Document:

ex_181285.htm

Exhibit 10.1

 

LITIGATION FUNDING AGREEMENT

 

This Litigation Funding Agreement is made as of the 9th day of April 2020, between BioCardia, Inc., (“Litigant”) and BSLF, LLC (“Funder”).

 

RECITALS

 

A.           WHEREAS, Litigant has requested funding for Litigation and Funder is prepared to provide funding to Litigant for Litigation; and

 

B.           WHEREAS, in exchange for the funding for Litigation, Litigant wishes to grant to Funder a share of any Litigation Proceeds.

 

NOW THEREFORE, in consideration of the promises contained herein, and for other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged by the parties, the parties agree to be bound as follows:

 

	
			1. 

				
			DEFINITIONS

			

 

Capitalized terms used in this Agreement shall have the respective meanings ascribed to them in Exhibit A or otherwise as specifically defined in this Agreement.

 

	
			2. 

				
			FUNDING

			

 

	 	
			2.1.

				
			General. Upon the terms and subject to the conditions set forth in this Agreement, Funder shall fund the fees and costs incurred in the Litigation on and after March 1, 2020. Such funding shall be on a non-recourse basis.

			

 

	 	
			2.2.

				
			Use of Funding. Litigant shall use the funding exclusively for legal fees and costs incurred in connection with the Litigation.

			

 

	
			3. 

				
			RECEIPT OF LITIGATION PROCEEDS

			

 

	 	
			3.1.

				
			Trust Account. Litigant shall cause the Lawyers (a) to arrange to receive any and all Litigation Proceeds; (b) to receive any and all Litigation Proceeds in cash unless otherwise agreed by Funder; (c) for any and all cash Litigation Proceeds received by the Lawyers immediately to be deposited into a separate trust account (the “Trust Account”) established by the Lawyers at a depositary bank acceptable to Funder; (d) not cause or permit the funds in the Trust Account to be commingled with any other funds that are not Litigation Proceeds; (e) not to disburse the funds in the Trust Account except in accordance with this Agreement; and (g) to hold any non-cash Litigation Proceeds in trust for the benefit of Funder, the Lawyers and Litigant.

			

 

 

 

 

 

	 	
			3.2.

				
			Litigant’s Receipt of Litigation Proceeds. If, notwithstanding Section 3.1, Litigant directly or indirectly receives any Litigation Proceeds, Litigant will pay the Litigation Proceeds consisting of cash over, together with any amount in cash equal to the reasonable market value of any non-cash Litigation Proceeds received, to the Lawyers to be deposited into the Trust Account and held and disbursed in accordance with this Agreement. If there is a dispute regarding the appropriate valuation of any non-cash portion of the Litigation Proceeds, then the dispute shall be resolved pursuant to Article 13.

			

 

	
			4. 

				
			APPLICATION OF LITIGATION PROCEEDS

			

 

	 	
			4.1.

				
			Payment Waterfall. Litigant shall cause the Lawyers promptly to pay to Funder out of the Trust Account all Investment Returns, as and when any Litigation Proceeds are received (once such funds clear or otherwise become available), in accordance with Exhibit B. If no Litigation Proceeds are obtained from the Litigation, then Funder will not be entitled to its financial return and Litigant will owe Funder nothing.

			

 

	 	
			4.2.

				
			Taxes. Litigant is liable for and shall pay any and all Taxes (other than taxes imposed upon Funder as a consequence of Funder’s income) on the Litigation Proceeds or as a consequence of any Settlement including, to the extent applicable, any Tax payable with respect to forgiveness of indebtedness or other comparable or similar Tax liability resulting from relief from a liability or obligation rather than an affirmative receipt of money or other value.

			

 

	 	
			4.2.1.

				
			No Tax payment, liability or obligation of Litigant shall operate to reduce any amount payable to Funder under this Agreement. If any such reduction or withholding is required by law, Litigant shall (a) promptly notify Funder upon becoming aware of the required deduction or withholding; (b) pay to the relevant authorities (within the time allowed) the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by Litigant to Funder under this clause); (c) promptly provide Funder an official receipt (or a certified copy or such other evidence reasonably acceptable to Funder), evidencing the relevant withholding and payment to such authorities; and (d) pay to Funder such additional amounts as are necessary to ensure that (after making any such withholdings or deductions) the net amount actually received by Funder in respect of the payment due from Litigant equals the amount Funder would have received if no such withholdings or deductions had been required.

			

 

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			4.2.2.

				
			Funder may, but shall not be obligated to, pay any Tax liability or obligation of Litigant with respect to the Claim, the Litigation or any Settlement that Litigant fails to pay timely and in full. Litigant shall be liable to reimburse Funder, upon demand, for any such payment plus interest thereon at the annual rate of 6%, compounded quarterly, calculated from the date of such payment until reimbursement by Litigant in full (whether before or after judgment). If Funder pays any such Tax liability or obligation of Litigant, all amounts payable by Litigant under this Paragraph 4.2.2 shall be in addition to all other amounts payable by Litigant to Funder pursuant to this Agreement including any Investment Return.

			

 

	
			5. 

				
			SETTLEMENT

			

 

	 	
			5.1.

				
			Right to Settle. Litigant shall not Settle the Claims or the Litigation without the prior consultation of the Funder, whose input shall be considered and addressed in writing if requested in writing, to the extent such consultation is practicable given the timing and exigencies of Settling the Claims (written input is unlikely to be practicable in, for example, a mediation). Funder shall have the right but not the obligation to participate in real-time settlement negotiations (e.g., a mediation). Notwithstanding the foregoing, Litigant shall have the sole and exclusive right to settle on whatever terms it deems acceptable.

			

 

	
			6. 

				
			COVENANTS OF LITIGANT

			

 

	 	
			6.1.

				
			Irrevocable Instruction to Lawyers. Concurrently with execution of this Agreement, Litigant shall, and shall cause the Lawyers to, execute and deliver, or to otherwise acknowledge in a manner satisfactory to Funder, an irrevocable instruction (an “Irrevocable Instruction”) substantially in the form attached as Exhibit C. If Litigant engages any additional or substitute Lawyers, except for local counsel that will not have access to Litigation Proceeds, then at the time of the engagement Litigant shall, and shall cause the additional or substitute Lawyers to, execute and deliver to Funder an Irrevocable Instruction in a manner satisfactory to Funder. Litigant shall cause the Lawyers to comply with each Irrevocable Instruction.

			

 

	 	
			6.2.

				
			Cooperation of Litigant. At all times during the term of this Agreement, Litigant shall:

			

 

	 	
			6.2.1.

				
			cooperate with the Lawyers and Funder in all material matters pertaining to the Claims and the Litigation, and devote sufficient time and attention as is reasonably necessary to conclude the Claims successfully;

			

 

	 	
			6.2.2.

				
			remain a party to the Litigation until Final Resolution and, subject to the terms of this Agreement, remain responsible for all liability, costs and expenses related thereto, including any and all Litigation Expenses relating to the Claims and the Litigation;

			

 

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			6.2.3.

				
			use best efforts to prevail in and pursue the Litigation, to maximize the value of the Litigation Proceeds and the recovery relating to the Claims and the Litigation and to collect the Litigation Proceeds as soon as practicable;

			

 

	 	
			6.2.5.

				
			promptly enter, enforce and execute on any judgment obtained and pursue prosecution in all appropriate jurisdictions, including collection of any and all available assets of any Defendant as soon as possible.

			

 

	 	
			6.3.

				
			Truth and Completeness of Representations and Warranties. Litigant’s representations and warranties to Funder in this Agreement shall remain true, correct and complete at all times during the term of this Agreement.

			

 

	
			7. 

				
			REPRESENTATIONS AND WARRANTIES

			

 

	 	
			7.1.

				
			Mutual Representations and Warranties. Each party represents, warrants and acknowledges to the other, as of the date hereof, that:

			

 

	 	
			7.1.1.

				
			It has full right, power and authority, and has taken all action necessary, to execute and deliver this Agreement, and to perform its obligations hereunder;

			

 

	 	
			7.1.2.

				
			This Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligations, enforceable against it in accordance with its terms;

			

 

	 	
			7.1.3.

				
			No notice to, registration with, consent or approval of, or any other action by, any relevant governmental authority or other Person is or will be required for it to execute, deliver, and perform its obligations under this Agreement;

			

 

	 	
			7.1.4.

				
			It has had this Agreement reviewed by competent counsel and has received advice regarding the execution and delivery of this Agreement and the performance of its obligations under this Agreement;

			

 

	 	
			7.1.5.

				
			The other party has not given any investment advice or rendered any opinion to it as to whether entering into this Agreement in exchange for the rights received is prudent; and

			

 

	 	
			7.1.6.

				
			It has received independent and appropriate tax advice in connection with this Agreement and, on the basis of that advice, is entering into this Agreement.

			

 

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			7.2.

				
			Litigant’s Additional Representations, Warranties and Covenants. Litigant represents and warrants to and covenants in favor of Funder that, at all times during the term of this Agreement:

			

 

	 	
			7.2.1.

				
			The making and performance by it of this Agreement do not and will not violate any charter, bylaw or other organizational agreement of Litigant, any law or regulation applicable to Litigant, or any other agreement or instrument by which Litigant is bound;

			

 

	 	
			7.2.2.

				
			Litigant is the sole legal and beneficial owner of, and has good title to, the Claims free and clear of any (a) mortgage, pledge, lien, charge, hypothecation, right of set-off or counterclaim, security interest or other encumbrance, security agreement or trust securing any obligation of any Person or arrangement of any kind; (b) purchase or option agreement or arrangement; (c) subordination agreement or arrangement; (d) agreements to create or effect any of the foregoing or which have a similar or analogous nature or effect, in each case other than as previously disclosed to Funder;

			

 

	 	
			7.2.3.

				
			Litigant will not cause, permit or assert over or otherwise attach to the Claims or the Litigation Proceeds any (a) mortgage, pledge, lien, charge, hypothecation, right of set-off or counterclaim, security interest or other encumbrance, security agreement or trust securing any obligation of any Person or arrangement of any kind; (b) purchase or option agreement or arrangement; (c) subordination agreement or arrangement; (d) agreements to create or effect any of the foregoing or which have a similar or analogous nature or effect;

			

 

	 	
			7.2.4.

				
			Litigant has not made or entered into and shall not make or enter into any assignment, trust arrangement, security, sale, transfer or sub-participation or local law equivalent of its right, title or interest in the Claims or the Litigation Proceeds, and there are no agreements (whether in writing or oral) between Litigant and another Person granting or agreeing to grant a contingent interest in, or granting or agreeing to grant a right to payment determined by reference to, the Litigation Proceeds other than this Agreement;

			

 

	 	
			7.2.5.

				
			Litigant has not taken and shall not take any steps or execute any documents which would materially or adversely affect the Claims or the recoverability of the Litigation Proceeds;

			

 

	 	
			7.2.6.

				
			Litigant has not engaged, and shall not engage, in any acts or conduct or make any material omissions, agreements or arrangements that would result in Funder receiving less payment or less favorable treatment in respect of the Claims or the Litigation Proceeds than as set forth in this Agreement;

			

 

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			7.2.7.

				
			Litigant has not recouped or set off or agreed to recoup or set off, and shall not agree to do so, any amounts against the Claims or the Litigation Proceeds and no rights of recoupment or set-off of, or similar rights against Litigant exist which will permit any recoupment or set-off of or counterclaim against the Claims or the Litigation Proceeds except as set forth in this Agreement or as has been otherwise disclosed in writing to Funder; and

			

 

	 	
			7.2.8.

				
			Litigant has the full power and authority to bring the Claims, pursue the Litigation and direct the Lawyers; and

			

 

	
			8. 

				
			DURATION OF AGREEMENT

			

 

	 	
			8.1.

				
			Subject to Article 9, this Agreement commences on the date hereof and, absent Termination, continues in effect until:

			

 

	 	
			8.1.1.

				
			Final Resolution; and

			

 

	 	
			8.1.2.

				
			Litigant has complied with all of its obligations pursuant to this Agreement; and

			

 

	 	
			8.1.3.

				
			all Litigation Proceeds (if any) have been fully disbursed in accordance with this Agreement.

			

 

	
			9. 

				
			TERMINATION RIGHTS

			

 

	 	
			9.1.

				
			By Funder. Funder shall have the right to terminate this Agreement upon ten (10) days’ written notice to Litigant. Funder shall be obligated to fund only the fees and costs necessarily incurred in the Litigation through the end of the month in which the termination notice was served.

			

 

	 	
			9.2.

				
			By Litigant. Litigant shall have the right to terminate this Agreement (other than Litigant’s obligations to pay or disburse the Litigation Proceeds in accordance with this Agreement) upon ten (10) days’ written notice to Funder from and after a failure by Funder to fulfill its obligations under this Agreement if such failure or material breach is continuing at the end of the ten (10) day period.

			

 

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			10. 

				
			SECURITY AGREEMENT

			

 

	 	
			10.1.

				
			Grant of Security Interest. As security for the payment and performance in full of the Secured Obligations, Litigant hereby grants, assigns and pledges to Funder, its successors and assigns, a security interest of first priority in any and all right, title or interest of Litigant in or to any and all of the following assets and properties now owned or at any time hereafter acquired by Litigant or in which Litigant now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”):

			

 

	 	
			 

				
			9.1.1. the Claims and the Judgment; and

			

 

	 	
			 

				
			9.1.2. the Litigation Proceeds.

			

 

	 	
			10.2.

				
			Continuing Security Interest. Litigant acknowledges and agrees that the Funder’s security interest in the Collateral constitutes continuing collateral security for all of the Secured Obligations. The proceeds of the Collateral, or any part thereof, and the proceeds of any remedy hereunder shall be paid and applied first to Funder in accordance with Exhibit B and then the balance, if any, to Litigant, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same.

			

 

	 	
			10.3.

				
			Financing Statements. Litigant hereby irrevocably authorizes Funder at any time and from time to time to file in any file office in any jurisdiction that Funder deems advisable (a) any Uniform Commercial Code financing statement providing the name of Litigant as debtor, Collateral Agent as secured party and indicating the Collateral as collateral covered by the financing statement and (b) any other notice, filing or other document that Funder deems necessary or advisable to perfect or protect the security interest or to maintain its first priority. To the extent that any filed financing statement referred to above is required to be modified in order to make the description of collateral provided for therein more consistent with the Collateral description provided herein, Funder agrees that it shall file amendments to any such financing statements requested by Litigant from time-to-time in furtherance of such purpose. Upon the payment to Funder in full of the Secured Obligations, including all Litigation Proceeds to which Funder is entitled under this Agreement, the security interest granted herein shall terminate and all rights to the remaining Collateral shall revert to Company. Upon such termination Funder hereby authorizes Company to file any UCC termination statements necessary to effect such termination and Funder will execute and deliver to Company any additional documents or instruments as Company shall reasonably request to evidence such termination.

			

 

	
			11. 

				
			GOVERNING LAW; JURISDICTION AND VENUE; DISPUTES

			

 

	 	
			11.1.

				
			Governing Law. This Agreement is entered into in the State of California and shall be governed by and construed in accordance with the laws of the State of California applicable to contracts entered into and fully to be performed in such state. Conflict of laws rules that would require the application of the law of any other jurisdiction shall not apply.

			

 

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			11.2.

				
			Arbitration of Disputes. All disputes, claims or causes of action between the parties arising out of or relating to this Agreement shall be resolved in accordance with Exhibit D.

			

 

	
			12. 

				
			NOTICES

			

 

	 	
			12.1.

				
			Method. All notices given under this Agreement shall be in writing and may be served personally, by recognized overnight courier such as FedEx, or by email, addressed as follows:

			

 

TO FUNDER:

Andrew S. Blank

3455 NW 54th Street

Miami, FL 33142

Ablank@archiveamerica.com

 

WITH A COPY TO:

Jorge L. Guerra

255 Alhambra Circle, Suite 1150

Coral Gables, Florida 33134

jlg@rtgn-law.com

 

 

TO LITIGANT:

Peter Altman

BioCardia, Inc.

125 Shoreway Road

San Carlos, CA 94065

 

 

WITH A COPY TO:

Wilson Sonsini

650 Page Mill Road

Palo Alto, CA 94304-1050

Attn: Michael Danaher

 

	 	
			12.2.

				
			Receipt. A notice shall be considered to have been received on the first business day after it is sent by overnight courier for next business day delivery and on the day it is transmitted by facsimile or email.

			

 

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			13. 

				
			ACKNOWLEDGEMENT

			

 

	 	
			13.1.

				
			By executing this Agreement Litigant acknowledges that:

			

 

	 	
			13.1.1.

				
			Funder recommended to Litigant that Litigant obtain legal advice as to the meaning and effect of this Agreement; and

			

 

	 	
			13.1.2.

				
			Funder is not a law firm; neither Funder nor its representatives or Affiliates are engaged in the practice of law or any other professional activity; Funder is not providing any legal advice to Litigant; and Litigant has not and shall not rely on Funder or its Affiliates for legal, tax, accounting or other professional advice.

			

 

	
			14. 

				
			GENERAL

			

 

	 	
			14.1.

				
			Interpretation. Section headings in this Agreement are for convenient reference only and shall not affect the interpretation or construction of this Agreement. The singular includes the plural in this Agreement and vice versa. Examples and words like “including” are deemed to mean “without limitation”. All references in this Agreement to Articles, Sections, Paragraphs and Exhibits are references to the relevant provisions of this Agreement.

			

 

	 	
			14.2.

				
			Merger Clause. This Agreement shall constitute the entire agreement between the parties, and shall supersede all prior agreements, understandings and negotiations between the parties with respect to the subject matter hereof. If the parties entered into any earlier agreements (other than a confidentiality agreement), those agreements are hereby terminated and this Agreement shall be the sole agreement governing the parties’ relationship. A prior confidentiality agreement is not superseded by this Agreement and continues in full force and effect. However, to the extent that there is a conflict between this Agreement and the confidentiality agreement, this Agreement will control.

			

 

	 	
			14.3.

				
			Assignment. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, assigns, and legal representatives. All representations, warranties, covenants and indemnities made herein shall survive the execution and delivery of this Agreement. Neither this Agreement, nor any rights, interests, obligations and duties arising hereunder, may be assigned or otherwise conveyed (a) by Litigant except as expressly provided herein without the express consent in writing of Funder, or (b) by Funder except that Assignee shall not be adverse or in conflict with Litigant and except as expressly provided herein without the express consent in writing of Litigant; provided that, without Litigant’s consent, Funder may (i) assign its rights and obligations under this Agreement to a Subsidiary, (ii) provide co-investment participations in or to all or a portion of its rights and obligations under this Agreement and (iii) exercise any rights as secured party with respect to the Collateral.

			

 

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			14.4.

				
			Independent Parties. The parties are independent contractors to one another with respect to this Agreement and neither party shall be deemed to be an agent, employee or joint venturer of the other by virtue of this Agreement. Nothing in this Agreement shall constitute the Litigant and Funder as partners or fiduciaries of one another. Neither party shall have any power, right or authority to bind the other to any obligation or liability, to assume or create any obligation or liability or transact any business in the name or on behalf of the other, or make any promises or representations on behalf of the other, except as expressly set forth herein.

			

 

	 	
			14.5.

				
			Amendment; Waiver. This Agreement shall not be amended, and no term or provision of this Agreement may be waived, except in writing signed by a duly authorized representative of each party. No delay on the part of a party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, and no single or partial exercise of any right, power or remedy by a party shall preclude any further exercise thereof.

			

 

	 	
			14.6.

				
			Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. This Agreement may be delivered by any party by facsimile or other electronic means and any copy so delivered shall be deemed to be an original.

			

 

	 	
			14.7.

				
			Severability. If any provision of this Agreement, or the application thereof to any Person or circumstances, is or becomes invalid or unenforceable, the remaining provisions will not be affected and each remaining provision shall remain valid and be enforceable to the full extent permitted by applicable law.

			

 

	 	
			14.8.

				
			Further Assurances. Each party will promptly execute all documents and do all things that another party from time to time reasonably requires to effect, perfect or complete the provisions of this Agreement and any transaction contemplated by it. Other than as provided in Article 10, neither party shall take any action, or omit to take any action, that is reasonably likely to have a Material Adverse Effect.

			

 

10

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written by their respective duly authorized representatives.

 

	
			BioCardia, Inc.

			 

			 

				 	
			BSLF, LLC

			 

			 

				 
	By:	/s/ Peter Altman	 	By:	/s/ Andrew S. Blank	 
	
			Name:   Peter Altman

			Title:     Chief Executive Officer

				 	Name: Andrew S. Blank	 

   

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EXHIBIT A

 

DEFINITIONS

 

	
			“Actual Funding”

				
			The aggregate principal portion of the Funding Amount actually paid by Funder pursuant to this Agreement up to and including the date of Termination.

			

 

 

	
			“Agreement”

				
			This agreement between the Litigant and Funder, as amended from time to time, in accordance with Section 16.5, including all Exhibits.

			

 

	
			“Claims”

				
			The claims that Litigant has against any party in connection with the Litigant.

			
	 	 
	“Collateral” 	Shall have the meaning assigned to such term in Section 9.1.

 

	
			“Final Resolution”

				
			The resolution of the Litigation which substantially concludes the Litigation with respect to Litigant pursuant to (i) a final, non-appealable, legal and valid judgment of the Court, or (ii) a Settlement agreement between Litigant and all Defendants.

			
	 	 
	“Irrevocable Instruction”	Shall have the meaning assigned to such term in Section 6.1.

 

	
			“Investment Return”

				
			The fees or return payable to Funder, in accordance with Exhibit B, for making available the Funding Amount.

			

 

	
			“Judgment”

				
			Means the judgment issued by the United States District Court for the District of Nebraska in connection with the Litigation.

			

 

	
			“Lawyers”

				
			Feinberg Day Kramer Alberti Lim Tonkovich & Belloli LLP, 577 Airport Boulevard, Suite 250, Burlingame, California 94010 and/or any substitute or additional legal counsel engaged by Litigant with respect to the Claims or the Litigation and who are approved by Funder, which approval shall not be unreasonably withheld.

			

 

	
			“Litigation”

				
			The legal proceedings and any and all claims, actions and/or proceedings relating to or arising from the case captioned Boston Scientific Corp., et al., v. Biocardia Inc., Case No. 3:19-05645-VC, U.S.D.C., N. D. Cal., including the Judgment, and any appeal or remand therefrom or proceedings in connection therewith and any new proceedings that may arise from the Claims.

			

 

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			“Litigation Proceeds”

				
			Any and all consideration actually paid directly or indirectly to or for the benefit of Litigant or received directly or indirectly by or for the benefit of Litigant in connection with the Litigation (whether by judgment, Settlement, licensing or otherwise), including the present fair market value, at the time of settlement or collection, of any cash or property recovered, or tangible or intangible value received, any cash, damages (punitive or otherwise), penalties, interest and other amounts paid or property transferred in respect of the Litigation. Without limiting the generality of the foregoing, Litigation Proceeds shall be determined without taking into consideration (i) any fees or expenses incurred in connection with obtaining or collecting the Litigation Proceeds (including any contingency fees), and (ii) recoupments or set-offs of any kind, including any recoupments or set-offs in respect of any counterclaims or cross-claims asserted against Litigant by any party.

			

 

	
			“Secured Obligations”

				
			Collectively: (i) the obligation of Litigant to pay the Investment Return to Funder, (ii) all other funding to Litigant, and debts, liabilities, obligations, covenants and duties of Litigant owing to Funder now or hereafter existing, whether joint or several, direct or indirect, absolute or contingent or due or to become due, arising under or in connection with this Agreement or any of the transactions contemplated thereby and including any interest due thereon and all fees, costs, and expenses incurred by Funder in connection therewith; (iii) all debts, liabilities, obligations, covenants and duties of Litigant to pay or reimburse Funder for all expenses including attorneys’ fees, incurred by Funder in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement, including all such costs and expenses incurred during any legal proceeding, including any proceeding under any applicable bankruptcy, insolvency or other similar debtor relief laws; and (iv) all interest and fees on any of the foregoing, whether accruing prior to or after the commencement by or against Litigant of any proceeding under any applicable bankruptcy, insolvency or other similar debtor relief laws naming Litigant as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

			

 

	
			“Settlement”

				
			Any compromise, discontinuance, waiver, payment, release or other form of settlement whatsoever where value passes from or on behalf of a Defendant to or for the benefit of Litigant in circumstances in which the Litigation does not continue as a result of or in connection with the passing of that value; and “Settle”, “Settles” and “Settled” have corresponding meanings.

			

 

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			“Taxes”

				
			Any and all applicable taxes, duties, charges or levies of any nature imposed by any taxing or other governmental or regulatory authority including income, gains, capital gains, surtax, capital, franchise, capital stock, value-added taxes, taxes required to be deducted from payments made by the payor and accounted for to any tax authority, employees’ income withholding, back-up withholding, withholding on payments to foreign Persons, social security, national insurance, unemployment, worker’s compensation, payroll, disability, real property, personal property, sales, use, goods and services or other commodity taxes, business, occupancy, excise, customs and import duties, transfer, stamp, and other taxes (including interest, penalties or additions to tax in respect of the foregoing), and includes all taxes payable pursuant to any provision of state, local or foreign law.

			
	 	 
	“Termination” 	Any termination of this Agreement in accordance with Article 9.

 

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EXHIBIT B

 

INVESTMENT RETURN

 

1.     Investment Return. Subject only to the fees due the Lawyers, but prior to payment of any other amounts from the Litigation Proceeds, Litigant shall cause the Lawyers to pay Funder all amounts owed by Litigant to Funder pursuant to Section 4.2, if any, plus an amount, without reduction, set-off or counterclaim, equal to (i) the Actual Funding, plus the greater of (ii)(a) 50% of the remaining Litigation Proceeds, up to three times (3x) the Actual Funding, or (b) 30% of the remaining Litigation Proceeds (the “Investment Return”).

 

 

 

 

15Exhibit 4.1

 

SECOND
SUPPLEMENTAL INDENTURE

 

SECOND SUPPLEMENTAL
INDENTURE, dated as of April 10, 2020 (this “Supplemental Indenture”), by and among PATTERN ENERGY GROUP INC.,
a Delaware corporation, as issuer (the “Company”), PATTERN US FINANCE COMPANY LLC, a Delaware limited liability
company (the “Guarantor”), PATTERN ENERGY OPERATIONS LP, a Delaware limited partnership (“Pattern
Ops”) and DEUTSCHE BANK TRUST COMPANY AMERICAS, as trustee (the “Trustee”), supplements the Indenture,
dated as of January 25, 2017 (as amended or supplemented prior to the date hereof, the “Indenture”), among
the Company, the Guarantor and the Trustee.

 

RECITALS
OF THE COMPANY

 

WHEREAS,
pursuant to the Indenture, the Company issued $350,000,000 aggregate principal amount of 5.875% Senior Notes due 2024 (the “Notes”);

 

WHEREAS,
Section 9.01(iv) of the Indenture provides that the Company, the Guarantor and the Trustee may amend or supplement the Indenture,
the Notes or the Guarantee, without the consent of any Holder of Notes, to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any Holder in
any material respect;

 

WHEREAS,
Section 9.02 of the Indenture provides that the Company and the Trustee may amend or supplement certain of the provisions of the
Indenture and the Notes with the consent of the Holders of at least a majority in aggregate principal amount of then outstanding
Notes;

 

WHEREAS,
pursuant to the Company’s Consent Solicitation Statement dated April 6, 2020 (the “Statement”), the Company
has solicited consents of Holders (the “Consent Solicitation”) to the Amendments (as defined in the Statement),
upon the terms and subject to the conditions set forth therein;

 

WHEREAS,
Holders of at least a majority in aggregate principal amount of the outstanding Notes have duly consented to the Amendments in
accordance with the provisions of the Indenture and evidence of such consents has been provided by the Company to the Trustee;

 

WHEREAS,
this Supplemental Indenture shall be effective upon its execution by the Company, the Guarantor, Pattern Ops and the Trustee,
and the amendments effected by this Supplemental Indenture shall become operative with respect to the Notes on the Payment Date
(as defined herein) in accordance with Section 4.02 hereof;

 

WHEREAS,
the Board of Directors has duly adopted resolutions authorizing the Company to execute and deliver this Supplemental Indenture;

 

     

     

    

WHEREAS,
the Company has requested that the Trustee execute and deliver this Supplemental Indenture and has delivered to the Trustee an
Officer’s Certificate and an Opinion of Counsel; and

 

WHEREAS,
all conditions precedent provided for in the Indenture relating to the execution of this Supplemental Indenture have been complied
with.

 

NOW, THEREFORE,
THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto mutually covenant and agree for the equal and proportionate benefit
of the Holders as follows:

 

Article
1

Terms

 

Section 1.01.     
Definitions. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the Indenture.

 

Article
2

Amendments

 

Section 2.01.     
Defined Terms. Section 1.01 of the Indenture will be amended to add or restate, as applicable, the following definitions:

 

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

 

(1)       the
direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties or assets of the Company or Pattern Ops and their
respective Subsidiaries, in each case taken as a whole, to any “person” (as that term is used in Section 13(d) of
the Exchange Act, but excluding any employee benefit plan of the Company or any of its Subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of such plan) other than a Permitted Holder;

 

(2)       the
adoption of a plan relating to the liquidation or dissolution of the Company or Pattern Ops;

 

(3)       the
consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person”
(as defined above), other than a Permitted Holder, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company or Pattern Ops; or

 

(4)       the
first day on which the Guarantor ceases to be a Wholly Owned Subsidiary of the Company.

 

    2 

     

    

Notwithstanding
the foregoing, a transaction will not be deemed to involve a Change of Control if (a) the Company or Pattern Ops becomes a direct
or indirect Subsidiary of a holding company, ‎(b) such holding
company beneficially owns, directly or indirectly, 100% of the Capital Stock of the Company or Pattern Ops, as applicable, and
‎(c) upon completion of such transaction, the ultimate Beneficial
Ownership of the Equity Interests of the Company or Pattern Ops, as applicable, has not been modified by such transaction.

 

“Existing
Liens” means Liens on the property or assets of the Company and/or any of its Subsidiaries existing on the Initial Indenture
Date securing Indebtedness of the Company or any of its Subsidiaries (other than Liens incurred pursuant to clause (i) of Section
4.07).

 

“Initial
Indenture Date” means January 25, 2017.

 

“Pattern
Energy Operations Inc.” means Pattern Energy Operations Inc., a Delaware corporation.

 

“Parent
Entity” means with respect to any Person, their direct or indirect parent.

 

“Principal
Property” means any building, structure or other facility, and all related property, plant or equipment or other long-term
assets used or useful in the ownership, development, construction or operation of such building, structure or other facility directly
owned or leased by the Company, the Guarantor or Pattern Ops and having a net book value in excess of 2.0% of Total Assets, except
any such building, structure or other facility (or related property, plant or equipment) that in the opinion of the Board of Directors
is not of material importance to the business conducted by the Company and its consolidated Subsidiaries, taken as a whole.

 

“Second
Supplemental Indenture” means that certain second supplemental indenture, by and among the Company, the Guarantor, Pattern
Ops and the Trustee, dated as of April 10, 2020, supplementing the Indenture.

 

Section 2.02.     
Reports and Other Information. Section 4.03 of the Indenture will be replaced in its entirety by the following:

 

Section 4.03. Reports
and Other Information.

 

(a) So long as any Notes
are outstanding, Pattern Ops shall furnish to the Holders of the Notes the following reports:

 

		(i)	(x) all annual and quarterly
                                         financial statements substantially in forms that would be required to be contained in
                                         a filing with the SEC on Forms 10-K or 10-Q, as applicable, of Pattern Ops, if Pattern
                                         Ops were required to file such forms, plus a “Management’s Discussion and
                                         Analysis of Financial Condition and Results of Operations” (the “MD&A”)
                                         in substantially the form required under Forms 10-K and 10-Q, provided that, solely
                                         for the fiscal quarter ended March 31, 2020, Pattern Ops may provide quarterly financial
                                         statements and accompanying MD&A of the Company, and (y) with respect to the annual

 

    3 

     

    

financial statements
only, an opinion on the annual financial statements by Pattern Ops’ independent registered public accounting firm; and

 

		(ii)	substantially the same information
                                         that would be required to be contained in filings with the SEC on Form 8-K under Items
                                         1.01, 1.02, 1.03, 2.01 (only with respect to acquisitions that are “significant”
                                         at the 20% or greater level pursuant to clauses (1) and (2) of the definition of “Significant
                                         Subsidiary” under Rule 1-02 of Regulation S-X only), 4.01, 4.02(a) and (b), 5.01
                                         and 5.02(b) (with respect to the principal executive officer, president, principal financial
                                         officer, principal accounting officer and principal operating officer only) and (c) (other
                                         than with respect to information otherwise required or contemplated by subclause (3)
                                         of such Item or by Item 402 of Regulation S-K) as in effect on the date of the Second
                                         Supplemental Indenture if Pattern Ops were required to file such reports;

 

provided, however,
that (A) no such report shall be required to include as an exhibit, or to include a summary of the terms of, any employment or
compensatory arrangement, agreement, plan or understanding between Pattern Ops (or any Parent Entity or its Subsidiaries) and
any director, manager or officer, of Pattern Ops (or any Parent Entity or its Subsidiaries), (B) the Issuer shall not be required
to make available any information regarding the occurrence of any of the events set forth in clause (ii) above if Pattern Ops
determines in its good faith judgment that the event that would otherwise be required to be disclosed is not material to the Holders
of the Notes or the business, assets, operations, financial positions or prospects of Pattern Ops, (C) no such report will be
required to comply with Regulation G under the Exchange Act or Item 10(e) of Regulation S-K with respect to any “non-GAAP”
financial information contained therein, (D) no such report shall be required to comply with Regulation S-X including, without
limitation, Rules 3-05, 3-09, 3-10, 3-16 or Article 11 thereof, (E) in no event shall such reports be required to include as an
exhibit copies of any agreements, financial statements or other items that would be required to be filed as exhibits under the
SEC rules; (F) trade secrets and other information that could cause competitive harm to Pattern Ops and its Subsidiaries may be
excluded from any disclosures; (G) such financial statements or information shall not be required to contain any “segment
reporting”; and (H) such financial statements and information may, at the election of Pattern Ops, be prepared in accordance
with U.S. GAAP or IFRS.

 

All such annual reports
for periods ending after the date of the Second Supplemental Indenture shall be furnished within 120 days after the end of the
fiscal year (which fiscal year ends on December 31 of each calendar year as of the date of the Second Supplemental Indenture)
to which they relate; all such quarterly reports for periods ending after the date of the Second Supplemental Indenture shall
be furnished within 60 days after the end of the fiscal quarter to which they relate; provided that the quarterly report for the
fiscal quarter ending on March 31, 2020 shall be furnished within 90 days

 

    4 

     

    

after the end of such
fiscal quarter; and all such current reports for triggering events occurring after the date of the Second Supplemental Indenture
shall be furnished within 15 days of the due date specified in the SEC’s rules and regulations for reporting companies under
the Exchange Act.

 

Pattern Ops will be
deemed to have furnished the reports referred to in subclauses (i) and (ii) of this Section 4.03(a) if Pattern Ops or any Parent
Entity has filed reports containing such information with the SEC.

 

If Pattern Ops or
any Parent Entity does not file reports containing such information with the SEC, Pattern Ops shall make available such information
and such reports to any Holder of the Notes and to any beneficial owner of the Notes, in each case by posting such information
on a password-protected website or online data system, and shall make such information readily available to any bona fide prospective
investor, any securities analyst (to the extent providing analysis of investment in the Notes) or any market maker in the Notes
who agrees to treat such information as confidential; provided that Pattern Ops shall post such information thereon and make readily
available any password or other login information to any such bona fide prospective investor, securities analyst or market maker;
provided, however, that Pattern Ops may deny access to any competitively sensitive information otherwise to be provided pursuant
to this covenant to any such Holder, beneficial owner, bona fide prospective investor, securities analyst or market maker to the
extent that Pattern Ops determines in good faith that the provision of such information to such Person would be competitively
harmful to Pattern Ops and its Subsidiaries; and provided, further, that such Holders, beneficial owners, bona fide prospective
investors, securities analysts and market makers shall agree to (A) treat all such reports (and information contained therein)
as confidential, (B) not to use such reports (and the information contained therein) for any purpose other than their investment
or potential investment in the Notes and (C) not publicly disclose any such reports (and the information contained therein).

 

(b) Pattern Ops will
participate in quarterly conference calls (which may be a single conference call together with investors and lenders holding other
securities or Indebtedness of Pattern Ops or any Parent Entity) to discuss results of operations. The conference call will be
following the last day of each fiscal quarter of the Pattern Ops and not later than 20 Business Days from the time that Pattern
Ops distributes the financial information as set forth in the first paragraph of Section 4.03(a). No fewer than two days prior
to the conference call, Pattern Ops will issue a press release or otherwise announce the time and date of such conference call
and providing instructions for Holders, prospective investors in the Notes, securities analysts and market making financial institutions
to obtain access to such call.

 

(c) To the extent
not satisfied by Section 4.03(a) hereof, Pattern Ops agrees that, it shall furnish to Holders of the Notes, securities analysts
and prospective investors upon request the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities
Act, so long as the Notes are not freely transferable under the Securities Act.

 

    5 

     

    

(d) The Trustee shall
have no obligation to determine if and when Pattern Ops’ financial statements or reports are publicly available and accessible
electronically. Delivery of these reports, information and documents to the Trustee is for informational purposes only and the
Trustee’s receipt of them will not constitute constructive notice of any information contained therein or determinable from
information contained therein, including Pattern Ops’ compliance with any of its covenants hereunder (as to which the Trustee
is entitled to rely exclusively on Officer’s Certificates).

 

(e) Notwithstanding
anything herein to the contrary, Pattern Ops will not be deemed to have failed to comply with any of its obligations hereunder
for purposes of Section 6.01(iii) hereof until 60 days after the receipt of the written notice delivered thereunder. To the extent
any information is not provided within the time periods specified in this Section 4.03 and such information is subsequently provided,
Pattern Ops will be deemed to have satisfied its obligations with respect thereto at such time and any Default with respect thereto
shall be deemed to have been cured.

 

Section 2.03.     
Liens. Section 4.07 of the Indenture will be replaced in its entirety by the following:

 

Section 4.07.
Liens. The Company will not, and will not permit the Guarantor or Pattern Ops to, create or permit to exist any Lien upon
any Principal Property owned by the Company, the Guarantor or Pattern Ops or upon any Equity Interests issued by, or Indebtedness
of, any direct or indirect Subsidiary of the Company to secure any Indebtedness of the Company, the Guarantor or Pattern Ops without
providing for the Notes to be equally and ratably secured with (or prior to) any and all such Indebtedness and any other Indebtedness
similarly entitled to be equally and ratably secured for so long as such Indebtedness is so secured; provided, however,
that this restriction will not apply to, or prevent the creation or existence of:

 

(i)           
Liens securing Indebtedness of the Company, the Guarantor or Pattern Ops under one or more Credit Facilities in an aggregate
principal amount pursuant to this clause ‎(i), measured as of the date of creation of any such Lien and the
date of incurrence of any such Indebtedness, not exceeding the greater of (a) 25% of Total Assets, and ‎(b)
$1.0 billion;

 

(ii)           
Existing Liens;

 

(iii)           
Liens securing Indebtedness of any Person that (a) is acquired by the Company or any of its Subsidiaries after the Initial
Indenture Date, ‎(b) is merged or amalgamated with or into the Company or any of its Subsidiaries after the
Initial Indenture Date or ‎(c) becomes consolidated in the financial statements of the Company or any of its
Subsidiaries after the Initial Indenture Date in accordance with GAAP; provided, however, that in each case contemplated
by this clause ‎(iii), such Indebtedness was not incurred in contemplation of such acquisition, merger, amalgamation
or consolidation and is only secured by Liens on the Equity Interests or assets of, the Person (and Subsidiaries of the Person)

 

    6 

     

    

acquired
by, or merged or amalgamated with or into, or consolidated in the financial statements of, the Company or any of its Subsidiaries;

 

(iv)           
Liens securing Indebtedness of the Company, the Guarantor or Pattern Ops incurred to finance (whether prior to or within
365 days after) the acquisition, development, construction or improvement of assets (whether through the direct purchase of assets
or through the purchase of the Equity Interests of any Person owning such assets or through an acquisition of any such Person
by merger); provided, however, that such Indebtedness is only secured by Liens on the Equity Interests and assets
acquired, constructed or improved in such financing;

 

(v)           
Liens in favor of the Company or any of its Subsidiaries;

 

(vi)           
Liens securing Hedging Obligations; provided that such agreements were not entered into for speculative purposes
(as determined by the Company in its reasonable discretion acting in good faith);

 

(vii)           
Liens relating to current or future escrow arrangements securing Indebtedness of the Company, the Guarantor or Pattern
Ops;

 

(viii)          
Liens to secure Environmental CapEx Debt or Necessary CapEx Debt that encumber only the assets purchased, installed or
otherwise acquired with the proceeds of such Environmental CapEx Debt or Necessary CapEx Debt;

 

(ix)           
Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements
of the Company, the Guarantor or Pattern Ops, including rights of offset and set-off;

 

(x)           
Refinancing Liens;

 

(xi)           
Liens on Equity Interest, assets or rights of Project Subsidiaries securing Project Debt of one or more Project Subsidiaries;

 

(xii)          
Liens on cash and cash equivalents securing Indebtedness incurred to finance an acquisition of assets or a business or
multiple businesses; provided that within 180 days from the date the related Indebtedness was incurred, such cash or cash
equivalents are used to (a) fund the acquisition (or a similar transaction), including any related fees and expenses, and the
related Indebtedness is (1) secured by Liens otherwise permitted under this ‎Section 4.07 or (2) unsecured;
or ‎(b) retire or repay the Indebtedness that it secures and to pay any related fees and expenses; and

 

(xiii)         
other Liens, in addition to those permitted in clauses ‎(i) through ‎(xii) above, securing
Indebtedness of the Company, the Guarantor or Pattern Ops having an aggregate principal amount, measured as of the date of creation
of any such Lien and the date of incurrence of any such Indebtedness, not to exceed the greater of ‎(i) 2.0%
of Total Assets and (ii) $75.0 million.

 

    7 

     

    

Liens securing
Indebtedness under the Credit Agreement existing on the Initial Indenture Date will be deemed to have been incurred on such date
in reliance on the exception provided by clause ‎(i) above.
For purposes of determining compliance with this ‎Section
4.07, in the event that a proposed Lien meets the criteria of more than one of the categories of Liens described in clauses ‎(i)
through ‎(xiii) above, the Company will be permitted to classify
such Lien on the date of its incurrence, or later reclassify all or a portion of such Lien, in any manner that complies with this
‎Section 4.07.

 

If the Company,
the Guarantor or Pattern Ops proposes to create or permit to exist any Lien upon any Principal Property owned by the Company,
the Guarantor or Pattern Ops or upon any Equity Interests or Indebtedness of any direct or indirect Subsidiary of the Company
to secure any Indebtedness of the Company, the Guarantor or Pattern Ops, other than as permitted by clauses ‎(i)
through ‎(xiii) of the previous paragraph, the Company will
give prior written notice thereof to the Trustee, who will give notice to the Holders of the Notes at the direction and expense
of the Company, and the Company will further agree, prior to or simultaneously with the creation of such Lien, effectively to
secure all the Notes equally and ratably with (or prior to) such other Indebtedness, for so long as such other Indebtedness is
so secured.

 

Section 2.04.     
Existence. Section 4.09 of the Indenture will be replaced in its entirety by the following:

 

Section 4.09.
Existence. Except as permitted by Article 5, the Company shall, and shall cause the Guarantor and Pattern Energy Operations
Inc. to, maintain its limited liability company existence or corporate existence, as the case may be, respectively, provided that
the Company shall not be required to maintain the existence of the Guarantor if its Board of Directors determines in good faith
that the failure to so maintain the existence of the Guarantor will not have a material adverse effect on the Holders of the Notes
and provided, further, that the Company may convert to a limited liability company upon the assumption of Pattern Energy Operations
Inc. of liability for (a) the due and punctual payment of the principal of (and premium, if any, on) and interest on all the Notes
issued under the Indenture and (b) the due and punctual performance and observance of all of the covenants and conditions of the
Indenture to be performed by the Company and Pattern Ops.

 

Section 2.05.     
Events of Default. Section 6.01 of the Indenture will be amended as follows:

 

(a)           
Clause (iii) of Section 6.01 is amended and restated to read in its entirety as follows: “failure by the Company,
the Guarantor or Pattern Ops for 90 days after written notice given by the Trustee or Holders of at least 25% in aggregate principal
amount of Notes then outstanding, voting as a single class, to comply with Section 4.03;”;

 

(b)           
Clause (iv) of Section 6.01 is amended and restated to read in its entirety as follows: “failure by the Company,
the Guarantor or Pattern Ops for 60 days after written notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding to comply with any of the agreements in

 

    8 

     

    

this
Indenture (other than a default referred to in clause (i), (ii) and (iii) of this Section 6.01);”;

 

(c)           
The first paragraph of clause (v) of Section 6.01 is amended and restated to read in its entirety as follows: “default
under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company, the Guarantor or Pattern Ops (or the payment of which is Guaranteed by the Company,
the Guarantor or Pattern Ops), whether such Indebtedness or Guarantee now exists, or is created after the date of the Second Supplemental
Indenture, if that default:”;

 

(d)           
Clause (vi) of Section 6.01 is amended and restated to read in its entirety as follows: “one or more judgments for
the payment of money in an aggregate amount in excess of the greater of (1) 1.5% of Total Assets and (2) $75.0 million (excluding
therefrom any amount reasonably expected to be covered by insurance) shall be rendered against the Company, the Guarantor or Pattern
Ops or any combination thereof and the same shall not have been paid, discharged or stayed for a period of 60 days after such
judgment became final and non-appealable;”;

 

(e)           
The first paragraph of clause (viii) of Section 6.01 is amended and restated to read in its entirety as follows: “the
Company, the Guarantor or Pattern Ops pursuant to or within the meaning of any Bankruptcy Law:”;

 

(f)            
 Clause (ix)(A) of Section 6.01 is amended and restated to read in its entirety as follows: “is for relief against
the Company, the Guarantor or Pattern Ops;”;

 

(g)           
Clause (ix)(B) of Section 6.01 is amended and restated to read in its entirety as follows: “appoints a custodian
of the Company, the Guarantor or Pattern Ops for all or substantially all of the property of the Company, the Guarantor or Pattern
Ops; or”; and

 

(h)           
Clause (ix)(C) of Section 6.01 is amended and restated to read in its entirety as follows: “orders the liquidation
of the Company, the Guarantor or Pattern Ops;”.

 

Article
3

Acceptance Of Supplemental Indenture

 

Section 3.01.     
Trustee’s Acceptance. The Trustee hereby accepts this Supplemental Indenture and agrees to perform the same
under the terms and conditions set forth in the Indenture.

 

Article
4

Miscellaneous Provisions

 

Section 4.01.     
Governing Law; Waiver of Trial by Jury. THIS SUPPLEMENTAL INDENTURE AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING
UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE SHALL

 

    9 

     

    

BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

EACH OF THE
COMPANY, THE GUARANTOR, PATTERN OPS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

Section 4.02.     
Effectiveness of Supplemental Indenture. Notwithstanding anything to the contrary elsewhere herein, this Supplemental
Indenture shall become effective upon the execution and delivery of this Supplemental Indenture by the Company, the Guarantor,
Pattern Ops and the Trustee; provided however, notwithstanding anything in the Indenture or this Supplemental Indenture to the
contrary, the amendments set forth in Section 2 of this Supplemental Indenture shall become operative only upon and simultaneously
with, and shall have no force and effect prior to the Company’s payment of the Consent Fee  (as defined in the Statement)
for validly delivered (and not validly withdrawn) consents representing at least a majority in aggregate principal amount of the
then outstanding Notes (such date of payment, the “Payment Date”). Prior to the Payment Date, the Company may terminate
this Supplemental Indenture upon written notice to the Trustee, including in connection with any termination or withdrawal of
the Consent Solicitation. If the Consent Solicitation is terminated or withdrawn, or the Company does not accept consents for
any reason, this Supplemental Indenture shall not become operative. Upon the effectiveness of this Supplemental Indenture, the
Indenture shall be and be deemed to be modified and amended in accordance herewith and the respective rights, limitations of rights,
obligations, duties and immunities under the Indenture of the Trustee, the Company, the Guarantor, Pattern Ops and the Holders
affected thereby shall hereafter be determined, exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of this Supplemental Indenture shall be and be deemed to be part of the terms
and conditions of the Indenture for any and all purposes. Except as modified by this Supplemental Indenture, all provisions of
the Indenture and the Notes shall remain in full force and effect.

 

Section 4.03.     
Benefits of Supplemental Indenture. Nothing in this Supplemental Indenture, expressed or implied, shall give to
any Person, other than the Holders, the parties hereto, any Paying Agent, any authenticating agent, any Registrar and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.

 

Section 4.04.     
Execution in Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies
of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and
delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental

 

    10 

     

    

Indenture
for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures
for all purposes.

 

Section 4.05.     
Ratification of Indenture. The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified
and confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein provided.

 

Section 4.06.     
The Trustee. The Trustee makes no representations as to and shall not be responsible in any manner whatsoever for
or in respect of the validity or sufficiency of this Supplemental Indenture. The recitals in this Supplemental Indenture are made
by the Company only and not by the Trustee, and all of the rights, privileges, protections, immunities and benefits afforded to
the Trustee under the Indenture are deemed to be incorporated herein, and shall be enforceable by the Trustee hereunder, in each
of its capacities hereunder as if set forth herein in full.

 

Section 4.07.     
Effect on Successors and Assigns. All agreements of the Company, the Guarantor, Pattern Ops, the Trustee, the Registrar
and the Paying Agent in this Supplemental Indenture will bind their respective successors.

 

Section 4.08.     
Headings, Etc. The titles and headings of the articles and sections of this Supplemental Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms
or provisions hereof.

 

[Signature
Pages Follow]

 

    11 

     

    

IN WITNESS
WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year first written above.

 

	 	PATTERN ENERGY GROUP INC.
	 	 
	 	 
	 	By:	/s/ Dyann Blaine
	 	 	Name:Dyann Blaine
	 	 	Title:Vice President
	 	 	 
	 	 	 

	 	PATTERN US FINANCE COMPANY LLC, as Guarantor
	 	 
	 	 
	 	By:	/s/ Dyann Blaine
	 	 	Name:Dyann Blaine
	 	 	Title:Vice President
	 	 	 
	 	 	 

	 	PATTERN ENERGY OPERATIONS LP
	 	 
	 	 
	 	By:	/s/ Dyann Blaine
	 	 	Name:Dyann Blaine
	 	 	Title:Vice President

 

 

[Signature Page to the Second Supplemental
Indenture]

 

     

     

    

	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee
	 	 
	 	 
	 	By:	/s/ Debra A. Schwalb
	 	 	Name:Debra A. Schwalb
	 	 	Title:Vice President
	 	 	 
	 	 	 

	 	By:	/s/ Chris Niesz
	 	 	Name:Chris Niesz
	 	 	Title:Vice President

 

 

[Signature Page to the Second Supplemental
Indenture]

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