Item 1.01 Entry Into a Material Definitive Agreement.
Securities Purchase Agreement
On October 23, 2021, Bloom Energy Corporation (the "Company") entered into a
Securities Purchase Agreement (the "Purchase Agreement") with SK ecoplant Co.,
Ltd. ("SK ecoplant") in connection with a strategic partnership. Pursuant to the
Purchase Agreement, the Company has agreed to sell to SK ecoplant 10,000,000
shares of zero coupon, non-voting redeemable convertible Series A preferred
stock, par value $0.0001 per share, of the Company (the "RCPS"), at a purchase
price of $25.50 per share or an aggregate purchase price of approximately
$255 million (the "Initial Investment"). The RCPS will have a liquidation
preference of 1x and will only be redeemable at the option of the Company. The
RCPS will not have any voting rights nor entitle the holder to receive
dividends. The holder of the RCPS may convert at any time provided that the RCPS
shall automatically be converted into Class A Common Stock on the one year
anniversary of the closing of the Initial Investment (the "First Closing").
The Purchase Agreement contains customary representations, warranties, covenants
and conditions to the First Closing, including receipt of all approvals or the
termination or expiration of all waiting periods required under applicable
antitrust laws. The Purchase Agreement may be terminated by either the Company
or SK ecoplant if the First Closing has not occurred by December 31, 2021,
subject to extension to March 31, 2022 in the event certain approvals have not
been obtained.
In addition to the Initial Investment, following the First Closing and on or
prior to November 30, 2023, SK ecoplant will have the option (but not the
obligation) to purchase a minimum of 11 million shares of the Company's Class A
Common Stock at the higher of (i) US$23 and (ii) one hundred and fifteen percent
(115%) of the volume-weighted average closing price of the twenty
(20) consecutive trading day period immediately preceding the notice to purchase
such shares (the "Second Investment"). The maximum amount of capital stock that
SK ecoplant and its Subsidiaries (as defined in the Purchase Agreement) may hold
is capped at 15 percent of the Company' issued and outstanding capital stock
(inclusive of the RCPS purchased in the Initial Investment and any other
purchases of the Company's stock). The Purchase Agreement contains customary
representations, warranties, covenants and conditions to closing of the Second
Investment (the "Second Closing").
Simultaneous with the execution of the Purchase Agreement, the Company and SK
ecoplant have executed an Amendment to the Joint Venture Agreement (the "JVA
Amendment"), an amendment and restatement to that certain Preferred Distribution
Agreement (the "PDA Restatement") and a new Commercial Cooperation Agreement
regarding initiatives pertaining to the hydrogen market and general market
expansion for the Bloom Energy Server and Bloom Energy Electrolyzer.
PDA Restatement
On November 14, 2018, the Company entered into a Preferred Distributor
Agreement, as amended, with SK ecoplant for the marketing and sale of Bloom
Energy Servers for the stationary utility and commercial and industrial South
Korean power market. As part of the strategic partnership, the parties executed
the PDA Restatement, which incorporates previously amended terms and
establishes: (i) SK ecoplant's purchase commitments for the next three years (on
a take or pay basis) for Bloom Energy Servers; (ii) rollover procedures; (iii)
premium pricing for product and services; (iv) termination procedures for
material breaches; and (v) procedures if there are material changes to the
Republic of Korea Hydrogen Portfolio Standard.
JVA Amendment
On September 23, 2019, the Company entered into a joint venture agreement with
SK ecoplant, to establish a facility in South Korea for the procurement of local
parts for the Bloom Energy Server and for assembly of certain portions of the
Bloom Energy Server for the South Korean market. As part of the expanded
strategic partnership, the parties have agreed to increase the scope of the
assembly work done in the joint venture facility.
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Investor Agreement
In connection with the Initial Investment, the Company and SK ecoplant will
enter into an Investor Agreement (the "Investor Agreement") providing for
certain rights and restrictions relating to the Initial Investment and the
Second Investment.
Board Representation. The Investor Agreement provides that SK ecoplant,
effective as of the date of the Second Closing (the "Second Closing Date"), will
be entitled to designate one person to be appointed to the Company's Board of
Directors (the "Board"). This right continues until such time as SK ecoplant and
its Subsidiaries (as defined in the Investor Agreement) (the "SK Parties")
beneficially own less than five percent (5.0%) of the shares of Common Stock
then issued and outstanding.
Standstill. The Investor Agreement provides that the SK Parties will be subject
to a standstill provision, with limited exceptions provided their ownership
stays under 15% of the Company's issued and outstanding capital stock,
commencing with the closing of the Initial Investment and continuing until the
later of (i) the second (2nd) anniversary of the Second Closing Date, (ii) the
date on which SK ecoplant ceases to have the right to designate a director to
the Board pursuant to the Investor Agreement, and (iii) the date on which the SK
Parties beneficially own less than five percent (5.0%) of the shares of Common
Stock then issued and outstanding (the "Standstill Term").
Disposition Restrictions. The Investor Agreement provides that, for a period
ending on the second (2nd) anniversary of the Second Closing Date, the SK
Parties will be prohibited from disposing of any of the Purchased Securities (as
defined in the Investor Agreement).
Voting Obligations. Commensurate with the term of SK ecoplant's Board
representation, SK ecoplant will vote all of its eligible voting securities in
accordance with the recommendation of the majority of the Board, including the
election of the Board. SK ecoplant has agreed upon request of the Company to
execute and deliver an irrevocable proxy to the Company to vote all such voting
securities.
Preemptive Right Shares. After the Second Closing Date, if the Company proposes
to issue any New Securities (as defined in the Investor Agreement), SK ecoplant
shall have the right to purchase up to such number of New Securities as required
to maintain its fully-diluted ownership on the same terms and conditions that
are applicable to such New Securities.
The foregoing description of the Purchase Agreement and the Investor Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by, the full text of the Purchase Agreement (including the form of
Investor Agreement attached as an exhibit thereto), which is filed herewith as
Exhibit 10.1 and incorporated herein by reference. The foregoing summary
description of the material terms of the JVA Amendment and PDA Restatement does
not purport to be complete and are qualified in their entirety by reference to
the text of each agreement, copies of which the Company expects to file as an
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on
Form 8-K regarding the Purchase Agreement and the Initial Investment is
incorporated herein by reference. The Company will offer and sell the RCPS in
reliance on the exemption from registration provided by Section 4(a)(2) of the
Securities Act of 1933, as amended (the "Securities Act"). The Company will rely
on this exemption from registration based in part on representations made by SK
ecoplant in the Purchase Agreement.
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Item 7.01 Regulation FD Disclosure.
On October 25, 2021, the Company issued a press release with respect to the
strategic partnership, the Initial Investment and the Second Investment. A copy
of the press release is furnished herewith as Exhibit 99.1.
The information included in this Item 7.01 and Exhibit 99.1 of this Current
Report are not deemed to be "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), nor shall this item and
Exhibit 99.1 be incorporated by reference into the Company's filings under the
Securities Act or the Exchange Act, except as expressly set forth by specific
reference in such future filing.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the federal securities laws. These statements include, but are not
limited to, statements regarding a strategic partnership with the SK ecoplant,
including the Initial Investment, Second Investment, the JVA Amendment and the
PDA Restatement. These forward-looking statements are made as of the date hereof
and are based on current expectations, estimates, forecasts and projections as
well as the beliefs and assumptions of management. Forward-looking statements
are subject to a number of risks and uncertainties, many of which involve
factors or circumstances that are beyond the Company's control. The Company's
actual results could differ materially from those stated or implied in
forward-looking statements due to a number of factors, including, but not
limited to, the risks related to the satisfaction of the conditions to the First
Closing or the Second Closing, the success of the JVA Amendment or the PDA
Restatement, the risks related to the ability of the existing partnership to
fortify the companies market leadership in power generation and to establish
market leadership in the hydrogen economy, continued incentives in the South
Korean market, the timing and pace of adoption of hydrogen for stationary power,
and the risks related to market risks and uncertainties generally, including the
impact of any natural disasters or public health emergencies such as the
COVID-19 pandemic, and other risks and uncertainties detailed in the Company's
SEC filings from time to time. More information on potential factors that may
impact the Company's business are set forth in the Company's periodic reports
filed with the SEC, including its Annual Report on Form 10-K for the year ended
December 31, 2020 and its most recently filed Quarterly Report on Form 10-Q for
the quarter ended on June 30, 2021 as filed with the SEC on August 6, 2021, as
well as subsequent reports filed with or furnished to the SEC from time to time.
The Company assumes no obligation to, and does not currently intend to, update
any such forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Securities Purchase Agreement, dated October 23, 2021, by and among
the Company and SK ecoplant Co., Ltd.
99.1 Press release dated October 25, 2021
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