excess of the Maximum Investment Amount, in an amount up to the greatest amount that may then be reasonably expected to be committed for investment in Subject Claim. If the Funder declines to
exercise its option, the Claimholder may negotiate and enter into agreements with one or more third parties to provide funding, which shall be subordinate to the Funders rights under the Agreement.
Pursuant to the Agreement, the Parties acknowledged that their common interest is served by settling the Subject Claim for a commercially
reasonable amount. The Agreement further provides that the Claimholder may at any time without the consent of the Funder either settle or refuse to settle the Subject Claim for any amount; provided, however, that if the Claimholder settles the
Subject Claim without the Funders consent, which consent shall not be unreasonably withheld, conditioned, or delayed, the value of the Recovery Percentage (as defined below) will be deemed to be the greater of (a) the Recovery Percentage
(under Phase I or Phase II, as applicable), or (b) the total amount of all Claims Payments made in connection with such Subject Claim multiplied by three (3).
If the Claimholder ceases the Subject Claim for any reason other than (a) a full and final arbitral award against the Claimholder or
(b) a full and final monetary settlement of the claims, including in particular, for a grant of an environmental permit to the Claimholder allowing it to proceed with the Project (with or without a monetary component), all Claims Payments under
Phase I and, if Claimholder has exercised the corresponding option, the Tranche A Committed Amount and Tranche B Committed Amount, shall immediately convert to a senior secured liability of the Claimholder. This sum shall incur an
annualized IRR of 50.0% retroactive to the date each Funding Request was paid by the Funder (under Phase I), or, to the conversion date for the Tranche A Committed Amount and Tranche B Committed Amount of Phase II if the
Claimholder has exercised the respective option (collectively, the Conversion Amount). Such Conversion Amount and any and all accrued IRR shall be payable
in-full
by the Claimholder within 24
months of the date of such conversion, after which time any outstanding Conversion Amounts, shall accrue an IRR of 100.0%, retroactive to the conversion date (the Penalty Interest Amount). The Claimholder will execute such documents and
take other actions as necessary to grant the Funder a senior security interest on and over all sums due and owing by the Claimholder in order to secure its obligation to pay the Conversion Amount to the Funder.
If, at any time after exercising its option to receive funds under either Tranche A or Tranche B of Phase II, the Claimholder
wishes to fund the Subject Claim with its own capital (Self-Funding) (which excludes any Claims Payments made, either directly or indirectly, by any other third party), the Claimholder shall immediately pay to the Funder the Conversion
Amount, provided that this requirement shall not apply if, after the Funder has made Claims Payments in an aggregate amount equal to the Maximum Investment Amount, the Funder does not exercise its option to provide
Follow-On
Funding.
In the event of any receipt of proceeds resulting from the Subject Claim
(Proceeds), the Funder shall be entitled to any additional sums above the Conversion Amount to which the Funder is entitled as described below. Should the Claimholder cease the Subject Claim as described above after Self-Funding the
Claim, accrued IRR and Penalty Interest shall be calculated and paid to the Funder as set forth above. The Funders rights to the Recovery Percentage as defined below shall survive any decision by Claimholder to utilize Self-Funding.
On each Distribution Date, distributions of the Proceeds shall be made to the Claimholder and the Funder in accordance with subparagraph
(a) or (b) below (the Recovery Percentage), as applicable:
(a) If the Claimholder receives only the Phase I
Investment Amount from the Funder, the first Proceeds shall be distributed as follows:
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(i)
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first, 100.0% to the Funder, until the cumulative amount distributed to the Funder equals the total Claims
Payments paid by the Funder under Phase I;
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