (the “Class B Common Stock”), and (b) 1,000,000 shares of preferred stock (the “Preferred Stock”).
In connection with the Special Meeting where stockholders approved of the Charter Amendment Proposal, stockholders properly elected to redeem an aggregate of 14,852,437 shares of Class A Common Stock at a redemption price of approximately $10.38 per share (the “Redemption”), for an aggregate redemption amount of $154,152,327. Following the Redemption, $84,562,944 remained in the Company’s trust account (the “Trust Account”), not including any Extension Payments.
Preferred stock— The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.
Class A common stock— The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each common share. At September 30, 2023 and December 31, 2022, there were 890,000 shares of Class A common stock issued or outstanding, excluding 8,147,563 and 23,000,000 shares of Class A common stock issued and outstanding subject to possible redemption, respectively.
Class B common stock— The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. On August 17, 2021, our sponsor purchased an aggregate of 5,750,000 shares of the Company’s Class B common stock for an aggregate purchase price of $25,000 or approximately $0.004 per share (the “Founder Shares”). On February 7, 2022, we effected a 1:1.33333339 stock split of our Class B common stock, resulting in our initial stockholders holding 7,666,667 Founder Shares as of September 30, 2023 and December 31, 2022. All share and per-share amounts have been retroactively restated to reflect the stock split.
With respect to any matter submitted to a vote of our stockholders, including any vote in connection with a Business Combination, except as required by law, holders of our Founder Shares and holders of our Public Shares will vote together as a single class, with each share entitling the holder to one vote.
The shares of Class B common stock will automatically convert into Class A common stock at the time of Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B common stock shall convert into Class A common stock will be adjusted (unless the holders of a majority of the outstanding Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A common stock issuable upon conversion of all Class B common stock will equal, in the aggregate, on an as-converted basis, 25% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination and excluding any private placement-equivalent shares and warrants underlying units issued to our Sponsor, its affiliates or any member of our management team upon conversion of Working Capital Loans.
19
Rights— Each holder of a right will automatically receive one-tenth (1/10) of one share of Class A common stock upon consummation of a Business Combination, even if the holder of a right redeemed all shares held by him, her or it in connection with a Business Combination or an amendment to the Company’s Certificate of Incorporation with respect to its pre-business combination activities. In the event that the Company will not be the surviving company upon completion of a Business Combination, each holder of a right will be required to affirmatively exchange his, her or its rights in order to receive the one-tenth (1/10) of a share underlying each right upon consummation of the Business Combination.
The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of Delaware law. As a result, the holders of the rights must hold rights in multiples of 10 in order to receive shares for all of the holders’ rights upon closing of a Business Combination. If the Company is unable to complete an initial Business Combination by the Termination Date and the Company redeems the Public Shares for the funds held in the Trust Account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless.
Warrants— Each whole warrant entitles the registered holder to purchase one whole share of Class A common stock at a price of $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of the initial Business Combination. The warrants will expire five years after the completion of the initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file a post-effective amendment to the registration statement or a new registration statement with the SEC covering the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to the shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A common stock for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00.
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Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Warrants):
| · | in whole and not in part; |
|---|---|
| · | at a price of $0.01 per warrant; |
| --- | --- |
| · | provided that the reference value of the Class A common stock equals or exceeds $18.00 per share;<br>and |
| --- | --- |
| · | either there is an effective registration statement covering the issuance of the shares of Common Stock<br>issuable upon exercise of the Public Warrants, and a current prospectus relating thereto, available throughout the 30-day redemption period;<br>or |
| --- | --- |
| · | the Company has elected to require the exercise of the Public Warrants on a “cashless basis”. |
| --- | --- |
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per common stock (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants may be exercised for cash or on a “cashless basis”, the Private Warrants and the Class A common stock issuable upon exercise of the Private Warrants may be subject to certain transfer restrictions, and the Private Warrants are not redeemable at the option of the Company. The Private Warrants shall not become Public Warrants as a result of any transfer of the Private Warrants, regardless of the transferee.
If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A common stock and upon completion of such offer, the offeror owns beneficially more than 50% of the outstanding shares of Class A Common Stock, the holder of the warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant had been exercised, accepted such offer and all of the Class A common stock held by such holder had been purchased pursuant to the offer. If less than 70% of the consideration receivable by the holders of the Class A common stock in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant properly exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value for a Capped American Call on Bloomberg Financial Markets.
Note 7. Income Tax
During the nine months ended September 30, 2023 and 2022, the Company recorded a tax provision of $853,922 and $278,308, respectively. The effective tax rate for the nine months ended September 30, 2023 and 2022 was 20.86% and (47.94)%, respectively. During the three months ended September 30, 2023 and 2022, the Company recorded a tax provision of $222,209 and $228,946, respectively. The effective tax rate for the three months ended September 30, 2023 and 2022 was 96.85% and 276.34%, respectively. The Company’s effective tax rate differs from the statutory income tax rate of 21.0% primarily due to the change in valuation allowance against deferred tax assets.
The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which primarily consist of net operating loss carryforwards. The Company has considered its history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets. As a result, as of September 30, 2023 and December 31, 2022, the Company has recorded a full valuation allowance against its net deferred tax assets.
21
Note 8. Fair Value Measurements
Cash and marketable securities held in the Trust Account must be recorded on the balance sheet at fair value and are subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s condensed statements of operations.
The following table presents the fair value information, as of September 30, 2023, of the Company’s financial assets that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. The Company’s marketable securities held in the Trust Account are based on dividend and interest income and market fluctuations in the value of invested marketable securities, which are considered observable. The fair value of the marketable securities held in trust is classified within Level 1 of the fair value hierarchy.
22
The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis:
| As of September 30, 2023 | Level 1 | Level 2 | Level 3 | |||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Marketable securities held in trust account | $ | 86,038,091 | $ | — | $ | — |
| As of December 31, 2022 | Level 1 | Level 2 | Level 3 | |||
| --- | --- | --- | --- | --- | --- | --- |
| Assets | ||||||
| Marketable securities held in trust account | $ | 235,586,028 | $ | — | $ | — |
The tables below represent the carrying value, fair value and fair value hierarchy category of certain financial assets and liabilities that are recorded at fair value in the Company’s condensed balance sheets for the periods. The promissory notes with related parties are classified as Level 2 measurements as the inputs underlying the conversion options would largely be driven by the fair value of Class A common stock and Public Warrants for which quoted prices are observable in active markets.
| As of September 30, 2023 | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Liabilities | ||||||||||
| Promissory note – related party | $ | 1,703,500 | $ | 1,703,500 | $ | — | $ | 1,703,500 | $ | — |
| As of December 31, 2022 | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | |||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Liabilities | ||||||||||
| Promissory note – related party | $ | 806,170 | $ | 806,170 | $ | — | $ | 806,170 | $ | — |
Note 9. Subsequent Events
On November 13, 2023, the Company withdrew $380,000 of funds from the Trust Account as allowed for tax payment obligations.
On October 8, 2023, November 1, 2023 and November 6, 2023 the Company drew down an additional $100,000, $10,000 and $40,000 on the Second WC Promissory Note, respectively, bringing the outstanding balance to $223,500 with $426,500 available borrowing capacity.
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “Clean Earth Acquisitions Corp.,” “us” or “we” refer to Clean Earth Acquisitions Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
| (1) | Special Note Regarding Forward-Looking Statements |
|---|
This Quarterly Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
| (2) | Overview |
|---|
Clean Earth Acquisitions Corp. was incorporated in Delaware on May 14, 2021. The Company is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).
On October 12, 2022, we entered into a Business Combination Agreement with Alternus Energy Group Plc (the “Seller” or “Alternus”). Pursuant to the Business Combination Agreement, we will acquire certain subsidiaries of the Seller, for up to 90 million shares. Initially, we will issue 55 million shares at closing (subject to a working capital adjustment capped at 1 million additional shares) plus up to 35 million shares subject to certain earn-out provisions, which will be deposited in escrow and will be released if certain conditions are met. The parties amended the terms of the Business Combination Agreement on April 12, 2023 pursuant to the First Amendment (see Note 1 to the condensed financial statements).
As of September 30, 2023, the Company had not commenced any operations. All activity through September 30, 2023, relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and following the Initial Public Offering, identifying a target company for a Business Combination and negotiating a Business Combination Agreement. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest and dividend income from the proceeds derived from the Initial Public Offering placed in the Trust Account (described below).
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The registration statement for the Company’s Initial Public Offering was declared effective on February 23, 2022 (the “Effective Date”). On February 28, 2022, the Company consummated the Initial Public Offering of 23,000,000 Units at $10.00 per Unit, generating gross proceeds of $230,000,000, which is discussed in Note 3 to the condensed financial statements. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 890,000 Private Placement Units (the “Private Units”) at a price of $10.00 per Private Unit in a private placement with Clean Earth Acquisitions Sponsor, LLC (the “Sponsor”) generating proceeds of $8,900,000 from the sale of the Private Units.
Following the closing of the Initial Public Offering on February 28, 2022, $232,300,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (“Trust Account”), located in the United States invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in money market funds selected by the Company meeting the conditions of Rule 2a-7(d) of the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s Second Amended and Restated Certificate of Incorporation, and (iii) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination by the Termination Date (defined below).
On May 25, 2023, the Company and Alternus executed a mutual written consent pursuant to which the Company and Alternus agreed pursuant to Section 7.03(b) of the Business Combination Agreement, to extend the Termination Date (as defined in the Business Combination Agreement) to November 28, 2023 (the “Termination Date”).
On May 25, 2023, the Company held a special meeting of stockholders (the “Special Meeting”, during which the Company’s stockholders approved the proposal (the “Charter Amendment Proposal”) to amend the Company’s amended and restated certificate of incorporation to give the Company the right to extend the date by which it has to consummate a business combination up to six times, from May 28, 2023 to November 28, 2023, composed of six one-month extensions (each an “Extension,” and the end date of each Extension, the “Extended Date”), by depositing into the Trust Account on the then-applicable Extension Date, for each Extension, the lesser of (i) $195,000 and (ii) $0.04 for each share of the Company’s Class A common stock not redeemed in connection with the Charter Amendment Proposal until November 28, 2023, or such earlier date as determined by the Board (assuming the Company’s business combination has not occurred) in exchange for a non-interest bearing, convertible unsecured promissory note payable upon consummation of a business combination.
In connection with the Special Meeting, stockholders properly elected to redeem an aggregate of 14,852,437 shares of Class A common stock at a redemption price of approximately $10.38 per share (the “Redemption”), for an aggregate redemption amount of $154,152,327. Following the Redemption, $84,562,944 remained in the Company’s Trust Account, not including any Extension Payments, as described above.
On November 7, 2023, the Company filed a definitive proxy statement in connection with a special meeting of stockholders, to consider and approve an extension of the date by which the Company must consummate a business combination.
The Securities and Exchange Commission accepted the Company’s definitive proxy statement on November 13, 2023, which announced the date for the Company’s Special Meeting of Stockholders, to among other things, approve the business combination previously announced, with Alternus Energy Group plc, a transatlantic clean energy independent power producer. The Company will hold the Special Meeting on December 4^th^, 2023 at 10:00 AM EST virtually via live webcast. Stockholders of record as of the close of business on November 8^th^, 2023 (the “Record Date”) are entitled to receive notice of, attend and vote at the Special Meeting.
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| (3) | Results of Operations |
|---|
Our entire activity from inception through September 30, 2023 relates to our formation, the Initial Public Offering and, since the closing of the Initial Public Offering, a search for, and negotiation with, a Business Combination candidate. We will not be generating any operating revenues until the closing and completion of our Business Combination at the earliest.
For the three months ended September 30, 2023, we had net income of $7,216, which consisted of $1,107,180 of dividend income on marketable securities held in the Trust Account, and $2 of interest income on the operating bank account, partially offset by $672,962 in legal and accounting expenses, $50,000 of franchise tax expense, a $222,009 provision for income taxes, $106,518 of insurance expense, $8,766 of dues and subscriptions, and $39,711 of marketing and advertising expenses, listing fee, general and administrative expenses and bank fees.
For the nine months ended September 30, 2023, we had net income of $3,239,010, which consisted of $4,216,253 of dividend income on marketable securities held in the Trust Account, $1,663,187 realized gains on marketable securities held in the Trust Account, and $40 of interest income on the operating bank account, partially offset by $1,049,820 in legal and accounting expenses, $150,000 of franchise tax expense, a $853,922 provision for income taxes, $319,559 of insurance expense, $169,314 of dues and subscriptions, and $97,854 of marketing and advertising expenses, listing fee, general and administrative expenses and bank fees.
For the three months ended September 30, 2022, we had a net loss of $146,096, which consisted of a $500,000 placement services fee, $334,967 in legal and accounting expenses, $50,000 of franchise tax expense, a $228,946 provision for income taxes, $106,521 of insurance expense, and $6,290 in dues and subscriptions, marketing and advertising expenses, and bank fees expenses, partially offset by $261,381 of dividend income on marketable securities held in the Trust Account and $877,634 of realized gains on marketable securities held in the Trust Account.
For the nine months ended September 30, 2022, we had a net loss of $858,816, which consisted of a $500,000 placement services fee, $1,016,032 in legal and accounting expenses, $150,000 of franchise tax expense, a $278,308 provision for income taxes, $253,621 of insurance expense, and $134,9298 in dues and subscriptions, marketing and advertising expenses, and bank fees expenses, partially offset by $596,440 of dividend income on marketable securities held in the Trust Account and $877,634 of realized gains on marketable securities held in the Trust Account.
| (4) | Going Concern |
|---|
As of September 30, 2023, the Company had $9,266 of operating cash and a working capital deficit of $3,861,647. At September 30, 2023, working capital deficit excludes the amount of marketable securities held in Trust Account and deferred underwriting fee payable.
The Company’s liquidity needs through September 30, 2023 had been satisfied through a payment from the Sponsor of $25,000 for Class B common stock, par value $0.0001 per share (“Class B common stock” and shares thereof, “founder shares”), the Initial Public Offering and the issuance of the Private Units. Additionally, the Company drew on unsecured promissory notes to pay certain offering costs, an unsecured promissory note to fund Extension Payments, and an unsecured working capital promissory note.
The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. The Sponsor is committed to extend Working Capital Loans as needed. The Company cannot assure that its plans to consummate an initial Business Combination will be successful. In addition, management continues to evaluate the impact of volatile and disruptive credit and financial markets and the current conflict between Ukraine and Russia and Hamas’ attack on Israel and their effects on the Company’s financial position, results of its operations and/or search for a target company.
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These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date the financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| (5) | Contractual Obligations |
|---|
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of September 30, 2023.
The underwriters of the Initial Public Offering are entitled to a cash deferred underwriting fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred underwriting fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreements. In October 2022, one of the Company’s underwriters waived their right to 50% of the deferred underwriting fee, forfeiting $3,622,500 of their deferred underwriting fee. The underwriter has additionally waived their remaining 50% of the deferred underwriting fee of $3,622,500 on April 17, 2023. As a result, the deferred underwriting fee has been reduced to $805,000. The deferred underwriter fee payable was $805,000 as of September 30, 2023.
| (6) | Commitments and Contingencies |
|---|---|
| ii) | Registration Rights |
| --- | --- |
The holders of the Founder Shares, as well as the holders of the Private Units and any units that may be issued in payment of Working Capital Loans made to the Company, will be entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of a majority of the Private Units and units issued in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a business combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
| iii) | Underwriting Agreements |
|---|
The Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and deferred underwriting fee. The underwriters exercised the option in full on February 28, 2022.
The underwriters were entitled to a cash underwriting discount of 2.00% of the gross proceeds of the Initial Public Offering, or $4,600,000, which was paid upon the closing of the Initial Public Offering.
The underwriters are also entitled to a cash deferred underwriting fee of 3.50% of the gross proceeds of the Initial Public Offering, or $8,050,000, payable to the underwriters for deferred underwriting fees. The full amount was placed in the Trust Account and will be released to the underwriters only on, and concurrently with, completion of an initial Business Combination. As the Termination Date is November 28, 2023, the deferred underwriter fee payable is classified as a current liability as of September 30, 2023.
In October 2022, one of the Company’s underwriters waived their right to 50% of the deferred underwriting fee, forfeiting $3,622,500 of their deferred underwriting fee. The underwriter has subsequently waived their remaining 50% of the deferred underwriting fee of $3,622,500 on April 17, 2023. As a result, the deferred underwriting fee payable has been reduced to $805,000 as of September 30, 2023.
Placement Services Agreement
In August 2022, the Company entered into an agreement with a Placement Agent to serve as a non-exclusive capital markets advisor and placement agent for the Company in connection with a proposed private placement of the Company’s equity or equity-linked, preferred, debt or debt-like, securities. The Placement Agent will receive a nonrefundable cash fee of $500,000 and an additional cash fee of $450,000 that is contingent upon the closing of the Business Combination. On August 10, 2022, the Company has recorded the $500,000 nonrefundable cash fee within accrued expenses on the condensed balance sheets and as placement services fee expense on the statement of operations. The Company has not incurred any amounts related to the $450,000 cash fee as of September 30, 2023 and payment of such amounts are contingent upon the closing of the Business Combination.
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Consulting Agreement
In June 2022, the Company entered into a consulting agreement. During the term of the agreement, the consultant (“Consultant”) will advise the Company concerning matters related to qualifying business combinations, including services such as de-SPAC readiness assessment, post transaction close preparation advisory, the overall capital markets climate related to global macroeconomic conditions, world leading exchanges, potential competitors, and general advice with respect to the business. The Company will pay the Consultant compensation in the form of $15,000 per month. Upon closing of an initial business combination, the Company will pay the Consultant a one-time success fee cash bonus of $25,000. Additionally, at the successful close of a business combination, the Company will pay a cash bonus of $50,000 if certain criteria are met for redemptions. Payment to the Consultant for any cash bonus fee is dependent upon the closing of an initial business combination. In November 2022, the Company terminated the agreement with the Consultant in accordance with the terms of the agreement. As of September 30, 2023, the Company has incurred and paid $79,353 under this agreement as of September 30, 2023.
| (1) | Critical Accounting Estimates |
|---|
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates.
| iv) | Recent Accounting Pronouncements |
|---|
Refer to “Recent Accounting Pronouncements” in Note 2 in the notes to the condensed financial statements.
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Exhibit 99.3
UNAUDITED PRO FORMA CONDENSEDCOMBINED FINANCIAL INFORMATION
Defined terms includedbelow shall have the same meaning as terms defined and included (i) elsewhere in this Current Report on Form 8-K and (ii) inClean Earth Acquisition Corp.’s definitive proxy statement filed with the Securities and Exchange Commission on November 13,2023.
The following unaudited pro forma condensed combined financial statements are provided to aid you in your analysis of the financial aspects of the Business Combination, the Material Events and the Significant Acquisitions (defined in the notes to the unaudited pro forma condensed combined financial statements), which are referred to as the “Transactions”.
The unaudited pro forma condensed combined financial statements are based on the Clean Earth historical financial statements and the Alternus historical consolidated financial statements as adjusted to give effect to the Transactions and reflect a refinancing of Alternus’ Solis assets in full. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the Transactions as if they had been consummated on September 30, 2023. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2023 and the year ended December 31, 2022 give effect to the Transactions as if they had occurred on January 1, 2022, which is the beginning of the earliest period presented.
The unaudited pro forma condensed combined financial statements were derived from and should be read in conjunction with:
| ● | the accompanying notes to the unaudited<br> pro forma condensed combined financial statements; |
|---|---|
| ● | the historical unaudited condensed financial statements of Clean Earth as of<br> and for the nine months ended September 30, 2023 and the related notes; |
| ● | the historical audited financial statements of Clean Earth as of December 31,<br> 2022 and 2021, for the year ended December 31, 2022, and for the period from May 14, 2021 (inception)<br> through December 31, 2021 and the related notes; |
| ● | the historical unaudited condensed consolidated financial statements of Alternus<br> as of and for the nine months ended September 30, 2023 and the related notes; |
| ● | the historical audited consolidated financial statements of Alternus as of December 31,<br> 2022 and 2021, and for the years ended December 31, 2022 and December 31, 2021 and the related notes; |
| ● | the sections entitled “Clean Earth Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Alternus Management’s Discussion and Analysis of Financial Condition and Results of Operation,” and other financial information<br> relating to Clean Earth and Alternus. |
The unaudited pro forma condensed combined financial information has been prepared based on actual redemptions of 6,419,831 shares of Class A Common Stock, of which 5,351,009 shares were redeemed for a per share redemption price of $10.62, 1,046,600 shares were redeemed for a per share redemption price of $10.74 and 22,222 shares were redeemed for a per share redemption price of $10.80 or approximately $68.3 million in the aggregate. The unaudited pro forma condensed combined financial information also reflects 1,496,234 of newly issued shares of Class A Common Stock as per Subscription Agreement dated December 3^rd^2023. Additionally, the unaudited pro forma condensed combined financial information reflects the Forward Purchase Agreement dated December 3^rd^ 2023 which is comprised of the 1,300,320 shares of Class A Common Stock purchased by the Seller from other shareholders, as well as the 1,496,234 issued shares of Class A Common Stock purchased under the Subscription Agreement, for a total quantity of shares contemplated under the Forward Purchase Agreement of 2,796,554. Upon Closing, the Company funded a prepayment amount for the Forward Purchase Shares equal to $13.4 million, which is calculated as the total Prepayment Amount of $30.0 million, less a Prepayment Shortfall of $0.5 million, and less the $16.1 million purchase price owed by the Seller under the Subscription Agreement. The Company also paid $1.1 million to the Seller as an inducement to enter into the Subscription Agreement and Forward Purchase Agreement, which was calculated as the 100,000 shares purchased by Seller from other shareholders at a purchase price of $10.74 per share.
On December 18, 2023, CLIN entered into a non-redemption agreement (as it may be amended, supplemented or otherwise modified from time to time, the “NRA”) by and among CLIN, the Sponsor, and the investor named therein (the “Investor”). Pursuant to the terms of the NRA, among other things, the Investor agreed to withdraw redemptions in connection with the Business Combination on any Class A Common Stock, held by the Investor and to purchase additional Class A Common Stock from redeeming stockholders of CLIN such that the Investor will be the holder of no fewer than 277,778 shares of Class A Common Stock. In exchange, CLIN and the Sponsor will cause to be delivered to the Investor at the Closing an additional 277,778 founder shares, which such founder shares will reflect the same legends and be restricted in the same manner as then-applicable to the Sponsor at the Closing. In addition, 2,300,000 shares were issued upon the automatic conversion of all 23,000,000 rights upon Closing.
The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not necessarily indicative of what the actual results of operations and financial position would have been had the Transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the combined company.
UNAUDITED PRO FORMA CONDENSEDCOMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2023
(in thousands, except shareand per share information)
| 4(B)<br><br><br><br>Alternus | 4(C)<br><br>Carve-Out<br> Adjustments | Alternus<br> Pro Forma | 4(D)<br><br>Material<br><br> events | Transaction <br><br>Accounting<br><br> Adjustments | Pro Forma<br><br> Balance<br><br> Sheet | |||||||||||||||||
| Assets | ||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||
| Cash and cash equivalents | 9 | $ | 3,886 | $ | (523 | ) | $ | 3,363 | $ | (1,269 | ) | B | $ | (805 | ) | 4(d) | $ | 6,576 | ||||
| 2,205 | C | (68,309 | ) | 4(i) | ||||||||||||||||||
| 85,921 | 4(e) | |||||||||||||||||||||
| (14,539 | ) | 4(l) | ||||||||||||||||||||
| Accounts receivable, net | - | 4,597 | (135 | ) | 4,462 | (1,410 | ) | B | - | 3,052 | ||||||||||||
| Other receivable, net | - | - | - | - | - | 500 | 4(l) | 500 | ||||||||||||||
| Marketable securities held in Trust Account | 86,038 | - | - | - | 468 | A | (85,921 | ) | 4(e) | - | ||||||||||||
| (585 | ) | 4(c) | ||||||||||||||||||||
| Unbilled energy incentives earned | - | 5,883 | - | 5,883 | 5,883 | |||||||||||||||||
| Prepaid expense and other current assets | 259 | 6,144 | (1,032 | ) | 5,112 | (2,211 | ) | B | (259 | ) | 4(g) | 939 | ||||||||||
| (1,962 | ) | 4(h) | ||||||||||||||||||||
| Taxes recoverable | - | 2,620 | (262 | ) | 2,358 | (1,030 | ) | B | - | 1,328 | ||||||||||||
| Total current assets | 86,306 | 23,130 | (1,952 | ) | 21,178 | (3,247 | ) | (85,959 | ) | 18,278 | ||||||||||||
| Non-current assets: | ||||||||||||||||||||||
| Property and equipment, net | - | 163,131 | 9,689 | 172,820 | (106,451 | ) | B | - | 66,369 | |||||||||||||
| Right of use asset | - | 9,377 | (785 | ) | 8,592 | (7,685 | ) | B | - | 907 | ||||||||||||
| Goodwill | - | 1,743 | (578 | ) | 1,165 | (1,165 | ) | B | - | - | ||||||||||||
| Restricted cash | - | 5,027 | - | 5,027 | (43 | ) | B | - | 4,984 | |||||||||||||
| Capitalized development cost and other long-term assets | - | 9,308 | (4,440 | ) | 4,868 | (126 | ) | B | - | 4,742 | ||||||||||||
| Forward purchase agreement derivative asset | - | - | - | - | - | 17,125 | 4(l) | 17,125 | ||||||||||||||
| Total Assets | 86,306 | $ | 211,716 | $ | 1,934 | $ | 213,650 | $ | (118,717 | ) | $ | (68,834 | ) | $ | 112,405 | |||||||
| Current liabilities: | ||||||||||||||||||||||
| Accounts payable | 171 | $ | 11,854 | $ | (3,190 | ) | $ | 8,664 | $ | (4,435 | ) | B | 1,788 | 4(h) | 6,188 | |||||||
| Accrued liabilities | 689 | 22,521 | (13,951 | ) | 8,570 | (7,234 | ) | B | 1,466 | 4(f) | 3,491 | |||||||||||
| Income and franchise taxes payable | 31 | - | - | - | - | - | 31 | |||||||||||||||
| Accrued legal expenses | 992 | - | - | - | - | - | 992 | |||||||||||||||
| Taxes payable | - | 1,200 | (451 | ) | 749 | - | - | 749 | ||||||||||||||
| Deferred income | - | 5,883 | - | 5,883 | (377 | ) | B | - | 5,506 | |||||||||||||
| Rights of asset liability - short term | - | 635 | (117 | ) | 518 | - | - | 518 | ||||||||||||||
| Green bonds, Convertible and non-convertible promissory notes, net | - | 194,918 | (27,994 | ) | 166,924 | (111,307 | ) | B | - | 55,617 | ||||||||||||
| Accrued offering costs | 543 | - | - | - | - | - | 543 | |||||||||||||||
| Promissory note – related party | 1,704 | - | - | - | 468 | A | (1,704 | ) | 4(k) | - | ||||||||||||
| (468 | ) | 4(c) | ||||||||||||||||||||
| Deferred underwriter fee payable | 805 | - | - | - | - | (805 | ) | 4(d) | - | |||||||||||||
| Total current liabilities | 4,935 | 237,011 | (45,703 | ) | 191,308 | (122,885 | ) | 277 | 73,635 | |||||||||||||
| Rights of asset liability - long term | - | 8,710 | (670 | ) | 8,040 | (7,190 | ) | B | - | 850 | ||||||||||||
| Convertible and non-convertible promissory notes, net | - | 11,476 | (2,160 | ) | 9,316 | (9,316 | ) | B | - | 2,205 | ||||||||||||
| 2,205 | C | |||||||||||||||||||||
| Asset retirement obligations | - | 1,534 | 1,534 | (1,347 | ) | B | - | 187 | ||||||||||||||
| Forward purchase agreement liability | - | - | - | - | - | - | 4(l) | - | ||||||||||||||
| Total liabilities | 4,935 | $ | 258,731 | $ | (48,533 | ) | $ | 210,198 | $ | (138,533 | ) | $ | 277 | $ | 76,877 | |||||||
| Class A common stock subject to possible redemption; 0.0001 par value; 100,000,000 shares authorized; 8,147,563 shares issued and outstanding at redemption | 86,038 | - | - | - | - | (72,073 | ) | 4(i) | - | |||||||||||||
| (13,965 | ) | 4(l) | ||||||||||||||||||||
| Stockholders’ Equity | ||||||||||||||||||||||
| CEAC Preferred shares, 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | - | - | - | - | - | - | ||||||||||||||||
| CEAC Class A common stock, 0.0001 par value, 100,000,000 shares authorized; 890,000shares issued and outstanding (excluding 23,000,000 shares subject to possible redemption) | - | - | - | - | - | - | - | |||||||||||||||
| CEAC Class B common stock, 0.0001 par value, 10,000,000 shares authorized; 7,666,667 shares issued and outstanding | 1 | - | - | - | - | (1 | ) | 4(b) | - | |||||||||||||
| Alternus Clean Energy, Inc. Class A common stock | - | - | - | - | - | 1 | 4(b) | 7 | ||||||||||||||
| - | 4(i) | |||||||||||||||||||||
| 6 | 4(j) | |||||||||||||||||||||
| - | 4(k) | |||||||||||||||||||||
| - | 4(a) | |||||||||||||||||||||
| - | 4(l) | |||||||||||||||||||||
| Common stock, 0.012 par value, 100,000,000 authorized and 26,365,738 issued and outstanding | - | 305 | - | 305 | (116 | ) | B | (189 | ) | 4(j) | - | |||||||||||
| - | 4(l) | |||||||||||||||||||||
| Preferred stock | - | - | - | - | 11,046 | B | - | 11,046 | ||||||||||||||
| Additional paid-in capital | - | 52,006 | (51,179 | ) | 827 | (656 | ) | B | (6,068 | ) | 4(j) | 26,579 | ||||||||||
| 1,704 | 4(k) | |||||||||||||||||||||
| 29,515 | 4(l) | |||||||||||||||||||||
| 3,764 | 4(i) | |||||||||||||||||||||
| (259 | ) | 4(g) | ||||||||||||||||||||
| (2,248 | ) | 4(h) | ||||||||||||||||||||
| - | 4(a) | |||||||||||||||||||||
| Foreign Currency Translation Reserve | - | (26 | ) | (3,361 | ) | (3,387 | ) | 4,184 | B | - | 797 | |||||||||||
| Accumulated deficit | (4,668 | ) | (98,140 | ) | 103,847 | 5,707 | 5,358 | B | 6,251 | 4(j) | (2,901 | ) | ||||||||||
| (1,466 | ) | 4(f) | ||||||||||||||||||||
| (1,502 | ) | 4(h) | ||||||||||||||||||||
| (117 | ) | 4(c) | ||||||||||||||||||||
| (12,464 | ) | 4(l) | ||||||||||||||||||||
| Non-controlling interest | - | (1,160 | ) | 1,160 | - | - | - | - | ||||||||||||||
| Total stockholders' equity (deficit) | (4,667 | ) | (47,015 | ) | 50,467 | 3,452 | 19,816 | B | 16,927 | 35,528 | ||||||||||||
| Total liabilities and stockholders' equity (deficit) | 86,306 | $ | 211,716 | $ | 1,934 | $ | 213,650 | $ | (118,717 | ) | $ | (68,834 | ) | $ | 112,405 |
All values are in US Dollars.
UNAUDITEDPRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023
(in thousands,except share and per share amounts)
| Historical | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 5(A)<br><br>Clean<br><br>Earth | 5(B)<br><br><br> Alternus | 5(C)<br> Carve-Out<br> Adjustments | Autonomous<br> Entity<br> Adjustments | Alternus<br> Pro Forma | 5(E)<br> Material<br><br>events | Transaction <br><br>Accounting<br><br> Adjustments | Pro Forma <br><br>Statement of <br><br>Operations | ||||||||||||||||||||
| Revenues | $ | - | $ | 27,799 | $ | (480 | ) | $ | - | $ | 27,319 | $ | (13,965 | ) | $ | - | $ | 13,354 | |||||||||
| Operating expenses: | |||||||||||||||||||||||||||
| Cost of revenues | - | (6,545 | ) | 30 | - | (6,515 | ) | 4,275 | - | (2,240 | ) | ||||||||||||||||
| Franchise tax expense | (150 | ) | - | - | - | - | - | - | (150 | ) | |||||||||||||||||
| Bank fees | (7 | ) | - | - | - | - | - | - | (7 | ) | |||||||||||||||||
| Insurance expense | (320 | ) | - | - | - | - | - | - | (320 | ) | |||||||||||||||||
| Dues and subscriptions | (169 | ) | - | - | - | - | - | - | (169 | ) | |||||||||||||||||
| Marketing and advertising expenses | (37 | ) | - | - | - | - | - | - | (37 | ) | |||||||||||||||||
| Legal and accounting expenses | (1,050 | ) | - | - | - | - | - | - | (1,050 | ) | |||||||||||||||||
| Listing fee | (53 | ) | - | - | - | - | - | - | (53 | ) | |||||||||||||||||
| Selling, general and administrative | - | (10,122 | ) | 5,939 | (5,770 | ) | 5(aa) | (9,953 | ) | - | - | (9,953 | ) | ||||||||||||||
| Development cost | - | (1,223 | ) | 1,051 | - | (172 | ) | - | - | (172 | ) | ||||||||||||||||
| Depreciation, amortization, and accretion | - | (5,586 | ) | 174 | - | (5,412 | ) | 3,904 | - | (1,508 | ) | ||||||||||||||||
| Total operating expenses | (1,786 | ) | (23,476 | ) | 7,194 | (5,770 | ) | (22,052 | ) | 8,179 | - | (15,659 | ) | ||||||||||||||
| Income (loss) from operations | (1,786 | ) | 4,323 | 6,714 | (5,770 | ) | 5,267 | (5,786 | ) | - | (2,305 | ) | |||||||||||||||
| Interest expense | - | (19,253 | ) | 1,012 | 7,800 | 5(ab) | (10,441 | ) | 5,530 | - | (4,911 | ) | |||||||||||||||
| Other income | - | 318 | (244 | ) | 2,282 | 5(ac) | 2,356 | - | - | 2,356 | |||||||||||||||||
| Dividend income on marketable securities held in Trust Account | 4,216 | - | - | - | - | - | (4,216 | ) | 5(a) | - | |||||||||||||||||
| Realized gains on marketable securities held in Trust Account | 1,663 | - | - | - | - | - | (1,663 | ) | 5(a) | - | |||||||||||||||||
| Other expenses | - | (12,160 | ) | 2,466 | 863 | 5(ad) | (8,831 | ) | 11,113 | - | 2,282 | ||||||||||||||||
| Total other expense | 5,879 | (31,095 | ) | 3,234 | 10,945 | (16,916 | ) | 16,643 | (5,879 | ) | (273 | ) | |||||||||||||||
| Net income (loss) before provision for income taxes | 4,093 | (26,772 | ) | 9,948 | 5,175 | (11,649 | ) | 10,857 | (5,879 | ) | (2,578 | ) | |||||||||||||||
| Income taxes | (854 | ) | - | - | - | - | - | - | 5(d) | (854 | ) | ||||||||||||||||
| Net income (loss) | $ | 3,239 | $ | (26,772 | ) | $ | 9,948 | $ | 5,175 | $ | (11,649 | ) | 10,857 | $ | (5,879 | ) | $ | (3,432 | ) | ||||||||
| Net loss attributable to non-controlling interest | $ | (660 | ) | $ | 660 | - | |||||||||||||||||||||
| Net loss attributable to Alternus Energy Group / Alternus Clean Energy, Inc. | $ | (26,112 | ) | $ | (3,432 | ) | |||||||||||||||||||||
| Basic and diluted net loss per share, non-redeemable Class A and Class B common stock | $ | (0.06 | ) | ||||||||||||||||||||||||
| Basic and diluted weighted average shares outstanding, non-redeemable Class A and Class B common stock | 8,556,667 | ||||||||||||||||||||||||||
| Basic and diluted net income (loss) per share, Class A common stock | $ | 0.23 | $ | (0.99 | ) | $ | (0.05 | ) | |||||||||||||||||||
| Basic and diluted weighted average shares outstanding, Class A common stock | 16,036,220 | 26,325,738 | 71,905,633 | 5(h) |
UNAUDITEDPRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022
(in thousands,except share and per share amounts)
| Historical | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 5(A)<br><br><br> Clean<br><br>Earth | 5(B)<br><br><br><br><br> Alternus | 5(C)<br><br><br> Carve-Out<br> Adjustments | Autonomous<br> Entity<br> Adjustments | 5(D)<br> SIG Portfolio<br><br> acquired by<br><br> Solis | Alternus<br> Pro Forma | 5(E)<br><br><br> Material<br><br> events | Transaction<br><br> Accounting<br><br> Adjustments | Pro Forma<br><br> Statement of<br><br> Operations | ||||||||||||||||||||||
| Revenues | $ | - | $ | 32,526 | $ | (370 | ) | $ | - | $ | - | $ | 32,156 | $ | (18,421 | ) | $ | - | $ | 13,735 | ||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||
| Cost of revenues | - | (9,224 | ) | 80 | - | - | (9,144 | ) | 5,516 | - | (3,628 | ) | ||||||||||||||||||
| Franchise tax expense | (200 | ) | - | - | - | - | - | - | - | (200 | ) | |||||||||||||||||||
| Bank fees | (1 | ) | - | - | - | - | - | - | - | (1 | ) | |||||||||||||||||||
| Insurance expense | (359 | ) | - | - | - | - | - | - | - | (359 | ) | |||||||||||||||||||
| Dues and subscriptions | (204 | ) | - | - | - | - | - | - | - | (204 | ) | |||||||||||||||||||
| Marketing and advertising expenses | (100 | ) | - | - | - | - | - | - | - | (100 | ) | |||||||||||||||||||
| Legal and accounting expenses | (1,214 | ) | - | - | - | - | - | - | - | (1,214 | ) | |||||||||||||||||||
| Placement services fee | (500 | ) | - | - | - | - | - | - | - | (500 | ) | |||||||||||||||||||
| Selling, general and administrative | - | (11,139 | ) | 7,070 | (4,373 | ) | 5(aa) | (38 | ) | (8,480 | ) | - | (1,466 | ) | 5(b) | (11,449 | ) | |||||||||||||
| (1,502 | ) | 5(c) | ||||||||||||||||||||||||||||
| Development cost | - | (23,925 | ) | 22,649 | - | - | (1,276 | ) | 115 | - | (1,161 | ) | ||||||||||||||||||
| Depreciation, amortization, and accretion | - | (7,157 | ) | 137 | (7,020 | ) | 4,956 | - | (2,064 | ) | ||||||||||||||||||||
| Total operating expenses | (2,578 | ) | (51,445 | ) | 29,936 | (4,373 | ) | (38 | ) | (25,920 | ) | 10,587 | (2,968 | ) | (20,879 | ) | ||||||||||||||
| Income (loss) from operations | (2,578 | ) | (18,919 | ) | 29,566 | (4,373 | ) | (38 | ) | 6,236 | (7,834 | ) | (2,968 | ) | (7,145 | ) | ||||||||||||||
| Interest expense | - | (17,437 | ) | 2,581 | (154 | ) | 5(ab) | - | (15,010 | ) | 6,995 | (945 | ) | 5(g) | (9,077 | ) | ||||||||||||||
| (117 | ) | 5(e) | ||||||||||||||||||||||||||||
| Other income | - | 1,275 | (3 | ) | - | - | 1,272 | (1,684 | ) | - | (412 | ) | ||||||||||||||||||
| Dividend income on marketable securities held in Trust Account | 1,058 | - | - | - | - | - | (1,058 | ) | 5(a) | - | ||||||||||||||||||||
| Realized gains on marketable securities held in Trust Account | 2,228 | - | - | - | - | - | (2,228 | ) | 5(a) | - | ||||||||||||||||||||
| Loss on disposal of asset | - | (139 | ) | 60 | - | - | (79 | ) | (3,049 | ) | - | (3,128 | ) | |||||||||||||||||
| Loss on issuance of derivative contract | - | - | - | - | - | - | - | (11,910 | ) | 5(f) | (11,910 | ) | ||||||||||||||||||
| Other expenses | - | (1,059 | ) | 388 | - | - | (671 | ) | (554 | ) | 5(f) | (1,225 | ) | |||||||||||||||||
| Total other income | 3,286 | (17,360 | ) | 3,026 | (154 | ) | - | (14,488 | ) | 2,262 | (16,812 | ) | (25,752 | ) | ||||||||||||||||
| Net income (loss) before provision for income taxes | 708 | (36,279 | ) | 32,592 | (4,527 | ) | (38 | ) | (8,252 | ) | (5,572 | ) | (19,780 | ) | (32,897 | ) | ||||||||||||||
| Income taxes | (648 | ) | (5 | ) | - | - | - | (5 | ) | - | - | 5(d) | (653 | ) | ||||||||||||||||
| Net income (loss) | $ | 60 | $ | (36,284 | ) | $ | 32,592 | $ | (4,527 | ) | $ | (38 | ) | $ | (8,257 | ) | $ | (5,572 | ) | $ | (19,780 | ) | $ | (33,550 | ) | |||||
| Net loss attributable to non-controlling interest | (484 | ) | 484 | - | - | |||||||||||||||||||||||||
| Net loss attributable to Alternus Energy Group / Alternus Clean Energy, Inc. | $ | (35,800 | ) | $ | (33,550 | ) | ||||||||||||||||||||||||
| Basic and diluted net loss per share, non-redeemable Class A and Class B common stock | $ | (1.38 | ) | |||||||||||||||||||||||||||
| Basic and diluted weighted average shares outstanding, non-redeemable Class A and Class B common stock | 8,412,804 | |||||||||||||||||||||||||||||
| Basic and diluted net income (loss) per share, Class A common stock | $ | 0.60 | $ | (1.36 | ) | $ | (0.47 | ) | ||||||||||||||||||||||
| Basic and diluted weighted average shares outstanding, Class A common stock | 19,282,192 | 26,360,231 | 71,905,633 | 5(h) |
NOTESTO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
| 1. | Description of the Transactions |
|---|
BusinessCombination Between Clean Earth Acquisitions Corp. and Alternus Energy Group Plc
On October 12, 2022, Clean Earth and Alternus entered into the Business Combination Agreement, which is attached as Annex A. The business combination between Clean Earth and Alternus is herein referred to as the “Business Combination.”
On December 22, 2023, Alternus transferred to Clean Earth, and Clean Earth received from Alternus, all issued and outstanding Alternus Interests in exchange for the issuance and transfer by Clean Earth to Alternus at the Closing of 57,500,000 shares of common stock of Clean Earth. As a result, the Acquired Subsidiaries (as defined in the Business Combination Agreement) became direct wholly owned subsidiaries of Clean Earth and Clean Earth is controlled by Alternus.
MaterialEvents
| A. | Extension Financing |
|---|
The Company extended the date by which the Company must consummate the Business Combination. Per the terms of the definitive proxy statement filed in connection with the extension, the Clean Earth sponsor entity has offered to pay a principal amount of the lesser of: (i) $195,000 a month or (ii) $0.04 per share, on an incremental monthly basis, into the trust to finance the extension in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a Business Combination. Following the Closing of the Business Combination, the principal amount was repaid by the Company plus 25% of the principal amount.
| B. | Sale of Netherlands, Poland and Italy entities |
|---|
Alternus is in the final stages of negotiations with multiple parties to sell the operating assets in the Netherlands, Poland, and Italy. The Company expects to execute definitive agreements by December 31st 2023. The Company believes that these transactions are probable to occur, and the disclosure of pro forma financial information is considered material to investors.
| C. | Debt issued in October 2023 |
|---|
In October of 2023, Alternus approved the issuance by one of its US subsidiaries of secured debt in the principal amount of $3.2 million for an original purchase price of $2.2 million and having a maturity date of no later than June 30, 2024. The holder of the note has received warrants issued at the close of the business combination between the Company and Clean Earth to purchase up to (i) 100,000 shares of common stock of Clean Earth at an exercise price of $11.50 per share and having a 5 year term, and (ii) 300,000 shares of common stock of Clean Earth at an exercise price of $0.01 per share and having a 3 year term. The debt is secured by a parent company guarantee and a share pledge from Vincent Browne, Alternus’ CEO, of his Alternus shares.
SignificantAcquisitions
Alternus acquired Solarpark Samas Sp. Z.O.O. on August 30, 2021 and Green Source Energy Beta Srl on April 22, 2021. Additionally, a subsidiary of Alternus, Alternus Solis (“Solis”), acquired the Risen Portfolio on March 22, 2021 and related entities within the SIG Portfolio in stages, which occurred on December 21, 2021 and March 22, 2022 (collectively referred to as the “Significant Acquisitions”). As a result of these acquisitions Solarpark Samas Sp. Z.O.O, Green Source Energy Beta Srl, Risen Portfolio and SIG Portfolio are wholly owned subsidiaries of Alternus.
The unaudited pro forma combined condensed financial statements do not include adjustments related to acquisitions by Alternus that took place in 2021 as the historical audited consolidated statement of operations of Alternus for the year ended December 31, 2022 reflects the full period of the operations of these companies.
As the historical audited consolidated statement of operations of Alternus for the year ended December 31, 2022 does not reflect the operations of the SIG Portfolio acquired on March 22, 2022 for the full period presented, a pro forma adjustment was added to include the historical information for the period from January 1, 2022 through the date of acquisition, March 22, 2022.
The Business Combination and Significant Acquisitions are collectively referred to as the “Transactions.”
ForwardPurchase Agreement
On December 3, 2023, CLIN entered into an agreement with (i) Meteora Capital Partners, LP (“MCP”), (ii) Meteora Select Trading Opportunities Master, LP (“MSTO”), and (iii) Meteora Strategic Capital, LLC (“MSC” and, collectively with MCP and MSTO, “Seller”) (the “Forward Purchase Agreement”) for OTC Equity Prepaid Forward Transactions. For purposes of the Forward Purchase Agreement, CLIN is referred to as the “Counterparty” prior to the consummation of the Business Combination, while Alternus Clean Energy, Inc. (“Pubco”) is referred to as the “Counterparty” after the consummation of the Business Combination. The purpose of the Forward Purchase Transaction is to decrease the amount of redemptions in connection with the Special Meeting and potentially increase the working capital available to Alternus following the Closing. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Forward Purchase Agreement.
Pursuant to the terms of the Forward Purchase Agreement, Meteora intends, but is not obligated, to purchase up to 2,796,554 (the “Purchased Amount”) Class A ordinary shares, par value $0.0001 per share, of CLIN (“CLIN Shares”) concurrently with the Closing pursuant to Seller’s FPA Funding Amount PIPE Subscription Agreement (as defined below), less the number of CLIN Shares purchased by Seller separately from third parties through a broker in the open market (“Recycled Shares”). Seller will not be required to purchase an amount of CLIN Shares such that, following such purchase, that Seller’s ownership would exceed 9.9% of the total CLIN Shares outstanding immediately after giving effect to such purchase, unless Seller, at its sole discretion, waives such 9.9% ownership limitation. The Number of Shares subject to the Forward Purchase Agreement is subject to reduction following a termination of the Forward Purchase Agreement with respect to such shares as described under “Optional Early Termination” in the Forward Purchase Agreement.
The Forward Purchase Agreement provides for a prepayment shortfall in an amount in U.S. dollars equal to $1,000,000. As described below in Shortfall Sales, Seller in its sole discretion may sell Recycled Shares at any time following the Trade Date at prices (i) at or above $10.00 during the first three months following the Closing Date and (ii) at any sales price thereafter, without payment by Seller of any Early Termination Obligation until such time as the proceeds from such sales equal 100% of the Prepayment Shortfall (as set forth under Shortfall Sales below) (such sales, “Shortfall Sales,” and such Shares, “Shortfall Sale Shares”). A sale of Shares is only (a) a “Shortfall Sale,” subject to the terms and conditions herein applicable to Shortfall Sale Shares, when a Shortfall Sale Notice is delivered under the Forward Purchase Agreement, and (b) an Optional Early Termination, subject to the terms and conditions of the Forward Purchase Agreement applicable to Terminated Shares, when an OET Notice is delivered under the Forward Purchase Agreement, in each case with the delivery of such notice being in the sole discretion of Seller (as further described in the “Optional Early Termination” and “Shortfall Sales” sections in the Forward Purchase Agreement).
Following the Closing, the reset price (the “Reset Price”) will be $10.00. The Reset Price will be subject to reduction upon a Dilutive Offering Reset immediately upon the occurrence of such Dilutive Offering.
| 2. | Basis of Pro Forma Presentation |
|---|
The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X, as amended by the final rule, Release No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. Release No. 33-10786 replaced the previous pro forma adjustment criteria with simplified requirements to depict the accounting for the Transactions (“Transactions Accounting Adjustments”), reflect incremental expense or other changes necessary to present the financial position and results of operations as if an entity was a separate stand-alone entity (“Autonomous Entity Adjustments”) and present the reasonably estimable synergies and other Transactions effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). Management has elected not to present Management’s Adjustments and will only be presenting Transactions Accounting Adjustments in the unaudited pro forma condensed combined financial information. The adjustments presented in the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an understanding of the combined company reflecting the Transactions.
The unaudited pro forma condensed combined financial statements are based on the Clean Earth historical financial statements and the Alternus historical consolidated financial statements as adjusted to give effect to the Transactions and reflect a refinancing of Alternus’ Solis assets in full. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the Transactions as if they had been consummated on September 30, 2023. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2023 and the year ended December 31, 2022 give effect to the Transactions as if they had occurred on January 1, 2022, which is the beginning of the earliest period presented.
Carve-OutAdjustments
Pursuant to the Business Combination Agreement, Alternus contributed interests in the Acquired Subsidiaries to Clean Earth. The historical consolidated financial statements of Alternus are inclusive of the “Excluded Companies” (as defined in the Business Combination Agreement), which were not acquired as part of the Business Combination. As such, the carve-out adjustments are presented to exclude these legal entities from the unaudited pro forma condensed combined financial statements of the combined company.
AutonomousEntity Adjustments
Autonomous entity adjustments, based on contractual agreements related to the carve-out, are reflected in the unaudited pro forma condensed combined statements of operations to present the Acquired Subsidiaries as if they had been operated as a standalone entity for the nine months ended September 30, 2023 and the year ended December 31, 2022.
SignificantAcquisitions
The Significant Acquisitions were determined to meet the definition of a business in accordance with Regulation S-X, Rule 11-02(d) and trigger the reporting requirements pursuant to Regulation S-X, Rule 3-05 due to their significance. However, the Significant Acquisitions do not meet the definition of businesses and are considered asset acquisitions pursuant to ASC 805, Business Combinations. The historical audited consolidated balance sheet and statement of operations of Alternus as of and for the year ended December 31, 2022 reflects the full period of the operations of the significant acquisitions that took place in 2021. Therefore, no adjustments are required in the unaudited pro forma condensed combined financial information. As the historical audited consolidated statement of operations of Alternus for the year ended December 31, 2022 does not reflect the operations of the SIG Portfolio acquired on March 22, 2022 for the full period presented, a pro forma adjustment was added to include the historical information for the period from January 1, 2022 through the date of acquisition, March 22, 2022.
Management has made significant estimates and assumptions in its determination of the pro forma adjustments. The pro forma adjustments reflecting the Transactions are based on certain currently available information and certain assumptions and methodologies that management believes are reasonable under the circumstances. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and it is possible the differences may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Transactions based on information available at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Business Combination. Clean Earth and Alternus did not have any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.
The unaudited pro forma combined condensed financial statements do not include adjustments related to the following acquisitions by Alternus:
| ● | KKSOL<br> S.R.L., acquired on February 15, 2021, |
|---|---|
| ● | Petriolo Fotovoltaica S.R.L,<br> acquired on March 15, 2021, |
| ● | Serre S.R.L., acquired on March 19,<br> 2021, |
| ● | Unisun, acquired on April 16,<br> 2021, |
| ● | BIMA<br> S.R.L., acquired on May 28, 2021, |
| --- | --- |
| ● | MABI S.R.L., acquired on May 28,<br> 2021, |
The historical audited consolidated Balance Sheet and Statement of Operations of Alternus as of and for the year ended December 31, 2022, reflects the full period of the operations of the significant acquisitions that took place in 2021.
The unaudited pro forma condensed combined financial information has been prepared based on actual redemptions of 6,419,831 shares of Class A Common Stock, of which 5,351,009 shares were redeemed for a per share redemption price of $10.62, 1,046,600 shares were redeemed for a per share redemption price of $10.74 and 22,222 shares were redeemed for a per share redemption price of $10.80 or approximately $68.3 million in the aggregate. The unaudited pro forma condensed combined financial information also reflects 1,496,234 of newly issued shares of Class A Common Stock as per Subscription Agreement dated December 3^rd^2023. Additionally, the unaudited pro forma condensed combined financial information reflects the Forward Purchase Agreement dated December 3^rd^, 2023, which is comprised of the 1,300,320 shares of Class A Common Stock purchased by the Seller from other shareholders, as well as the 1,496,234 issued shares of Class A Common Stock purchased under the Subscription Agreement, for a total quantity of shares contemplated under the Forward Purchase Agreement of 2,796,554. Upon Closing, the Company funded a prepayment amount for the Forward Purchase Shares equal to $13.4 million, which is calculated as the total Prepayment Amount of $30.0 million, less a Prepayment Shortfall of $0.5 million, and less the $16.1 million purchase price owed by the Seller under the Subscription Agreement. The Company also paid $1.1 million to the Seller as an inducement to enter into the Subscription Agreement and Forward Purchase Agreement, which was calculated as the 100,000 shares purchased by Seller from other shareholders at a purchase price of $10.74 per share.
On December 18, 2023, CLIN entered into a non-redemption agreement (as it may be amended, supplemented or otherwise modified from time to time, the “NRA”) by and among CLIN, the Sponsor, and the investor named therein (the “Investor”). Pursuant to the terms of the NRA, among other things, the Investor agreed to withdraw redemptions in connection with the Business Combination on any Class A Common Stock, held by the Investor and to purchase additional Class A Common Stock from redeeming stockholders of CLIN such that the Investor will be the holder of no fewer than 277,778 shares of Class A Common Stock. In exchange, CLIN and the Sponsor will cause to be delivered to the Investor at the Closing an additional 277,778 founder shares, which such founder shares will reflect the same legends and be restricted in the same manner as then-applicable to the Sponsor at the Closing. In addition, 2,300,000 shares were issued upon the automatic conversion of all 23,000,000 rights upon Closing.
Upon closing of the Business Combination, shares outstanding as presented in the unaudited pro forma condensed combined financial statements include the following:
| Shares | % | ||||
|---|---|---|---|---|---|
| Alternus Clean Energy, Inc. Class A common stock owned by the Sponsors | 8,781,667 | 12 | % | ||
| Alternus Clean Energy, Inc. Class A common stock owned by public stockholders (1) | 2,827,412 | 4 | % | ||
| Class A common stock owned by Meteora parties subject to FPA (2) | 2,796,554 | 4 | % | ||
| Issuance of Alternus Clean Energy, Inc. Class A common stock to Alternus in connection with Business Combination | 57,500,000 | 80 | % | ||
| Total numbers of shares | 71,905,633 | 100 | % | ||
| (1) | Includes (i) 2,300,000 shares which were issued at Closing,<br>and (ii) 100,000 shares held by the Meteora parties as public stockholders. | ||||
| --- | --- | ||||
| (2) | Excludes 100,000 shares held by the Meteora parties as public<br>stockholders. | ||||
| --- | --- |
The presentation of the share ownership in the table above does not include (a) shares issuable on exercise of warrants to purchase 11,945,000 shares of Class A common stock (consisting of 11,500,000 public warrants and 445,000 private warrants issued to the Sponsor), which will remain outstanding immediately following the Business Combination, (b) the issuance of any shares upon completion of the business combination under the 2023 Equity Incentive Plan, (c) shares issuable on exercise of warrants to purchase (i) 100,000 shares of Class A common stock at an exercise price of $11.50 per share and (ii) 300,000 shares of Class A common stock at an exercise price of $0.01, (iii) 150,000 shares of Class A common stock at an exercise price of $0.01 per share, and (iv) 250,000 Class A common stock at an exercise price of $0.01 per share, the issuance of such warrants conditioned upon, and only issued upon, the close of the Business Combination, and (d) beginning 90 days after the close of the Business Combination, the potential issuance of 1,320,000 shares of Class A common stock pursuant to the terms of the First Note, which may only be issued upon the exercise of the holder of such note’s option to convert the full principal balance of such note and any accrued but unpaid interests thereon, the terms of which are more fully described in Clean Earth’s definitive proxy statement filed on November 13, 2023, under the subsection entitled “Alternus’ Management’s Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital Resources — Financing Activities”
The unaudited pro forma condensed combined financial statements are provided for illustrative purposes only and are not necessarily indicative of what the actual results of operations and financial position would have been had the Transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the combined company.
| 3. | Accounting for the Business Combination |
|---|
Notwithstanding the legal form, the Business Combination will be accounted for as a reverse acquisition in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, Clean Earth was treated as the acquired company for financial reporting purposes, whereas Alternus was treated as the accounting acquiror. In accordance with this accounting method, the Business Combination was treated as the equivalent of Alternus issuing stock for the net assets of Clean Earth, accompanied by a recapitalization. The net assets of Alternus were stated at historical cost, with no goodwill or other intangible assets recorded, and operations prior to the Business Combination were those of Alternus. Alternus has been determined to be the accounting acquiror for purposes of the Business Combination based on an evaluation of the following facts and circumstances:
| ● | Persons<br> affiliated with Alternus control a majority of the governing body of the combined company; |
|---|---|
| ● | Operations of Alternus<br> prior to the Business Combination comprise the ongoing operations of the combined company;<br> and |
| ● | Existing senior management<br> team of Alternus comprise the senior management team of the combined company. |
| 4. | Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet |
| --- | --- |
The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:
Proforma notes
| (A) | Derived<br> from the unaudited balance sheet of Clean Earth as of September 30, 2023. |
|---|---|
| (B) | Derived<br> from the unaudited consolidated balance sheet of Alternus as of September 30, 2023. |
| --- | --- |
| (C) | The<br> historical consolidated financial statements of Alternus are inclusive of the Excluded Companies<br> that will not be contributed as part of the Business Combination. The carve-out adjustments<br> are presented to exclude these entities. The information was derived from the combined balance<br> sheets of the Excluded Companies, which was obtained from the accounting records of Alternus. |
| --- | --- |
| (D) | Represents<br> Material Events: |
| --- | --- |
| A. | Represents<br> an adjustment to reflect the non-interest bearing, unsecured promissory note payable upon<br> consummation of a Business Combination of $468,000 related to the Extension Financing. |
| --- | --- |
| B. | The<br> historical consolidated financial statements of Alternus are inclusive of Netherlands,<br> Poland and Italy entities subject to sale. The adjustments are<br> presented to exclude these entities. The information was derived from the combined balance<br> sheets of the Netherlands, Poland and Italy entities,<br> which were obtained from the accounting records of Alternus. |
| C. | Represents an adjustment<br> to reflect the accounting at inception for the non-interest bearing secured debt in the principal<br> amount of $3,150,000 net of debt discount of $945,000 and having a maturity date of no later<br> than June 30, 2024. See Note 5(g) for the Condensed Combined Statements of Operations<br> impact. |
TransactionsAccounting Adjustments
| a) | To<br> reflect the conversion of 23,000,000 Rights to 2,300,000 shares of Alternus Clean Energy, Inc.<br> Class A common stock upon consummation of the Business Combination. Each holder of a<br> Right received one-tenth (1/10) of one share of Class A common stock upon Closing. The<br> conversion has been recorded as increase to common stock and decrease to additional paid-in<br> capital of $230. |
|---|---|
| b) | To reflect the reclassification<br> of Clean Earth Class B common stock to Clean Earth Class A common stock. Clean<br> Earth Class A common stock subsequently converted into Alternus Clean Energy, Inc.<br> Class A common stock. See Note 4(k). |
| c) | To reflect the repayment<br> at Closing of the promissory note of $468,000 plus 25% of the principal amount of $117,000<br> recorded as a loss on extinguishment of debt in accumulated deficit. See Note 5(e). |
| d) | To reflect the payment of<br> Clean Earth’s deferred underwriting fee payable of $0.8 million, which is related to<br> costs incurred in connection with the Clean Earth initial public offering and is payable<br> upon completion of the Business Combination. The assumed payment of $0.8 million has been<br> recorded as a reduction of $0.8 million of deferred underwriting fee payable. |
| e) | To reflect the release of<br> investments from the trust account to cash and cash equivalents. |
| f) | To reflect the accrual for $1.5 million of Clean Earth’s additional closing transaction costs<br> that are not yet incurred and paid as of September 30, 2023 and that are directly attributable to the Business Combination and are<br> non-recurring items. The accrual of $1.5 million of additional transaction costs has been recorded as an increase to accumulated<br> deficit (see Note 5(b)). Clean Earth will pay these transaction costs within twelve months after the consummation of the Business<br> Combination. These transaction costs are preliminary estimates; the final amounts and the resulting effect on New Alternus’s<br> financial position and results of operations may differ significantly. |
| g) | To reflect the reclassification<br> of deferred transaction costs of $0.3 million that are deemed to be direct and incremental<br> costs of the Business Combination from prepaid expenses and other current assets to additional<br> paid-in capital. Note Clean Earth will pay amount of accrued liabilities of $0.7 million,<br> accrued offering costs of $0.5 million, accounts payable of $0.2 million, accrued legal expenses<br> of $1.0 million within twelve months after the consummation of the Business Combination.<br> These transaction costs are preliminary estimates; the final amounts and the resulting effect<br> on New Alternus’s financial position and results of operations may differ significantly. |
| h) | To reflect the accrual of<br> Alternus estimated additional advisory, legal, accounting and auditing fees and other professional<br> fees of $1.8 million in addition to the transaction costs of $1.4 million accrued in the<br> accounting records of Alternus as of September 30, 2023, of which $0.3 million that<br> are deemed to be direct and incremental costs have been recorded as a reduction to additional<br> paid-in capital and $1.5 million that are not direct and incremental expenses of the Business<br> Combination have been recorded as an expense. Company’s total transaction cost of $3.2<br> million will be paid within twelve months after the consummation of the Business Combination.<br> Prepaid expenses and other current assets balance of $2.0 million has been reclassified to<br> additional paid-in capital. See Note 5(c). These transaction costs are preliminary estimates;<br> the final amounts and the resulting effect on New Alternus’s financial position and<br> results of operations may differ significantly. |
| i) | To reflect the redemption of 6,419,831 shares of Class A Common Stock, of which 5,351,009 shares were redeemed for a per share redemption<br>price of $10.62, 1,046,600 shares were redeemed for a per share redemption price of $10.74 and 22,222 shares were redeemed for a per share<br>redemption price of $10.80, or approximately $68.3 million in the aggregate. This also reflects the reclassification of 427,412 non-redeemed<br>shares from equity subject to possible redemption to permanent equity. |
| j) | To reflect the recapitalization<br> of Alternus through the contribution of all outstanding common stock and preferred stock<br> of Acquired Subsidiaries to Clean Earth and the issuance of 57,500,000 shares of Clean Earth<br> Class A common stock and the elimination of the accumulated deficit of Clean Earth,<br> the accounting acquiree. As a result of the recapitalization, Alternus common stock of $0.1<br> million and Clean Earth accumulated deficit of $6.3 million were derecognized. The shares<br> of Clean Earth common stock issued in exchange for Alternus Clean Energy, Inc. equity<br> were recorded as increase to common stock of $6 thousand and decrease to additional paid-in<br> capital amounting to $6.1 million. |
| k) | To<br> reflect the conversion of Clean Earth convertible promissory note to 225,000 shares of Class A<br> common stock. |
| --- | --- |
| l) | To reflect the fair value of the Prepaid Forward Purchase<br> Agreement Asset in amount of $17.1 million, as well as the $14.5 million payment from the Company to the Seller, comprised of the<br> $30.0 million Prepayment Amount, less the $0.5 million Prepayment Shortfall, less the $16.1 million Subscription Agreement purchase<br> price due from Seller, and plus 100,000 shares or approximately $1.1 million in Share Consideration reimbursement that was recorded<br> as decrease of $0.5 million to additional paid in capital and decrease of $0.6 million to the retained earnings. This transaction<br> resulted in a loss of $11.9 million recorded in accumulated deficit. Therefore, the total impact recorded in retained earnings<br> amounts to $12.5 million. The value of the Prepaid Forward Purchase Agreement Assets was calculated using a Monte Carlo<br> multi-scenario model. The valuation of the Forward Purchase Agreement derivative was prepared as if it was entered into on December<br> 4, 2023 and the principal assumptions of the valuation are as follows: underlying share price of $6.88, volatility of 75%;<br> risk-free rate of 4.4%; and the contractual period of three years. |
| 5. | Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations |
| --- | --- |
The pro forma notes and adjustments, based on preliminary estimates that could change materially as additional information is obtained, are as follows:
Proforma notes
| (A) | Derived<br> from the unaudited statement of operations of Clean Earth for the nine months ended September 30,<br> 2023 and the audited statement of operations of Clean Earth for the year ended December 31,<br> 2023. | ||
|---|---|---|---|
| (B) | Derived<br> from the unaudited consolidated statement of operations of Alternus for the nine months ended<br> September 30, 2023 and the audited consolidated statement of operations of Alternus<br> for the year ended December 31, 2023. | ||
| --- | --- | ||
| (C) | The<br> historical consolidated financial statements of Alternus are inclusive of the Excluded Companies<br> that will not be contributed as part of the Business Combination. The carve-out adjustments<br> are presented to exclude these entities. This information was derived from the accounting<br> records of Alternus and represents the combined statements of operations of the Excluded<br> Companies. | ||
| --- | --- | ||
| (D) | As<br> the consolidated statement of operations of Alternus for the year ended December 31,<br> 2022 do not reflect the operations of the SIG Portfolio acquired by Solis for the full period<br> presented, the following table presents the pro forma impact to include the historical information<br> for the period from January 1, 2022 through the date of acquisition. This information<br> was derived from the pre-acquisition accounting records of the SIG Portfolio. | ||
| --- | --- | ||
| Period from <br><br> January 1 to<br><br> March 22, 2022 | |||
| --- | --- | --- | --- |
| SIG Portfolio <br><br> acquired by <br><br> Solis | |||
| Selling, general and administrative | $ | (38 | ) |
| Total Operating Expenses | (38 | ) | |
| Income (loss) from operations | (38 | ) | |
| Net income (loss) before provision for income taxes | (38 | ) | |
| Net income (loss) | $ | (38 | ) |
| (E) | The<br> historical consolidated financial statements of Alternus are inclusive of Netherlands,<br> Poland and Italy entities subject to sale. The adjustments are<br> presented to exclude these entities. This information was derived from the accounting records<br> of Alternus and represents the combined statements of operations of the Excluded Companies. | ||
| --- | --- |
AutonomousEntity Adjustments
| aa) | The consolidated financial<br> statements of Alternus include certain selling and administrative expenses included within<br> the accounting records of the Excluded Entities. The unaudited pro forma condensed combined<br> statements of operations include carve-out adjustments to remove the results of operations<br> of the Excluded Companies (refer to Note 5(C)). As such, this adjustment is to reflect selling<br> and administrative expenses that the Acquired Subsidiaries will incur as a standalone company,<br> such as payroll and bonus expenses, consulting, legal, audit and other professional fees. |
|---|---|
| ab) | To reflect interest<br> expense on $1.8 million secured note which will be settled at the end of 2023. Prior to the<br> Business Combination the interest expense was reflected on the parent’s accounting<br> records that were not acquired in the Business Combination. The secured note survived the<br> business combination and will be reflected on the Acquired Subsidiaries accounting records. |
| --- | --- |
| ac) | The consolidated financial statements of Alternus include certain other expenses included within the accounting records of the Excluded<br>Entities. The unaudited pro forma condensed combined statements of operations include carve-out adjustments to remove the results of operations<br>of the Excluded Companies (refer to Note 5(C)). As such, this adjustment is to reflect former intercompany balances that the Acquired<br>Subsidiaries will be forgiven as a standalone company. |
| --- | --- |
| ad) | The consolidated financial statements of Alternus include<br>certain other expenses included within the accounting records of the Excluded Entities. The unaudited pro forma condensed combined statements<br>of operations include carve-out adjustments to remove the results of operations of the Excluded Companies (refer to Note 5(C)). As such,<br>this adjustment is to reflect other expenses that the Acquired Subsidiaries will incur as a standalone company. |
| --- | --- |
TransactionsAccounting Adjustments
| a) | To<br> reflect an adjustment to eliminate interest and dividend income earned on investments held<br> in the trust account as if the Business Combination had occurred on January 1, 2022. |
|---|---|
| b) | To reflect non-recurring<br> transaction closing costs not yet incurred and paid as of September 30, 2023 of $1.5 million within general and administrative<br> expense of Clean Earth that are considered direct and incremental expenses. See Note 4(f). |
| c) | To reflect non-recurring<br> transaction costs of $1.5 million within general and administrative expense of Alternus that<br> are not considered direct and incremental expenses. See Note 4(h). |
| d) | Alternus Clean Energy, Inc.<br> does not recognize current or deferred tax expense upon consummation of the transaction.<br> The historical Alternus current tax expense is related to foreign jurisdictions, in which,<br> there will be no impact from the transaction. The U.S. deferred tax balances are offset by<br> a full valuation allowance. Therefore, no income tax provision impact related to the transaction<br> accounting adjustments is reflected. |
| e) | To reflect the non-recurring<br> expense of $117,000 as a loss on extinguishment of debt in interest expense. See Note 4(c). |
| f) | To reflect loss of $11.9<br> million related to the Forward Purchase Agreement and also reflect loss of $0.6 million from<br> Share Consideration reimbursement. See Note 4(l). |
| g) | To reflect amortization of<br> debt discount related the non-interest bearing secured debt in the principal amount of $3,150,000<br> or an original purchase price of $2,205,000 and having a maturity date of no later than June 30,<br> 2024. |
| h) | The pro forma basic and diluted<br> net loss per share amounts presented in the unaudited pro forma condensed combined statements<br> of operations are based upon the number of Alternus Clean Energy, Inc. shares outstanding<br> as if the Transactions occurred on January 1, 2022. The calculation of weighted average<br> shares outstanding for pro forma basic and diluted net loss per share assumes that the shares<br> issuable in connection with the Business Combination have been outstanding for the entirety<br> of the periods presented. |
Pro forma weighted-average common shares outstanding — basic and diluted is calculated as follows:
| Shares | % | |||||
|---|---|---|---|---|---|---|
| Weighted-average shares calculation - basic and diluted | ||||||
| Alternus Clean Energy, Inc. Class A common stock owned by the Sponsors | 8,781,667 | 12 | % | |||
| Alternus Clean Energy, Inc. Class A common stock owned by public stockholders (1) | 2,827,412 | 4 | % | |||
| Class A common stock owned by Meteora parties subject to FPA (2) | 2,796,554 | 4 | % | |||
| Issuance of Alternus Clean Energy, Inc. Class A common stock to Alternus stockholders in connection with Business Combination | 57,500,000 | 80 | % | |||
| Pro forma weighted-average shares outstanding—basic and diluted | 71,905,633 | 100 | % | |||
| Net loss attributable to Alternus Clean Energy, Inc. for the nine months ended September 30, 2023 | $ | (3,432 | ) | |||
| Basic and diluted net loss per share for the nine months ended September 30, 2023, Class A common stock | $ | (0.05 | ) | |||
| Net loss attributable to Alternus Clean Energy, Inc. for the year ended December 31, 2022 | $ | (33,550 | ) | |||
| Basic and diluted net loss per share for the year ended December 31, 2022, Class A common stock | $ | (0.47 | ) | |||
| (1) | Includes (i) 2,300,000 shares which were issued at Closing,<br>and (ii) 100,000 shares held by the Meteora parties as public stockholders. | |||||
| --- | --- | |||||
| (2) | Excludes 100,000 shares held by the Meteora parties as public<br>stockholders. | |||||
| --- | --- |
Exhibit99.4
Alternus Energy GroupPlc Completes Business Combination with Clean Earth Acquisitions Corp.
· AlternusEnergy Group becomes majority shareholder in Alternus Clean Energy Inc.
· Commencestrading on NASDAQ under the ticker “ALCE”
Dublin Ireland, 22December 2023 - Transatlantic clean energy independent power producer (“IPP”) Alternus Energy Group Plc (OSE: ALT) (“AEG”) has today completed its previously announced business combination with Clean Earth Acquisitions Corp. (NASDAQ: CLIN) (“Clean Earth”), a special purpose acquisition company. The business combination was approved by Clean Earth shareholders in a Special Meeting of Clean Earth shareholders on December 4, 2023.
The newly combined company will operate under the name “Alternus Clean Energy Inc.” (“Alternus Clean Energy” or the “Company”). Under the terms of the amended business combination agreement, AEG owns approximately 80% of the Company with the remaining shares owned by Clean Earth sponsors and public shareholders. The Company has acquired a majority of AEG’s assets while AEG will continue to exist as a separate legal entity and will continue to trade on the Euronext Growth stock market in Oslo under the ticker (OSE: ALT). The assets acquired comprise 168 megawatts (MW) in operation, 98 MW under construction, over 300 MW in various stages of development and an acquisition pipeline of over 1 GW.
Alternus Clean Energy’s common stock is expected to begin trading on the NASDAQ Stock Market on or about December 26, 2023 under the ticker symbol “ALCE”.
"This is a momentous step forward for Alternus and its stakeholders. The completion of the business combination with Clean Earth and resultant listing on Nasdaq, is a key strategic pillar in our commitment towards a sustainable future,” commented Alternus Clean Energy CEO, Vincent Browne. “Following a year of consolidation and reshaping the business to best capture the opportunities in hand, that deliver higher margins with lower equity requirements, we are now very well positioned to accelerate our impact, extend our reach, and drive significant growth in the business towards our goal of having 3 GW of operating assets within the next five years.”
Clean Earth CEO Aaron Ratner stated, “We are thrilled with the completion of our business combination with AEG. This strategic alignment of expertise and values positions us to make an enduring impact on the renewable energy sector. As part of Alternus Clean Energy, we are excited to leverage our combined resources to build a leading Transatlantic clean energy IPP.”
Advisors
Clean Earth was advised by Jones Group Ventures LLC as financial advisors with Winston & Strawn LLP, Proskauer Rose LLP serving as legal counsel on the transaction.
AEG was advised by Sichenzia Ross Ference Carmel LLP as their legal counsel.
About Alternus Energy Group
Alternus is a transatlantic clean energy independent power producer. Headquartered in Ireland, we currently develop, install, own, and operate utility scale solar parks in Europe and the US. Our highly motivated and dynamic team at Alternus have achieved rapid growth in recent years. Building on this, our goal is to reach 3GW of operating projects within five years through continued organic development activities and targeted strategic opportunities. Our vision is to become a leading provider of 24/7 clean energy delivering a sustainable future of renewable power with people and planet in harmony. For more information visit www.alternusenergy.com.
About Clean Earth Acquisitions Corp.
Clean Earth Acquisitions Corp. is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities, focused on identifying and developing a strategic partnership with a business that participates in the global energy transition ecosystem that is facilitating the way that energy is produced, stored, transmitted, distributed, and consumed, all while reducing or mitigating greenhouse gas emissions. For more information visit www.cleanearthacquisitions.com.
Forward-Looking Statements
Certain statements included in this notice that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are sometimes accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding Alternus’ growth, prospects and the market for solar parks and other renewable power sources. These statements are based on various assumptions, whether or not identified in this notice, and on the current expectations of the respective management teams of Alternus Clean Energy, AEG (together with Alternus Clean Energy, the “Alternus Entities”) and Clean Earth and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by an investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Alternus Entities and Clean Earth.
These forward-looking statements are subject to a number of risks and uncertainties, including: the impact of reduction, modification or elimination of government subsidies and economic incentives (including, but not limited to, with respect to solar parks); the impact of decreases in spot market prices for electricity; dependence on acquisitions for growth in the Alternus Entities’ business; inherent risks relating to acquisitions and the Alternus Entities’ ability to manage its growth and changing business; risks relating to developing and managing renewable solar projects; risks relating to photovoltaic plant quality and performance; risks relating to planning permissions for solar parks and government regulation; the Alternus Entities’ need for significant financial resources (including, but not limited to, for growth in its business); the need for financing in order to maintain future profitability; the lack of any assurance or guarantee that the Alternus Entities can raise capital or meet its funding needs; the Alternus Entities’ limited operating history; risks relating to operating internationally, include currency risks and legal, compliance and execution risks of operating internationally; the potential inability of the parties to successfully or timely consummate the proposed business combination; the risk that any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the proposed business combination; the approval of the stockholders of Clean Earth is not obtained; the risk of failure to realize the anticipated benefits of the proposed business combination; the amount of redemption requests made by Clean Earth’s stockholders exceeds expectations or current market norms; the ability of the Alternus Entities or the combined company to obtain equity or other financing in connection with the proposed business combination or in the future; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; the risk that the proposed business combination disrupts current plans and operations as a result of the announcement and consummation of the Transaction; costs related to the proposed business combination; the impact of the global COVID-19 pandemic; the effects of inflation and changes in interest rates; an economic slowdown, recession or contraction of the global economy; a financial or liquidity crisis; geopolitical factors, including, but not limited to, the Russian invasion of Ukraine; global supply chain concerns; the status of debt and equity markets (including, market volatility and uncertainty); and other risks and uncertainties, including those risks to be included under the heading “Risk Factors” in the Proxy Statement and also those included under the heading “Risk Factors” in Clean Earth’s final prospectus relating to its initial public offering dated February 23, 2022 and other factors identified in Clean Earth’s prior and future filings with the SEC, available at www.sec.gov.
If any of these risks materialize or Clean Earth’s and the Alternus Entities’ assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that neither Clean Earth nor the Alternus Entities presently know, or that neither Clean Earth nor the Alternus Entities currently believe are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Clean Earth’s and the Alternus Entities’ expectations, plans or forecasts of future events and views as of the date of this notice. Clean Earth and the Alternus Entities anticipate that subsequent events and developments will cause Clean Earth’s and the Alternus Entities’ assessments to change. However, while Clean Earth and the Alternus Entities may elect to update these forward-looking statements at some point in the future, Clean Earth and the Alternus Entities specifically disclaim any obligation to do so. Neither Clean Earth nor the Alternus Entities anticipate that subsequent events and developments will cause Clean Earth’s and the Alternus Entities’ assessments to change. However, while Clean Earth and the Alternus Entities may elect to update these forward-looking statements at some point in the future, Clean Earth and the Alternus Entities specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing Clean Earth’s or the Alternus Entities’ assessments of any date subsequent to the date of this notice. Accordingly, undue reliance should not be placed upon the forward-looking statements.
No Offer or Solicitation
This communication is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Business Combination and shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act.
For More Information:
Investors:
Alternus Energy Group
ir@alternusenergy.com
+1 (913) 815-1557
or
Media:
The Blueshirt Group
alternus@blueshirtgroup.com
+1 (323) 240-5796