Exhibit 10.1

SUBSCRIPTION AGREEMENT

This SUBSCRIPTION AGREEMENT (this “Subscription Agreement”) is entered into this
29th day of July, 2020, by and between Sunrun Inc., a Delaware corporation (the
“Issuer”), and SK E&S Co., Ltd., a company duly organized under the laws of the
Republic of Korea (“Subscriber”).

RECITALS

WHEREAS, Subscriber will subscribe for and purchase from the Issuer, and the
Issuer will issue to Subscriber, newly issued shares of common stock, par value
$0.0001 per share (“Common Stock”), of the Issuer to fund the Issuer’s portion
of capital to be contributed to a company to be formed by the Issuer and an
affiliate of Subscriber (the “Transaction”); and

WHEREAS, the Issuer desires to issue and sell to Subscriber, and Subscriber
desires to subscribe for and purchase from the Issuer, newly issued shares of
Common Stock of the Issuer, in accordance with the provisions of this
Subscription Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants, and subject to the conditions, herein
contained, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:

1.    Subscription. Pursuant to the terms and subject to the conditions set
forth herein, Subscriber hereby agrees to subscribe for and purchase from the
Issuer, and the Issuer hereby agrees to issue and sell to Subscriber (such
subscription and issuance, the “Subscription”), upon the payment of the purchase
price:

(a)    Immediately prior to the closing of the Transaction with an affiliate of
Subscriber (the “Closing”) (which shall occur no later than ten (10) business
days after the date hereof), such number of shares of Common Stock (rounded to
the nearest whole share) (the “Acquired Shares”) equal to (i) $75 million,
divided by (ii) the Share Subscription Price (as defined below), for a purchase
price (the “Purchase Price”) equal to $74,999,971.20; and

(b)    The Subscription will be transacted at a price per share of $36.15 (such
price per share, the “Share Subscription Price”) as payment in full for the
Acquired Shares purchased by the Subscriber hereunder.

2.    Subscription Closing.

(a)    The closing of the Subscription (the “Subscription Closing”) is intended
to occur on the same day as, but immediately prior to, the Closing. On the date
on which the Subscription Closing occurs (the “Subscription Closing Date”),
Subscriber shall deliver to the Issuer the Purchase Price for the Acquired
Shares by wire transfer of U.S. dollars in immediately available funds to the
account specified by the Issuer in writing. On the Subscription Closing Date,
the Issuer shall deliver to Subscriber (i) the Acquired Shares in book-entry
form, free and clear of any liens or other restrictions whatsoever (other than
those arising under state or federal securities laws or as set forth herein), in
the name of Subscriber (or its nominee in accordance with its delivery
instructions) or to a custodian designated by Subscriber, as applicable, and
(ii) a copy of the records of the Issuer’s transfer agent (the “Transfer Agent”)
showing Subscriber (or such nominee or custodian) as the owner of the Acquired
Shares on and as of the Subscription Closing Date. In the event the Closing
fails to occur on or prior to the date that is ten (10) business days after the
date hereof, the Issuer shall promptly (and in no event later than the eleventh
(11th) business day

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after the date hereof) return the Purchase Price to Subscriber by wire transfer
of U.S. dollars in immediately available funds to the account specified by
Subscriber, and any book-entries shall be deemed cancelled; provided, that the
return of the funds shall not terminate this Subscription Agreement or otherwise
relieve any party of any of its obligations hereunder (including Subscriber’s
obligation to purchase the Acquired Shares at the Subscription Closing).

(b)    The Subscription Closing shall be subject to the conditions that, on the
Subscription Closing Date:

(i)    no suspension by Nasdaq of the qualification of the Acquired Shares for
offering or sale or trading in the United States, or initiation or threatening
of any proceedings for any of such purposes, shall have occurred and no
objection by Nasdaq to the consummation of the transactions contemplated by this
Subscription Agreement shall have been raised;

(ii)    the agreements relating to the Transaction designated as such by
agreement of the parties (together with this Subscription Agreement, the
“Transaction Agreements”) shall have been duly executed and delivered and such
agreements shall be in full force and effect;

(iii)    solely with respect to Subscriber’s obligation to close, (A) all
representations and warranties made by the Issuer in this Subscription Agreement
that are not qualified by materiality or the absence of a material adverse
effect on the business, operations, assets, properties, financial condition,
stockholders’ equity or results of operations of the Issuer and its
subsidiaries, taken as a whole (a “Material Adverse Effect”) shall be true and
correct in all material respects as of the date hereof and as of the
Subscription Closing Date as though made on and as of such date (other than
those representations and warranties expressly made as of an earlier date, which
shall be true and correct in all material respects as of such date) and (B) all
representations and warranties made by the Issuer in this Subscription Agreement
that are already qualified by materiality or the absence of a Material Adverse
Effect shall be true and correct in all respects as of the date hereof and as of
the Subscription Closing Date) as though made on and as of such date (other than
those representations and warranties expressly made as of an earlier date, which
shall be true and correct in all respects as of such date);

(iv)    solely with respect to the Issuer’s obligation to close, (A) all
representations and warranties made by Subscriber in this Subscription Agreement
that are not qualified by materiality or the absence of a Material Adverse
Effect shall be true and correct in all material respects as of the date hereof
and as of the Subscription Closing Date as though made on and as of such date
(other than those representations and warranties expressly made as of an earlier
date, which shall be true and correct in all material respects as of such date)
and (B) all representations and warranties made by Subscriber in this
Subscription Agreement that are already qualified by materiality or the absence
of a Material Adverse Effect shall be true and correct in all respects as of the
date hereof and as of the Subscription Closing Date as though made on and as of
such date (other than those representations and warranties expressly made as of
an earlier date, which shall be true and correct in all respects as of such
date);

(v)    solely with respect to Subscriber’s obligation to close, the Issuer shall
have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Subscription Agreement to
be performed, satisfied or complied with by it at or prior to the Subscription
Closing;

 

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(vi)    solely with respect to Subscriber’s obligation to close, no event or
circumstance has occurred with respect to the Issuer or any of its subsidiaries
or its or their business, operations, assets, properties, financial conditions,
stockholders’ equity or results of operation, which has had or would reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; and

(vii)    no governmental authority shall have enacted, issued, promulgated,
enforced or entered any judgment, order, law, rule or regulation (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making consummation of the transactions contemplated hereby illegal or
otherwise preventing or prohibiting consummation of the transactions
contemplated hereby and no governmental authority shall have threatened in
writing a proceeding seeking to impose any such restraint or prohibition.

(c)    At the Subscription Closing, the parties hereto shall make reasonable
efforts to execute and deliver such additional documents and take such
additional actions as the parties reasonably may deem to be necessary in order
to consummate the Subscription as contemplated by this Subscription Agreement.

(d)    For purposes of this Subscription Agreement, “business day” shall mean
any day other than (i) any Saturday or Sunday or (ii) any other day on which
banks located in New York, New York and Seoul, South Korea are required or
authorized by applicable law to be closed for business.

3.    Issuer Representations and Warranties. The Issuer represents and warrants
that:

(a)    The Issuer has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. Each of
the Issuer’s subsidiaries has been duly incorporated, is validly existing and
(where applicable) in good standing under the laws of its jurisdiction of
organization, except where the failure to be in good standing would not,
individually or in the aggregate, have a Material Adverse Effect. The Issuer and
each of its subsidiaries has all corporate power and authority to lease and
operate its properties and conduct its business as presently conducted. The
Issuer has all corporate power and authority to and to enter into, deliver and
perform its obligations under this Subscription Agreement.

(b)    As of the Subscription Closing Date, the Acquired Shares will be duly
authorized by the Issuer and, when issued and delivered to Subscriber against
full payment for the Acquired Shares in accordance with the terms of this
Subscription Agreement and registered with the Transfer Agent, the Acquired
Shares will be validly issued, fully paid and non-assessable and will be free
and clear of all encumbrances, liens, restrictions, and any pre-emptive or
similar rights, except for restrictions on transfer imposed by applicable
securities laws.

(c)    This Subscription Agreement has been duly authorized, executed and
delivered by the Issuer and, assuming that this Subscription Agreement
constitutes the valid and binding agreement of Subscriber, is the valid and
binding obligation of the Issuer, enforceable against the Issuer in accordance
with its terms, except as may be limited or otherwise affected by (i) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws relating to or affecting the rights of creditors generally, and
(ii) principles of equity, whether considered at law or equity.

(d)    The execution, delivery and performance by the Issuer of this
Subscription Agreement (including compliance by the Issuer with all of the
provisions hereof), and the issuance and sale by the Issuer of the Acquired
Shares, will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the property or
assets of the Issuer or any of its subsidiaries pursuant to the terms of (i) any
indenture, mortgage, deed of trust, loan agreement, lease, license or other
agreement or instrument to which the Issuer or any of its subsidiaries is a
party or by which the Issuer or any of its subsidiaries is

 

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bound or to which any of the property or assets of the Issuer or any of its
subsidiaries is subject; (ii) the organizational documents of the Issuer or any
of its subsidiaries; or (iii) subject to obtaining or making, as the case may
be, the Issuer Required Approvals, any statute or any judgment, order, rule or
regulation of any court or governmental agency or body, domestic or foreign,
having jurisdiction over the Issuer or any of its subsidiaries or any of their
respective properties or assets, except in the case of clauses (i) or (iii) of
this paragraph for any such conflicts, breaches, violations, defaults, creations
or impositions that would not, individually or in the aggregate, materially
affect the validity of the Acquired Shares or the legal authority of the Issuer
to comply in all material respects with the Issuer’s obligations under this
Subscription Agreement.

(e)    There are no securities or instruments issued by or to which the Issuer
is a party containing anti-dilution or similar provisions that will be triggered
by the issuance of the Acquired Shares. Except as described in the SEC Documents
(as defined below), there are no voting agreements, agreements restricting the
issuance, sale or transfer of securities of the Issuer, option or right of first
purchase agreements or other agreements of any kind among the Issuer and any of
the stockholders of the Issuer relating to the securities of the Issuer held by
them. Except as described in this Subscription Agreement and in the SEC
Documents, no person or entity has the right to require the Issuer to register
any securities of the Issuer under the Securities Act, whether on a demand basis
or in connection with the registration of securities of the Issuer for its own
account or for the account of any other person or entity.

(f)    Neither the Issuer nor any of its subsidiaries is (i) in default or
violation (and no event has occurred which, with notice or the lapse of time or
both, would constitute a default or violation) of any term, condition or
provision of the organizational documents of the Issuer or any of its
subsidiaries, (ii) in material default or violation (and no event has occurred
which, with notice or the lapse of time or both, would constitute a material
default or violation) of (A) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, permit, franchise or license to which the
Issuer or any of its subsidiaries is now a party or by which the property or
assets of the Issuer or any of its subsidiaries are bound or (B) any statute or
any judgment, order, rule or regulation of any court or governmental agency or
body, domestic or foreign, having jurisdiction over the Issuer or any of its
subsidiaries or any of their respective properties or assets. The Issuer and its
subsidiaries possess all certificates, authorizations and permits issued by the
appropriate regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess the same would not, individually
or in the aggregate, have a Material Adverse Effect, and neither the Issuer nor
any such subsidiary has received any notice of proceedings relating to the
revocation or modification of any material certificate, authorization or permit.

(g)    Neither the Issuer nor any of its subsidiaries is required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority, or self-regulatory organization in connection with the
execution, delivery and performance by the Issuer of this Subscription Agreement
(including, without limitation, the issuance of the Acquired Shares), other than
(i) filings with the Securities and Exchange Commission (the “Commission”), (ii)
filings required by applicable state securities laws, (iii) filings required by
Nasdaq, if any, and (iv) clearances, approvals and consents required to be
obtained under all applicable antitrust laws (the “Issuer Required Approvals”).

(h)    The Issuer has conducted an assessment and determined that none of the
Issuer, any of the Issuer’s subsidiaries, or any of the Issuer’s affiliates
(i) produce, design, test, manufacture, fabricate, or develop “critical
technologies” as that term is defined in 31 C.F.R. § 800.215; (ii) perform the
functions as set forth in column 2 of Appendix A to 31 C.F.R. part 800 with
respect to covered investment critical infrastructure; or (iii) maintain or
collect, directly or indirectly, “sensitive personal data” as that term is
defined in 31 C.F.R. § 800.241; and, therefore, in turn, is not a “TID U.S.
business” within the meaning of 31 C.F.R. § 80.248.

 

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(i)    As of the date of this Subscription Agreement, the authorized capital
stock of the Issuer consists of 2,200,000,000 shares of capital stock, $0.0001
par value per share, of which 2,000,000,000 shares are designated as Common
Stock; and 200,000,000 shares are designated as preferred stock. As of the date
of this Subscription Agreement, the Issuer has reserved 48,394,822 shares of
Common Stock for issuance pursuant to equity incentive plans duly adopted by the
Issuer’s board of directors and approved by the Issuer’s stockholders, 9,734,027
shares are subject to outstanding options under such equity incentive plans,
4,484,204 shares are subject to outstanding restricted stock units under such
equity incentive plans, and 9,279,342 shares remain available for grants under
such equity incentive plans. 8,569,816 shares of Common Stock are reserved for
issuance pursuant to the Issuer’s employee stock purchase plan duly adopted by
the Issuer’s board of directors and approved by the Issuer’s stockholders. No
shares of preferred stock are issued and outstanding. All of the issued and
outstanding shares of the Issuer’s capital stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of pre-emptive rights
and were issued in full compliance with applicable legal requirements. The
Issuer shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the purchase of the Acquired Shares
hereunder, 2,074,688 shares of Common Stock. All of the authorized shares of
Common Stock are entitled to one vote per share.

(j)    Neither the Issuer nor any of its subsidiaries has received any written
communication from a governmental entity or third party that alleges that the
Issuer or any of its subsidiaries is in material non-compliance with or is in
material default or violation of any applicable law, except where any
non-compliance, default or violation would not, individually or in the
aggregate, have a Material Adverse Effect.

(k)    The issued and outstanding shares of Common Stock are registered pursuant
to Section 12(b) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the “Exchange Act”), and are
listed for trading on Nasdaq under the symbol “RUN”. There is no suit, action,
proceeding or investigation pending or, to the knowledge of the Issuer,
threatened against the Issuer by Nasdaq or the Commission, respectively, to
prohibit or terminate the listing of the shares of Common Stock on Nasdaq, to
deregister the shares of Common Stock under the Exchange Act or otherwise to the
effect that Issuer is not in compliance with the listing or maintenance
requirements of Nasdaq. The Issuer has taken no action that is designed to
terminate the registration of the shares of Common Stock under the Exchange Act.
Issuer is in compliance with all such listing and maintenance requirements. The
issuance and sale of the Acquired Shares hereunder do not contravene the rules
and regulations of Nasdaq.

(l)    Assuming the accuracy of Subscriber’s representations and warranties set
forth in Section 4 of this Subscription Agreement, no registration under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the “Securities Act”) is required for the offer and sale of the
Acquired Shares by the Issuer to Subscriber. Issuer is a “well-known seasoned
issuer” as defined in Rule 405 under the Securities Act.

(m)    Neither the Issuer nor anyone acting on its behalf has offered the shares
of Common Stock or any similar securities for sale to, or solicited any offer to
buy any of the same from, or otherwise approached or negotiated in respect
thereof with, any person other than Subscriber, which has been offered shares of
Common Stock at a private sale for investment.

(n)    None of the Issuer nor any of its affiliates has offered shares of Common
Stock or any similar securities during the six months prior to the date hereof
to anyone other than Subscriber in connection with the transactions contemplated
hereby. Other than the foregoing and as disclosed in the SEC Documents (as
defined below), the Issuer has no current intention to offer shares of Common
Stock or any similar security during the six months from the date hereof other
than in connection with the transactions contemplated hereby.

 

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(o)    Neither the Issuer nor any person acting on its behalf has offered or
sold the Acquired Shares by any form of general solicitation or general
advertising, including, but not limited to, the following: (1) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio;
(2) any website posting or widely distributed email; or (3) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising.

(p)    A complete copy of each form, report, statement, schedule, prospectus,
proxy, registration statement and other document, if any, filed by the Issuer
with the Commission since its initial registration of the shares of Common Stock
under the Exchange Act (the “SEC Documents”) is available to Subscriber via the
Commission’s EDGAR system. As of their respective dates, the SEC Documents at
the time filed complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder applicable to such SEC
Documents. None of the SEC Documents contained, when filed or, if amended, as of
the date of such amendment with respect to those disclosures that are amended,
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
Issuer has timely filed each report, statement, schedule, prospectus, and
registration statement that the Issuer was required to file with the Commission
since January 1, 2017. There are no material outstanding or unresolved comments
in comment letters from the staff of the Division of Corporation Finance of the
Commission with respect to any of the SEC Documents.

(q)    The financial statements included in the SEC Documents, together with the
related notes and schedules, comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing and present fairly, in all
material respects, the consolidated financial position of the Issuer and its
subsidiaries as of the dates shown and its consolidated results of operations
and cash flows for the periods shown, and such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved. Except for such liabilities that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, neither the Issuer nor any of its subsidiaries has any
liabilities, contingent or otherwise, except as set forth in the most recent
consolidated balance sheet of the Issuer and its subsidiaries included in the
SEC Documents or those incurred in the ordinary course of business, consistent
(as to amount and nature) with past practices since the date of such
consolidated balance sheet. There are no material unconsolidated subsidiaries of
the Issuer or any material off-balance sheet arrangements of any type (including
any off balance sheet arrangements required to be disclosed pursuant to Item
303(a)(4) of Regulation S-K promulgated under the Securities Act) that have not
been so described in the SEC Documents nor any obligations to enter into any
such arrangements.

(r)    The Issuer and each of its subsidiaries, considered as one enterprise,
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization and
(iv) the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference. The Issuer maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Securities Act) that are effective in ensuring that information required to be
disclosed by the Issuer in the reports that it files or submits under the
Securities Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Commission, including, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Issuer in the reports that it files or submits under the

 

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Securities Act is accumulated and communicated to the Issuer’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. During the twelve months prior to the date hereof
neither the Issuer nor any of its subsidiaries have received any notice or
correspondence from any accountant relating to any material weakness in any part
of the system of internal accounting controls of the Issuer or any of its
subsidiaries.

(s)    Since December 31, 2019, except as expressly contemplated by this
Subscription Agreement or specifically disclosed in any SEC Documents filed
since December 31, 2019 and prior to the date of this Agreement, the Issuer has
conducted its business in the ordinary course and in a manner consistent with
past practice, and there has not been any Material Adverse Effect with respect
to the Issuer.

(t)    Except for such matters that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there is no
(i) action, suit, claim, hearing, investigation or other proceeding, in each
case by or before any governmental authority pending, or, to the knowledge of
the Issuer, threatened against the Issuer or any of its subsidiaries, or
(ii) judgment, decree, injunction, ruling or order of any governmental entity or
arbitrator outstanding against the Issuer or any of its subsidiaries.

(u)    The Issuer has not dealt with any broker, finder, commission agent,
placement agent or arranger in connection with the sale of the Acquired Shares,
and the Issuer is not under any obligation to pay any broker’s fee or commission
in connection with the sale of the Acquired Shares. Neither the Issuer nor any
of its affiliates nor any other person acting on its behalf (other than its
officers acting in such capacity) has solicited offers for, or offered or sold,
the Acquired Shares.

4.    Subscriber Representations and Warranties. Subscriber represents and
warrants that:

(a)    Subscriber has been duly incorporated and is validly existing in good
standing under the laws of its jurisdiction of incorporation. Subscriber has all
corporate power and authority to enter into, deliver and perform its obligations
under this Subscription Agreement.

(b)    This Subscription Agreement has been duly authorized, executed and
delivered by Subscriber and, assuming that this Subscription Agreement
constitutes the valid and binding agreement of the Issuer, this Subscription
Agreement is the valid and binding obligation of Subscriber, enforceable against
Subscriber in accordance with its terms, except as may be limited or otherwise
affected by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws relating to or affecting the rights of
creditors generally, and (ii) principles of equity, whether considered at law or
equity.

(c)    Subscriber is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental authority,
self-regulatory organization or other person in connection with the execution,
delivery and performance by Subscriber of this Subscription Agreement
(including, without limitation, the issuance of the Acquired Shares), other than
(i) filings with the Commission, (ii) filings required by applicable state
securities laws, (iii) filings required by Nasdaq, if any, and (iv) clearances,
approvals and consents required to be obtained under all applicable antitrust
laws (the “Subscriber Required Approvals”).

(d)    The execution, delivery and performance by Subscriber of this
Subscription Agreement and the consummation of the transactions contemplated
herein will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the property or
assets of Subscriber pursuant to

 

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the terms of (i) any indenture, mortgage, deed of trust, loan agreement, lease,
license or other agreement or instrument to which Subscriber is a party or by
which Subscriber is bound or to which any of the property or assets of
Subscriber is subject, (ii) the organizational documents of Subscriber, or
(iii) subject to obtaining or making, as the case may be, any Subscriber
Required Approvals, any statute or any judgment, order, rule or regulation of
any court or governmental agency or body, domestic or foreign, having
jurisdiction over Subscriber or any of its properties; except in the case of
clauses (i) or (iii) of this paragraph for any such conflicts, breaches,
violations, defaults, creations or impositions that would not, individually or
in the aggregate, materially affect the legal authority of Subscriber to comply
in all material respects with Subscriber’s obligations under this Subscription
Agreement.

(e)    Subscriber is an accredited investor or a non-U.S. person, satisfying the
applicable requirements set forth on Schedule A. Subscriber represents that it
is purchasing the Acquired Shares for its own account (and not for the account
of others) or for one or more separate accounts maintained by it as a fiduciary
or agent for the benefit of one or more other accredited investors and not with
a view to the distribution thereof in violation of the securities laws;
provided, that the disposition of Subscriber’s property shall at all times be
within Subscriber’s control. Subscriber understands that the Acquired Shares
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Issuer is
not required to register the Acquired Shares other than as provided for in
Section 5 of this Subscription Agreement. Subscriber further represents and
warrants that it will not sell, transfer or otherwise dispose of the Acquired
Shares or any interest therein except in a registered transaction or in a
transaction exempt from or not subject to the registration requirements of the
Securities Act and except in accordance with the terms and conditions of this
Subscription Agreement. Subscriber acknowledges that the Acquired Shares will be
subject to transfer restrictions as set forth on Exhibit A to this Subscription
Agreement.

(f)    The purchase of Acquired Shares by Subscriber has not been solicited by
or through anyone other than the Issuer.

(g)    Subscriber understands and agrees that the Acquired Shares will be
subject to transfer restrictions as set forth on Exhibit A to this Subscription
Agreement, unless and until such transfer restrictions have been removed in
accordance with Section 5 of this Subscription Agreement and, as a result of
these transfer restrictions, Subscriber may not be able to readily resell the
Acquired Shares. Subscriber understands that it has been advised to consult
legal counsel prior to making any offer, resale, pledge or transfer of any of
the Acquired Shares.

(h)    Subscriber acknowledges and agrees that Subscriber has received such
information as Subscriber deems necessary in order to make an investment
decision with respect to the Acquired Shares, including with respect to the
Issuer and the transactions contemplated hereby. Subscriber represents and
warrants that Subscriber was given the opportunity to ask questions and receive
answers concerning the terms and conditions of the Subscription and to obtain
any additional information which the Issuer possessed or could acquire without
unreasonable effort or expense.

(i)    Subscriber became aware of the offering of the Acquired Shares solely by
means of direct contact between Subscriber and the Issuer, and the Acquired
Shares were offered to Subscriber solely by direct contact between Subscriber
and the Issuer. Subscriber did not become aware of this offering of the Acquired
Shares, nor were the Acquired Shares offered to Subscriber, by any other means.
Subscriber acknowledges that the Issuer represents and warrants that the
Acquired Shares (i) were not offered by any form of general solicitation or
general advertising and (ii) are not being offered in a manner involving a
public offering under, or in a distribution in violation of, the Securities Act,
or any state securities laws.

 

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(j)    Subscriber 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 Acquired Shares, and Subscriber has sought such accounting, legal and tax
advice as Subscriber has considered necessary to make an informed investment
decision.

(k)    Subscriber represents and warrants that neither Subscriber nor any of its
officers, directors, managers, managing members, general partners or any other
individual acting in a similar capacity or carrying out a similar function, is
(i) a person or entity named on the Specially Designated Nationals and Blocked
Persons List, the Foreign Sanctions Evaders List, the Sectoral Sanctions
Identification List, or any other similar list of sanctioned persons
administered by the U.S. Treasury Department’s Office of Foreign Assets Control,
or any similar list of sanctioned persons administered by the European Union or
any individual European Union member state, including the United Kingdom
(collectively, “Sanctions Lists”); (ii) directly or indirectly owned or
controlled by, or acting on behalf of, one or more persons on a Sanctions List;
(iii) organized, incorporated, established, located, resident or born in, or a
citizen, national, or the government, including any political subdivision,
agency, or instrumentality thereof, of, Cuba, Iran, North Korea, Syria,
Venezuela, the Crimea region of Ukraine, or any other country or territory
embargoed or subject to substantial trade restrictions by the United States, the
European Union or any individual European Union member state, including the
United Kingdom; (iv) a Designated National as defined in the Cuban Assets
Control Regulations, 31 C.F.R. Part 515; or (v) a non-U.S. shell bank or
providing banking services indirectly to a non-U.S. shell bank (collectively, a
“Prohibited Investor”). Subscriber represents that if it is a financial
institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.)
(the “BSA”), as amended by the USA PATRIOT Act of 2001 (the “PATRIOT Act”), and
its implementing regulations (collectively, the “BSA/PATRIOT Act”), that
Subscriber maintains policies and procedures reasonably designed to comply with
applicable obligations under the BSA/PATRIOT Act. Subscriber also represents
that it maintains policies and procedures reasonably designed to ensure
compliance with sanctions administered by the United States, the European Union,
or any individual European Union member state, including the United Kingdom.
Subscriber further represents that the funds held by Subscriber and used to
purchase the Acquired Shares were legally derived and were not obtained,
directly or indirectly, from a Prohibited Investor.

(l)    Subscriber is not and is not acting on behalf of (i) an employee benefit
plan that is subject to Title I of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), (ii) a plan, an individual retirement account or
other arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the “Code”), (iii) an entity whose underlying assets are
considered to include “plan assets” of any such plan, account or arrangement
described in clauses (i) and (ii) (each, an “ERISA Plan”), or (iv) an employee
benefit plan that is a governmental plan (as defined in Section 3(32) of ERISA),
or a church plan (as defined in Section 3(33) of ERISA).

(m)    At the Subscription Closing, Subscriber will have sufficient funds to pay
the amounts contemplated by Section 1.

5.    Registration Rights.

(a)    Shelf Registration Statement. The Issuer agrees that it will file with
the Commission (at the Issuer’s sole cost and expense) a registration statement
on Form S-3 promulgated under the Securities Act (which, if Issuer is then a
“well-known seasoned issuer” (as defined in Rule 405 under the Securities Act),
shall be filed pursuant to General Instruction I.D. of Form S-3) (an “Automatic
Shelf Registration Statement”) registering the resale of the Registrable
Securities (the “Registration Statement”) (x) on the date which is six
(6) months following the Subscription Closing Date, unless counsel for the
Issuer shall have delivered to Subscriber and the Transfer Agent a legal opinion
within five (5) business days prior to such date that Subscriber does not
constitute an affiliate of the Issuer under the Securities Act (and counsel

 

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for Subscriber agrees with such legal opinion) or (y) within ten (10) business
days after Subscriber delivers a written request to file a Registration
Statement, if at any time and from time to time after the date which is six
(6) months following the Subscription Closing Date Subscriber requests counsel
for the Issuer to deliver to Subscriber and the Transfer Agent a legal opinion
in connection with a planned sale of Registrable Securities that Subscriber does
not constitute an affiliate of the Issuer under the Securities Act and counsel
for the Issuer is unwilling or unable to deliver such a legal opinion within
five (5) business days after receipt of such request or counsel for Subscriber
does not agree with such legal opinion, and thereafter the Issuer shall use its
commercially reasonable efforts, if the Registration Statement is not an
Automatic Shelf Registration Statement, to have the Registration Statement
declared effective as soon as practicable after the filing thereof, but no later
than the earlier of (i) the 90th calendar day following the date the
Registration Statement is filed if the Commission notifies the Issuer that it
will “review” the Registration Statement and (ii) the 10th business day after
the date the Issuer is notified in writing by the Commission that the
Registration Statement will not be “reviewed” or will not be subject to further
review (such earlier date, the “Effectiveness Date”); provided, however, that
the Issuer’s obligations to include the Registrable Securities in the
Registration Statement are contingent upon Subscriber furnishing in writing to
the Issuer such information regarding Subscriber, the securities of the Issuer
held by Subscriber and the intended method of disposition of the Registrable
Securities as shall be reasonably requested by the Issuer to effect the
registration of the Registrable Securities, and Subscriber shall use reasonable
efforts to execute such documents in connection with such registration as the
Issuer may reasonably request that are customary of a selling stockholder in
similar situations, including providing that the Issuer shall be entitled to
postpone and suspend the effectiveness or use of the Registration Statement
during any customary blackout or similar period or as permitted hereunder.
Following the Effectiveness Date, if the transfer restrictions as set forth on
Exhibit A to this Subscription Agreement are no longer required by the
Securities Act or any applicable state securities laws, upon request of
Subscriber, the Issuer shall use its commercially reasonable efforts to
cooperate with Subscriber to have such transfer restrictions removed, including
providing authorization to the Transfer Agent within five (5) business days of
the Issuer’s receipt of such request.

(i)    All Registration Expenses shall be borne by the Issuer. It is
acknowledged that Subscriber shall bear, with respect to Subscriber’s
Registrable Securities being sold, all underwriters’ commissions and discounts,
brokerage fees and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing
Subscriber.

(ii)    As used in this Section 5 or elsewhere in this Subscription Agreement,
the following terms shall have the following meanings:

(1)    “Registration Expenses” shall mean the out-of-pocket expenses relating to
the filing of the Registration Statement, including, without limitation, the
following: (A) all registration and filing fees (including fees with respect to
filings required to be made with the Financial Industry Regulatory Authority,
Inc (“FINRA”), including reasonable fees and disbursements of outside counsel
for the underwriters in connection with such FINRA filings, if any) and any
national securities exchange on which the shares of Common Stock are then
listed; (B) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of outside counsel for the
underwriters in connection with blue sky qualifications of Registrable
Securities, if any); (C) printing, messenger, telephone and delivery expenses;
(D) fees and disbursements of counsel for the Issuer; and (E) fees and
disbursements of all independent registered public accountants of the Issuer
incurred specifically in connection with such registration.

 

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(2)    “Registrable Security” shall mean any of the Acquired Shares, together
with any securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the Acquired
Shares, until the earliest to occur of: (A) the Registration Statement shall
have become effective under the Securities Act and such securities shall have
been sold, transferred, disposed of or exchanged in accordance with the
Registration Statement; (B) such Acquired Shares shall have ceased to be
outstanding; (C) such Acquired Shares have been sold without registration
pursuant to Rule 144 (or any successor rule promulgated thereafter by the
Commission); and (D) such Acquired Shares have been sold to, or through, a
broker, dealer or underwriter in a public distribution or other public
securities transaction.

(b)    Registration Cooperation. At its expense, the Issuer shall:

(i)    except for such times as the Issuer is permitted hereunder to suspend the
use of the prospectus forming part of the Registration Statement, use its
commercially reasonable efforts to keep such registration, and any
qualification, exemption or compliance under state securities laws which the
Issuer determines to obtain, continuously effective with respect to Subscriber,
and to keep the Registration Statement free of any material misstatements or
omissions, until the earlier of the following: (i) Subscriber ceases to hold any
Registrable Securities, and (ii) the date on which counsel for the Issuer has
delivered a legal opinion that Subscriber does not constitute an affiliate under
the Securities Act, which such legal opinion has been agreed to by counsel to
Subscriber. The period of time during which the Issuer is required hereunder to
keep a Registration Statement effective is referred to herein as the
“Registration Period”;

(ii)    advise Subscriber within two (2) business days:

(1)    when the Registration Statement or any amendment thereto has been filed
with the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective;

(2)    of any request by the Commission for amendments or supplements to the
Registration Statement or the prospectus included therein or for additional
information;

(3)    of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for such purpose;

(4)    of the receipt by the Issuer of any notification with respect to the
suspension of the qualification of the Registrable Securities included therein
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and

(5)    subject to the provisions in this Subscription Agreement, of the
occurrence of any event that requires the making of any changes in the
Registration Statement or prospectus so that, as of such date, the statements
therein are not misleading and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case of
the prospectus, in the light of the circumstances under which they were made)
not misleading.

Notwithstanding anything to the contrary set forth herein, the Issuer shall not,
when so advising Subscriber of such events, provide Subscriber with any
material, nonpublic information regarding the Issuer other than to the extent
that providing notice to Subscriber of the occurrence of the events listed in
(1) through (5) above constitutes material, nonpublic information regarding the
Issuer;

 

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(iii)    use its commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement as soon as
reasonably practicable;

(iv)    upon the occurrence of any event contemplated in Section 5(b)(ii)(5),
except for such times as the Issuer is permitted hereunder to suspend, and has
suspended, the use of the prospectus forming part of the Registration Statement,
the Issuer shall use its commercially reasonable efforts to as soon as
reasonably practicable prepare a post-effective amendment to the Registration
Statement or a supplement to the related prospectus, or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, such prospectus will not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

(v)    use its commercially reasonable efforts to cause all Registrable
Securities to be listed on Nasdaq and each other national securities exchange
(within the meaning of the Exchange Act), if any, on which the shares of Common
Stock issued by the Issuer have been listed;

(vi)    use its commercially reasonable efforts to take all other steps
necessary to effect the registration of the Registrable Securities as required
hereby; and

(vii)    use its commercially reasonable efforts to allow Subscriber to review
disclosure regarding Subscriber in the Registration Statement.

(c)    Suspension Event. Notwithstanding anything to the contrary in this
Subscription Agreement, the Issuer shall be entitled to delay or postpone the
effectiveness of the Registration Statement, and from time to time to require
Subscriber not to sell under the Registration Statement, or to suspend the
effectiveness thereof, if the negotiation or consummation of a transaction by
the Issuer or its subsidiaries is pending or an event has occurred, which
negotiation, consummation or event the Issuer’s board of directors reasonably
believes, upon the written advice of legal counsel, would require additional
disclosure by the Issuer in the Registration Statement of material information
that the Issuer has a bona fide business purpose for keeping confidential and
the non-disclosure of which in the Registration Statement would be expected, in
the reasonable determination of the Issuer’s board of directors, upon the
written advice of legal counsel, to cause the Registration Statement to fail to
comply with applicable disclosure requirements (each such circumstance, a
“Suspension Event”); provided, however, that the Issuer may not delay or suspend
the Registration Statement on more than two (2) occasions, for more than thirty
(30) consecutive calendar days each during any twelve-month period. Upon receipt
of any written notice from the Issuer of the happening of any Suspension Event
(such notice to include a certificate signed by the Issuer’s chief executive
officer stating that upon the written advice of legal counsel, a Suspension
Event has occurred) during the period that the Registration Statement is
effective or if as a result of a Suspension Event the Registration Statement or
related prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein (in the case of the prospectus, in the light of the
circumstances under which they were made) not misleading, Subscriber agrees that
(i) it will immediately discontinue offers and sales of the Registrable
Securities under the Registration Statement (excluding, for the avoidance of
doubt, sales conducted pursuant to Rule 144) until Subscriber receives copies of
a supplemental or amended prospectus (which the Issuer agrees to promptly
prepare) that corrects the misstatement(s) or omission(s) referred to above and
receives notice that any post-effective amendment has become effective or unless
otherwise notified by the Issuer that it may resume such offers and sales, and
(ii) it will maintain the confidentiality of any information included in such
written notice delivered by the Issuer unless otherwise required by law or
subpoena. If so directed by the Issuer, Subscriber will deliver to the Issuer
or, in Subscriber’s sole discretion destroy, all copies of the prospectus
covering the Registrable

 

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Securities in Subscriber’s possession; provided, however, that this obligation
to deliver or destroy all copies of the prospectus covering the Registrable
Securities shall not apply (i) to the extent Subscriber is required to retain a
copy of such prospectus (a) in order to comply with applicable legal,
regulatory, self-regulatory or professional requirements or (b) in accordance
with a bona fide pre-existing document retention policy or (ii) to copies stored
electronically on archival servers as a result of automatic data back-up.

(d)    Opt-Out Notice. Subscriber may deliver written notice (including via
email in accordance with Section 8(l) of this Subscription Agreement) (an
“Opt-Out Notice”) to the Issuer requesting that Subscriber not receive notices
from the Issuer otherwise required by this Section 5; provided, however, that
Subscriber may later revoke any such Opt-Out Notice in writing. Following
receipt of an Opt-Out Notice from Subscriber (unless subsequently revoked), (i)
the Issuer shall not deliver any such notices to Subscriber and Subscriber shall
no longer be entitled to the rights associated with any such notice and
(ii) each time prior to Subscriber’s intended use of the Registration Statement,
Subscriber will notify the Issuer in writing at least two (2) business days in
advance of such intended use, and if a notice of a Suspension Event was
previously delivered (or would have been delivered but for the provisions of
this Section 5(d)) and the related suspension period remains in effect, the
Issuer will so notify Subscriber, within one (1) business day of Subscriber’s
notification to the Issuer, by delivering to Subscriber a copy of such notice of
Suspension Event that would have been provided, and thereafter will provide
Subscriber with the related notice of the conclusion of such Suspension Event
immediately upon its availability, and Subscriber shall comply with any
restrictions on using the Registration Statement during such Suspension Event.

(e)    Subscriber Indemnification. The Issuer agrees to indemnify and hold
Subscriber, each person, if any, who controls Subscriber within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of Subscriber within the meaning of Rule 405 under the Securities
Act, and each broker, placement agent or sales agent to or through which
Subscriber effects or executes the resale of any Acquired Shares (collectively,
the “Subscriber Indemnified Parties”), harmless against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) (collectively, “Losses”) incurred by Subscriber
directly that are caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement (including the
prospectus contained therein) or any amendment thereof (including the prospectus
contained therein) or caused by any omission or alleged omission to state
therein a material fact necessary in order to make the statements therein (in
the case of the prospectus, in the light of the circumstances under which they
were made), not misleading, except insofar as the same are caused by or
contained in any information or affidavit so furnished in writing to the Issuer
by Subscriber expressly for use therein.

(f)    Issuer Indemnification. Subscriber agrees to indemnify and hold harmless
the Issuer, each person, if any, who controls the Issuer within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each affiliate of the Issuer within the meaning of Rule 405 under the Securities
Act, and each broker, placement agent or sales agent to or through which
Subscriber effects or executes the resale of any Acquired Shares (collectively,
the “Issuer Indemnified Parties”), harmless against any and all Losses incurred
by the Issuer directly that are caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (including
the prospectus contained therein) or any amendment thereof (including the
prospectus contained therein) or caused by any omission or alleged omission to
state therein of a material fact necessary in order to make the statements
therein (in the case of the prospectus, in light of the circumstances under
which they were made), not misleading, insofar as the same are caused by or
contained in any information or affidavit so furnished in writing to the Issuer
by Subscriber expressly for use therein. Notwithstanding the foregoing,
Subscriber’s indemnification obligations under this Section 5(f), in the
aggregate, will not exceed the Purchase Price.

 

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6.    Termination. This Subscription 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:

(a)    upon the mutual written agreement of each of the parties hereto to
terminate this Subscription Agreement,

(b)    by Subscriber, if the Issuer breaches any of its representations,
warranties, covenants or agreements contained herein, which breach would cause
the failure of any of the conditions to Subscriber’s obligation to consummate
the Subscription Closing set forth in Section 2(b), and such breach is not cured
(if capable of being cured) within ten (10) business days after written notice
of such breach by Subscriber, provided that Subscriber is not then in material
breach of any of its representations, warranties, covenants or agreements
contained herein,

(c)    by the Issuer, if Subscriber materially breaches any of its
representations, warranties, covenants or agreements contained herein, which
breach would cause the failure of any of the conditions to the Issuer’s
obligation to consummate the Subscription Closing set forth in Section 2(b), and
such breach is not cured (if capable of being cured) within ten (10) business
days after written notice of such breach by the Issuer, provided that the Issuer
is not then in material breach of any of its representations, warranties,
covenants or agreements contained herein, and

(d)    by either party, if there is a change in law, or an applicable
governmental authority (including a court of competent jurisdiction) imposes a
binding, non-appealable restriction, requirement or order, that prohibits the
consummation of the transactions contemplated by this Agreement;

provided, that nothing herein will relieve any party from liability for any
willful breach hereof prior to the time of termination, and each party will be
entitled to any remedies at law or in equity to recover losses, liabilities or
damages arising from such breach; provided, further, that upon any termination
under this Subscription Agreement, the obligations of Section 5, Section 7,
Section 8, and the provisos of this Section 6 shall survive.

7.    Issuer’s Covenants.

(a)    With a view to making available to Subscriber the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the Commission that may at any time permit Subscriber to sell securities of the
Issuer to the public without registration, the Issuer agrees, until all of the
Registrable Securities are sold by Subscriber, to:

(i)    make and keep public information available, as those terms are understood
and defined in Rule 144;

(ii)    file with the Commission in a timely manner all reports and other
documents required of the Issuer under the Securities Act and the Exchange Act
so long as the Issuer remains subject to such requirements and the filing of
such reports and other documents is required for the applicable provisions of
Rule 144;

(iii)    furnish to Subscriber so long as it owns the Registrable Securities, as
promptly as practicable upon request, (x) a written statement by the Issuer, if
true, that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (y) a copy of the most recent annual or
quarterly report of the Issuer and such other reports and documents so filed by
the Issuer with the Commission and (z) such other information as may be
reasonably requested to permit Subscriber to sell such securities pursuant to
Rule 144 without registration; and

 

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(iv)    in connection with a sale by Subscriber pursuant to Rule 144, if the
transfer restrictions as set forth on Exhibit A to this Subscription Agreement
are no longer required by the Securities Act or any applicable state securities
laws, upon request of Subscriber, the Issuer shall use its commercially
reasonable efforts to cooperate with Subscriber to have such transfer
restrictions removed, including providing authorization to the Transfer Agent
within two (2) business days of the Issuer’s receipt of such request.

(b)    The Issuer shall use all of the proceeds from the sale of the Acquired
Shares solely to fund the Transaction as contemplated in this Subscription
Agreement (except that up to $10 million of such proceeds may be used for
general working capital purposes).

(c)    Following the Subscription Closing, unless relying on Regulation S, the
Issuer agrees to file a Form D with respect to the Acquired Shares as required
under Regulation D under the Securities Act and to provide a copy thereof to
Subscriber promptly after such filing. The Issuer shall make all filings and
reports relating to the offer and sale of the Acquired Shares required under
applicable securities or “Blue Sky” laws of the states of the United States, if
applicable, following the Subscription Closing.

(d)    Except as required by applicable law (including the requirement of any
stock exchange or securities regulatory authority), the parties hereto shall not
(and the parties shall cause their respective affiliates not to) release any
public statement regarding the Transaction, this Agreement or the transactions
contemplated thereby (including the identity of any party or financial terms of
the Transaction Agreements), without the prior written consent of the other
parties, not to be unreasonably withheld, conditioned or delayed. In each case
in which applicable law requires a party’s release of any such public statement
without the other party’s prior consent, such releasing party shall use
reasonable efforts to provide a copy of such release or statement to the other
parties in advance of such release and to incorporate the other party’s
reasonable comments thereon.

8.    Miscellaneous.

(a)    Subscriber acknowledges that the Issuer, and the Issuer acknowledges that
Subscriber, will rely on the acknowledgments, understandings, agreements,
representations and warranties contained in this Subscription Agreement. Prior
to the Subscription Closing, each party agrees to promptly notify the other
party if it becomes aware that any of the acknowledgments, understandings,
agreements, representations and warranties set forth herein are no longer
accurate in all material respects.

(b)    Each party is entitled to rely upon this Subscription Agreement and is
irrevocably authorized to produce this Subscription Agreement or a copy hereof
to any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby. Disclosure of Subscriber’s
name shall be subject to the notice provisions set forth in Section 8(l) of this
Subscription Agreement.

(c)    Neither this Subscription Agreement nor any rights that may accrue to
Subscriber hereunder may be transferred or assigned (other than the transfer and
assignment of (i) the Acquired Shares acquired hereunder, if any, subsequent to
Subscriber’s purchase of such Acquired Shares at the Subscription Closing and in
accordance with Subscriber’s representations and warranties herein; (ii) any or
all of Subscriber’s rights and obligations under this Subscription Agreement to
its affiliates, subject to, if such transfer or assignment is prior to the
Subscription Closing, such affiliates executing a subscription agreement in
substantially the same form as this Subscription Agreement, including with
respect to the

 

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purchase price described in Section 1 and other terms and conditions; and
(iii) after the Subscription Closing, Subscriber’s rights pursuant to Section 5,
Section 7 and Section 8 of this Subscription Agreement to any purchaser of the
Acquired Shares that receives the Acquired Shares without the removal of the
transfer restrictions set forth on Exhibit A of this Subscription Agreement).
Neither this Subscription Agreement nor any rights that may accrue to the Issuer
hereunder may be transferred or assigned by the Issuer.

(d)    All the agreements, representations and warranties made by each party
hereto in this Subscription Agreement shall survive the Subscription Closing.

(e)    The Issuer may request from Subscriber such additional information as may
be reasonably necessary to evaluate the eligibility of Subscriber to acquire the
Acquired Shares and to comply with the Issuer’s registration obligations under
Section 5 of this Subscription Agreement, and Subscriber shall take reasonable
efforts to provide such information as may be reasonably requested, to the
extent readily available and to the extent consistent with its internal policies
and procedures.

(f)    This Subscription Agreement may not be modified, waived or terminated
except by an instrument in writing, signed by the party against whom enforcement
of such modification, waiver, or termination is sought.

(g)    This Subscription Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof. This Subscription Agreement shall not
confer any rights or remedies upon any person other than the parties hereto, and
their respective successors and assigns; provided, that the parties acknowledge
and agree that such indemnified parties with respect to Section 5(e) and
Section 5(f) shall each be a third-party beneficiary to this Subscription
Agreement, and that the Transfer Agent shall be a third-party beneficiary of the
representations and warranties of Subscriber contained in Section 4 of this
Subscription Agreement, and in each case with respect thereto shall be entitled
to the rights and benefits hereunder and may enforce the provisions hereof as if
it were a party hereto.

(h)    Subject to Section 8(c), and except as otherwise provided herein, this
Subscription Agreement shall be binding upon, and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives, and permitted assigns, and the agreements, representations,
warranties, covenants and acknowledgments contained herein shall be deemed to be
made by, and be binding upon, such heirs, executors, administrators, successors,
legal representatives and permitted assigns as if it were a party hereto.
Without limiting the generality of the foregoing, a “successor” of a person
shall include any transferee of majority ownership and control of such person
after the date hereof.

(i)    If any provision of this Subscription Agreement shall be invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions of this Subscription Agreement shall not in any way be affected or
impaired thereby and shall continue in full force and effect.

(j)    This Subscription Agreement may be executed in one (1) or more
counterparts (including by electronic means), all of which shall be considered
one and the same agreement and shall become effective when one (1) or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart. Delivery by facsimile or electronic transmission to counsel for the
other parties of a counterpart executed by a party shall be deemed to meet the
requirements of the previous sentence.

 

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(k)    Subscriber shall pay all of its own expenses in connection with this
Subscription Agreement and the transactions contemplated herein, except as
otherwise expressly provided herein.

(l)    All notices and other communications hereunder shall be in writing and
shall be deemed given (i) if delivered personally, when received, (ii) if
transmitted by electronic mail, on the date of transmission if the receiving
party confirms its receipt of such electronic mail, or the next business day, if
the receiving party does not confirm its receipt of such electronic mail, or
(iii) if by international courier service, on the fourth business day following
the date of deposit with such courier service, or such earlier delivery date as
may be confirmed in writing to the sender by such courier service. Such
communications, to be valid, must be addressed as follows:

(1) if to Subscriber, to such address set forth on the signature page hereto;

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

Covington & Burling LLP

Salesforce Tower, 415 Mission Street, Suite 5400

San Francisco, CA 94105-2533

Attn: Denny Kwon

Email: dkwon@cov.com

(2) if to the Issuer, to:

Sunrun Inc.

225 Bush Street, Suite 1400

San Francisco, CA 94104

Attention: Chief Product Officer

with a copy to:

Sunrun Inc.

225 Bush Street, Suite 1400

San Francisco, CA 94104

Attention: General Counsel

Email: legalnotices@sunrun.com

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

Orrick, Herrington & Sutcliffe LLP

405 Howard Street

San Francisco, California 94105

Attention: John Cook

Email: jcook@orrick.com

(m)    This Subscription Agreement shall be governed by the internal laws of the
State of New York, without regard to conflict of law principles that would
result in the application of any law other than the law of the State of New
York.

(n)    The parties agree that any dispute or controversy arising out of,
relating to, or in connection with this Subscription Agreement or the
transactions contemplated hereby (a “Dispute”) shall be arbitrated pursuant to
the provisions of the Rules of Arbitration of the International Chamber of
Commerce (the “ICC Arbitration Rules”), by three arbitrators (the “Tribunal”)
appointed in accordance with the ICC Arbitration Rules. Such arbitration
(“Arbitration”) shall take place in New York City, or such other

 

17

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location as the parties and the Tribunal may agree. The arbitral award (the
“Award”) shall (i) be rendered within 120 days after the Tribunal’s acceptance
of his or her appointment; (ii) be delivered in writing; (iii) state the reasons
for the Award; (iv) be the sole and exclusive final and binding remedy with
respect to the Dispute between and among the parties without the possibility of
challenge or appeal, which are hereby waived; and (v) be accompanied by a form
of judgment. The Award shall be deemed an award of the United States, the
relationship between the parties shall be deemed commercial in nature, and any
Dispute arbitrated pursuant to this Section 8(n) shall be deemed commercial. The
Tribunal shall have the authority to grant any equitable or legal remedies,
including entering preliminary or permanent injunctive relief; provided,
however, that the Tribunal shall not have the authority to award (and the
parties waive the right to seek an award of) punitive, consequential, special or
exemplary damages.

EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS SUBSCRIPTION AGREEMENT, THE OTHER
TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE),
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS
SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES AND THESE PROVISIONS
SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND
THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

The parties agree that, subject to any non-waivable disclosure obligations under
applicable law, the Arbitration, and all matters relating thereto or arising
thereunder, including the existence of the Dispute, the Arbitration and all of
its elements (including any pleadings, briefs or other documents submitted or
exchanged, any testimony or other oral submissions, and any decision of the
Tribunal or Award), shall be kept strictly confidential, and each party hereby
agrees that such information shall not be disclosed beyond: (i) the Tribunal and
necessary support personnel; (ii) the participants in the Arbitration;
(iii) those assisting the parties in the preparation or presentation of the
Arbitration; (iv) other employees or agents of the parties with a need to know
such information for purposes of the Arbitration; and (v) any third parties that
are subpoenaed or otherwise provide discovery in the Arbitration proceedings,
only to the extent necessary to obtain such discovery. In all events, the
parties participating in the Arbitration proceedings shall treat information
pertaining to the Arbitration with the same care that they treat their most
valuable proprietary secrets. In the event that applicable law imposes upon any
party an obligation to disclose the fact of the Arbitration or the nature of the
claims or counterclaims asserted, such party shall disclose no more than the
minimum information required by law after first consulting with and attempting
in good faith to reach agreement with the opposing party regarding the scope and
content of any such required disclosure.

Each party shall bear its own legal fees and costs in connection with the
Arbitration; provided, however, that each such party shall pay one-half of any
filing fees, fees and expenses of the Tribunal or other similar costs incurred
by the parties in connection with the prosecution of the Arbitration.

Notwithstanding any provisions of this Subscription Agreement, or any statute
protecting the confidentiality of the Arbitration and proceedings taken in
connection therewith, in the event that any party in the Arbitration (the
“Respondent”) is required to defend itself in response to later proceedings
instituted by another party in any court, relating to matters decided in the
Arbitration, such party shall be relieved of any obligation to hold confidential
the Arbitration and its proceedings in order to submit, confidentially if and to
the extent possible, sufficient information to such court to allow it to
determine whether the doctrines of res judicata, collateral estoppel, bar by
judgment, or other, similar doctrines apply to such subsequent proceedings.

 

18

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(o)    Except as expressly set forth in this Subscription Agreement, no former,
current or future equity holders, controlling persons, directors, officers,
employees, agents, affiliates, members, managers, general or limited partners,
representatives or assignees of Subscriber or any former, current or future
equity holder, controlling person, director, officer, employee, agent,
affiliate, member, manager, general or limited partner, representative or
assignee of any of the foregoing, shall have any obligation to the Issuer or to
any other person hereunder in connection with the transactions contemplated
hereby.

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

[Signature pages follow]

 

19

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IN WITNESS WHEREOF, each party has executed or caused this Subscription
Agreement to be executed by its duly authorized representative as of the date
set forth below.

 

SUNRUN INC. By:  

/s/ Lynn Jurich

Name:   Lynn Jurich Title:   Chief Executive Officer   Date: July 29, 2020

 

[Signature Page to Subscription Agreement]

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SUBSCRIBER: SK E&S CO., LTD. By:  

/s/ Daejin Choi

Name:   Daejin Choi Title:   Senior Vice President

Date: July 29, 2020

 

Address:  

26, Jong-ro

 

Jongno-gu, Seoul

 

Republic of Korea, 03188

Attention:  

Jaehyun Joseph Kim

 

[Signature Page to Subscription Agreement]

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List of Omitted Schedules and Exhibits

Schedule A – Eligibility Representations of Subscriber

Exhibit A – Restricted Legend