Document:

ex_279592.htm

 

Executive Employment Agreement

 

 

This Employment Agreement is entered into as of the date of the last signature affixed hereto, by and between Perma-Pipe International Holdings, Inc. (PPIH), a Delaware corporation ("PPIH" or "the Company"), and Grant W. Dewbre ("Employee").

 

In consideration of the mutual promises and covenants set forth herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, PPIH and Employee hereby agree as follows:

 

	 	
			1.

				
			Position of Employment.

			

 

The Company will appoint the Employee to the position of Chief Operating Officer (COO), PPIH, and, in that position, Employee will report to the President and CEO of PPIH. PPIH retains the right to change Employee's title, duties, and reporting relationships as may be determined to be in the best interests of the Company; provided, however, that any such change in Employee's duties shall be reasonably consistent with Employee's training, experience, and qualifications. During the Assignment Employee is must conduct himself in a manner (in all forums) as not to undermine the Company’s reputation. The employment term shall be considered to start on the date indicated in this Employment Agreement.

 

The terms and conditions of the Employee's employment shall, to the extent not addressed or described in this Employment Agreement, be governed by the PPIH Policies and Procedures and existing practices. In the event of a conflict between this Employment Agreement and the PPIH Policies and Procedures or existing practices, the terms of this Employment Agreement shall govern.

 

	 	
			2.

				
			Term of Employment.

			

 

Employee's employment with PPIH shall begin on July 26, 2021 and shall continue for a period of 1 year (the “Initial Term”), and then automatically renew annually for successive one-year terms (each, a “Renewal Term”, together with the Initial Term, the “Term”) unless;

 

	 	
			a.

				
			either party gives the other party written notice otherwise at least 90 days before the end of the Initial Term or a Renewal Term; or

			

 

	 	
			b.

				
			Employee's employment is terminated by either party in accordance with the terms of Section 5 of this Employment Agreement; or

			

 

 

	 	
			c.

				
			Such term of employment is extended or shortened by a subsequent agreement duly executed by each of the parties to this Employment Agreement, in which case such employment shall be subject to the terms and conditions contained in the subsequent written agreement.

			

 

	 	
			3.

				
			Compensation and Benefits.

			

 

 

	 	
			a.

				
			Base Salary. Employee shall be paid a base salary of $10,384.62 bi-weekly, which is $270,000 annually ("Base Salary"), subject to applicable federal, state, and local withholding, such Base Salary to be paid to Employee in the same manner and on the same payroll schedule in which all exempt PPIH employees receive payment. Salary will be reviewed annually and adjusted by the President and CEO and upon approval by the Board of Directors based on performance and external benchmarking of market compensation for equivalent positions. Timing of any adjustments will be aligned to overall Corporate annual salary review.

			

 

 

	 	
			b.

				
			Incentive Compensation. Employee shall be eligible to participate in incentive compensation programs available to other similarly-situated executives of PPIH as outlined below. Nothing in this Employment Agreement shall be deemed to require the payment of bonuses, awards, or incentive compensation to Employee.

			

 

 

	 	
			i)

				
			Short Term Incentive (STI). Employee will be eligible to receive Short Term Incentive in the form of an annual cash bonus opportunity with a target incentive set at 50% of base salary. Performance measures applicable to the STI bonus will be based on Company Performance Metrics aligned to financial and strategic plans approved by the Board.  Bonus payment award and timing will align with Corporate annual bonus payouts following completion of annual financial calendar.  For the current fiscal year, bonus eligibility will be pro-rata for portion of the fiscal year worked in your current position at 45% and new position at 50% target incentive and based on part year metrics for the same time period. Complete details of the plan will be provided separately.

			

 

	 	
			ii)

				
			Long Term Incentive (LTI). Employee will be eligible to receive Long Term Incentive in the form of Restricted Stock and Performance-Based Cash with a target annual award of 50% times base salary. Under the current plan, Restricted Stock is granted that vests over a 3-year period, with 1/3 vesting at the end of each anniversary of the grant. The actual award may be adjusted up or down based on compensation benchmarking and/or performance as determined in good faith by the Board. The Board reserves the right to amend the LTI program and terms as deemed necessary. Complete details of the plan will be provided separately.

			

 

 

 

 

 

	 	
			c.

				
			Employee Benefits. Employee shall be eligible to participate in all employee benefit plans, policies, programs, or perquisites made available by the Company to similarly-situated employees. Notwithstanding anything herein to the contrary, the terms and conditions of Employee's participation in PPIH's employee benefit plans, policies, programs, or perquisites shall be governed by the terms of each such plan, policy, or program. Complete details of the plans including Health, Dental, Retirement, and Incentives will be provided separately.

			

 

	 	
			d.

				
			Vacation. Employee will be entitled to 4 weeks of paid vacation annually.

			

 

	 	
			4.

				
			Duties and Performance. The Employee acknowledges and agrees that he is being offered a position of employment by PPIH with the understanding that the Employee possesses a unique set of skills, abilities, and experiences which will benefit the Company, and he agrees that his continued employment with the Company, whether during the term of this Employment Agreement or thereafter, is contingent upon his successful performance of his duties in his position as noted above, or in such other position to which additional duties may be assigned.

			

 

a.         General Duties.

 

	 	
			1.

				
			Employee shall provide vision, direction and leadership and will have overall strategic, management and responsibility for maintaining and driving operational results within PPIH.

			

	 	
			2.

				
			Partner with the CFO to achieve favorable financial results with respect to sales, profitability, cash flow, mergers and acquisitions, systems, reporting and controls.

			

	 	
			3.

				
			Employee is responsible for the development and implementation of comprehensive strategic plans, annual business plans, objectives and strategies for sales and operations, and overall financial performance.

			

	 	
			4.

				
			Employee shall render to the very best of Employee's ability, on behalf of the Company, services to and on behalf of the Company, and shall undertake diligently all duties assigned to him by the Company.

			

 

	 	
			5.

				
			Employee shall devote his full time, energy and skill to the performance of the services in which the Company is engaged, at such time and place as the Company may direct. Employee shall not undertake, either as an owner, director, shareholder, employee or otherwise, the performance of services for compensation (actual or expected) for any other entity without the express written consent of the President and CEO or Board of Directors. Such consent will not be unreasonably withheld for a paid Board of Directors position offered to Employee as long as such role is not in conflict with Employee’s role and position in the Company.

			

 

	 	
			6.

				
			Employee shall faithfully and industriously assume and perform with skill, care, diligence and attention all responsibilities and duties connected with his employment on behalf of the Company.

			

 

	 	
			7.

				
			Employee shall have no authority to enter into any contracts binding upon the Company, or to deliberately create any obligations on the part of the Company, except as may be specifically authorized by the President and CEO, Board of Directors of PPIH and as outlined in the Company Delegation of Authority policy.

			

 

b.         Specific Duties.

 

	 	
			1.

				
			Provide leadership in operational, managerial and administrative procedures, reporting structures and operational controls of the company.

			

	 	
			2.

				
			Drive results, spur growth and increase the overall efficiency of the business

			

	 	
			3.

				
			Foster an organization with underlying values in safety, integrity and ethics.

			

	 	
			4.

				
			Assist executive team members in creating, growing and building a world class, industry leading organization.

			

	 	
			5.

				
			Relentlessly pursue, achieve and exceed cost, revenue and margin targets; develop contingency plans to overcome known and potential obstacles and, ensure the achievement of financial and other business goals.

			

	 	
			6.

				
			 Drive company results from both an operational and financial perspective working closely with the CFO, CEO and other key executive team members.

			

	 	
			7.

				
			Provide full oversite of QSHE including the development of policies and procedures consistent with regulatory requirements and industry practices.

			

 

	 	
			8.

				
			Spearhead the development, communication and implementation of effective growth strategies and processes.

			

 

	 	
			9.

				
			Forge strategic partnerships and relationships with clients, vendors, and all other professional business relationships

			

 

	 	
			10.

				
			 Provide leadership to a team of key managers to develop and implement systems, practices and procedures that will lead to improved and sustained profitability, growth, efficiency in operations and shareholder value.

			

 

	 	
			11.

				
			Establish a high performance, results-driven culture that meets or exceeds commitments.

			

 

	 	
			12.

				
			Maintain a high performing, collaborative, hands-on management team.

			

	 	
			13.

				
			Ensure a process is in place which provides robust sales and marketing plans and forecasts.

			

	 	
			14.

				
			Ensure a system is in place which drives operational excellence, continuous improvement and thoughtful innovation.

			

	 	
			15.

				
			Prioritize the best growth and investment strategies to pursue given limited resources.

			

	 	
			16.

				
			Instill a sense of urgency in development and execution of sales and business plans and strategies.

			

	 	
			17.

				
			Oversee development and commercialization of new products and services and entry into new markets.

			

	 	
			18.

				
			Ensure connectivity to the competitive landscape including market trends, tracking key competitors and utilizing this intelligence and information to drive market differentiation and maintain and increase market share

			

	 	
			19.

				
			Provide visibility and strong communication skills to internal and external stakeholders. Identify and evaluate attractiveness of potential new markets (geographic and/or product) for growth.

			

 

 

 

 

5.         Termination of Employment. Employee's employment with the Company may be terminated, in accordance with any of the following provisions:

 

	 	
			a.

				
			Termination by Employee. The Employee may terminate employment at any time during the course of this Employment Agreement by giving 90 days’ notice in writing to the President and CEO of PPIH. During the notice period, Employee must fulfill all duties and responsibilities set forth above and use his best efforts to train and support his replacement, if any. Failure to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period.

			

 

 

	 	
			b.

				
			Termination by the Company Without Cause. PPIH may terminate Employee's employment at any time during the course of this Employment Agreement by giving ninety (90) days’ notice in writing to the Employee. During the notice period, Employee must fulfill all of Employee's duties and responsibilities set forth above and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. Should PPIH terminate Employee’s employment without Cause, contingent on Employee signing a release of claims, Employee will receive 12 months of Severance plus pro rata STI for the year of termination at 100% of target, and retain all rights to vested Restricted Stock, and any unvested Restricted Stock and RSUs and any other equity awards will be forfeited except that Restricted Stock due to vest in the current year will vest pro rata for the number of months Employee was employed in that year.

			

 

 

	 	
			c.

				
			Termination by Employee for Good Reason. Employee may terminate his employment with the Company for Good Reason (as defined below) by giving 90 days’ notice in writing to the Company. During the notice period, Company shall have the right to cure any Good Reason as defined in this Agreement. If requested by the Company, Employee must fulfill all of Employee's duties and responsibilities set forth above during the 90 day notice period and use Employee's best efforts to train and support Employee's replacement, if any. Failure of Employee to comply with this requirement may result in Termination for Cause described below, but otherwise Employee's salary and benefits will remain unchanged during the notification period. Should Company fail to cure Employee’s stated Good Reason within 90 days and, as a result, termination for Good Reason occurs, contingent on Employee signing a release of claims, Employee will receive (12) months of Severance plus pro rata STI for the year of termination at 100% of target, and retain all rights to vested Restricted Stock, and any unvested Restricted Stock and RSUs and any other equity awards will be forfeited except that Restricted Stock due to vest in the current year will vest pro rata for the number of months Employee was employed in that year. For the purposes of this Agreement, “Good Reason” is defined as material diminution in Employee's compensation or material negative changes by the Company affecting the Employee’s duties, responsibilities, reporting or authority as outlined in this Employment Agreement. Good Reason shall not exist at any time that the Employee could be terminated for Cause.

			

 

 

	 	
			d.

				
			Termination by the Company for Cause. The Company may, at any time and without notice, terminate the Employee for "Cause". Termination for "Cause" shall include but not be limited to termination based upon any of the following: (a) repeated failure to perform the duties of the Employee's position in a satisfactory manner; (b) fraud, misappropriation, embezzlement or acts of similar dishonesty; (c) conviction of or entrance of a plea of no contest for a felony involving moral turpitude; (d) illegal use of drugs or excessive use of alcohol in the workplace; (e) intentional and willful misconduct that may subject the Company to criminal or civil liability; (f) breach of the Employee's duty of loyalty, including the diversion or usurpation of corporate opportunities properly belonging to the Company; (g) willful disregard of Company policies and procedures; (h) breach of any of the material terms of the Employment Agreement; and (i) insubordination or deliberate refusal to follow the lawful instructions of the Board of Directors of PPIH. Termination for Cause will result in immediate termination, no Severance, no STI for the year of termination, and forfeiture of all unvested Restricted Stock, RSUs and any other equity awards. Cause shall not exist under subsections (a), (f), or (h) unless the Employee fails to cure the alleged misconduct, breach or violation after being given thirty (30) days' written notice by the Company of the alleged misconduct, breach or violation that is asserted as the basis for Cause.

			

 

 

	 	
			e.

				
			Termination by Death or Disability. The Employee's employment and rights to compensation under this Employment Agreement shall terminate if the Employee is unable to perform the duties of his position due to death, or disability lasting more than 90 days, taking into consideration the accommodation obligations under the Americans with Disabilities Act or parallel state law based on the applicable facts of any such disability, and the Employee's heirs, beneficiaries, successors, or assigns shall not be entitled to any of the compensation or benefits to which Employee is entitled under this Employment Agreement, except: (a) to the extent specifically provided in this Employment Agreement (b) to the extent required by law; or (c) to the extent that such benefit plans or policies under which Employee is covered provide a benefit to the Employee's heirs, beneficiaries, successors, or assigns.

			

 

 

	 	
			f.

				
			Change in Control (CIC). CIC is defined by a change in ownership or a sale of substantially all of the Company’s assets and a material diminution of Employee’s duties, responsibilities, reporting or authority within 12 months following such ownership change. In the event of a CIC, Employee may terminate his employment with Good Reason. In addition, all RSU vesting will be accelerated. For purposes of determining whether a CIC has occurred, Company shall mean only PPIH, Inc.

			

 

 

	 	
			g.

				
			Severance. Severance means a payment equal to Employee’s Annual Base Salary plus continuation of group health and welfare benefits via COBRA for the for the Severance period. Severance will be paid in equal installments for the length of the Severance period, beginning with the first payroll period on or after 30 days after Employee signs the release of claims referenced herein.

			

 

	 	
			h.

				
			Release. Any post-termination Severance or benefits are subject to Employee signing a release of claims prior to receipt.

			

 

 

 

 

 

	 	
			6.

				
			Confidentiality. To the fullest extent permitted by applicable law, the terms of the Confidentiality Agreement executed by the Employee are incorporated by reference into this Employment Agreement and are made a part hereto as if they appeared in this Employment Agreement itself. The terms of such Confidentiality Agreement, as incorporated herein, will extend for the duration of any Severance period.

			

 

 

	 	
			7.

				
			Non-Solicitation/Non-Compete. To the fullest extent permitted by applicable law, the terms of the Non-Solicitation/Non-Compete Agreement executed by the Employee are incorporated by reference into this Employment Agreement and are made a part hereto as if they appeared in this Employment Agreement itself. The terms of such Non-Solicitation/Non-Compete Agreement, as incorporated herein, will extend for the duration of any Severance period.

			

 

	 	
			8.

				
			Code of Conduct and Compliance with Laws. Employee agrees to be bound by the provisions of the PPIH Code of Conduct and Global Anti-corruption Policy and Procedure. Employee asserts he has no conflict of interests in any other business dealings to PPIH. In the event a potential conflict of interest arises, Employee will promptly notify CEO in writing.

			

 

	 	
			9.

				
			Assignment of Inventions, Improvements and Developments. The Employee hereby assigns and agrees to assign to the Company the entire worldwide right, in all inventions, improvements and developments, patentable or unpatentable, which, during his employment by the Company he shall have made or conceived or hereafter may make or conceive, either solely or jointly with others (a) with the use of the Company’s time, equipment, materials, supplies, facilities, or trade secrets or confidential business information or (b) resulting from or suggested by his work for the Company or (c) contemplated business of the Company, including, but not limited to, pre-insulated and/or secondarily contained piping systems for district heating and cooling systems, oil and gas flow lines, chemical transportation and related products and materials. All such inventions, improvements and developments shall automatically and immediately be deemed to be the property of the Company as soon as made or conceived. This assignment includes all rights to claim for any patent application for such inventions, improvements and developments the full benefits and priority rights under the Patent Cooperation Treaty, the Paris Convention, and any other international intellectual property agreement. This assignment includes all rights to sue for all infringements, including those which may have occurred before this assignment. It is understood that this Employment Agreement does not apply to an invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on the Employee’s own time, unless the invention (i) is related to the business of the Company, (ii) is related to the Company’s actual or demonstrably anticipated research or development, or (iii) results from any work performed by the Employee for the Company.

			

 

 

	 	
			10.

				
			Disclosure. Employee agrees to disclose promptly to the Company all such inventions, improvements and developments when made or conceived. Upon termination of his employment for any reason, Employee shall immediately give to the Company all written records of such inventions, improvements and developments and make all full disclosures thereof, whether or not they have been reduced to writing.

			

 

	 	
			11.

				
			Aid and Assistance. The Employee agrees, (a) to execute all documents necessary to protect inventions, improvement and developments assigned pursuant to Section 9, and to obtain, maintain, modify, or enforce any United States or foreign patent on such invention, improvements or developments; and (b) to cooperate with the Company in every reasonable way possible in obtaining evidence for use in any such proceedings to obtain, maintain, modify or enforce any such patent.

			

 

	 	
			12.

				
			Office Location. You will be based at the PPIH offices at 24900 Pitkin Road, Spring, Texas or similar Company location. You will also be required to travel to other locations as necessary.

			

 

 

	 	
			13.

				
			Parachute Payment Limitation. Notwithstanding any contrary provision above, if Employee is a "disqualified individual" (as defined in Section 280G of the Internal Revenue Code), and the CIC Benefits, together with any other payments which the Employee has the right to receive from the Company, would constitute a "parachute payment" (as defined in Section 280G of the Code), the payments and benefits provided under this Agreement shall be either (i) reduced (but not below zero) so that the aggregate present value of such payments and benefits received by the Employee from the Company shall be $1.00 less than three times Employee's "base amount" (as defined in Section 280G of the Code) and so that no portion of such payments received by Employee shall be subject to the excise tax imposed by Section 4999 of the Code, or (ii) paid in full, whichever produces the better net after-tax result for Employee (taking into account any applicable excise tax under Section 4999 of the Code and any applicable income tax). If a reduced payment is made to Employee pursuant to clause (i) above and through error or otherwise that payment, when aggregated with other payments from the Company used in determining if a parachute payment exists, exceeds $1.00 less than three times Employee's base amount, Employee must immediately repay such excess to the Company upon notification that an overpayment has been made.

			

 

 

	 	
			14.

				
			Indemnification and Insurance. The Company will defend, indemnify and hold Employee, his heirs, executors and administrators harmless against and in respect of any and all damages, losses, obligations, liabilities, claims, deficiencies, costs and expenses (including, but not limited to, attorneys’ fees and other costs and expenses incident to any suit, action, investigation, claim or proceeding) suffered, sustained, incurred or required to be paid by Employee by reason of or on account of Employee’s performance of work on behalf of the Company, except to the extent due to any act or omission by Employee that constitutes a breach of this Employment Agreement or is outside the scope of his authority under this Employment Agreement. In addition, the Company will maintain directors and officer’s liability insurance in place, with reasonable and customary limits, pursuant to which Employee shall be a named, additional or covered insured. Employee shall cooperate with reasonable requests of the Company in connection with any indemnifiable claim and shall provide such documentation or information which is reasonably necessary to defend the indemnifiable claim.

			

 

 

 

 

 

	 	
			15.

				
			General Provisions.

			

 

 

	 	
			a.

				
			Notices. All notices and other communications required or permitted by this Employment Agreement to be delivered by PPIH or Employee to the other party shall be delivered in writing to the address shown below, either personally, or by registered, certified or express mail, return receipt requested, postage prepaid, to the address for such party specified below or to such other address as the party may from time to time advise the other party, and shall be deemed given and received as of actual personal delivery, or upon the date or actual receipt shown on any return receipt if registered, certified or express mail is used, as the case may be.

			

 

PPIH, Inc.:

6410 W. Howard Street

Niles, IL. 60714

 

Attention: President and CEO

 

Grant W. Dewbre

 

 

	 	
			b.

				
			Amendments and Termination; Entire Agreement. This Employment Agreement may not be amended or terminated except in writing executed by all of the parties hereto. This Employment Agreement constitutes the entire agreement of PPIH and Employee relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter.

			

 

	 	
			c.

				
			Existing Agreements. The Employee represents to the Company that he is not subject or a party to any employment or consulting agreement, confidentiality, non-competition covenant or other agreement, covenant or understanding which might prohibit him from executing this Employment Agreement or limit his ability to fulfill his responsibilities hereunder.

			

 

	 	
			d.

				
			Successors and Assigns. The rights and obligations of the parties hereunder are not assignable to another person without prior written consent; provided, however, that PPIH, without obtaining Employee's consent, may assign its rights and obligations hereunder to a wholly-owned subsidiary and provided further that any post- employment restrictions shall be assignable by PPIH to any entity which purchases all or substantially all of the Company's assets. In addition, in the event of any sale, transfer or other disposition of all or substantially all of the Company’s assets or business, whether by merger, consolidation or otherwise, the Company may assign this Employment Agreement and its rights hereunder without obtaining Employee’s consent, provided that the assignee assumes all of the obligations of the Company hereunder, and upon such assignment and assumption, the Employee shall have no right to look to the Company for obligations arising hereunder after the effective date of such assignment.

			

 

	 	
			e.

				
			Severability Provisions Subject to Applicable Law. All provisions of this Employment Agreement shall be applicable only to the extent that they do not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Employment Agreement invalid, illegal or unenforceable under any applicable law. If any provision of this Employment Agreement or any application thereof shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of other provisions of this Employment Agreement or of any other application of such provision shall in no way be affected thereby.

			

 

	 	
			f.

				
			Waiver of Rights. No waiver by PPIH or Employee of a right or remedy hereunder shall be deemed to be a waiver of any other right or remedy or of any subsequent right or remedy of the same kind.

			

 

	 	
			g.

				
			Definitions, Headings, and Number. A term defined in any part of this Employment Agreement shall have the defined meaning wherever such term is used herein. The headings contained in this Employment Agreement are for reference purposes only and shall not affect in any manner the meaning or interpretation of this Employment Agreement. Where appropriate to the context of this Employment Agreement, use of the singular shall be deemed also to refer to the plural, and use of the plural to the singular.

			

 

	 	
			h.

				
			Counterparts. This Employment Agreement may be executed in separate counterparts, each of which shall be deemed an original but both of which taken together shall constitute but one and the same instrument.

			

 

	 	
			i.

				
			Governing Laws and Forum. This Employment Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas. The Company and Employee agree that any claim, dispute, or controversy arising under or in connection with the Employment Agreement, or otherwise in connection with Employee’s employment by the Company (including, without limitation, any such claim, dispute, or controversy arising under any federal, state, or local statute, regulation, or ordinance or any of the Company's employee benefit plans, policies, or programs) shall be resolved solely and exclusively by final and binding arbitration. The arbitration shall be held in the city of Houston, Texas (USA) and the language shall be English. The arbitration shall be conducted in accordance with the Rules of the American Arbitration Association (the "AAA") in effect at the time of the arbitration and each party shall appoint one arbitrator of its own choosing with a third arbitrator on a panel of three (3) being appointed by the parties’ respective arbitrators. All fees and expenses of the arbitration, including a transcript if either requests, shall be borne equally by the parties. Any judgement upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

			

 

 

 

 

 

 

IN WITNESS WHEREOF, PPIH and Employee have executed and delivered this Employment Agreement as of the date written below.

 

	
			 

			 

			/s/ Grant Dewbre

				 	
			PPIH, Inc.

			By:     /s/ David J. Mansfield           

			
	
			Grant W. Dewbre

				 	
			Name: David Mansfield

			
	 	 	
			Title: President and CEO

			
	 	 	
			Date: July 26, 2021EX-10.1

 Exhibit 10.1 

Certain information marked as [****] has been excluded from this exhibit because it is both (i) not material and (ii) the type that the
Registrant treats as private or confidential. 
 Framework Agreement on 

Supply of Blockchain Servers 

between 
 SuperAcme Technology
(Hong Kong) Limited 
 and 

Cipher Mining Technologies Inc. 

  
 1 

  
 Agreement No.: SFA-20210901-M30-101 

September 2021 

  
 2 

 This Framework Agreement on Supply of Blockchain Servers (this “Agreement”) is made and entered
into on September 2, 2021 (the “Effective Date”) by and among: 
  

	1.	 SuperAcme Technology (Hong Kong) Limited (company No. of 2676338), a business company incorporated under
the laws of Hong Kong and having its registered office at FLAT/RM A 12/F KIU FU COMM BLDG 300 LOCKHART RD WAN CHAI HONGKONG (“the Seller”); and 

  

	2.	 Cipher Mining Technologies Inc., a company incorporated under the laws of United States of America and having
its address at 222 Purchase Street, #290 Rye, NY 10580 United States of America (“the Buyer”). 

 Each of the parties to this
Agreement is referred to herein individually as a “Party” and collectively as the “Parties” 
 RECITALS: 

 

	B.	 The Seller has been engaged in the business of development, production, sales of high performance computing
chips and blockchain servers based on the blockchain technology; 

  

	C.	 The Buyer intends to secure long-term, price-competitive and quantitative supply of blockchain servers.

  

	D.	 The Parties desire to enter into this Agreement and make the respective representations, warranties, covenants
and agreements set forth herein on the terms and conditions set forth herein. 

 NOW, THEREFORE, in consideration of the foregoing
recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound hereto hereby agree as follows: 

 

	1.	 Description of the Products 

 

	1.1	 The Models, Performance Parameters of the target block chain server (“the Products”) are set out
below: 

  

									
	 Model
	  	 M31S+
	 	 M30S
	 	 M30S+
	 	 M30S++

	 Power Efficiency
	  	42W/T +/-5%	 	38W/T +/-5%	 	34W/T +/-5%	 	31W/T +/-5%
					
	 Hash Rate per Unit
	  	Average: 80T
74T~84T +/-5%	 	Average: 88T
82T~92T +/-5%	 	Average: 100T
94T~106T +/-5%	 	Average:110T
112T~104T +/-5%

  
 3 

	1.2	 To ensure the normal and stable operation of the Products, the data center used by the Buyer should be equipped
with necessary cooling and dust prevention measures, stable supply of electricity, and basic environmental requirements, including: temperature -5 to + 35 degrees Celsius, humidity <75%, AC voltage 210 to ~ 277V, single outlet current 16A, dust
<0.5mg per cubic meter (where the metal and sulfide content less than 1%). 

  

	1.3	 In case within the valid period of this contract, the Seller releases any new product, both Parties agree that
the Buyer can purchase the new product released by the Seller as long as the Seller has sufficient supply capacity to fulfill the demand from the Buyer. The detailed parameters and model shall be agreed by both Parties in the supplementary terms and
conditions to this contract. 

  

	1.4	 Seller agrees the Products shall be fitted for 277V power supply and UL certified. 

 

	2.	 Unit Price and Quantities 

 

	2.1	 The Seller promises to sell and the Buyer promises to purchase the Products not less than 60,000 units in total
(“Committed Purchase”). The parties agree that the units as set forth in the Committed Purchase shall be scheduled for delivery from January 2022 to the end of Year 2022 (“Delivery Period”). The committed quantity is distributed
equivalently to every Month from January 2022 to December 2022. And the ratio among M30S, M30S+ and M30S++ shall be 40%:40%:20% in principle. Both parties agree that the ratio among different models may vary in different supply period due to yield
of wafer from foundry factory may vary. The final quantity to be supplied for different models shall be finalized in the Purchase order to be signed by both parties under this agreement 5 Months earlier than supply time of the servers.

  

	2.2	 Both Parties agree that from July 2022 to December 2022, the Seller shall supply to the Buyer Month wise 10,000
units as specified in this contract. In case the Buyer can not place purchase order to the Seller in a certain Month for the quantity agreed in the contract, the Buyer shall submit an application to the Seller in writing Six Months earlier than the
scheduled supply time, only with consent from the Seller, the quantity to be supplied can be changed. The reduced or added quantity will be consolidated in future purchase to keep the total supply quantity same as agreed in the Agreement.

  

	2.3	 As of the effective date of this agreement, both parties agree that among 60,000 Units, price of 30,000 Units
is fixed as below form. 

  
 4 

							
	 Model
	  	 M30S
	  	 M30S+
	  	 M30S++

	 Power Efficiency
	  	38W/T +/-5%	  	34W/T +/-5%	  	31W/T +/-5%
				
	 Hash Rate
	  	 Avg.: 88T

Scope: 
82T~92T +/-5%
	  	 Avg.: 100T

Scope:
 94T~106T +/-5%
	  	 Avg.:110T

Scope: 
112T~104T +/-5%

				
	 Fixed Price/TH

(USD)
	  	33.00	  	37.9	  	42.7

  

	2.4	 As of the Effective Date of this Agreement, both parties agree that among 60,000 units, price of 30,000 units
shall be finalized as per terms and conditions from 2.4 to 2.5. 

  

	2.4.1	 The minimum price and top price of the models are given in the below table. 

 

							
	 Model
	  	 M30S
	  	 M30S+
	  	 M30S++

	 Power Efficiency
	  	38W/T +/-5%	  	34W/T +/-5%	  	31W/T +/-5%
				
	 Hash Rate
	  	Avg.: 88T
 Scope: 
82T~92T +/-5%
	  	Avg.: 100T
Scope: 
94T~106T +/-5%	  	Avg.:110T
 Scope: 
112T~104T +/-5%

				
	 Minimum Price/TH

(USD)
	  	18.5	  	21.8	  	25.2
				
	 Maximum Price/TH

(USD)
	  	50	  	57.1	  	63.7

  

	    	 The Parties agree that new models (other than M30S/M30S+/M30S++) and their Minimum and Maximum prices may be
added into the target list based on committed purchase level and prices as agreed between the Parties from time to time if any new models are ready for purchase during the valid period of the

  
 5 

	 	
Agreement. Parties shall separately negotiate and sign a supplementary agreement to define the parameters and its minimum and maximum prices for the new models other than M31S+/M30S/M30S+/M30S++.

  

	2.5	 The Parties agree that the final price of the servers for various supply batches shall be decided base on the
terms and conditions of clause 2.4. Definitions of various parameters which are required to derive the price are given as below. 

  

	 	2.5.1	 Daily average price (USD) “A”: 

 

	 	    	 Data from https://www.blockchain.com/charts/market-price, which presents average price of Bitcoin in USD
everyday; 

  

	 	2.5.2	 Total network difficulty “B”: 

 

	 	    	 Data from https://www.blockchain.com/charts/difficulty, which presents daily total network difficulty;

  

	 	2.5.3	 Total network difficulty at 25.05T, FPPS 1T*24H Revenue “C”: 

 

	 	    	 1T*24h=0.00000546 (Data from BTC.com); 

 

	 	2.5.4	 30 days average mining revenue in USD “R”: 

 

	 	    	 R=(A1*25.05*C/B1+A2*25.05*C/B2+........+A30*25.02*C/B30)/30 

 

	 	    	 A1, B1, A2, B3, ......, A30, B30 shall, at 15th every
month, be taken date back for 30 days. For example, when supply time is January 2022, A1 shall be average price on 16th November 2021 and A30 shall be average price on 15th December 2021. 

  

	 	2.5.5	 Final implementation price for server “P”: 

 

	    	 P=(R-Power Efficiency of Sever/1000*Power Cost kWh*24)*Static Payback
Days T*Futures-vs-Spot Pricing Discount Raito (0.8). 

  

											
	 Model
	  	Power
Efficiency	  	Static
Payback	  	Power
Cost
(KWH)	  	30days
Revenue
per TH
(R)	  	Final
Implementation
Price (P)
	  	(W)	  	Days (T)
	 M30S++
	  	31	  	366	  	0.055	  	0.1875	  	42.92
	 M30S+
	  	34	  	334	  	0.055	  	0.1875	  	38.11

  
 6 

	    	 In case P is more than the Maximum price, the Final Implementation Price shall be capped at the Maximum price;
in case P is less than the minimum price, then the Final Implementation Price shall be set at the minimum price. In case P is in between the Minimum price and the Maximum price, it shall be same as it is calculated with the formular as designated in
2.4.6. 

  

	    	 The detailed calculation examples are given in in Annexure I and Annexure II. 

 

	2.6	 The Products under this Agreement shall be produced in China and delivered to the place designated by the
Buyer. The Seller may, if agreed to by the Buyer (such agreement not to be unreasonably withheld), transfer part or all of the production of the Products to its overseas factories and deliver the finished Products to other destinations if agreed by
the Buyer in advance, and the final quantities and unit price of the Products, and any additional delivery charges (if any) shall be agreed by the Parties before production from overseas factories. 

 

	2.7	 The Seller shall keep the pricing terms and conditions agreed in this contract frozen take exemption for
following scenario. 

  

	    	 1) Cost of wafer supplied by vendor fluctuate more than 5%. Due to the major cost of server produced by the
seller is from cost of wafer from foundry factory, demand of wafer to foundry factory shall impact the cost of wafer significantly, in case the cost of wafer fluctuate more than 5%, the seller may modify the price terms and conditions in this
contract within 10% each time and inform the Buyer; provided that any such increase in the price to Buyer shall be not be a higher increase than any increase to Seller’s other customers. Both parties shall agree the modified terms and
conditions for pricing in good faith of each other and continue executing the contract. 

  

	    	 2) USD versus CNY exchange rate fluctuate more than 5%. Due to unpredictable reason that exchange rate of USD
and CNY may fluctuate more than 5%, due to the Seller financial report is based on CNY, the fluctuation of exchange rate may result in higher/lower cost of products manufacturing by the Seller, in case exchange rate fluctuate more than 5%, the
seller may modify the price terms and conditions in this contract within 10% each time and inform the Buyer; provided that any such increase in the price to Buyer shall be not be a higher increase than any increase to Seller’s other customers.
Both parties shall agree the modified terms and conditions for pricing in good faith of each other and continue executing the contract. 

  
 7 

	    	 3) Other policy against crypto computing released by Chinese Government impact cost of manufacturing of servers
more than 5%. Nowadays, Chinese Government may release unpredictable policy against crypto computing servers, it may result in higher/lower taxation to be charged or manufacturing cost of servers has to be moved to a third party countries and
finally result in higher/lower cost of producing, in such case, the seller may modify the price terms and conditions in this contract within 10% each time and inform the Buyer; provided that any such increase in the price to Buyer shall be not be a
higher increase than any increase to Seller’s other customers. Both parties shall agree the modified terms and conditions for pricing in good faith of each other and continue executing the contract. 

 

	2.8	 If there is any tax credit or export tax rebate available for the Buyer, the Buyer may claim such tax benefits
by itself or require the Seller to claim such tax benefits on behalf of the Buyer, in each case the Seller shall cooperate in good faith with the Buyer including providing certain information or documents as required. 

 

	3.	 Deposit and Payment 

 

	3.1	 The Buyer shall pay a deposit (the “Deposit”) of USD 22,240,080.00 (USD Twenty Two Million Two
Hundred Forty Thousand and Eighty Only) to the Seller. The Deposit is calculated based on 10% average maximum price and minimum price/unit on 30,000 servers and 10% on total amount of fixed price portion which is 30,000 units. The Deposit shall be
paid as follows: 

  

	    	 Deposit Installment One: 100% due ten (10) business days after this agreement is signed by both parties;

  

	    	 Total Amount of the Deposit to be paid is calculated as below table. 

 

																	
	 Model
	  	Average Of
Maximum Price
and Minimum 
Price	 	  	Quantity	 	  	Subtotal Based
on Fixed Price	 	  	Deposit	 
	M30S++	  	 	4,782.40	 	  	 	6000	 	  	 	28,694,400.00	 	  	 	2,869,440.00	 
	M30S+	  	 	3,790.00	 	  	 	12000	 	  	 	45,480,000.00	 	  	 	4,548,000.00	 
	M30S	  	 	2,904.00	 	  	 	12000	 	  	 	34,848,000.00	 	  	 	3,484,800.00	 
		  				  				  	  
	  
	 	  	  
	  
	 
	 Total
	  				  				  	 	109,022,400.00	 	  	 	10,902,240.00	 
		  				  				  	  
	  
	 	  	  
	  
	 

  
 8 

																	
	 Model
	  	Average Of
Maximum Price
and Minimum
Price	 	  	Quantity	 	  	Subtotal Based
on Fixed Price	 	  	Deposit	 
	M30S++	  	 	4,978.40	 	  	 	6000	 	  	 	29,870,400.00	 	  	 	2,987,040.00	 
	M30S+	  	 	3,945.00	 	  	 	12000	 	  	 	47,340,000.00	 	  	 	4,734,000.00	 
	M30S	  	 	3,014.00	 	  	 	12000	 	  	 	36,168,000.00	 	  	 	3,616,800.00	 
		  				  				  	  
	  
	 	  	  
	  
	 
	 Total
	  				  				  	 	113,378,400.00	 	  	 	11,337,840.00	 
		  				  				  	  
	  
	 	  	  
	  
	 

  

	    	 Based on the above calculation, total amount of deposit is U22,240,080.00 (USD Twenty Two Million Two Hundred
Forty Thousand and Eighty Only) 

  

	3.2	 The Deposit will be used to confirm and ‘lock up’ the supply of Committed Purchase, the maximum price
and the minimum price of M30S/M30S+/M30S++ for delivery until 31st December 2022. 

  

	3.3	 The Buyer shall pay 50% advance payment to the seller for each batch of supply 5 months earlier than the supply
time and pay 40% delivery payment to the seller for each of supply 1 Month earlier than supply time as per the below payment schedule for 30,000 Units which prices are fixed and agreed by both parties. 

 

																							
	 	  	M30S++
Qty	  	M30S+
Qty	  	M30S
Qty	  	M30S++
Unit Price	  	M30S+
Unit Price	  	M30S
Unit Price	  	Subtotal @
Fixed Price	  	50% Advance
Payment	 	  	40% delivery
Payment	 
	21-May	  		  		  		  		  		  		  		  				  			
	Jun-21	  		  		  		  		  		  		  		  				  			
	Jul-21	  		  		  		  		  		  		  		  				  			
	Aug-21	  		  		  		  		  		  		  		  				  			
	Sept 2021	  		  		  		  		  		  		  		  				  			
	Oct-21	  		  		  		  		  		  		  		  				  			
	Nov-21	  		  		  		  		  		  		  		  				  			
	Dec-21	  		  		  		  		  		  		  		  				  	 	—  	 
	Jan-22	  		  		  		  		  		  		  		  				  	 	—  	 
	Feb-22	  		  		  		  		  		  		  		  	 	9,085,200	 	  	 	—  	 
	Mar-22	  		  		  		  		  		  		  		  	 	9,085,200	 	  	 	—  	 
	April 2022	  		  		  		  		  		  		  		  	 	9,085,200	 	  	 	—  	 
	May-22	  		  		  		  		  		  		  		  	 	9,085,200	 	  	 	—  	 
	Jun-22	  		  		  		  		  		  		  		  	 	9,085,200	 	  	 	7,268,160	 

  
 9 

																																					
	Jul-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,782.40	 	  	 	3,790.00	 	  	 	2,904.00	 	  	 	18,170,400	 	  	 	9,085,200	 	  	 	7,268,160	 
	Aug-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,782.40	 	  	 	3,790.00	 	  	 	2,904.00	 	  	 	18,170,400	 	  				  	 	7,268,160	 
	Sept 2022	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,782.40	 	  	 	3,790.00	 	  	 	2,904.00	 	  	 	18,170,400	 	  				  	 	7,268,160	 
	Oct-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,782.40	 	  	 	3,790.00	 	  	 	2,904.00	 	  	 	18,170,400	 	  				  	 	7,268,160	 
	Nov-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,782.40	 	  	 	3,790.00	 	  	 	2,904.00	 	  	 	18,170,400	 	  				  	 	7,268,160	 
	Dec-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,782.40	 	  	 	3,790.00	 	  	 	2,904.00	 	  	 	18,170,400	 	  				  			

  

	3.4	 The Buyer shall pay 50% advance payment to the seller for each batch of supply 5 months earlier than the supply
time based on the average price of Minimum price and Top price agreed in Clause No. 2.4.1. 

  

																																	
	 	  	M30S++
Qty	 	  	M30S+
Qty	 	  	M30S
Qty	 	  	M30S++
Unit Price	 	  	M30S+
Unit Price	 	  	M30S
Unit Price	 	  	Subtotal @
Average
Price	 	  	50%
Advance
Payment	 
	21-May	  				  				  				  				  				  				  				  			
	Jun-21	  				  				  				  				  				  				  				  			
	Jul-21	  				  				  				  				  				  				  				  			
	Aug-21	  				  				  				  				  				  				  				  			
	Sept 2021	  				  				  				  				  				  				  				  			
	Oct-21	  				  				  				  				  				  				  				  			
	Nov-21	  				  				  				  				  				  				  				  			
	Dec-21	  				  				  				  				  				  				  				  			
	Jan-22	  				  				  				  				  				  				  				  			
	Feb-22	  				  				  				  				  				  				  				  	 	9,448,200	 
	Mar-22	  				  				  				  				  				  				  				  	 	9,448,200	 
	April 2022	  				  				  				  				  				  				  				  	 	9,448,200	 
	May-22	  				  				  				  				  				  				  				  	 	9,448,200	 
	Jun-22	  				  				  				  				  				  				  				  	 	9,448,200	 
	Jul-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,978.40	 	  	 	3,945.00	 	  	 	3,014.00	 	  	 	18,896,400	 	  	 	9,448,200	 
	Aug-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,978.40	 	  	 	3,945.00	 	  	 	3,014.00	 	  	 	18,896,400	 	  			
	Sept 2022	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,978.40	 	  	 	3,945.00	 	  	 	3,014.00	 	  	 	18,896,400	 	  			
	Oct-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,978.40	 	  	 	3,945.00	 	  	 	3,014.00	 	  	 	18,896,400	 	  			
	Nov-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,978.40	 	  	 	3,945.00	 	  	 	3,014.00	 	  	 	18,896,400	 	  			
	Dec-22	  	 	1,000	 	  	 	2,000	 	  	 	2,000	 	  	 	4,978.40	 	  	 	3,945.00	 	  	 	3,014.00	 	  	 	18,896,400	 	  			

  
 10 

	3.5	 The final implementation price of the servers with floating price shall be determined as per clause
No. 2.4 to 2.5 in middle of the month earlier, i.e. the price of the servers to be supplied in January 2022 will be determined on 15th December 2021. The Buyer need to pay to the
seller for the servers to be supplied based on the final settlement amount as per the price finalized by setting off the corresponding deposit and advance payment paid to the Seller. In case the corresponding deposit and advance payment is more than
the final settlement amount, the extra amount paid will be used as final delivery payment or advance payment for other batch purchase. 

  

	3.6	 The Seller shall ship the servers to the Buyer according to the sequence that the payments for delivery are
received. 

  

	3.7	 The Seller’s bank account information is as follows: 

 

			
	Bank Name:	  	[****]
		
	Bank Address:	  	[****]
		
	ABA Routing number:	  	[****]
		
	Swift code:	  	[****]
		
	Beneficiary Account No.:	  	[****]
		
	Account Name:	  	[****]
		
	Account Address:	  	[****]

  

	4.	 Delivery and Acceptance 

 

	4.1	 The Seller shall complete the delivery of the servers described in each respective PO within 30 days after
receiving the full amount (100%) of payment for such PO from the Buyer. The Seller shall ship the servers to the Buyer according to the sequence that the payments for delivery are received. 

 

	4.2	 The Seller shall deliver the designated models of the Products under each PO to a place in Hong Kong designated
by the Buyer, or other place mutually agreed to by both Parties, at least 5 business days before the scheduled delivery date of the servers under the PO (the “Delivery Address”). Incoterms will apply to FCA unless otherwise agreed by the
Parties from time to time. 

  
 11 

	4.3	 In the case of the contractual terms and conditions related to the Purchase, the Seller agrees to deliver the
respective Products to the Buyer or the carrier designated by the Buyer on a timely basis. Once picked up by the carrier, the Seller’s responsibilities in terms of the delivery shall be deemed to be complete. Upon the completion of the
delivery, the ownership, risks of damage or loss of the Products are transferred to the Buyer. 

  

	4.4	 The Seller is responsible for properly packaging the Products including the related accessories and taking all
necessary measures such as waterproofing, moisture proofing and anti-collision packaging to ensure the safe transportation of the Products. The packaging cost of the Products shall be borne by the Seller, all logistics costs involved in
transportation, packaging for transportation and insurance shall be borne by the Buyer. 

  

	4.5	 The Buyer shall complete the acceptance within 30 calendar days after the completion of the delivery by the
Seller or within 15 working days after the arrival of the Products at the final delivery destination, whichever arrives earlier refers to as the end of Acceptance Period. 

 

	4.6	 Upon inspection, if the Buyer believes that there is any defect, damage or problem in or with any of the
Products or that any or all of the Products does not conform to the performance specifications set forth herein or otherwise fails to conform to this Agreement, the Buyer shall give written notice of its objection(s) to the Seller during the
Acceptance Period. After receiving the written objection from the Buyer, the Seller shall promptly investigate and confirm the nature and cause of the problem with the Buyer, and remedy (including but not limited to replenishment, return,
replacement, etc.) the problems caused by the reasons arising before the Product delivery. If the Buyer fails to file a written objection during the Acceptance Period, it shall be deemed to be qualified as accepted. 

 

	4.7	 In the case that there is a difference in the total hash rate between that specified in the respective PO and
the hash rate of the servers actually delivered, the Seller shall compensate the Buyer correspondingly. Upon receiving all the servers with total hash rate equal or greater than that specified in the respective PO and a communication of such fact to
the Seller, it shall be deemed that the Seller has accomplished the contractual obligation regarding total hash for each batch and/or each PO. 

  
 12 

	5.	 Liability and Penalty 

 

	It	 is the Buyer’s responsibility to ensure that the Buyers will purchase agreed total quantity agreed in this
agreement without default and it is the Seller’s responsibility to commit that the supply of the servers shall not be delayed; both parties agree that below terms and conditions shall be applied in case following default happens:

  

	5.1	 The Buyer defaults paying advance payment: As per the clause No. 3.4 and 3.5, the Buyer shall pay the
seller 50% advance payment 5 Months earlier than the supply time of the server, due to any reasons that the Buyer can not pay to the Seller 5 Months earlier for a certain lot supply, the corresponding deposit for the lot shall be forfeited. And the
assigned quantity for the lot shall be released, the Seller has its own discretion to deal with the quantity released. 

  

	5.2	 In case the Buyer complete the advance payment for a certain lot supply however due to whatever reason can not
pay delivery payment for the lot, the deposit of the lot shall be forfeited however the 50% of the advance payment made by the Buyer shall be used as advance payment or delivery payment for future lot. 

 

	5.3	 In case the Buyer pay advance payment and delivery payment on time as agreed in this agreement, however, the
Seller can not supply the servers as per the supply schedule agreed, the Seller shall pay penalty to the Buyer at 0.3% per day for the servers which is not shipped. If the delay of the supply is more than 30 days, the penalty paid shall up to 30
days. In case the delay of supply is resulted by force majeur from third parties like delay of supply of wafer from foundry factory, producing of servers interrupted due to Covid 19 epidemic spreading where manufacturing factory located, etc, the
penalty of delay of supply shall be waived subject to the agreement from the Buyer for extension of supply. 

  

	6.	 Quality Assurance and After-Sales Service 

 

	6.1	 The warranty period of the Products shall be a period of 1 year, commencing 30 days after the shipment to the
Buyer from the factory. The Seller shall offer online repair training or offline repair training as required in appropriate time. The Seller shall arrange specific engineers for remote after-sale technical support at Buyer’s request.

  
 13 

	6.2	 After discovering that there is a defect or quality problem or failure of the Products, the Buyer shall
promptly notify the Seller and cooperate with the Seller to conduct fault analysis and treatment. During the working day between 9:00am and 21:00pm of China time, the Seller shall respond within 2 hours of notification by the Buyer and the Seller
shall resolve the fault or provide a solution within 36 hours after receiving the notice from the Buyer. In special circumstances, if Seller is unable to resolve the fault or provide a solution within the above-mentioned time limit, the Seller shall
explain the situation to the Buyer in writing and provide an estimated time for resolution of the problem. If the estimated time limit is more than 12 hours or it is confirmed that it is a defect or quality problem of the Product itself, and the
defect or quality problem is outside the normal failure rate (5%), the Seller shall immediately provide an alternative product for the Buyer to use. 

  

	6.3	 During the warranty period, the Seller shall provide and the Buyer may accept a paid repair service due to the
failure or damage caused by improper use of the Buyer. The Buyer shall bear the expenses for the actual materials, parts and transportation, and the Seller shall waive the labor fee. Notwithstanding, if the Buyer is the party providing the warranty
service, it shall be entitled to charge a reasonable labor rate to the Seller for providing the repair service. 

  

	6.4	 The Seller agrees to open API for ease of management in the facilities. There is one feature with the API that
the facilities can monitor the power consumption of each server remotely with 1% accuracy without power meter. 

  

	6.5	 The Seller agrees to release when possible, and upon approval by Seller for usage; authorized firmware with
high performance mode for these servers which will obtain more 3%~10% hash rate in case of 235v ~240v voltage input to PSU & the temperature around input fan is less than 30 degrees centigrade. Use of such firmware by the Buyer shall not void
the Seller’s warranty. 

  

	6.6	 If the Products have a batch failure, the failure rate is too high, or the failure reason cannot be confirmed,
the Buyer shall allow and cooperate with the technical personnel of the Seller’s provider to analyze the cause of the failure. 

  

	6.7	 The following circumstances or products are not covered by the Seller’s warranty: 

 

	 	(i)	 component detachment, unstable link, circuit board breakage, etc. caused by the reason that the product is not
installed as per the specification or instruction, be freely pulled up and down, or freely pulled / smashed / lifted and smashed. 

  

	 	(ii)	 Products that are not properly installed due to improper operation, including but not limited to products that
are damaged by reverse insertion, less insertion or no insertion; 

  
 14 

	 	(iii)	 Products that are damaged by the reason of being freely disassembled, modified or repaired, without the written
or electronic authorization of the Seller or without the consent of the Seller’s after-sales support personnel; 

  

	 	(iv)	 Insufficient hash power or mismatch of the servers caused by use of unofficial designated accessories,
including but not limited to power supplies, control panels, fans, cables, etc.; 

  

	 	(v)	 Insufficient hash power, abnormal hash power, card machine and burning machine etc. caused by the use of
unofficial supporting software; 

  

	 	(vi)	 Shortened product life or direct damage of servers caused by the reason of freely modifying the operating
parameters of the product (such as overclocking) except through firmware mentioned in herein.; 

  

	 	(vii)	 Products that are damaged by the reason of failure to comply with the specifications or instructions for use of
electricity, nets, and by the reason that data center environment fails to meet the servers’ operational requirements, including but not limited to wet environments, corrosive environments, ultra-high temperature environments, dust particles
exceeding the standard, abnormal voltage and current (such as wave surges, shock, instability etc.). 

  

	 	(viii)	 Products whose serial number has been maliciously modified, defaced, or intentionally removed.

  

	 	(ix)	 Damage caused by natural disasters, including but not limited to earthquakes, fires, heavy rains, sandstorms
etc. 

  

	7.	 Warranty 

  

	7.1	 Each Party shall, at its sole cost and expense, indemnify, defend and hold harmless the other Party and its
members, managers, directors, officers, employees and affiliates from and against all losses, liabilities, costs, damages and expenses, including but not limited to reasonable legal fees and attorneys’ expenses (“Losses”) incurred or
suffered arising out of, in connection with or as a result of (i) the Party’s material breach of the representations, warranties or covenants in this Agreement, including confidentiality obligations hereunder, (ii) the
Party’s willful misconduct or gross negligence, and (iii) third party claims of infringement or violation of its rights arising out of any Products provided by such Party. 

 

	7.2	 The Buyer warrants that it will not use any of the Products to engage in any violation of laws and regulations
to damage the legitimate rights and interests of any other party. Otherwise, the Buyer shall bear all legal liabilities arising therefrom. 

  
 15 

	7.3	 The Buyer agrees to use and maintain the Products in accordance with the environmental standards agreed by both
Parties. If the Buyer or its employees or agents fail to use or maintain the products under this Agreement in accordance with the aforementioned environmental standards, the Buyer shall not seek any compensation from Seller for economic losses or
personal injury arising therefrom. 

  

	7.4	 Without limitation to its warranty commitments, Seller agrees, for the duration of the warranty period to
replace or repair, at their choice, any defective Products, or parts thereof upon receipt of such defective Products or parts thereof returned by the Buyer; and receipt of the broken parts by the Seller approved as a valid warranty claim, in a
timely manner. 

  

	8.	 Confidentiality 

 

	8.1	 Confidential Information. 

Confidential Information means any information obtained by a Party (the “Receiving Party”) to this Agreement from the other Party
(the “Disclosing Party”) under this Agreement including, but not limited to, past, present or future products, services, marketing, research, development, business activities, intellectual property, trade secret, know-how, any information
relating to business or financial plans, proposals, forecasts, projections, benchmark test results and statistics, pricing, methods, methodologies, processes, personnel data, customers and supplier’s information, apparatus, software programs,
databases, data models and techniques, information technology, documentation including technical and functional specifications, the terms and existence of this Agreement or related information, and any other information which should reasonably be
understood to be confidential. Confidential Information does not include information which (i) is or becomes generally available to the public other than as a result of the Receiving Party’s breach of this Agreement,
(ii) becomes available to the Receiving Party by a source other than the Disclosing Party who is not bound by any confidentiality obligations, (iii) was known to the Receiving Party or in its possession prior to the date of
disclosure by the Disclosing Party, as demonstrated by written evidence of the Receiving Party, (iv) is furnished by the Disclosing Party to the Receiving Party with written permission to disclose, or (v) is independently
developed by the Receiving Party without access to the Confidential Information, as demonstrated by written evidence of the Receiving Party. Notwithstanding the foregoing, each Party has no obligation to disclose its Confidential Information to the
other Party unless such disclosure is reasonably required to perform this Agreement. 

  
 16 

	8.2	 Standard of Care 

The Receiving Party shall preserve the Confidential Information of the Disclosing Party in confidence using the same precautions and standard
of care which the Receiving Party would use to safeguard Confidential Information of its own but no less than reasonable care. Except as otherwise provided herein, the Receiving Party shall not, without first obtaining the Disclosing Party’s
written consent, disclose to any person, firm or organization any such Confidential Information, for the Term and thereafter. Furthermore, the Receiving Party shall not use the Confidential Party of the Disclosing Party for any purpose other than
those permitted herein. 
  

	8.3	 Limited Disclosure 

In case the Buyer is a publicly traded company. Except as required by securities’ regulators, no public announcement or press release in
connection with the subject matter of the term sheet or this Agreement shall be made or issued by or on behalf of either Party without the prior written approval of the other Party. The Parties mutually agree that each Party may disclose to third
parties that it has entered into this Agreement subject to the other Party’s prior written approval. The Receiving Party may disclose Confidential Information of the Disclosing Party on a strict need-to-know basis only to its authorized
employees, auditors, counsel and other representatives performing services for its benefit (the “Authorized Recipients”), solely as required in order for the Receiving Party to perform their respective obligations hereunder, so long as
such representatives are bound by the written confidentiality agreements having terms no less strict than those set forth herein. The Receiving Party shall remain liable at all times for any breach by the Authorized Recipients of the confidentiality
obligations set forth therein. If Confidential Information is required to be disclosed by law, regulation, court order by either Party, such disclosure shall be permitted to the extent legally required, provided that to the extent legally
permissible, the Disclosing Party is given reasonable prior notice to enable it to seek a protective order or confidential treatment prior to such disclosure. Notwithstanding anything to the contrary in this Agreement, Buyer shall be permitted to:
(i) make public disclosure of such details related to this Agreement as it determines are necessary to satisfy its disclosure obligations as a public company under applicable law and regulation, including public filing of this Agreement on the
Edgar website of the United States Securities and Exchange Commission; and (ii) disclose any Confidential Information in response to a request or demand of any regulator or self-regulatory organization of competent jurisdiction in
respect of Buyer. 
  

	9.	 Anti-money Laundering Agreement 

 

	9.1	 Each Party shall strictly abide by the applicable laws, regulations and administrative regulations on
anti-money laundering that apply to it, such as the Law of the People’s Republic of China on Money Laundering, and shall not participate in money laundering activities or provide convenience for others to launder money. 

  
 17 

	9.2	 Each Party shall fulfill its respective anti-money laundering obligations in accordance with the requirements
of applicable anti-money laundering laws and regulations, including, as applicable, establish and improve the internal control system for anti-money laundering, implement customer identification, identity information and transaction record keeping,
identification and reporting of large and suspicious transactions. Each Party shall comply with applicable regulatory requirements such as customer classification management guidelines, to ensure that the cooperative business under this Agreement
meets the requirements of China’s anti-money laundering laws and regulations. 

  

	9.3	 Either Party may request the other to provide the following information according to the relevant provisions of
anti-money laundering: the identity of the customer and its actual controlling shareholder(s) or actual beneficial owners), the customer’s economic status or business status, the source of the client’s funds, and the purpose of the
customer’s purchase. Each Party undertakes not to use or disclose relevant information or materials provided by the other than in connection with the foregoing purposes. 

 

	10.	 Force Majeure 

 

	10.1	 Force majeure refers to objective conditions that cannot be foreseen, cannot be avoided and cannot be overcome
at the time of conclusion of this Agreement, including but not limited to natural disasters (such as typhoons, earthquakes, floods, hail, etc.), social anomalies (such as strikes, disturbances, pandemics, epidemics etc.), government actions (such as
expropriation, blockade, government ban, etc.), and Seller’s outsourced factories (such as wafer foundry factories) are unable to deliver on time due to the aforementioned natural disasters, social anomalies, government actions or changes in
intergovernmental policies, and stop production, stop supply due to above situation, etc. The rise in raw material prices, employee shortages, changes in market transactions, etc. are not force majeure. 

 

	10.2	 In the event of force majeure, the Party that is affected by force majeure shall promptly notify the other
Party in writing and provide the other party with sufficient evidence of the occurrence and duration of force majeure within the next 7 working days. Both Parties should immediately consult and seek a reasonable solution to minimize the damage
caused by force majeure. 

  
 18 

	10.3	 If the Agreement cannot be continued due to force majeure, or the influence of force majeure exceeds 90 days,
either Party has the right to terminate this Agreement and the Parties shall not be liable for breach of contract except for prompt return of all amounts theretofore paid to Seller hereunder for Product not delivered to or accepted by Buyer
including the balance of the deposit referred to in Clause 3. 

  

	10.4	 Each Party represents and warrants to the other that it knows of no event of force majeure existing as of the
date hereof that would impede or prevent its performance under this Agreement. 

  

	11.	 Dispute Resolution 

 

	11.1	 This Agreement shall be governed by and construed under the laws of Hong Kong. 

 

	11.2	 If a controversy, claim or dispute arises out of or in connection with this Agreement, or the breach thereof,
whether based on contract, tort, statute or other legal or equitable theory, the Parties shall use good faith efforts to settle such dispute through negotiations between senior executives of each Party. In the event the Parties fail to resolve such
dispute within thirty (30) days (or such longer period as they mutually agree) of its occurrence, such unresolved controversy, claim or dispute will be finally resolved by binding arbitration administered by the Hong Kong International
Arbitration Commission in accordance with the Arbitration Rules of Hong Kong International Arbitration Commission for the time being in force, which rules are deemed to be incorporated by reference in this section. The seat of the arbitration shall
be Hong Kong. The Tribunal shall consist of three qualified commercial arbitrators, of which one shall be selected by the Seller, one shall be selected by the Buyer and one shall be selected by the Hong Kong International Arbitration Commission in
accordance with the its Arbitration Rules. The language of the arbitration shall be English. The Parties further agree that any arbitral proceedings may be conducted by way of video-conferencing or other remote facilities and specifically waive any
procedural requirements (if any) that demand a physical presence of either Party, their witnesses, or the Tribunal. 

  

	12.	 Others 

  

	12.1	 This Agreement shall set forth the entire agreement of the Parties in relation to the subject matter, any
changes to this Agreement must be made in writing and signed by both Parties or their authorized representatives. 

  
 19 

	12.2	 All rights and obligations under this Agreement could be transferred to the related affiliate designated by
each Parties, which must be made in writing and signed by both Parties or their authorized representatives. 

  

	12.3	 Notices shall be in writing shall be deemed given on the date of receipt, if delivered by any means for which a
delivery receipt is given, or, if sent by facsimile or by electronic means, upon receipt of confirmation or answer back. Notices shall be given to each Party at its address and marked to the attention of the person set forth below. Any such address
may be changed by any Party hereto by the delivery of written notice thereof to the other Party. 

  

			
	Buyer:	  	Cipher Mining Technologies Inc.
		
	Notice Party:	  	Tyler Page
		
	Title:	  	CEO
		
	Address:	  	222 Purchase Street, #290 Rye, NY 10580 United States of America
		
	Email:	  	 [****]

		
	With a copy to:	  	[****]
		
	Seller:	  	SuperAcme Technology (Hong Kong) Limited
		
	Notice Party:	  	Wencheng Zhang,
		
	Title:	  	Sales Director
		
	Address:	  	FLAT/RM A 12/F KIU FU COMM BLDG 300 LOCKHART RD WAN CHAI HK
		
	Email:	  	[****]

  

	12.4	 This Agreement is written in English and shall be executed in quadruplicate. Each Party shall hold two
originals with the same legal effect. 

 [The remainder of this page has been left intentionally blank] 

  
 20 

 IN WITNESS WHEREOF, the Parties hereto have caused their respective duly authorized representatives to
execute this Agreement on the date and year first above written. 
 The Seller: SuperAcme Technology (Hong Kong) Limited 

(seal) 
 Authorized representative: Jianbing Chen, COO 

(signature) 
 Date: September 2nd, 2021 

The Buyer: Cipher Mining Technologies Inc. 
 Authorized
representative: Tyler Page, CEO 
 (signature) 
 Date:
September 2nd, 2021 

  
 21 

 Annexure I: Example of Calculating 30-days Average
Mining Revenue 
  

															
	 Date
	  	Network
difficulty	 	  	Price
in USD	 	  	 1T*24H Qty
	  	1T*24 Hours
Mining
Revenue in
USD	 
	 Benchmark Network Difficulty
	  	 	25.05	 	  				  	Benchmark 1T*24hr Revenue	  	 	0.00000546	 
	 2021/4/7
	  	 	23.137	 	  	 	58020	 	  	0.0000059114	  	 	0.342981781	 
	 2021/4/8
	  	 	23.137	 	  	 	55947	 	  	0.0000059114	  	 	0.330727364	 
	 2021/4/9
	  	 	23.137	 	  	 	58049	 	  	0.0000059114	  	 	0.343153212	 
	 2021/4/10
	  	 	23.137	 	  	 	58103	 	  	0.0000059114	  	 	0.34347243	 
	 2021/4/11
	  	 	23.137	 	  	 	59774	 	  	0.0000059114	  	 	0.353350447	 
	 2021/4/12
	  	 	23.137	 	  	 	59965	 	  	0.0000059114	  	 	0.354479533	 
	 2021/4/13
	  	 	23.137	 	  	 	59835	 	  	0.0000059114	  	 	0.353711045	 
	 2021/4/14
	  	 	23.137	 	  	 	63554	 	  	0.0000059114	  	 	0.375695693	 
	 2021/4/15
	  	 	23.218	 	  	 	62969	 	  	0.0000058908	  	 	0.370938885	 
	 2021/4/16
	  	 	23.582	 	  	 	63253	 	  	0.0000057999	  	 	0.366860426	 
	 2021/4/17
	  	 	23.582	 	  	 	61456	 	  	0.0000057999	  	 	0.356438024	 
	 2021/4/18
	  	 	23.582	 	  	 	60087	 	  	0.0000057999	  	 	0.348497975	 
	 2021/4/19
	  	 	23.582	 	  	 	56251	 	  	0.0000057999	  	 	0.326249598	 
	 2021/4/20
	  	 	23.582	 	  	 	55703	 	  	0.0000057999	  	 	0.323071259	 
	 2021/4/21
	  	 	23.582	 	  	 	56508	 	  	0.0000057999	  	 	0.32774017	 
	 2021/4/22
	  	 	23.582	 	  	 	53809	 	  	0.0000057999	  	 	0.312086267	 
	 2021/4/23
	  	 	23.582	 	  	 	51732	 	  	0.0000057999	  	 	0.300039896	 
	 2021/4/24
	  	 	23.582	 	  	 	51153	 	  	0.0000057999	  	 	0.29668176	 
	 2021/4/25
	  	 	23.582	 	  	 	50111	 	  	0.0000057999	  	 	0.290638275	 
	 2021/4/26
	  	 	23.582	 	  	 	49076	 	  	0.0000057999	  	 	0.284635389	 
	 2021/4/27
	  	 	23.582	 	  	 	54057	 	  	0.0000057999	  	 	0.31352464	 
	 2021/4/28
	  	 	23.582	 	  	 	55071	 	  	0.0000057999	  	 	0.319405728	 

  
 22 

															
	 2021/4/29
	  	 	23.582	 	  	 	54884	 	  	0.0000057999	  	 	0.318321149	 
	 2021/4/30
	  	 	23.582	 	  	 	53584	 	  	0.0000057999	  	 	0.310781292	 
	 2021/5/1
	  	 	23.004	 	  	 	57797	 	  	0.0000059456	  	 	0.343638892	 
	 2021/5/2
	  	 	20.609	 	  	 	57858	 	  	0.0000066366	  	 	0.383978467	 
	 2021/5/3
	  	 	20.609	 	  	 	56610	 	  	0.0000066366	  	 	0.375696032	 
	 2021/5/4
	  	 	20.609	 	  	 	57213	 	  	0.0000066366	  	 	0.379697882	 
	 2021/5/5
	  	 	20.609	 	  	 	53242	 	  	0.0000066366	  	 	0.353344076	 
	 2021/5/6
	  	 	20.609	 	  	 	57473	 	  	0.0000066366	  	 	0.381423389	 
		  				  	 
 
 
	30 Days
 Average
 Revenue
	 
  
  
	  		  	 	0.339375548	 

  
 23 

 Annexure II: Examples for Calculating Final Settlement Prices 

 

	1.	 Surpassing maximum price scenario (using 30-days Average Revenue
0.339375548 as exemplified in Annexure I) 

  

											
	 Model
	 	 Power Efficiency 
(W/TH)
	 	 Static Payback Days
	 	 Power Cost (USD/kWh)
	 	 30 days Avg. Revenue
per TH (R)
(USD/T)
	 	 Final Implementation
Price (P)
(USD)

	 M30S++
	 	31	 	366	 	0.055	 	0.339375548	 	63.7
	 M30S+
	 	34	 	334	 	0.055	 	0.339375548	 	57.1
	 M30S
	 	38	 	298	 	0.055	 	0.339375548	 	50

  

	2.	 Reaching minimum price scenario 

 

											
	 Model
	 	 Power Efficiency 
(W/TH)
	 	 Static Payback Days
	 	 Power Cost (USD/kWh)
	 	 30 days Avg. Revenue
per TH (R)
(USD/T)
	 	 Final Implementation
Price (P)
(USD)

	 M30S++
	 	31	 	366	 	0.055	 	0.12	 	25.2
	 M30S+
	 	34	 	334	 	0.055	 	0.12	 	21.8
	 M30S
	 	38	 	298	 	0.055	 	0.12	 	18.5

  

	3.	 Scenario in-between maximum and minimum prices 

 

											
	 Model
	 	 Power Efficiency 
(W/TH)
	 	 Static Payback Days
	 	 Power Cost (USD/kWh)
	 	 30 days Avg. Revenue
per TH (R)
(USD/T)
	 	 Final Implementation
Price (P)
(USD)

	 M30S++
	 	31	 	366	 	0.055	 	0.18	 	40.72
	 M30S+
	 	34	 	334	 	0.055	 	0.18	 	36.1
	 M30S
	 	38	 	298	 	0.055	 	0.18	 	30.95

  
 24

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