NEOV 8-K
NeoVolta Inc. (NEOV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously disclosed in the Current Report on Form 8-K filed on January 13, 2026, NeoVolta Inc., a Nevada corporation (“NeoVolta”), NeoVolta Power, LLC, NPJV MANAGER LLC (“NMC”), and Can Current Corporation (“CCC”) entered into the Operating Agreement of NeoVolta Power, LLC (the “Original Operating Agreement”) and a Contribution Agreement (the “Original Contribution Agreement”) in connection with the formation of NeoVolta Power, LLC, a Delaware limited liability company (“NeoVolta Power”), established for the purpose of jointly owning and operating a domestic battery energy storage manufacturing facility in the State of Georgia.
Amended and Restated Operating Agreement
On April 15, 2026, NeoVolta Power, NeoVolta, and CCC entered into an Amended and Restated Operating Agreement (the “A&R Operating Agreement”), which amends and restates the Original Operating Agreement in its entirety. The A&R Operating Agreement was entered into to, among other things, account for the removal of NMC as a member of NeoVolta Power. The principal changes effected by the A&R Operating Agreement include the following: (i) NMC has been removed as a party and as a member of NeoVolta Power; (ii) the number of authorized Class A Units has been increased from sixty (60) to eighty (80) Class A Units issuable to NeoVolta, and the number of authorized Class B Units has been reduced from forty (40) (previously allocated twenty (20) each to NMC and CCC) to twenty (20) Class B Units issuable solely to CCC; (iii) the Board of Managers has been reduced from five (5) managers to three (3) managers, all of whom are designated by NeoVolta, and CCC has been granted the right, but not the obligation, to designate up to two (2) non-voting observers to attend all meetings of the Board of Managers; (iv) the Class B Units issued to CCC are now expressly issued in consideration for certain technical services to be provided by CCC pursuant to a Technical Services Agreement.
First Amendment to Contribution Agreement
On April 15, 2026, NeoVolta Power, NeoVolta, NMC, and CCC entered into a First Amendment to Contribution Agreement (the “First Amendment”), which amends the Original Contribution Agreement to remove NMC as a party thereto.
Asset Purchase Agreement
On April 15, 2026, NeoVolta Power, as buyer, and CCC, as seller, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) pursuant to which CCC agreed to sell, convey, assign, transfer, and deliver to NeoVolta Power certain manufacturing equipment used to manufacture battery energy storage systems (the “Purchased Assets”). The aggregate purchase price consists of (i) an equipment price of $9,000,000, payable in milestone-based installments ($2,000,000 upon shipment of equipment, $3,000,000 upon delivery to the facility, and $4,000,000 upon completion of commissioning), and (ii) the excess portion of corresponding U.S. tariffs, customs duties, and related customs bond expenses arising from the import of the equipment. Title to the equipment transfers to NeoVolta Power upon CCC’s receipt of the full purchase price. The Asset Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions for a transaction of this type.
Management Services Agreement
On April 20, 2026, NeoVolta and PotiSedge Technology Pte Ltd., a Singapore Private Limited (“Potisedge”), entered into a Management Services Agreement (the “Management Services Agreement”) pursuant to which Potisedge agreed to provide sales and marketing coordination services to NeoVolta in connection with NeoVolta’s commercial and industrial battery energy storage business. As consideration for the services, NeoVolta agreed to issue to Potisedge 1,200,000 shares of NeoVolta’s common stock (the “Share Grant”). The Share Grant vests in four (4) equal semi-annual installments of 300,000 shares (25%) on each of the 6-month, 12-month, 18-month, and 24-month anniversaries of the effective date. Unvested shares are subject to transfer restrictions and a company repurchase right at $0.001 per share upon forfeiture. Potisedge retains full voting and dividend rights on unvested shares. The Management Services Agreement has an initial term ending on the 24-month anniversary of the effective date and may only be extended by written agreement of the parties. Either party may terminate the agreement for material breach (subject to a 30-day cure period) or insolvency. In the event of termination for material breach by Potisedge, unvested shares are forfeited; in the event of termination for material breach by NeoVolta, all unvested shares automatically vest.
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Copies of the A&R Operating Agreement, the First Amendment to Contribution Agreement, the Asset Purchase Agreement, and the Management Services Agreement are filed with this Current Report on Form 8-K as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, and are incorporated herein by reference. The foregoing descriptions of such agreements are qualified in their entirety by reference to the full text thereof.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth in Item 1.01 above regarding the Management Services Agreement is incorporated herein by reference.
The shares of common stock underlying the Share Grant were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Potisedge represented that it is an “accredited investor” as defined in Rule 501(a) of Regulation D.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. | Exhibit Description | |
| 10.1 | Amended and Restated Operating Agreement of NeoVolta Power, LLC, dated April 15, 2026 | |
| 10.2 | First Amendment to Contribution Agreement, dated April 15, 2026 | |
| 10.3 | Asset Purchase Agreement between Can Current Corporation and NeoVolta Power, LLC, dated April 15, 2026 | |
| 10.4 | Management Services Agreement between NeoVolta Inc. and Potisedge Technology Pte Ltd., dated April 20, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NeoVolta, Inc. | ||
| By: | /s/ Steve Bond | |
| Steve Bond | ||
| Chief Financial Officer | ||
Dated: April 21, 2026
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Exhibit 10.1
AMENDED & RESTATED OPERATING AGREEMENT
among
NEOVOLTA POWER, LLC
and
THE MEMBERS NAMED HEREIN
dated as of
April 15th, 2026
THE SECURITIES (MEMBERSHIP INTERESTS) REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR REGISTERED OR QUALIFIED UNDER ANY SECURITIES OR BLUE SKY LAWS OF ANY STATE OR JURISDICTION. THEREFORE, THE SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD TO THE PROPOSED TRANSFER UNLESS THE PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION OR QUALIFICATION. THE COMPANY MAY REQUEST AN OPINION OF LEGAL COUNSEL ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT OR APPLICABLE BLUE SKY LAWS IS NOT REQUIRED IN CONNECTION WITH THE PROPOSED TRANSFER.
AMENDED & RESTATED OPERATING AGREEMENT
This Amended & Restated Operating Agreement (“Agreement”) of NeoVolta Power, LLC, a Delaware limited liability company (the “Company”), is entered into as of April 15th, 2026, by and among the Company, NeoVolta Inc., a Nevada corporation (“NeoVolta”), and Can Current Corporation, a Delaware corporation (“CCC”). For purposes of this Agreement, each of the Company, NeoVolta and CCC shall be referred to as a “Party” and, collectively, the “Parties”.
RECITALS
WHEREAS, the Company was formed under the laws of the State of Delaware by the filing of a Certificate of Formation with the Secretary of State of Delaware (the “Secretary of State”) on November 25, 2025 (the “Certificate of Formation”) for the purpose set forth in Section 2.05 of this Agreement;
WHEREAS, the Company has previously been governed by the Operating Agreement (the “Original Operating Agreement”) among the Company, NeoVolta, NPJV MANAGER LLC (“NMC”), and CCC, dated as of January 13, 2026 (“Effective Date”);
WHEREAS, pursuant to a Contribution Agreement, dated as of January 13, 2026, by and among the Parties, as amended by that certain First Amendment to Contribution Agreement, dated as of the date hereof (the “Contribution Agreement”), NeoVolta CCC each agreed to contribute, or cause to be contributed, to the Company (as defined in the Contribution Agreement) certain assets or services in exchange for Membership Interests; and
WHEREAS, NeoVolta and CCC wish to amend and restate the Original Operating Agreement to, among other things, account for NMC being removed as a member of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions.
For purposes of this Agreement, the following terms shall have the meanings set forth below. Defined terms include both the singular and plural forms and any gender, as the context requires.
“Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:
(a) crediting to such Capital Account any amount which such Member is obligated to restore or is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1), and 1.704-2(i); and
(b) debiting to such Capital Account the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.
“Agreement” means this Amended & Restated Operating Agreement of the Company, as amended, modified, or supplemented from time to time.
“Applicable Law” means all applicable provisions of (a) constitutions, treaties, statutes, laws (including the common law), rules, regulations, decrees, ordinances, codes, proclamations, declarations, or orders of any Governmental Authority; (b) any consents or approvals of any Governmental Authority; and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments, awards, decrees of, or agreements with, any Governmental Authority.
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“Article” or “Section” means the corresponding article or section of this Agreement.
“Available Cash” means all cash of the Company available for distribution after payment of Company obligations then due and payable and after establishing reasonable reserves as determined by the Board in accordance with this Agreement.
“Board” has the meaning set forth in Section 7.01.
“Book Value” means, with respect to any Company asset, the adjusted basis of such asset for federal income tax purposes, except as follows:
(a) the initial Book Value of any Company asset contributed by a Member to the Company shall be the gross Fair Market Value of such Company asset as of the date of such contribution;
(b) immediately prior to the distribution by the Company of any Company asset to a Member, the Book Value of such asset shall be adjusted to its gross Fair Market Value as of the date of such distribution;
(c) the Book Value of all Company assets shall be adjusted to equal their respective gross Fair Market Values, as determined by the Board, as of the following times:
(i) the acquisition of an additional Membership Interest in the Company by a new or existing Member in consideration of a Capital Contribution of more than a de minimis amount;
(ii) the distribution by the Company to a Member of more than a de minimis amount of property (other than cash) as consideration for all or a part of such Member’s Membership Interest in the Company; and
(iii) the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g);
(iv) provided, that an adjustment pursuant to clauses (i) or (ii) above need not be made if the Board reasonably determines that such adjustment is not necessary or appropriate to reflect the relative economic interests of the Members and that the absence of such adjustment does not adversely and disproportionately affect any Member;
(d) the Book Value of each Company asset shall be increased or decreased, as the case may be, to reflect any adjustments to the adjusted tax basis of such Company asset pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining capital account balances pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided, that Book Values shall not be adjusted pursuant to this paragraph (d) to the extent that an adjustment pursuant to paragraph (c) above is made in conjunction with a transaction that would otherwise result in an adjustment pursuant to this paragraph (d); and
(e) if the Book Value of a Company asset has been determined pursuant to paragraph (a) or adjusted pursuant to paragraphs (c) or (d) above, such Book Value shall thereafter be adjusted to reflect the book depreciation taken into account with respect to such Company asset for purposes of computing Net Income and Net Losses.
“Budget” has the meaning set forth in Section 7.13(a).
“Business” has the meaning set forth in Section 2.05.
“Business Days” means any day other than a Saturday, a Sunday or any other day on which banks are authorized to be closed in New York, New York.
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“Call Option” has the meaning set forth in Section 9.03.
“Capital Account” means, with respect to any Member, the capital account maintained for such Member in accordance with the principles of Treasury Regulations Section 1.704-1(b)(2)(iv).
“Capital Contributions” mean, for any Member, the total amount of cash and cash equivalents and the Fair Market Value of any property contributed to the Company by such Member (as such Fair Market Value is determined for capital account purposes).
“Change of Control” means: (a) the sale of all or substantially all of the consolidated assets of the Company to a third party purchaser; (b) a sale resulting in no less than a majority of the Class A Units on a Fully Diluted Basis being held by a third party purchaser; or (c) a merger, consolidation, recapitalization, or reorganization of the Company with or into a third party purchaser that results in the inability of the Members to designate or elect a majority of the managers (or the board of directors (or its equivalent)) of the resulting entity or its parent company.
“Change of Control” has the meaning set forth in Section 10.02.
“Class A Interests” means a Membership Interest issued pursuant to Section 3.02 of this Agreement that entitles the holder thereof to receive the distributions of cash and property, allocations of profits and losses and other rights that are accorded holders of a Class A Interest under this Agreement.
“Class A Unit” means a Unit representing a Class A Interest having the rights, preferences and designations provided for such class in this Agreement.
“Class B Interests” means the Membership Interest issued pursuant to Section 3.03 of this Agreement, which entitles the holder thereof to receive distributions of cash and property, allocations of profits and losses and other rights that are accorded holders of a Class B Interest under this Agreement.
“Class B Liquidation Value” means, as of the date of determination and with respect to the relevant new Class B Interests to be issued, the aggregate amount that would be distributed to the Members if, immediately prior to the issuance of the relevant new Class B Interests, the Company sold all of its assets for Fair Market Value and immediately liquidated, the Company’s debts and liabilities were satisfied, and the proceeds of the liquidation were distributed pursuant to Section 12.03(c).
“Class B Unit” means a Unit representing a Class B Interest having the rights, preferences and designations provided for such class in this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” means NeoVolta Power, LLC.
“Company Minimum Gain” means “partnership minimum gain” as defined in Treasury Regulations Section 1.704-2(b)(2), substituting the term “Company” for the term “partnership” as the context requires.
“Contribution Agreement” has the meaning set forth in the Recitals.
“Defaulting Class A Member” has the meaning set forth in Section 3.01(d).
“Defaulting Member” means any Member determined to be in default under this Agreement, including for breach of its obligations, failure to perform required actions, or violation of FEOC Requirements, and subject to the consequences set forth in this Agreement.
“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101 et seq., as amended from time to time.
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“Distribution” means any distribution made by the Company to a Member in accordance with ARTICLE VI.
“Fair Market Value” means, with respect to any asset or property, the price at which such asset or property would be sold in an arm’s-length transaction between an informed and willing buyer and an informed and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of all relevant facts and circumstances, as determined in good faith by the Board.
“Fiscal Year” means the calendar year, unless the Company is required to have a taxable year other than the calendar year, in which case Fiscal Year shall be the period that conforms to its taxable year.
“Foreign Entity of Concern Requirements” or “FEOC Requirements” means Section 7701(a)(51) and (52) of the Code and any Treasury Regulations or guidance issued by the U.S. Department of Treasury or Internal Revenue Service.
“Forfeiture Allocations” has the meaning set forth in Section 5.02(e).
“Fully Diluted Basis” means, as of any date of determination, (a) with respect to all the Units, all issued and outstanding Units of the Company, and all Units issuable upon the exercise of any outstanding Unit Equivalents as of such date, whether or not such Unit Equivalent is at the time exercisable, or (b) with respect to any specified type, class, or series of Units, all issued and outstanding Units designated as such type, class, or series, and all such designated Units issuable upon the exercise of any outstanding Unit Equivalents as of such date, whether or not such Unit Equivalent is at the time exercisable.
“Governmental Authority” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations, or orders of such organization or authority have the force of law), or any arbitrator, court, or tribunal of competent jurisdiction.
“Initial Budget” has the meaning set forth in Section 7.13(a).
“JV Agreement” means any agreement entered into by any Member with respect to the formation, funding, construction, or operation of the Business, including any contribution agreement and any ancillary agreement.
“Liquidator” has the meaning set forth in Section 12.03(a).
“Losses” has the meaning set forth in Section 8.03(a).
“Manager” has the meaning set forth in Section 7.01.
“Managers Schedule” has the meaning set forth in Section 7.04(e).
“Member” means any Person admitted as a member of the Company in accordance with Section 4.01, and any successor or Permitted Transferee admitted in accordance with this Agreement.
“Member Indemnitors” has the meaning set forth in Section 8.03(e).
“Member Nonrecourse Debt” means “partner nonrecourse debt” as defined in Treasury Regulations Section 1.704-2(b)(4), substituting the term “Company” for the term “partnership” and the term “Member” for the term “partner” as the context requires.
“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i)(3).
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“Member Nonrecourse Deduction” means “partner nonrecourse deduction” as defined in Treasury Regulations Section 1.704-2(i), substituting the term “Member” for the term “partner” as the context requires.
“Membership Interest” means a Member’s entire interest in the Company, including such Member’s economic interest, governance rights, and Percentage Interest.
“Net Income” and “Net Loss” mean, for each Fiscal Year or other period specified in this Agreement, an amount equal to the Company’s taxable income or taxable loss, or particular items thereof, determined in accordance with Code Section 703(a) (where, for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or taxable loss), but with the following adjustments:
(a) any income realized by the Company that is exempt from federal income taxation, as described in Code Section 705(a)(1)(B), shall be added to such taxable income or taxable loss, notwithstanding that such income is not includable in gross income;
(b) any expenditures of the Company described in Code Section 705(a)(2)(B), including any items treated under Treasury Regulations Section 1.704-1(b)(2)(iv)(i) as items described in Code Section 705(a)(2)(B), shall be subtracted from such taxable income or taxable loss, notwithstanding that such expenditures are not deductible for federal income tax purposes;
(c) any gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property so disposed, notwithstanding that the adjusted tax basis of such property differs from its Book Value;
(d) any items of depreciation, amortization, and other cost recovery deductions with respect to Company property having a Book Value that differs from its adjusted tax basis shall be computed by reference to the property’s Book Value (as adjusted for Book Depreciation) in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g);
(e) if the Book Value of any Company property is adjusted as provided in the definition of Book Value, then the amount of such adjustment shall be treated as an item of gain or loss and included in the computation of such taxable income or taxable loss; and
(f) to the extent an adjustment to the adjusted tax basis of any Company property pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis).
“Nonrecourse Deduction” means any deduction attributable to a Nonrecourse Liability, as defined in Treasury Regulations §1.704-2(b)(1).
“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(3).
“Observer” has the meaning set forth in Section 7.02(b).
“Participating Tag-Along Member” has the meaning set forth in Section 9.04(c)(i).
“Party” has the meaning set forth in the first paragraph of this Agreement.
“Percentage Interest” means, with respect to any Member, the percentage interest set forth for such Member on Schedule A, as amended from time to time.
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“Permitted Transferee” means an Affiliate transferee permitted under Section 9.02.
“Person” means any individual, corporation, partnership, limited liability company, trust, association, unincorporated organization, or Governmental Authority.
“PFE” means a prohibited foreign entity, as such term is defined in Code Section 7701(a)(51)(A)(i).
“Profits Interest” has the meaning set forth in Section 3.03(d).
“Profits Interest Hurdle” means an amount set forth in each Service Agreement reflecting the Class B Liquidation Value of the relevant Class B Units at the time the Units are issued.
“Proposed Transferee” has the meaning set forth in Section 9.04(a).
“Restricted Class B Units” has the meaning set forth in Section 3.03(b)(i).
“Sale Notice” has the meaning set forth in Section 9.04(b).
“Selling Member” has the meaning set forth in Section 9.04(a).
“Specified Indemnified Persons” has the meaning set forth in Section 8.03(e).
“Subsidiary” means, with respect to any Person, any other Person of which a majority of the outstanding shares or other equity interests having the power to vote for directors or comparable managers are owned, directly or indirectly, by the first Person.
“Tag-Along Member” has the meaning set forth in Section 9.04(a).
“Tag-Along Notice” has the meaning set forth in Section 9.04(c)(i).
“Tag-Along Period” has the meaning set forth in Section 9.04(c)(i).
“Tag-Along Sale” has the meaning set forth in Section 9.04(a).
“Technical Services Agreement” has the meaning set forth in Section 3.03(a).
“Transfer” means any sale, assignment, transfer, exchange, or other disposition of a Membership Interest, whether direct or indirect, voluntary or involuntary.
“Treasury Regulations” means the regulations promulgated under the Code by the U.S. Department of the Treasury.
“Unit Equivalents” means any security or obligation that is by its terms, directly or indirectly, convertible into, exchangeable, or exercisable for Units, and any option, warrant, or other right to subscribe for, purchase, or acquire Units.
“Units” means a unit representing a fractional part of the Membership Interests of the Members and shall include all types and classes of Units including the Class A Interests and the Class B Interests; provided, that any type or class of Unit shall have the privileges, preference, duties, liabilities, obligations, and rights set forth in this Agreement and the Membership Interests represented by such type or class or series of Unit shall be determined in accordance with such privileges, preference, duties, liabilities, obligations, and rights.
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“Unrestricted Class B Units” has the meaning set forth in Section 3.03(b)(ii).
Section 1.02 Interpretation. In this Agreement:
(a) The singular shall include the plural and the masculine shall include the feminine and neuter as the context requires.
(b) References to “Articles,” “Sections,” “Exhibits” or “Annexes” shall be to articles, sections, exhibits or annexes of this Agreement.
(c) Unless otherwise expressly specified, any agreement, contract, statute or law, or document defined or referred to herein (including in any exhibit, schedule or annex hereto) shall mean such agreement, contract, statute or law, or document as the same may be amended, supplemented or otherwise modified from time to time in accordance with this Agreement and the Company LLC Agreement, as applicable.
(d) References to “days” shall mean calendar days, unless otherwise indicated.
(e) The words “herein,” “hereof” and “hereunder” shall refer to this Agreement as a whole and not to any particular section or subsection of this Agreement; the words “include,” “includes” or “including” shall mean “including, but not limited to.”
ARTICLE
II
Organization
Section 2.01 Formation.
(a) The Company was formed on November 25, 2025, pursuant to the provisions of the Delaware Act, upon the filing of the Certificate of Formation with the Secretary of State.
(b) This Agreement shall constitute the “limited liability company agreement” (as that term is used in the Delaware Act) of the Company. The rights, powers, duties, obligations, and liabilities of the Members shall be determined pursuant to the Delaware Act and this Agreement. To the extent that the rights, powers, duties, obligations, and liabilities of any Member are different by reason of any provision of this Agreement than they would be under the Delaware Act in the absence of such provision, this Agreement shall, to the extent permitted by the Delaware Act, control.
Section 2.02 Name. The name of the Company is “NeoVolta Power, LLC”.
Section 2.03 Principal Office. The principal office of the Company is located at 595 Henry D. Robinson Blvd., Pendergrass, Georgia 30567, or such other place as may from time to time be determined by the Board. The Board shall give prompt notice of any such change to each of the Members.
Section 2.04 Registered Office; Registered Agent.
(a) The registered office of the Company shall be the office of the initial registered agent named in the Certificate of Formation, or such other office (which need not be a place of business of the Company) as the Board may designate from time to time in the manner provided by the Delaware Act and Applicable Law.
(b) The registered agent for service of process on the Company in the State of Delaware shall be the initial registered agent named in the Certificate of Formation, or such other Person or Persons as the Board may designate from time to time in the manner provided by the Delaware Act and Applicable Law.
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Section 2.05 Purpose; Powers.
(a) The purpose of the Company is to engage in (i) the operation of a battery energy storage manufacturing facility (the “Business”) (ii) any and all lawful activities necessary or incidental thereto, and (iii) ensuring that all Company operations, procurement, software, firmware, supply chain decisions, and manufacturing activities comply with Code Section 45X and Section 48E, specifically and limited to ensuring that the battery modules and energy storage systems produced by the Company comply with the FEOC Requirements.
(b) The Company shall have all the powers necessary or convenient to carry out the purpose for which it is formed, including the powers granted by the Delaware Act.
Section 2.06 Term. The term of the Company (“Term”) commenced on the date that the Certificate of Formation was filed with the Secretary of State and shall continue in existence perpetually until the Company is dissolved in accordance with the provisions of this Agreement.
Section 2.07 No State-Law Partnership. The Members intend that the Company shall not be a partnership or common law joint venture, and that no Member, Manager, or Officer of the Company shall be a partner or joint venturer of any other Member, Manager, or Officer of the Company, for any purposes other than as set forth in Section 11.03.
ARTICLE
III
Capital Contributions; Capital Accounts
Section 3.01 Initial Capital Contributions.
(a) The initial Capital Contributions of the Members shall be made pursuant to, and in accordance with, the terms and timing set forth in the Contribution Agreement and this Agreement. Each Member’s obligation to make its required Capital Contributions is governed exclusively by the Contribution Agreement, and each such Capital Contribution shall entitle the contributing Member to the Units and Percentage Interest set forth opposite such Member’s name on Schedule A, as updated from time to time in accordance with this Agreement. The dates set forth for Capital Contributions are intended as target dates, and a delay in funding by any Member shall not, by itself, constitute a default under this Agreement, provided that CCC shall have the right to seek the remedies available under Section 3.01(d).
(b) A Member that fails to timely complete any portion of its required Capital Contributions under the Contribution Agreement shall be deemed a Defaulting Member for all purposes of this Agreement, including, without limitation, Section 7.06 (voting rights), Section 9.01 (Transfer restrictions), and any other provision relating to the rights or limitations of a Defaulting Member.
(c) The Board shall update Schedule A to reflect (i) the Percentage Interests resulting from each Member’s Capital Contributions made pursuant to the Contribution Agreement, (ii) the admission of any new or existing Member upon a permitted Transfer, and (iii) any change of address or other administrative modifications reasonably necessary to maintain accurate records.
(d) In the event that any Member holding Class A Units fails to timely make all or any portion of its required Capital Contributions (any such Member, a “Defaulting Class A Member”) in accordance with the Contribution Agreement and this Agreement, CCC shall have the right, independently and without the need for Board or Member approval, to seek and cause the Company to issue Class A Units and admit as a Member one or more Persons not described in Section 9.01(b)(vii) in exchange for contributions of capital in an amount that is at least equal to the remaining Capital Contributions of such Defaulting Class A Member. The amount of Class A Units issued to any such additional Member shall be equal to that amount required to cause the proportion of total Class A Units held by such additional Member to be equal to the proportion of total Capital Contributions made by such additional Member.
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Section 3.02 Authorization of Class A Units. The Company is hereby authorized to issue eighty (80) Class A Units to NeoVolta. In addition, the Company may issue additional Class A Units from time to time in accordance with Section 3.01(d).
Section 3.03 Authorization of Class B Units.
(a) The Company is hereby authorized to issue twenty (20) Class B Units to CCC. As of the date hereof, twenty (20) Class B Units are issued and outstanding in the amounts set forth on Schedule A opposite the applicable Member’s name.
(i) The Company and each of the Members hereby expressly acknowledge and agree that those Class B Units issued to CCC are issued in consideration for certain technical services to be provided by CCC pursuant to that certain Technical Services Agreement by and between the Company and CCC, dated as of the date hereof (such writing, the “Technical Services Agreement”).
(ii) Each Service Agreement shall include such terms, conditions, rights, and obligations as may be determined by the Board, in its sole discretion, consistent with the terms herein.
(b) The Board shall establish such vesting criteria for the Class B Units as it determines in its discretion and shall include such vesting criteria in the Incentive Plan and/or the applicable Service Agreement for any grant of Class B Units. As of the date hereof, none of the issued and outstanding Class B Units shall be deemed vested. As used in this Agreement:
(i) any Class B Units that have not vested pursuant to the terms of the Incentive Plan and any associated Service Agreement are referred to as “Restricted Class B Units”; and
(ii) any Class B Units that have vested pursuant to the terms of the Incentive Plan and any associated Service Agreement are referred to as “Unrestricted Class B Units”.
(c) Immediately prior to each subsequent issuance of Class B Units following the initial issuance described in the second sentence of Section 3.02, the Board shall determine in good faith the Class B Liquidation Value. In each Service Agreement that the Company enters into, the Board shall include an appropriate Profits Interest Hurdle for such Class B Units on the basis of the Class B Liquidation Value immediately prior to the issuance of such Class B Units.
(d) The Company and each Member hereby acknowledge and agree that all Class B Units constitute a “profits interest” in the Company within the meaning of Rev. Proc. 93-27 (a “Profits Interest”), and that any and all Class B Units received by a Member are received in exchange for the provision of services by such Member to or for the benefit of the Company in a service provider capacity or in anticipation of becoming a service provider. The Company and each Member who receives Class B Units hereby agree to comply with the provisions of Rev. Proc. 2001-43, and neither the Company nor any Member who receives Class B Units shall perform any act or take any position inconsistent with the application of Rev. Proc. 2001-43 or any future Internal Revenue Service guidance or other Governmental Authority that supplements or supersedes the foregoing Revenue Procedures.
(e) Class B Units shall receive the following tax treatment:
(i) The Company and each Member who receives Class B Units shall treat such Member as the owner of such Class B Units from the date of their receipt, and the Member receiving such Class B Units shall take into account their distributive share of Net Income, Net Loss, income, gain, loss, and deduction associated with the Class B Units in computing such Member’s income tax liability for the entire period during which such Member holds the Class B Units.
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(ii) Each Member that receives Class B Units shall make a timely and effective election under Code Section 83(b) with respect to such Class B Units and shall promptly provide a copy to the Company. Except as otherwise determined by the Board, both the Company and all Members shall (A) treat such Class B Units as outstanding for tax purposes, (B) treat such Member as a partner for tax purposes with respect to such Class B Units and (C) file all tax returns and reports consistently with the foregoing. Neither the Company nor any of its Members shall deduct any amount (as wages, compensation, or otherwise) with respect to the receipt of such Class B Units for federal income tax purposes.
(iii) In accordance with the finally promulgated successor rules to Proposed Treasury Regulations Section 1.83-3(l) and IRS Notice 2005-43, each Member, by executing this Agreement, authorizes and directs the Company to elect a safe harbor under which the Fair Market Value of any Class B Units issued after the effective date of such Proposed Treasury Regulations (or other guidance) will be treated as equal to the liquidation value (within the meaning of the Proposed Regulations or successor rules) of the Class B Units as of the date of issuance of such Class B Units. In the event that the Company makes a safe harbor election as described in the preceding sentence, each Member hereby agrees to comply with all safe harbor requirements with respect to Transfers of Units while the safe harbor election remains effective.
(f) Except as expressly conferred by law or as otherwise set forth under this Agreement, the holders of Class B Units shall have no voting rights. Notwithstanding the foregoing, so long as any Class B Units remain outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the Class B Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of this Agreement applicable to Class B Units so as to materially and adversely affect any right or privilege of the Class B Units or the holders of Class B Units as such.
(g) Any Class B Units that are forfeited shall be treated as owned by the holders of Class A Units pro rata in accordance with their relative Percentage Interests.
Section 3.04 Additional Capital Contributions. Except as set forth in Section 3.07 or this Section 3.04, no Member shall make additional Capital Contributions or make loans to the Company without the consent of each other Member. Notwithstanding anything to the contrary, NeoVolta shall be required to make additional Capital Contributions in an amount up to $33,000,000 no later than June 30, 2027. Except for the foregoing, no Member shall be required or permitted to make additional Capital Contributions or make loans to the Company without the consent of the Board. A failure by any Member to make a required Capital Contribution in accordance with the schedule set forth in the Contribution Agreement shall be subject to the remedies set forth in Section 3.01(d).
Section 3.05 Maintenance of Capital Accounts. The Company shall establish and maintain for each Member a separate Capital Account on its books and records in accordance with this Section 3.05. Each Capital Account shall be established and maintained in accordance with the following provisions:
(a) Each Member’s Capital Account shall be increased by the amount of:
(i) such Member’s Capital Contributions, including such Member’s initial Capital Contribution and any additional Capital Contributions;
(ii) any Net Income or other item of income or gain allocated to such Member pursuant to ARTICLE V; and
(iii) any liabilities of the Company that are assumed by such Member or secured by any property distributed to such Member.
(b) Each Member’s Capital Account shall be decreased by:
(i) the cash amount or Book Value of any property distributed to such Member pursuant to ARTICLE VI and Section 12.03(c);
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(ii) the amount of any Net Loss or other item of loss or deduction allocated to such Member pursuant to ARTICLE V; and
(iii) the amount of any liabilities of such Member assumed by the Company or that are secured by any property contributed by such Member to the Company.
Section 3.06 Succession Upon Transfer. In the event that any Membership Interest is Transferred in accordance with the terms of this Agreement, the Permitted Transferee shall succeed to the Capital Account of the Transferring Member to the extent it relates to the Transferred Membership Interest and, subject to Section 5.04, shall receive allocations and distributions pursuant to ARTICLE V, ARTICLE VI, and ARTICLE XII in respect of such Membership Interest.
Section 3.07 Negative Capital Accounts. In the event that any Member shall have a deficit balance in its Capital Account, such Member shall have no obligation, including during the Term or upon dissolution or liquidation of the Company, to restore such negative balance or make any Capital Contributions to the Company by reason thereof, except as may be required by Applicable Law or in respect of any negative balance resulting from a withdrawal of capital or dissolution in contravention of this Agreement.
Section 3.08 No Withdrawals from Capital Accounts. No Member shall be entitled to withdraw any part of its Capital Account or to receive any distribution from the Company, except as otherwise provided in this Agreement. No Member shall receive any interest, salary, management, or service fees, or drawing with respect to its Capital Contributions or its Capital Account, except as otherwise provided in this Agreement or any JV Agreement. The Capital Accounts are maintained for the sole purpose of allocating items of income, gain, loss, and deduction among the Members and shall have no effect on the amount of any distributions to any Members, in liquidation or otherwise.
Section 3.09 Loans From Members. Loans by any Member to the Company shall not be considered Capital Contributions and shall not affect the maintenance of such Member’s Capital Account, other than to the extent provided in Section 3.05(a)(iii), as applicable.
Section 3.10 Modifications. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations. Any determination to modify the manner in which the Capital Accounts are computed, or to authorize an increase or decrease to the Capital Accounts, in order to comply with such Treasury Regulations shall be made by the Board.
ARTICLE
IV
Members
Section 4.01 Admission of New Members.
(a) A new Member may be admitted from time to time in connection with a Transfer of a Membership Interest in accordance with this Agreement or the issuance of additional Class A Units in accordance with Section 3.01(d), in each case, subject to compliance with the provisions of ARTICLE IX and following compliance with the provisions of Section 4.01(b).
(b) In order for any Person not already a Member of the Company to be admitted as a Member, such Person shall have executed and delivered to the Company a written undertaking substantially in the form of the Joinder Agreement. Upon the amendment of Schedule A hereto and the satisfaction of any applicable conditions as may reasonably be deemed necessary by the Board to effect such admission, such Person shall be admitted as a Member and deemed listed as such on the books and records of the Company. The Board shall also adjust the Capital Accounts of the Members as necessary in accordance with Section 3.05 or Section 3.06.
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(c) Any Member that proposes to Transfer its Membership Interest shall: (i) be responsible for the payment of expenses incurred by such Member in connection with such Transfer, whether or not consummated; and (ii) except in connection with a Transfer pursuant to Section 9.02, reimburse the Company and the other Members for all reasonable and documented out-of-pocket expenses (including reasonable attorneys’ fees and expenses) incurred by or on behalf of the Company or such other Members in connection with such proposed Transfer, whether or not consummated.
Section 4.02 No Personal Liability. Except as otherwise provided in the Delaware Act, by Applicable Law, or expressly in this Agreement, no Member will be obligated personally for any debt, obligation, or liability of the Company or another Member, whether arising in contract, tort, or otherwise, solely by reason of being a Member.
Section 4.03 No Withdrawal. So long as a Member continues to hold any Membership Interest, such Member shall not have the ability to withdraw or resign as a Member prior to the dissolution and winding up of the Company and any such withdrawal or resignation or attempted withdrawal or resignation by a Member prior to the dissolution or winding up of the Company shall be null and void. A Member shall cease to be a Member as a result of (i) its bankruptcy, (ii) any other events specified in Section 18-304 of the Delaware Act, or (iii) such Member ceasing to own any Membership Interest in the Company.
Section 4.04 No Interest in Company Property. No real or personal property of the Company shall be deemed to be owned by any Member individually, but shall be owned by, and title shall be vested solely in, the Company. Without limiting the foregoing, each Member hereby irrevocably waives during the term of the Company any right that such Member may have to maintain any action for partition with respect to the property of the Company.
Section 4.05 Certification of Membership Interests.
(a) The Board may, but shall not be required to, issue certificates representing the Membership Interests held by the Members.
(b) If the Board issues certificates representing Membership Interests in accordance with Section 4.05(a), then, in addition to any other legend required by Applicable Law, all certificates representing issued and outstanding Membership Interests shall bear a legend substantially in the following form:
“THE MEMBERSHIP INTEREST REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO AN OPERATING AGREEMENT AMONG THE COMPANY AND ITS MEMBERS, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OF THE MEMBERSHIP INTEREST REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH OPERATING AGREEMENT.
THE MEMBERSHIP INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED EXCEPT PURSUANT TO (A) A REGISTRATION STATEMENT EFFECTIVE UNDER SUCH ACT AND LAWS OR (B) AN EXEMPTION FROM REGISTRATION THEREUNDER.”
ARTICLE
V
Allocations
Section 5.01 Allocation of Net Income and Net Loss. For each Fiscal Year (or portion thereof), after giving effect to the special allocations set forth in Section 5.02, Net Income and Net Loss of the Company shall be allocated among the Members pro rata in accordance with their Membership Interests. Notwithstanding the foregoing, Net Loss allocated to a Member shall not exceed the maximum amount of Net Loss that can be allocated to such Member without causing such Member to have an Adjusted Capital Account Deficit, unless all Members would have an Adjusted Capital Account Deficit. All such items in excess of the limitation set forth in the preceding sentence shall be allocated first, to Members who would not have an Adjusted Capital Account Deficit pro rata in proportion to their Capital Account balances, adjusted as provided in clauses (a) and (b) of the definition of “Adjusted Capital Account Deficit,” until no Member would be entitled to any further allocation, and thereafter to the Members in a manner determined by the Manager taking into account the relative economic interests of the Members of the Company.
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Section 5.02 Regulatory and Special Allocations. Notwithstanding the provisions of Section 5.01:
(a) If there is a net decrease in Company Minimum Gain (determined according to Treasury Regulations Section 1.704-2(d)(1)) during any Fiscal Year, each Member shall be specially allocated Net Income for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g). The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.02 is intended to comply with the “minimum gain chargeback” requirement in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
(b) Member Nonrecourse Deductions shall be allocated in the manner required by Treasury Regulations Section 1.704-2(i). Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during any Fiscal Year, each Member that has a share of such Member Nonrecourse Debt Minimum Gain shall be specially allocated Net Income for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to that Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain. Items to be allocated pursuant to this paragraph shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.02(b) is intended to comply with the “minimum gain chargeback” requirements in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(c) Nonrecourse Deductions shall be allocated to the Members in accordance with their Membership Interests.
(d) In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), Net Income shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit created by such adjustments, allocations, or distributions as quickly as possible. This Section 5.02(d) is intended to comply with the qualified income offset requirement in Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(e) Forfeiture Allocations. The Company and the Members acknowledge that allocations like those described in Proposed Treasury Regulations Section 1.704-1(b)(4)(xii)(c) (“Forfeiture Allocations”) result from the allocations of Net Income and Net Loss provided for in this Agreement. For the avoidance of doubt, the Company is entitled to make Forfeiture Allocations and, once required by applicable final or temporary guidance, allocations of Net Income and Net Loss will be made in accordance with Proposed Treasury Regulations Section 1.704-1(b)(4)(xii)(c) or any successor provision or guidance.
(f) The allocations set forth in paragraphs (a), (b), (c), (d) and (e) above (the “Regulatory Allocations”) are intended to comply with certain requirements of the Treasury Regulations under Code Section 704. Notwithstanding any other provisions of this ARTICLE V (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating Net Income and Net Losses among Members so that, to the extent possible, the net amount of such allocations of Net Income and Net Losses and other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to such Member if the Regulatory Allocations had not occurred.
Section 5.03 Tax Allocations.
(a) Subject to Section 5.03(b), Section 5.03(c), and Section 5.03(d), all income, gains, losses, and deductions of the Company shall be allocated, for federal, state, and local income tax purposes, among the Members in accordance with the allocation of such income, gains, losses, and deductions pursuant to Section 5.01 and Section 5.02, except that if any such allocation for tax purposes is not permitted by the Code or other Applicable Law, the Company’s subsequent income, gains, losses, and deductions shall be allocated among the Members for tax purposes, to the extent permitted by the Code and other Applicable Law, so as to reflect as nearly as possible the allocation set forth in Section 5.01 and Section 5.02.
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(b) Items of Company taxable income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code Section 704(c) and the traditional method with curative allocations of Treasury Regulations Section 1.704-3(c), so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Book Value.
(c) If the Book Value of any Company asset is adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) as provided in clause (c) of the definition of Book Value in Section 1.01, subsequent allocations of items of taxable income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c).
(d) Allocations of tax credit, tax credit recapture, and any items related thereto shall be allocated to the Members according to their interests in such items as determined by the Board taking into account the principles of Treasury Regulations Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 5.03 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Income, Net Losses, distributions, or other items pursuant to any provisions of this Agreement.
Section 5.04 Allocations in Respect of Transferred Membership Interests. In the event of a Transfer of a Membership Interest during any Fiscal Year made in compliance with the provisions of ARTICLE IX, Net Income, Net Losses, and other items of income, gain, loss, and deduction of the Company attributable to such Membership Interest for such Fiscal Year shall be determined using the interim closing of the books method.
ARTICLE
VI
Distributions
Section 6.01 General.
(a) Any Available Cash of the Company, after allowance for payment of all Company obligations then due and payable, including debt service and operating expenses, and such other reasonable reserves as the Board, acting in accordance with ARTICLE VII, may determine, shall be distributed to the Members, on at least an annual basis, pro rata in accordance with their respective Percentage Interests.
(b) Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any distribution to the Members if such distribution would violate Section 18-607 of the Delaware Act or other Applicable Law or if such distribution is prohibited by the Company’s then-applicable debt financing agreements.
Section 6.02 Tax Withholding; Withholding Advances.
(a) Each Member agrees to furnish the Company with any representations and forms as shall be reasonably requested by the Board to assist the Company in determining the extent of, and in fulfilling, any withholding obligations it may have under Applicable Law.
(b) The Company is hereby authorized at all times to make payments (“Withholding Advances”) with respect to each Member in amounts required to discharge any obligation of the Company (as determined by the Tax Matters Representative based on the advice of legal or tax counsel to the Company) to withhold or make payments to any federal, state, local, or foreign taxing authority (a “Taxing Authority”) with respect to any distribution or allocation by the Company of income or gain to such Member and to withhold the same from distributions to such Member. Any funds withheld from a distribution by reason of this Section 6.02(b) shall nonetheless be deemed distributed to the Member in question for all purposes under this Agreement.
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(c) Any Withholding Advance made by the prime rate as published in the Wall Street Journal on the date of payment (or if not published on such date, the most recent date prior thereto on which published) plus two percent (2.0%) per annum (the “Company Interest Rate”):
(i) be promptly repaid to the Company by the Member on whose behalf the Withholding Advance was made (which repayment by the Member shall not constitute a Capital Contribution, but shall credit the Member’s Capital Account if the Board shall have initially charged the amount of the Withholding Advance to the Capital Account); or
(ii) with the consent of the Board (not including, for purposes of such vote, any Managers designated by the Member on whose behalf the Withholding Advance has been made), be repaid by reducing the amount of the next succeeding distribution or distributions to be made to such Member (which reduction amount shall be deemed to have been distributed to the Member, but which shall not further reduce the Member’s Capital Account if the Board shall have initially charged the amount of the Withholding Advance to the Capital Account).
Interest shall cease to accrue from the time the Member on whose behalf the Withholding Advance was made repays such Withholding Advance (and all accrued interest) by either method of repayment described above.
(d) Each Member hereby agrees to indemnify and hold harmless the Company and the other Members from and against any liability with respect to taxes, interest, or penalties that may be asserted by reason of the Company’s failure to deduct and withhold tax on amounts distributable or allocable to such Member. The Company may pursue and enforce all rights and remedies it may have against each Member under this Section 6.02, including bringing a lawsuit to collect repayment with interest of any Withholding Advances.
(e) Neither the Company nor any Manager shall be liable for any excess taxes withheld in respect of any distribution or allocation of income or gain to a Member. In the event of an excess withholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Taxing Authority.
(f) The provisions of this Section 6.02 and the obligations of a Member pursuant to Section 6.02 shall survive the termination, dissolution, liquidation, and winding up of the Company and the withdrawal of such Member from the Company or Transfer of its Membership Interest.
Section 6.03 Distributions in Kind. No Member has the right to demand or receive property other than cash in payment for its share of any distribution made in accordance with this Agreement.
ARTICLE
VII
Management
Section 7.01 Establishment of the Board. A board of managers of the Company (the “Board”) is hereby established and shall be comprised of natural Persons (each such Person, a “Manager”) who shall be designated in accordance with the provisions of Section 7.02 and constitute the “managers” (as that term is defined the Delaware Act) of the Company. The business and affairs of the Company shall be managed, operated, and controlled by or under the direction of the Board, and the Board shall have, and is hereby granted, the full, complete, and exclusive power, authority, and discretion for, on behalf of, and in the name of the Company, to take such actions as it may in its sole discretion deem necessary or advisable to carry out any and all of the objectives and purposes of the Company, subject only to the terms of this Agreement. No Manager, acting in such Manager’s capacity as such, shall have any authority to bind the Company with respect to any matter except pursuant to a resolution authorizing such action that is duly adopted by the Board by the affirmative vote required with respect to such matter pursuant to this Agreement.
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Section 7.02 Board Composition.
(a) The Company and the Members shall take such actions as may be required to ensure that the number of Managers constituting the Board is at all times three (3). The Board shall be comprised of three (3) individuals designated by NeoVolta; provided that, in no case shall any Person that is a PFE serve as Manager.
(b) CCC shall have the right, but not the obligation, to designate up to two (2) individuals (each, an “Observer”) to attend all meetings of the Board in a non-voting, observer capacity. The Company shall provide each Observer with copies of all notices, agendas, materials and other information provided to the Managers at the same time and in the same manner as such materials are provided to the Mangers. Each Observer shall be entitled to attend and participate in discussions at all meetings of the Board (including telephonic or video meetings), but shall not be entitled to vote on any matter coming before the Board, shall not be counted for purposes of determining a quorum, and shall not have any fiduciary duties to the Company or any Member. CCC may remove or replace any Observer at any time in its sole discretion by providing written notice to the Company.
(c) At all times, the composition of any board of directors, board of managers, or similar governing body of any Subsidiary of the Company shall be the same as that of the Board. Unless otherwise determined by the Board, the quorum, removal rights, meeting procedures, and voting requirements set forth in this ARTICLE VII with respect to the Board shall apply mutatis mutandis to Subsidiaries of the Company and the boards of directors, boards of managers, or similar governing bodies of such Subsidiaries.
Section 7.03 FEOC Restrictions.
(a) Notwithstanding anything to the contrary in this Agreement, the Board shall not authorize, approve, or direct any action that would reasonably be expected to (i) cause the Company to fail to qualify for Section 45X in respect of any batteries produced by the Company by reason of the FEOC Requirements or (ii) cause any battery produced by the Company to be treated as manufactured or produced by a PFE for purposes of Section 48E(b)(6). Any action taken in violation of this Section 7.03 shall be null and void.
(b) Without limiting the generality of the foregoing, the Board shall not approve or permit (i) the procurement, sourcing, or use of any components, equipment, software, firmware, or intellectual property that would cause the Company, itself, to violate the FEOC Requirements, (ii) any operational or contractual arrangement that would cause the Company to violate the FEOC Requirements, (iii) the procurement, sourcing, or use of any components, equipment, software, firmware, or intellectual property that would cause battery energy storage to violate the FEOC Requirements.
(c) A Member that causes, encourages, or knowingly permits the Company to take any action in violation of this Section 7.03 shall be deemed a “Defaulting Member” under Section 3.01(b), and the consequences of default shall apply.
(d) The provisions of this Section 7.03 shall supersede any conflicting provisions elsewhere in this Agreement, and compliance herewith shall constitute a fundamental governance requirement of the Company.
Section 7.04 Removal; Resignation; Vacancies.
(a) Each Member may remove any Manager designated by it at any time with or without cause, effective upon written notice to the other Members and the Board. No Manager may be removed except in accordance with this Section 7.04(a).
(b) In the event that any Manager becomes a PFE after its appointment as Manager, such Person shall immediately and without further action be removed as a Manager.
(c) A Manager may resign at any time from the Board by delivering such Manager’s written resignation to the Board. Any such resignation shall be effective upon receipt thereof unless it is specified to be effective at some other time or upon the occurrence of some other event. The Board’s or Company’s acceptance of a resignation shall not be necessary to make it effective.
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(d) Any vacancy on the Board resulting from the resignation, removal, death, or disability of a Manager shall be filled by the same Member that designated such Manager pursuant to Section 7.02(a), with such appointment to become effective immediately upon delivery of such written notice of such appointment to the other Members and the Board.
(e) The Board shall maintain a schedule of all Managers with their respective mailing addresses (the “Managers Schedule”), and shall update the Managers Schedule upon the designation, removal, or replacement of any Manager in accordance with Section 7.02 or this Section 7.04.
(f) Each Party hereto shall take all necessary action to carry out fully the provisions of Section 7.02 and the foregoing provisions of this Section 7.04 to ensure that the Board and the board of directors or other governing body of any Subsidiary of the Company consists of the Managers that are duly designated in accordance with such sections.
Section 7.05 Meetings.
(a) Regular meetings of the Board shall be held when and as determined by the Board at such dates and times as the Board may designate. Special meetings of the Board may be called at any time by the Chairperson and shall be called by the Chairperson at the written request of any Manager who makes such request in good faith. Meetings of the Board may be held either in person at the principal office of the Company or by telephone or video conference or other communication device that permits all Managers participating in the meeting to hear each other.
(b) Written notice of a meeting of the Board or any Committee stating the place, date, and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each Manager by electronic mail, facsimile, or other electronic transmission no less than fifteen (15) days before the date of the meeting; provided that, in the case of a special meeting, the Chairperson or the Manager requesting the meeting may reduce the advance notice period to not less than three (3) Business Days if the Chairperson or such Manager determines, acting reasonably and in good faith, that it is necessary and in the best interests of the Company for the Board to take action within a time period of less than fifteen (15) days. Notice of any meeting may be waived in writing by any Manager. Presence at a meeting shall constitute waiver of any deficiency of notice under this Section 7.05(b), except when a Manager attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting was not called or convened in accordance with this Agreement and does not otherwise attend the meeting.
(c) The Secretary of the Company (or the Chairperson, if there is no Secretary) shall circulate to each Manager an agenda for each regular meeting not less than three (3) Business Days in advance of such meeting. In the case of a regular meeting, such agenda shall include a discussion of the financial reports most recently delivered pursuant to Section 11.01 and any other matters that a Manager may reasonably request to be included on such agenda. In the case of a special meeting, the agenda for such meeting shall be established by the Chairperson and shall, if applicable, include any matters specified by the Manager requesting such meeting, and shall be provided to each Manager at the time such special meeting is called.
(d) The decisions and resolutions of the Board and each Committee, as applicable, shall be recorded in minutes, which shall state the date, time, and place of the meeting (or the date of any written consent in lieu of a meeting), the Managers present at the meeting, the resolutions put to a vote (or the subject of a written consent), and the results of such voting or written consent. The minutes shall be entered in a minute book kept at the principal office of the Company and a copy of the minutes of each Board and Committee meeting shall be provided to each Manager.
Section 7.06 Quorum; Manner of Acting.
(a) The presence in person or by proxy of at least a majority of the total number of Managers shall constitute a quorum for the conduct of business at any meeting of the Board; provided that, if and for so long as a Member is a Defaulting Member, the presence of such Member’s Managers shall not be required to achieve a quorum. If such quorum shall not be present at any meeting of the Board (a “Suspended Meeting”), the Managers present shall adjourn the meeting and promptly give notice to the Managers of when it shall be reconvened (a “Reconvened Meeting”), which notice shall include a copy of the notice and agenda originally given with respect to such Suspended Meeting and, if applicable, specify in writing that the Board has invoked the procedures with respect to such Reconvened Meeting set forth in the following sentence.
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(b) Any Manager may participate in a meeting of the Board or any Committee by telephone or video conference or other communications device that permits all Managers participating in the meeting to hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting. A Manager may vote or be present at a meeting either in person or by proxy in accordance with Section 7.06(d).
(c) Each Manager shall have one vote on all matters submitted to the Board or any Committee of which such Manager is a member; provided, however, that, without limitation of any other rights or remedies that may be available regarding a Member’s breach or default, if and for so long as a Member is a Defaulting Member, any Managers designated by such Member shall cease to have any voting, consent, or approval rights with respect to any matters voted or acted on by the Board or any such Committee and any decision that requires the vote, consent, or approval of Managers designated by such Defaulting Member shall be made without regard to such Managers or any requirement to obtain the vote, consent, or approval of such Managers. Except as otherwise set forth in this Agreement (including the foregoing provisions of this Section 7.06(c) and Section 7.06), the affirmative vote of a majority of the Managers in attendance at any meeting of the Board or any Committee at which a quorum is present shall be required to authorize any action by the Board or Committee and shall constitute the action of the Board or Committee for all purposes.
(d) Each Manager may authorize another individual (who may or may not be a Manager, but who shall be an officer or employee of the Member that designated such Manager or an Affiliate of such Member) to act for such Manager by proxy at any meeting of the Board or any Committee, or to express consent or dissent to a Company action in writing without a meeting. Any such proxy may be granted in writing, by electronic transmission, or as otherwise permitted by Applicable Law.
Section 7.07 Action By Written Consent. Any action of the Board or any Committee may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed unanimously by all the Managers (or all the Managers comprising the Committee, as applicable) other than any Managers designated by a Defaulting Member for so long as such Member is a Defaulting Member; provided, however, that the Company shall, within three (3) Business Day following the taking of any such action by less than unanimous written consent, provide notice of the taking of such action to the Defaulting Member. Such consent shall have the same force and effect as a vote at a meeting where a quorum was present and may be stated as such in any document or instrument filed with the Secretary of State.
Section 7.08 Compensation; No Employment.
(a) Each Manager shall serve without compensation in their capacity as such. Each Manager shall be entitled to reimbursement from the Company for such Manager’s reasonable and necessary out-of-pocket expenses incurred in the performance of their duties as a Manager, pursuant to such policies as may from time to time be established by the Board.
(b) This Agreement does not, and is not intended to, confer upon any Manager any rights with respect to employment by the Company or any Subsidiary of the Company, and nothing herein shall be construed to have created any employment agreement or relationship with any Manager.
Section 7.09 Chairperson of the Board. The Board may appoint any one of the Managers to act as Chairperson of the Board (“Chairperson”) and preside at all meetings of the Board at which such Chairperson is present, subject to the ultimate authority of the Board to appoint an alternate presiding chairperson at any meeting. Ardes Johnson, Chief Executive Officer of NeoVolta, shall act as the initial Chairperson. For the avoidance of doubt, a Manager shall not be considered to be an officer of the Company by virtue of holding the position of Chairperson and, except as expressly provided herein, shall not have any rights or powers different from any other Manager other than with respect to any procedural matters to the extent delegated by the Board or as expressly set forth in this Agreement.
Section 7.10 Committees.
(a) The Board may, by resolution designate from among the Managers one or more committees of the Board (each, a “Committee”), each of which shall be comprised of one or more Managers. Any such Committee, to the extent provided in the resolution forming such Committee, shall have and may exercise the authority of the Board. The Board may dissolve any Committee at any time.
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(b) Except as otherwise provided in the resolution initially establishing such Committee, the presence in person or by proxy of a number of Managers at least equal to a majority of the total number of Managers comprising the applicable Committee shall constitute a quorum for the conduct of business at any meeting of such Committee. Except as otherwise provided in the resolution adopting such Committee, actions of any Committee shall be made and determined in accordance with Section 7.06(b), Section 7.06(c), and Section 7.06(d). Notice of Committee meetings shall be given to each member of the Committee in the manner provided in Section 7.05(b).
Section 7.11 Officers. The Board may appoint individuals as officers of the Company (the “Officers”) as it deems necessary or desirable to carry on the business of the Company and the Board may delegate to such Officers such powers and authorities as the Board deems advisable. No Officer need be a Member or Manager. Any individual may hold two or more offices of the Company. Each Officer shall hold office until such Officer’s successor is appointed by the Board or until such Officer’s earlier death, resignation, or removal. Any Officer may resign at any time on written notice to the Board. Any Officer may be removed by the Board with or without cause at any time. A vacancy in any office occurring because of death, resignation, removal, or otherwise, may, but need not, be filled by the Board. Notwithstanding anything to the contrary, no person who is a PFE may be appointed as an officer of the Company.
Section 7.12 No Personal Liability. Except as otherwise provided in the Delaware Act or by Applicable Law, no Manager or Officer will be obligated personally for any debt, obligation, or liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a Manager or Officer.
Section 7.13 Budget.
(a) The Parties have determined the initial business plan and annual budget for the Company through the Fiscal Year ending 2026 (collectively, the “Initial Budget”), which have previously been approved by the initial Members. The Board shall operate or cause to be operated the Company in accordance with the Initial Budget, as it may thereafter be amended, modified, or replaced in accordance with Section 7.13(b) (as so amended, modified, or replaced and in effect from time to time, the “Budget”).
(b) At least sixty (60) days before the beginning of each Fiscal Year (commencing with the Fiscal Year ending 2027), the Chief Executive Officer shall prepare and submit to the Board proposed revisions to the Budget for such upcoming Fiscal Year. The Company shall operate in accordance with the then-approved Budget until a revised budget is approved.
(c) In addition to the Budget process described above, the Board shall review the Budget on a quarterly basis. The Board shall approve the applicable Budget (whether the existing quarterly budget or an updated quarterly budget) no later than three (3) months prior to the first day of the quarter contemplated in such budget. The Chairperson shall circulate a proposed budget to all Board members at least ten (10) Business Days’ prior to a Board meeting scheduled for the purpose of consideration and approval of such budget. Approval of each quarterly Budget shall require the affirmative vote of a majority of the Managers in accordance with Section 7.06. If the Board does not approve any updates to the quarterly Budget by the deadline, the then-current approved Budget for the applicable quarter shall remain in effect until such time as an updated quarterly Budget is approved.
(d) The Parties acknowledge that the capital contributions set forth in Exhibit A of the Contribution Agreement shall be made as scheduled, except that the final tranche of up to Fifteen Million Dollars ($15,000,000) shall be contingent upon the Company’s working capital needs (including trial production) as reasonably determined by the Board. Such needs shall be identified through the quarterly Budget review process described in Section 7.13(c) for each quarter through June 30, 2027. Any portion of the final $15,000,000 Capital Contributions required (as reasonably determined by the Board) to fund such approved quarterly Budget shall be identified in such Budget and shall be contributed by the holder of the Class A Units as promptly as reasonably practical based on the applicable operating capital needs following the date on which the Board approves the applicable quarterly Budget.
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Section 7.14 Other Activities
(a) Nothing contained in this Agreement shall prevent any Member or Manager or any of their Affiliates from engaging in any other activities or businesses, regardless of whether those activities or businesses are similar to or competitive with the Business; provided that such Member, Manager or Affiliate does not engage in such activity or business as a result of or using Confidential Information. None of the Members or Managers or any of their Affiliates shall be obligated to account to the Company or to the Members for any profits or income earned or derived from such other activities or businesses. None of the Members or Managers or any of their Affiliates shall be obligated to inform the Company or any Member of any business opportunity of any type or description.
Section 7.15 Claims Under JV Agreements. Notwithstanding anything herein to the contrary, in the event of a breach or alleged breach by a Member or its Affiliate of an obligation owed by such Member or Affiliate to the Company under any JV Agreement, the other Members so long as the other Members are not Defaulting Members (each, an “Asserting Member”) shall be entitled, at the sole and reasonable cost and expense of the Company, to assert a claim (or otherwise enforce any other available actions or remedies), either in such Asserting Member’s own name or on behalf of the Company, in respect of such breach or alleged breach. The Company shall cooperate and comply with any reasonable instructions provided by the Asserting Member in connection with any of the foregoing actions. If a claim or other action taken by or on behalf of a Company by or at the direction of an Asserting Member under this Section 7.15 is unsuccessful, then the Asserting Member shall promptly reimburse the Company and the other Members for any expenses incurred or advanced by them in connection with such claim.
ARTICLE
VIII
Exculpation and Indemnification
Section 8.01 Exculpation of Covered Persons.
(a) As used herein, the term “Covered Person” shall mean each (i) Member; (ii) officer, director, shareholder, partner, member, Affiliate, employee, agent, or representative of each Member; (iii) Manager, Officer, employee, agent, or representative of the Company; (iv) Tax Matters Representative; and (v) Designated Individual.
(b) No Covered Person shall be liable to the Company, any other Covered Person or any Member for any loss, damage, or claim incurred by reason of any action taken or omitted to be taken by such Covered Person in their capacity as a Covered Person, whether or not such Person continues to be a Covered Person at the time such loss, damage, or claim is incurred or imposed, so long as such action or omission does not constitute fraud, gross negligence, willful misconduct, or a material breach or knowing violation by such Covered Person of any of such Covered Person’s or such Covered Person’s Affiliates’ agreements contained herein or in any JV Agreements.
(c) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports, or statements (including financial statements and information, opinions, reports, or statements as to the value or amount of the assets, liabilities, Net Income, or Net Losses of the Company, or any facts pertinent to the existence and amount of assets from which distributions might properly be paid) of the following Persons or groups: (i) a Manager; (ii) one or more Officers or employees of the Company; (iii) any attorney, independent accountant, appraiser, or other expert or professional employed or engaged by or on behalf of the Company; or (iv) any other Person selected in good faith by or on behalf of the Company, in each case as to matters that such relying Person reasonably believes to be within such other Person’s professional or expert competence. The preceding sentence shall in no way limit any Person’s right to rely on information to the extent provided in Section 18-406 of the Delaware Act.
Section 8.02 Liabilities and Duties of Covered Persons.
(a) This Agreement is not intended to, and does not, create or impose any fiduciary duty on any Covered Person. Furthermore, each of the Members and the Company hereby waives any and all fiduciary duties that, absent such waiver, may be implied by Applicable Law, and in doing so, acknowledges and agrees that the duties and obligations of each Covered Person to each other and to the Company are only as expressly set forth in this Agreement and the JV Agreements. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.
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(b) Whenever in this Agreement a Covered Person is permitted or required to make a decision (including a decision that is in such Covered Person’s “discretion” or under a grant of similar authority or latitude), such Covered Person shall be entitled to consider only such interests and factors as such Covered Person desires, including such Covered Person’s own interests (or, in the case of a Manager, the interests of the Member that designated such Manager or such Member’s Affiliates), and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company, the Members, or any other Person. Whenever in this Agreement a Covered Person is permitted or required to make a decision in such Covered Person’s “good faith,” the Covered Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or any other Applicable Law.
Section 8.03 Indemnification.
(a) To the fullest extent permitted by the Delaware Act, as the same now exists or may hereafter be amended, substituted, or replaced (but, in the case of any such amendment, substitution, or replacement, only to the extent that such amendment, substitution, or replacement permits the Company to provide broader indemnification rights than the Delaware Act permitted the Company to provide prior to such amendment, substitution, or replacement), the Company shall indemnify, hold harmless, defend, pay, and reimburse any Covered Person from and against any and all losses, claims, damages, judgments, fines, or liabilities, including reasonable legal fees or other expenses incurred in investigating or defending against such losses, claims, damages, judgments, fines, or liabilities, and any amounts expended in settlement of any claims (other than in connection with any claims brought by (A) a Member or its Affiliate against another Member or its Affiliate or (B) the Company) (collectively, “Losses”) to which such Covered Person may become subject by reason of:
(i) any act or omission or alleged act or omission performed or omitted to be performed on behalf of the Company in connection with the Business of the Company; or
(ii) such Covered Person being or acting in connection with the Business of the Company as a Member, a Manager, or an Officer, or that such Covered Person is or was serving at the request of the Company as a member, manager, partner, director, officer, employee, or agent of any other Person;
provided, that (x) such Covered Person acted in good faith and in a manner believed by such Covered Person to be in, or not opposed to, the best interests of the Company and within the scope of such Covered Person’s authority conferred on such Covered Person by the Company and, with respect to any criminal proceeding, had no reasonable cause to believe their conduct was unlawful, and (y) such Covered Person’s conduct did not constitute fraud, gross negligence, willful misconduct, or a material breach or knowing violation by such Covered Person of any of such Covered Person’s or such Covered Person’s Affiliates’ agreements contained herein or in any JV Agreements, in either case as determined by a final, non-appealable order of a court of competent jurisdiction. In connection with the foregoing, the termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Covered Person did not act in good faith or, with respect to any criminal proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful, or that the Covered Person’s conduct constituted fraud, gross negligence, willful misconduct, or a material breach or knowing violation by such Covered Person of any of such Covered Person’s or such Covered Person’s Affiliates agreements contained herein or in any JV Agreements.
(b) The indemnification provided by this Section 8.03 shall not be deemed exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any agreement or otherwise. The provisions of this Section 8.03 shall continue to afford protection to each Covered Person regardless of whether such Covered Person remains in the position or capacity pursuant to which such Covered Person became entitled to indemnification under this Section 8.03 and shall inure to the benefit of the executors, administrators, legatees, and distributees of such Covered Person.
(c) Notwithstanding anything herein to the contrary, nothing in this ARTICLE VIII shall (or shall be construed to): (i) relieve any Member or other Person from any liability or obligation of such Person pursuant to any JV Agreement, or to in any way impair the enforceability of any provision of any JV Agreement against any party thereto; or (ii) require the Company to indemnify, hold harmless, defend, pay, or reimburse any Covered Person with respect to any Loss to the extent a Member or its Affiliate is required pursuant to the terms of a JV Agreement to which such Member or Affiliate is a party to indemnify, hold harmless, defend, pay, or reimburse such Covered Person with respect to such Loss.
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(d) Notwithstanding anything contained herein to the contrary, any indemnity by the Company relating to the matters covered in this Section 8.03 shall be provided out of and to the extent of Company assets only, and no Member (unless such Member otherwise agrees in writing) shall have personal liability on account thereof solely by reason of being a Member or shall be required to make additional Capital Contributions to help satisfy such indemnity by the Company.
(e) The Company hereby acknowledges that certain Covered Persons (the “Specified Indemnified Persons”) may have or be granted rights to indemnification and advancement of expenses provided by a Member or its Affiliate (directly or by insurance provided by such Person) (collectively, the “Member Indemnitors”). The Company hereby agrees that it is the indemnitor of first resort of the Specified Indemnified Persons with respect to matters for which indemnification is provided to them under this Agreement and that the Company shall be obligated to make all payments due to or for the benefit of a Specified Indemnified Person under this Agreement without regard to any rights that such Specified Indemnified Person may have against a Member Indemnitor. The Company hereby waives and releases any and all equitable and other rights or claims to contribution, subrogation, or indemnification from the Member Indemnitors in respect of any amounts paid to a Specified Indemnified Person hereunder. The Company further agrees that no payment of Losses or expenses by any Member Indemnitor to or for the benefit of a Specified Indemnified Person shall affect the obligations of the Company hereunder, and that the Company shall be obligated to repay the Member Indemnitors for all amounts so paid or reimbursed to the extent that the Company has an obligation to indemnify a Specified Indemnified Person for such Losses or expenses hereunder. The Member Indemnitors are third-party beneficiaries of and shall have the power and authority to enforce the provisions of this Section 8.03(e).
(f) If this Section 8.03 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Covered Person pursuant to this Section 8.03 to the fullest extent permitted by any applicable portion of this Section 8.03 that shall not have been invalidated and to the fullest extent permitted by Applicable Law.
(g) The provisions of this Section 8.03 shall be a contract between the Company, on the one hand, and each Covered Person who served in such capacity at any time while this Section 8.03 is in effect, on the other hand, pursuant to which the Company and each such Covered Person intend to be legally bound. No amendment, modification, or repeal of this Section 8.03 that adversely affects the rights of a Covered Person to indemnification for Losses incurred or relating to a state of facts existing prior to such amendment, modification, or repeal shall apply in such a way as to eliminate or reduce such Covered Person’s entitlement to indemnification for such Losses without the Covered Person’s prior written consent.
Section 8.04 Survival. The provisions of this ARTICLE VIII shall survive the dissolution, liquidation, winding up, and termination of the Company.
ARTICLE
IX
Transfer
Section 9.01 Restrictions on Transfer.
(a) Except as otherwise provided in this ARTICLE IX, no Member (or any Permitted Transferee of such Member) shall Transfer, and no Transfer may occur with respect to, all or any portion of its Membership Interest without the prior written consent of the other Members, which consent may be granted or withheld in the sole discretion of each other Member. No Transfer of a Membership Interest to a Person not already a Member of the Company shall be deemed completed until the prospective transferee is admitted as a Member of the Company in accordance with Section 4.01(b). Notwithstanding the foregoing, the issuance of additional Class A Units and the admission of new Members in connection with additional capital contributions or third-party funding pursuant to Section 3.01(d), Section 3.02, or Section 3.04 shall not be deemed a Transfer subject to the restrictions of this Article IX.
(b) Notwithstanding any other provision of this Agreement (including Section 9.02), each Member agrees that it will not Transfer all or any portion of its Membership Interest, and the Company agrees that it shall not issue any Membership Interests:
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(i) except as permitted under the Securities Act and other applicable federal or state securities or blue sky laws, and then, with respect to a Transfer of a Membership Interest, only upon delivery to the Company of an opinion of counsel in form and substance satisfactory to the Company to the effect that such Transfer may be effected without registration under the Securities Act;
(ii) if such Transfer or issuance would cause the Company to be considered a “publicly traded partnership” under Code Section 7704(b);
(iii) if such Transfer or issuance would affect the Company’s existence or qualification as a limited liability company under the Delaware Act;
(iv) if such Transfer or issuance would cause the Company to lose its status as a partnership for federal income tax purposes;
(v) if such Transfer or issuance would cause the Company to be required to register as an investment company under the Investment Company Act of 1940; or
(vi) if such Transfer or issuance would cause the assets of the Company to be deemed “Plan Assets” as defined under the Employee Retirement Income Security Act of 1974 or its accompanying regulations or result in any “prohibited transaction” thereunder involving the Company; or
(vii) if such Transfer or issuance would constitute a Transfer to (A) a PFE or (B) any Person whose direct or indirect ownership, control, or affiliation would reasonably be expected to cause the Company to be treated as receiving manufactured products, components, software, firmware, or services from a PFE or otherwise jeopardize the Company’s compliance with the FEOC Requirements.
(c) Any Transfer or attempted Transfer of any Membership Interest in contravention of this Agreement shall be null and void, no such Transfer shall be recorded on the Company’s books or otherwise recognized by the Company, and the purported transferee in any such Transfer shall not be treated as the owner of such Membership Interest for any purposes of this Agreement or have any rights as a Member (and the Member shall continue to be treated as the owner of such Membership Interest and as a Member).
(d) For the avoidance of doubt, any Transfer of a Membership Interest permitted by this Agreement shall be deemed a sale, Transfer, assignment, or other disposal of such Membership Interest in its entirety as intended by the parties to such Transfer, and shall not be deemed a sale, Transfer, assignment, or other disposal of any less than all of the rights and benefits described in the definition of the term “Membership Interest,” unless otherwise explicitly agreed to by the parties to such Transfer.
Section 9.02 Permitted Transfers. The provisions of Section 9.01(a) shall not apply to any Transfer by a Member that is not a Defaulting Member (a “Transferring Member”) of all of its Membership Interest to an Affiliate of such Transferring Member that is an entity wholly owned, directly or indirectly, by the ultimate parent of such Transferring Member; provided that (a) such Transferring Member shall have guaranteed in a writing delivered to the Company and the other Members the performance by the Permitted Transferee of all of such Transferring Member’s obligations under this Agreement and all of its obligations under any JV Agreement to which such Transferring Member is a party or otherwise bound; and (b) if at any time such Proposed Transferee ceases to be an Affiliate of such Transferring Member that is wholly owned, directly or indirectly, by the ultimate parent of such Transferring Member, then the Company, such Transferring Member, and such Proposed Transferee shall take such action as is necessary to cause there to be an immediate and unconditional reconveyance of the Membership Interest to either (in the sole discretion of such Transferring Member) such Transferring Member or any wholly owned Affiliate of such Transferring Member.
Section 9.03 Call Option. If the Board reasonably determines that any Member having an interest in 25% or more of the profits or capital of the Company is a PFE, the Company shall have an option to purchase such Member’s Units or, if the Board elects to decline such opportunity, the other Members shall have an option to purchase such Member’s Units or assign their right to purchase such Member’s Units to a Person that is not a PFE (such option, a “Call Option”). Notwithstanding anything to the contrary:
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(a) In the event that the Members may exercise the Call Option and more than one Member elects to do so, such electing Members shall exercise the Call Option on a pro rata basis;
(b) In all cases, the exercise price for the Call Option shall be determined by a professional, independent valuation provider located in the United States using U.S. valuation principles and shall be approved by the Board in their sole discretion;
(c) No Member that is a PFE shall be permitted to purchase any Units held by any other PFE;
(d) If there would be no Members of the Company following the Company’s exercise of the Call Option, the Board shall decline the opportunity to exercise the Call Option; and
(e) All Transfers of Units shall be subject to Section 9.01 and Section 9.02 hereof.
Section 9.04 Tag-Along Rights
(a) Subject to the terms and conditions of Section 9.01 and Section 9.02, if any Member holding more than 50% of the outstanding Class A Units of the Company (the “Selling Member”) proposes to Transfer to an independent third party (the “Proposed Transferee”) each Member (each, a “Tag-Along Member”) shall be permitted to participate in such sale as set forth in this Section 9.04 (a “Tag-Along Sale”).
(b) Prior to the consummation of a Tag-Along Sale, the Selling Member shall deliver to the Company and each Tag-Along Member a written notice (a “Sale Notice”) of the proposed Tag-Along Sale, together with fully-executed copies of any merger, acquisition, or comparable transaction agreement pursuant to which such Tag-Along Sale is proposed to take place and all material ancillary agreements related thereto, within 10 Business Days after the execution and delivery by all the parties thereto of the definitive agreement entered into with respect to such Transfer and, in any event, no less than 20 Business Days prior to the closing date of the Tag-Along Sale. The Sale Notice shall make reference to the Tag-Along Members’ rights and obligations hereunder and shall describe in reasonable detail:
(i) the number of Units to be sold by the Selling Member in the Tag-Along Sale;
(ii) the identity of the Proposed Transferee;
(iii) the purchase price and the other material terms and conditions of the Tag-Along Sale, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof; and
(iv) the proposed date, time, and location of the closing of the Tag-Along Sale.
(c) Amount to be Sold.
(i) Each Tag-Along Member that desires to participate in the Tag-Along Sale (each Tag-Along Member electing to do so, a “Participating Tag-Along Member”) shall exercise its rights under this Section 9.04 by delivering to the Selling Member a written notice (a “Tag-Along Notice”) within five Business Days after its receipt of the Sale Notice (the “Tag-Along Period”), stating (A) its election to participate in the Tag-Along Sale on the terms and conditions set forth in the Sale Notice and in accordance with this Section 9.04 and (B) the number of Units it is offering to Transfer in such Tag-Along Sale. The offer of each Participating Tag-Along Member set forth in a Tag-Along Notice shall be irrevocable, and, to the extent such offer is accepted, such Participating Tag-Along Member shall be bound and obligated to sell in the Tag-Along Sale on the terms and conditions set forth in this Section 9.04. Subject to Section 9.04(c)(ii), each Tag-Along Member shall have the right to sell in a Tag-Along Sale up to the number of Units equal to the product obtained by multiplying (A) the number of Units held by the Tag-Along Member by (B) a fraction (1) the numerator of which is equal to the number of Units the Selling Member proposes to Transfer to the Proposed Transferee and (2) the denominator of which is equal to the number of Units then owned by the Selling Member.
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(ii) The Selling Member shall use commercially reasonable efforts to include in the Tag-Along Sale all of the Units that the Participating Tag-Along Members have offered to Transfer pursuant to the Tag-Along Notices, it being understood that the Proposed Transferee shall not be required to purchase Units in excess of the amount set forth in the Sale Notice. In the event the Proposed Transferee elects to purchase less than all of the Units sought to be Transferred by the Participating Tag-Along Members, the number of Units to be Transferred to the Proposed Transferee by the Selling Member and each Participating Tag-Along Member shall be reduced so that each such Member is entitled to sell its pro rata portion of the number of Units the Proposed Transferee is willing to purchase (which in no event may be less than the number of Units set forth in the Sale Notice).
(iii) Each Tag-Along Member that does not deliver a Tag-Along Notice in compliance with Section 9.04(c)(i) shall be deemed to have waived all of such Tag-Along Member’s rights to participate in such Tag-Along Sale, and the Selling Member shall (subject to Section 9.04(h) and the rights of any Participating Tag-Along Member) thereafter be free to Transfer to the Proposed Transferee, without any further obligation to the Tag-Along Members that are not Participating Tag-Along Members, its Units at a per Unit price that is no greater than the per Unit price set forth in the Sale Notice and on other terms and conditions which are not in the aggregate materially more favorable to the Selling Member than those set forth in the Sale Notice.
(d) Consideration. The Selling Member and each Participating Tag-Along Member shall receive the same form and amount of consideration per Unit; provided, that each such Member’s proportionate share of related expenses will be deducted from such consideration in accordance with Section 9.04(f).
(e) Conditions of Sale. Each Participating Tag-Along Member shall make or provide the same representations, warranties, covenants, indemnities, and agreements as the Selling Member makes or provides in connection with the Tag-Along Sale (except that in the case of representations, warranties, covenants, indemnities, and agreements pertaining specifically to the Selling Member, each Participating Tag-Along Member shall make the comparable representations, warranties, covenants, indemnities, and agreements pertaining specifically to itself); provided, that all representations, warranties, covenants, and indemnities shall be made by the Selling Member and each Participating Tag-Along Member severally and not jointly and any indemnification obligation in respect of breaches of representations and warranties that do not relate to such Participating Tag-Along Member shall be in an amount not to exceed the aggregate proceeds received by such Participating Tag-Along Member in connection with any Tag-Along Sale consummated pursuant to this Section 9.04.
(f) Expenses. The fees and expenses of the Selling Member incurred in connection with a Tag-Along Sale for the benefit the Selling Member and all Participating Tag-Along Members (it being understood that costs incurred by or on behalf of the Selling Member for its sole benefit will not be considered to be for the benefit of all Participating Tag-Along Members), to the extent not paid or reimbursed by the Company or the Proposed Transferee, shall be shared by the Selling Member and all the Participating Tag-Along Members on a pro rata basis, based on the consideration received by each such Member; provided, that no such Participating Tag-Along Member shall be obligated to make any out-of-pocket expenditure prior to the consummation of the Tag-Along Sale.
(g) Cooperation. The Selling Member and each Participating Tag-Along Member shall take all actions as may be reasonably necessary to consummate the Tag-Along Sale, including, without limitation, entering into agreements and delivering certificates and instruments, in each case, consistent with the agreements being entered into and the certificates being delivered by the Selling Member, subject to the limitations set forth in Section 9.04(e).
(h) Deadline for Completion of Sale. The Selling Member shall have 60 days following the expiration of the Tag-Along Period in which to sell the Units described in the Sale Notice, on terms not more favorable to the Selling Member than those set forth in the Sale Notice and subject to the rights of the Participating Tag-Along Members set forth in this Section 9.04 (which such 60-day period may be extended for a reasonable time, such extension not to exceed 90 days to the extent reasonably necessary to obtain any required governmental approvals). If at the end of such period the Selling Member has not completed such sale, the Selling Member may not then effect a Transfer of Units subject to this Section 9.04 without again fully complying with the provisions of this Section 9.04.
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(i) Sales in Violation of the Tag-Along Right. If the Selling Member Transfers to the Proposed Transferee any of its Units in breach of this Section 9.04, then each Tag-Along Member shall have the right to Transfer to the Selling Member, and the Selling Member undertakes to purchase from each Tag-Along Member that exercises such right, the number of Units that such Tag-Along Member would have had the right to Transfer to the Proposed Transferee pursuant to this Section 9.04, for a per Unit amount and form of consideration and upon the terms and conditions on which the Proposed Transferee bought such Units from the Selling Member, except that no Tag-Along Member shall be required to indemnify the Selling Member in connection with any Transfer consummated pursuant to this Section 9.04(i).; provided, that nothing contained in this Section 9.04 shall preclude any Member from seeking alternative remedies against such Selling Member as a result of its breach of this Section 9.04. The Selling Member shall also reimburse each Participating Tag-Along Member for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of the Tag-Along Member’s rights under this Section 9.04(i).
(j) Application of Transfer Restrictions. This Section 9.04 shall apply only to Transfers that do not comply with Section 9.02.
ARTICLE
X
COVENANTS AND AGREEMENTS OF THE MEMBERS
Section 10.01 Confidentiality.
(a) Each Member acknowledges that it may have access to and become acquainted with trade secrets, proprietary information, and confidential information belonging to the Company that are not generally known to the public, including information concerning business plans, financial statements, and other information provided pursuant to this Agreement, operating practices and methods, expansion plans, strategic plans, marketing plans, contracts, customer lists, or other business documents that the Company treats as confidential, in any format whatsoever (including oral, written, electronic, or any other form or medium) (collectively, “Confidential Information”). In addition, each Member acknowledges that: (i) the Company has invested, and continues to invest, substantial time, expense, and specialized knowledge in developing its Confidential Information; (ii) the Confidential Information provides the Company with a competitive advantage over others in the marketplace; and (iii) the Company would be irreparably harmed if the Confidential Information were disclosed to competitors or made available to the public. Without limiting the applicability of any other agreement to which any Member is subject, no Member shall, directly or indirectly, disclose or use (other than in connection with the conduct of the Company’s business or the monitoring of its investment in the Company) at any time, including use for personal, commercial, or proprietary advantage or profit, either during its association with the Company or thereafter, any Confidential Information of which such Member is or becomes aware. Each Member in possession of Confidential Information shall take all appropriate steps to safeguard such information and to protect it against disclosure, misuse, espionage, loss, and theft.
(b) Nothing contained in Section 10.01(a) shall prevent any Member from disclosing Confidential Information: (i) upon the order of any court or administrative agency; (ii) upon the request or demand of any Governmental Authority having jurisdiction over such Member; (iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories, or other discovery requests; (iv) to the extent necessary to assert any right or defend any claim arising under this Agreement or any JV Agreement; (v) to the other Members; or (vi) to such Member’s Representatives who, in the reasonable judgment of such Member, need to know such Confidential Information and agree to be bound by the provisions of this Section 10.01 as if a Member; or (vii) to any potential Permitted Transferee in connection with a proposed Transfer of the Membership Interest of such Member in accordance with this Agreement, as long as such potential Permitted Transferee shall have agreed to be bound by the provisions of this Section 10.01 as if a Member; provided, that, in the case of clause (i), (ii), or (iii), such Member shall notify the Company and the other Members of the proposed disclosure as far in advance of such disclosure as practicable (but in no event make any such disclosure before notifying the Company and the other Members) and use reasonable efforts to ensure that any Confidential Information so disclosed is accorded confidential treatment satisfactory to the Company and the other Members, when and if available.
(c) The restrictions of Section 10.01 shall not apply to Confidential Information that: (i) is or becomes generally available to the public other than as a result of a disclosure by such Member or its Affiliate or Representative in breach of this Agreement; (ii) is or has been independently developed or conceived by such Member or its Affiliate without use of Confidential Information; or (iii) becomes available to such Member or any of its Affiliates or Representatives on a non-confidential basis from a source other than the Company, the other Member, or any of their respective Representatives, provided, that such source is not known by the receiving Member to be bound by a confidentiality agreement regarding the Company.
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(d) The obligations of each Member under this Section 10.01 shall survive: (i) the termination, dissolution, liquidation, and winding up of the Company; and (ii) such Member’s Transfer of its Membership Interest.
Section 10.02 Change of Control Notice. In the event of a Change of Control of a Member, such Member shall promptly, but not later than three (3) Business Days following such Change of Control, notify the other Members in writing thereof (a “Change of Control Notice”), setting forth the date and identity of the party or parties that have acquired control of such Member.
Section 10.03 Related-Party Agreements. Except as expressly provided in this Agreement or in any JV Agreement, the Company shall not and shall not cause or permit any of its Subsidiaries to, directly or indirectly, enter into, enter into any commitment to enter into, extend, amend in any material respect, waive, supplement, or terminate (other than pursuant to its terms) any related-party agreement (including any JV Agreement) other than (a) to the extent approved by the Board or (b) as are reasonably required by the Company terms that are no less favorable to the Company than those that would have been obtained in a comparable transaction entered into with an unaffiliated third party on an arm’s-length basis.
ARTICLE
XI
Accounting; Tax Matters
Section 11.01 Financial Statements. The Company shall furnish to each Member the following reports:
(a) As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, unaudited consolidated balance sheets of the Company as at the end of each such Fiscal Year and unaudited consolidated statements of income, cash flows, and Members’ equity for such Fiscal Year, in each case setting forth in comparative form the figures for the previous Fiscal Year, in each case setting forth in comparative form the figures for the corresponding periods of the previous Fiscal Year, all in reasonable detail and all prepared in accordance with GAAP, consistently applied (subject to normal year-end audit adjustments and the absence of notes thereto), and certified by the principal financial or accounting officer of the Company.
(b) As soon as available, and in any event within forty-five (45) days after the end of each quarterly accounting period in each Fiscal Year (other than the last fiscal quarter of the Fiscal Year), unaudited consolidated balance sheets of the Company as at the end of each such fiscal quarter and for the current Fiscal Year to date and unaudited consolidated statements of income, cash flows, and Members’ equity for such fiscal quarter and for the current Fiscal Year to date, in each case setting forth in comparative form the figures for the corresponding periods of the previous fiscal quarter, all in reasonable detail and all prepared in accordance with GAAP, consistently applied (subject to normal year-end audit adjustments and the absence of notes thereto), and certified by the principal financial or accounting officer of the Company.
(c) As soon as available, and in any event within thirty (30) days after the end of each monthly accounting period in each fiscal quarter (other than the last month of the fiscal quarter), unaudited consolidated balance sheets of the Company as at the end of each such monthly period and for the current Fiscal Year to date and unaudited consolidated statements of income, cash flows, and Members’ equity for each such monthly period and for the current Fiscal Year to date, all in reasonable detail and all prepared in accordance with GAAP, consistently applied (subject to normal year-end audit adjustments and the absence of notes thereto).
Section 11.02 Inspection Rights. Subject to Section 10.01, upon reasonable notice from a Member, the Company shall afford such Member and its Representatives access during normal business hours for any purpose reasonably related to such Member’s interest as a Member to:
(a) the Company’s properties, offices, plants, and other facilities;
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(b) the corporate, financial, and similar records, reports, and documents of the Company, including all books and records, minutes of proceedings, internal management documents, reports of operations, reports of adverse developments, and copies of any management letters and communications with Members (which right of access shall include the right to examine such documents and to make copies thereof or extracts therefrom); and
(c) any Officers, senior employees, and accountants of the Company for the purpose of discussing and advising on the affairs, finances, and accounts of the Company (and the Company hereby authorizes each such Officer, senior employee, and accountant to engage in such discussions with such Member and its Representatives);
provided, however, that, (i) a requesting Member shall bear its own and its Representatives’ expenses and all reasonable expenses incurred by the Company in connection with any inspection or examination requested by such Member pursuant to this Section 11.02; and (ii) if the Company provides or makes available any report or written analysis to or for any Member or Representative of such Member pursuant to this Section 11.02, it shall promptly provide or make available such report or analysis to or for the other Members.
Section 11.03 Income Tax Status. It is the intent of the Company and the Members that the Company shall be treated as a partnership for U.S., federal, state, and local income tax purposes. Neither the Company nor any Member shall make an election for the Company to be classified as other than a partnership pursuant to Treasury Regulations Section 301.7701-3.
Section 11.04 Tax Matters Representative.
(a) The Members hereby appoint NeoVolta, Inc. as the “partnership representative” as provided in Code Section 6223(a) (the “Tax Matters Representative”). The Tax Matters Representative shall appoint an individual (the “Designated Individual”) meeting the requirements of Treasury Regulation Section 301.6223-1(c)(3) as the sole person authorized to represent the Tax Matters Representative in audits and other proceedings governed by the partnership audit procedures set forth in Subchapter C of Chapter 63 of the Code as amended by the BBA (the “Revised Partnership Audit Rules”). The Tax Matters Representative shall resign if it is no longer a Member. In the event of the resignation of the Tax Matters Representative, the remaining Members shall jointly select a replacement. Any person appointed as the Designated Individual shall be subject to the requirements and obligations of the Tax Matters Representative for purposes of this Section 11.04.
(b) The Tax Matters Representative is authorized and required to represent the Company in connection with all examinations of the Company’s affairs by Taxing Authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services and costs associated therewith. The Tax Matters Representative shall promptly notify the other Members in writing of the commencement of any tax audit of the Company, upon receipt of a tax assessment and upon the receipt of a notice of final partnership adjustment, and shall keep the other Members reasonably informed of the status of any tax audit and resulting administrative and judicial proceedings.
(c) To the extent permitted by Applicable Law and regulations, the Tax Matters Representative will cause the Company to annually elect out of the Revised Partnership Audit Rules pursuant to Code Section 6221(b). For any year in which Applicable Law and regulations do not permit the Company to elect out of the Revised Partnership Audit Rules, then, within forty-five (45) days of any notice of final partnership adjustment, the Tax Matters Representative will cause the Company to elect the alternative procedure under Code Section 6226, and furnish to the Internal Revenue Service and each Member during the year or years to which the notice of final partnership adjustment relates a statement of the Member’s share of any adjustment set forth in the notice of final partnership adjustment.
(d) Each Member agrees that such Member shall not treat any Company item inconsistently on such Member’s federal, state, foreign, or other income tax return with the treatment of the item on the Company’s return. Any deficiency for taxes imposed on any Member (including penalties, additions to tax or interest imposed with respect to such taxes, and any taxes imposed pursuant to Code Section 6226) will be paid by such Member and if required to be paid (and actually paid) by the Company, will be recoverable from such Member as provided in Section 6.02(d).
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(e) Notwithstanding anything herein to the contrary, any reasonable out-of-pocket expenses incurred by the Tax Matters Representative or the Designated Individual in carrying out their responsibilities and duties in such capacities under this Agreement shall be an expense of the Company for which the Tax Matters Representative or the Designated Individual shall be reimbursed by the Company.
(f) The Tax Matters Representative will make an election under Code Section 754, if requested in writing by a Member.
(g) The provisions of this Section 11.04 and the obligations of a Member or former Member pursuant to Section 11.04 shall survive the termination, dissolution, liquidation, and winding up of the Company and the Transfer of a Member’s Membership Interest.
Section 11.05 Tax Returns. At the expense of the Company, the Board (or any Officer that it may designate) shall cause the preparation and timely filing (including extensions) of all tax returns required to be filed by the Company pursuant to the Code as well as all other required tax returns in each jurisdiction in which the Company owns property or does business. As soon as reasonably possible after the end of each Fiscal Year, the Board or designated Officer will cause to be delivered to each Person who was a Member at any time during such Fiscal Year, IRS Schedule K-1 to Form 1065 and such other information with respect to the Company as may be necessary for the preparation of such Person’s federal, state, and local income tax returns for such Fiscal Year.
Section 11.06 Company Funds. All funds of the Company shall be deposited in its name in such checking, savings, or other bank accounts, or held in its name in the form of such other investments as shall be designated by the Board. The funds of the Company shall not be commingled with the funds of any other Person. All withdrawals of such deposits or liquidations of such investments by the Company shall be made exclusively upon the signature or signatures of such Officer or Officers as the Board may designate.
ARTICLE
XII
Dissolution and Liquidation
Section 12.01 Events of Dissolution. The Company shall be dissolved and its affairs wound up only upon the occurrence of any of the following events:
(a) The unanimous determination of the Members to dissolve the Company;
(b) The bankruptcy or dissolution of a Member, unless within thirty (30) days after the occurrence of such bankruptcy or dissolution, the other Members agree in writing to continue the business of the Company;
(c) The sale, exchange, involuntary conversion, or other disposition or transfer of all or substantially all the assets of the Company; or
(d) The entry of a decree of judicial dissolution under Section 18-802 of the Delaware Act.
Section 12.02 Effectiveness of Dissolution. Dissolution of the Company shall be effective on the day on which the event described in Section 12.01 occurs, but the Company shall not terminate until the winding up of the Company has been completed, the assets of the Company have been distributed as provided in Section 12.03, and the Certificate of Formation shall have been cancelled as provided in Section 12.04.
Section 12.03 Liquidation. If the Company is dissolved pursuant to Section 12.01, the Company shall be liquidated and its business and affairs wound up in accordance with the Delaware Act and the following provisions:
(a) The Board shall act as liquidator to wind up the Company (the “Liquidator”); provided that, notwithstanding anything herein to the contrary, if the Company is being dissolved pursuant to Section 12.01(b) based on the Bankruptcy or Dissolution of a Member, the other Members shall act as Liquidator. The Liquidator shall have full power and authority to sell, assign, and encumber any or all of the Company’s assets and to wind up and liquidate the affairs of the Company in an orderly and business-like manner; provided that, if the Board is the Liquidator, then the Board shall act in accordance with the governance provisions in ARTICLE VII until the winding up occurs.
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(b) As promptly as possible after dissolution and again after final liquidation, the Liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities, and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable.
(c) The Liquidator shall liquidate the assets of the Company and distribute the proceeds of such liquidation in the following order of priority, unless otherwise required by mandatory provisions of Applicable Law:
(i) first, to the payment of all of the Company’s debts and liabilities to its creditors (including Members, if applicable) and the expenses of liquidation (including sales commissions incident to any sales of assets of the Company);
(ii) second, to the establishment of and additions to reserves that are determined by the Liquidator to be reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company; and
(iii) third, to the Members in accordance with the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments for the taxable year of the Company during which the liquidation of the Company occurs.
(d) Notwithstanding the provisions of Section 12.03(c) that require the liquidation of the assets of the Company, but subject to the order of priorities set forth in Section 12.03(c), if upon dissolution of the Company the Liquidator reasonably determines that an immediate sale of part or all of the Company’s assets would be impractical or could cause undue loss to the Members, the Liquidator may defer the liquidation of any assets except those necessary to satisfy Company liabilities and reserves, and may, upon unanimous consent of the Members, distribute to the Members, in lieu of cash, as tenants in common and in accordance with the provisions of Section 12.03(c), undivided interests in such Company assets as the Liquidator deems not suitable for liquidation. Any such distribution in kind shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. For purposes of any such distribution, any property to be distributed will be valued at its Fair Market Value, as determined by the Liquidator in good faith.
Section 12.04 Cancellation of Certificate. Upon completion of the distribution of the assets of the Company as provided in Section 12.03(c), the Company shall be terminated and the Liquidator shall cause the cancellation of the Certificate of Formation in the State of Delaware and of all qualifications and registrations of the Company as a foreign limited liability company in jurisdictions other than the State of Delaware and shall take such other actions as may be necessary to terminate the Company.
Section 12.05 Survival of Rights, Duties and Obligations. Dissolution, liquidation, winding up, or termination of the Company for any reason shall not release any party from any Loss that at the time of such dissolution, liquidation, winding up, or termination already had accrued to any other party or thereafter may accrue in respect of any act or omission prior to such dissolution, liquidation, winding up, or termination. For the avoidance of doubt, none of the foregoing shall replace, diminish, or otherwise adversely affect any Member’s right to indemnification pursuant to Section 8.03.
Section 12.06 Recourse for Claims. Each Member shall look solely to the assets of the Company for all distributions with respect to the Company, such Member’s Capital Account, and such Member’s share of Net Income, Net Loss, and other items of income, gain, loss, and deduction, and shall have no recourse therefor (upon dissolution or otherwise) against the Liquidator or any other Members.
ARTICLE
XIII
Miscellaneous
Section 13.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including fees and disbursements of counsel, financial advisors, and accountants, incurred in connection with the preparation and execution of this Agreement, or any amendment or waiver hereof, and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.
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Section 13.02 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, the Company and each Member hereby agrees, at the request of the Company or any Member, to execute and deliver such additional documents, instruments, conveyances, and assurances and to take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated hereby.
Section 13.03 Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 13.03):
| If to the Company: |
Address: 12195 Dearborn Place Poway, CA 92064
Email: [***]
|
| If to NeoVolta: |
Address: 12195 Dearborn Place Poway, CA 92064
Email: [***]
|
| If to CCC: |
Address: [***]
Email: [***] |
Section 13.04 Headings. The headings in this Agreement are inserted for convenience or reference only and are in no way intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision of this Agreement.
Section 13.05 Severability. If any term or provision of this Agreement is held to be invalid, illegal, or unenforceable under Applicable Law in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Except as provided in Section 8.03(f), upon such determination that any term or other provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
Section 13.06 Entire Agreement.
(a) This Agreement, together with the Certificate of Formation and the JV Agreements in effect on the date hereof and all related Exhibits and Schedules, constitutes the sole and entire agreement of the Parties to this Agreement with respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter.
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(b) In the event of an inconsistency or conflict between the provisions of this Agreement and any provision of the Contribution Agreement, this Agreement shall control with respect to such conflict.
Section 13.07 Successors and Assigns. Subject to the restrictions on Transfers set forth herein, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. This Agreement may not be assigned by any Member except as permitted by this Agreement and any assignment in violation of this Agreement shall be null and void.
Section 13.08 No Third-Party Beneficiaries. Except as provided in ARTICLE VIII, which shall be for the benefit of and enforceable by Covered Persons and Member Indemnitors as described therein, this Agreement is for the sole benefit of the Parties (and their respective heirs, executors, administrators, successors, and permitted assigns) and nothing herein, express or implied, is intended to or shall confer upon any other Person, including any creditor of the Company, any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
Section 13.09 Amendment. No provision of this Agreement may be amended or modified except by an instrument in writing executed by Members holding at least a majority of the Membership Interests; provided, however, that no amendment shall adversely affect the rights of any Member in a disproportionate manner without the written consent of such affected Member. Any such written amendment or modification will be binding upon the Company and each Member. Notwithstanding the foregoing, amendments to Schedule A hereto that are necessary to reflect any Transfer of a Membership Interest in accordance with this Agreement or change of address of a Member shall be made by the Board without the consent of or execution by the Members.
Section 13.10 Waiver. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. For the avoidance of doubt, nothing contained in this Section 13.10 shall diminish any of the explicit and implicit waivers described in this Agreement, including in Section 13.13 hereof.
Section 13.11 Governing Law. All issues and questions concerning the application, construction, validity, interpretation, and enforcement of this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.
Section 13.12 Submission to Jurisdiction. The Parties hereby agree that any suit, action, or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby, whether in contract, tort, or otherwise, shall be brought in the United States District Court for the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, in the Superior Court of the State of Delaware), so long as one of such courts shall have subject matter jurisdiction over such suit, action, or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware. Each of the Parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action, or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding in any such court or that any such suit, action, or proceeding that is brought in any such court has been brought in an inconvenient form. Service of process, summons, notice, or other document by registered mail to the address set forth in Section 13.03 shall be effective service of process for any suit, action, or other proceeding brought in any such court.
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Section 13.13 Waiver of Jury Trial. Each Party hereto hereby acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such Party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.
Section 13.14 Equitable Remedies. Each Party hereto acknowledges that a breach or threatened breach by such Party of any of its obligations under this Agreement would give rise to irreparable harm to the other Parties, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by such Party of any such obligations, each of the other Parties shall, in addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).
Section 13.15 Attorneys’ Fees. In the event that a Party hereto institutes any legal suit, action, or proceeding, including arbitration, against another Party in respect of a matter arising out of or relating to this Agreement, the prevailing Party in the suit, action, or proceeding shall be entitled to receive, in addition to all other damages to which it may be entitled, the costs incurred by such Party in conducting the suit, action, or proceeding, including reasonable attorneys’ fees and expenses and court costs.
Section 13.16 Remedies Cumulative. Except as expressly provided herein to the contrary, the rights and remedies under this Agreement are cumulative and are in addition to and not in substitution for any other rights and remedies available at law or in equity or otherwise.
Section 13.17 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[Signature page follows.]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
|
The Company:
NeoVolta Power, LLC
By: /s/Steve Bond | |
|
The Members:
| |
|
NeoVolta, Inc.
By: /s/Steve Bond | |
|
Can Current Corporation
By: /s/ [***] |
[Signature Page to Amended & Restated Operating Agreement]
Exhibit A
FORM OF JOINDER AGREEMENT
Reference is hereby made to the Amended & Restated Operating Agreement, dated as of April 15th, 2026, as amended from time to time (the “Agreement”), by and among NeoVolta Power, LLC, a Delaware limited liability company (the “Company”) and the existing Members of the Company. Pursuant to and in accordance with Section 4.01(b) of the Agreement, the undersigned hereby acknowledges that it has received and reviewed a complete copy of the Agreement and agrees that, upon execution of this Joinder Agreement, such Person shall become a party to the Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Agreement as though an original party thereto and shall be deemed, and is hereby admitted as, a Member for all purposes thereof and entitled to all the rights incidental thereto.
Capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement.
IN WITNESS WHEREOF, the undersigned hereby duly executes and delivers this Joinder Agreement as of the date below.
| Date: | 4/15/2026 | MEMBER: | |||
| By: | /s/ Steve Bond | ||||
| Name: Steve Bond | |||||
| Title: President of NeoVolta Power | |||||
Exhibit A
Schedule A
MEMBERS SCHEDULE
| Member Name and Address | Units | Percentage Interest |
|
NeoVolta Inc. Address: 12195 Dearborn Place Poway, CA 92064
|
80 Class A Units | 80.00% |
|
CCC Address:
|
20 Class B Units | 20.00% |
| Total: | 100 Units | 100.00% |
Schedule A
Exhibit 10.2
FIRST AMENDMENT TO CONTRIBUTION AGREEMENT
THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT (the “Amendment”) is made and entered into as of April 15th, 2026 (the “Effective Date”), by and among NeoVolta Power, LLC, a Delaware limited liability company (the “Company”), NeoVolta Inc. (“NeoVolta”), NPJV Manager LLC (“NMC”) and Can Current Corporation (“CCC”). For purposes of this Agreement, each of the Company, NeoVolta, NMC and CCC shall be referred to as a “Party” and, collectively, the “Parties”. All undefined, initially capitalized terms used in this Amendment shall have the meanings set forth in the Contribution Agreement (as defined below).
RECITALS
WHEREAS, reference is made to that certain Contribution Agreement, dated as of January 13, 2026, by and among the Company, NeoVolta, NMC, and CCC (the “Agreement”);
WHEREAS, the Parties hereby acknowledge that, simultaneously herewith, the Parties will amend and restate the Operating Agreement of the Company (the “A&R Operating Agreement”) to remove NMC as a member of the Company;
WHEREAS, pursuant to Section 7.10 of the Agreement, the Contribution Agreement may only be amended by an agreement in writing signed by each Party; and
WHEREAS, pursuant to Section 7.10 of the Agreement, the Parties desire to amend the Contribution Agreement pursuant to the terms set forth in this Amendment.
NOW, THEREFORE, BE IT RESOLVED, the Members hereby agree as follows:
| 1. | Effective as of the date hereof, NMC is hereby removed as a party to the Agreement. All references to NMC in the Agreement, including without limitation any references to NMC by name, defined term, or as a signatory, are hereby deleted in their entirety. Any rights, obligations, duties, or liabilities of or relating to NMC under the Agreement are hereby terminated and of no further force or effect. |
| 2. | Section 1.01(c) is hereby deleted from the Agreement in its entirety. |
| 3. | The defined term “Services Agreements” is hereby deleted from the Agreement in its entirety and each instance of “Services Agreements” occurring in the Agreement is hereby replaced, in each case, with “the Technical Services Agreement”. |
| 4. | Exhibit A of the Agreement is hereby amended to delete “Contributions by NMC” and all text following the subheading “Contributions by NMC.” |
| 5. | The Agreement is hereby further amended as follows: |
| a. | All references in the Agreement to “the Parties,” “each Party,” “any Party,” or words of similar import shall be deemed to refer solely to the remaining Parties and shall be construed as if NMC had never been a party to the Agreement. |
| b. | Any defined term in the Agreement that includes or references NMC, whether individually or as part of a collective definition, is hereby amended to exclude NMC. |
| c. | Any provision of the Agreement that is rendered inapplicable, unnecessary, or meaningless solely as a result of the removal of NMC is hereby deemed deleted in its entirety. |
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| d. | Any notice, consent, approval, or other communication provision in the Agreement requiring delivery to or from NMC is hereby amended to remove any such requirement with respect to NMC. |
| 6. | Effective as of the date hereof, (a) NMC is hereby released and discharged from any and all obligations, duties, covenants, and liabilities arising under or in connection with the Agreement from and after the date hereof, and (b) the remaining Parties hereby release and discharge NMC from any and all claims arising under the Agreement from and after the date hereof. |
| 7. | Except as set forth herein, the Agreement remains in full force and effect as the binding obligations of the parties thereto. This Amendment is hereby incorporated by reference into the Agreement. |
| 8. | This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same Amendment, and any of the parties to this Amendment may execute this Amendment by signing any of the counterparts. Any counterpart of this Amendment may be executed by facsimile transmission, .pdf format, electronic signature or other electronic transmission, including DocuSign. |
| 9. | This Amendment shall be governed by, construed and interpreted according to the laws of the State of Delaware without regard to any choice or conflicts of laws principles thereof. |
[Signature Page Follows.]
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IN WITNESS WHEREOF, the undersigned has executed this Amendment to be effective as of the Effective Date.
|
The Company:
NeoVolta Power, LLC
By: /s/Steve Bond | |
|
The Members:
| |
|
NeoVolta, Inc.
By: /s/Steve Bond | |
| NPJV Manager LLC | |
| By: /s/ [***] | |
| Name: [***] | |
| Title: Authorized Signatory | |
|
Can Current Corporation
By: /s/ [***] |
[Signature Page to First Amendment to Contribution Agreement of NeoVolta Power, LLC]
Exhibit 10.3
ASSET PURCHASE AGREEMENT
by and between
CAN CURRENT CORPORATION
and
NEOVOLTA POWER, LLC
dated as of
April 15th , 2026
TABLE OF CONTENTS
Page
| ARTICLE I Purchase and Sale | 4 |
| Section 1.01 Purchase and Sale of Assets | 4 |
| Section 1.02 Excluded Assets | 4 |
| Section 1.03 Liabilities | 4 |
| Section 1.04 Purchase Price | 4 |
| Section 1.05 Delayed Payments | 5 |
| Section 1.06 Non-Assignable Assets | 5 |
| ARTICLE II Closing | 6 |
| Section 2.01 Closing | 6 |
| Section 2.02 Closing Deliverables | 6 |
| ARTICLE III Representations and Warranties of Seller | 7 |
| Section 3.01 Organization and Authority of Seller | 7 |
| Section 3.02 No Conflicts or Consents | 7 |
| Section 3.03 Title to Tangible Personal Property | 7 |
| Section 3.04 Legal Proceedings; Governmental Orders | 7 |
| Section 3.05 Compliance with Laws | 7 |
| Section 3.06 Taxes | 8 |
| Section 3.07 Brokers | 8 |
| Section 3.08 Condition of the Purchased Assets | 8 |
| Section 3.09 No Other Representations and Warranties | 8 |
| ARTICLE IV Representations and Warranties of Buyer | 8 |
| Section 4.01 Organization and Authority of Buyer | 8 |
| Section 4.02 No Conflicts; Consents | 9 |
| Section 4.03 Legal Proceedings | 9 |
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| Section 4.04 Brokers | 9 |
| Section 4.05 Independent Investigation | 9 |
| ARTICLE V Covenants | 9 |
| Section 5.01 Confidentiality | 9 |
| Section 5.02 Public Announcements | 9 |
| Section 5.03 Transfer Taxes | 9 |
| Section 5.04 Further Assurances | 9 |
| ARTICLE VI Indemnification | 10 |
| Section 6.01 Survival | 10 |
| Section 6.02 Indemnification by Seller | 10 |
| Section 6.03 Indemnification by Buyer | 10 |
| Section 6.04 Certain Limitations | 10 |
| Section 6.05 Indemnification Procedures | 11 |
| Section 6.06 Tax Treatment of Indemnification Payments | 11 |
| Section 6.07 Exclusive Remedies | 11 |
| ARTICLE VII Miscellaneous | 11 |
| Section 7.01 Notices | 11 |
| Section 7.02 Interpretation; Headings | 12 |
| Section 7.03 Severability | 12 |
| Section 7.04 Entire Agreement | 12 |
| Section 7.05 Successors and Assigns; Assignment | 12 |
| Section 7.06 Amendment and Modification; Waiver | 12 |
| Section 7.07 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial | 12 |
| Section 7.08 Counterparts | 13 |
| Section 7.09 Non-Recourse | 13 |
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this “Agreement”), dated as of April 15th, 2026, is entered into between Can Current Corporation, a Delaware corporation (“Seller”), and NeoVolta Power, LLC, a Delaware limited liability company (“Buyer”). Seller and Buyer are sometimes referred to herein as the “Parties” and each a “Party”. Capitalized terms used in this Agreement have the meanings given to such terms herein, as such definitions are identified by the cross-references set forth in Exhibit A attached hereto.
RECITALS
WHEREAS, Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, certain manufacturing equipment to manufacture battery energy storage systems, as set forth on Exhibit B, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
Purchase and Sale
Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell, convey, assign, transfer, and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title, and interest in, to, and under the tangible and intangible assets set forth on Exhibit B (collectively, the “Purchased Assets”). Seller shall deliver such Purchased Assets to Shanghai Port (the “Port”).
Section 1.02 Excluded Assets. Other than the Purchased Assets, Buyer expressly understands and agrees that it is not purchasing or acquiring, and Seller is not selling or assigning, any other assets or properties of Seller, and all such other assets and properties shall be excluded from the Purchased Assets (collectively, the “Excluded Assets”).
Section 1.03 Liabilities. Notwithstanding anything to the contrary herein, Buyer shall not assume, and shall have no obligation to pay, perform, or discharge, any liabilities, obligations, or commitments of any nature whatsoever, whether asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured, or otherwise (collectively, “Liabilities”) of the Seller.
Section 1.04 Purchase Price (a)The aggregate purchase price for the Purchased Assets consist of: (i) the equipment price of $9 Million (The “Equipment Price”),which includes the cost of equipment; provided that each installment of the Equipment Price shall be paid in installments as set forth below and (ii) the excess portion of corresponding tariffs and customs duties imposed by the United States arising from the import of the Equipment under this Agreement that shall be borne by the Buyer, as well as the corresponding customs bond expenses (such total amount, the “Purchase Price”).
Buyer shall pay each installment of the Equipment Price by wire transfer to Seller of immediately available funds in accordance with the wire transfer instructions provided to Buyer at least three (3) days prior to the applicable date set forth below.
| Milestone | Purchase Price Amount ($) |
| Shipment of Equipment | $2,000,000 |
| Purchased Assets are Delivered to the Facility | $3,000,000 |
| Completion of Commissioning | $4,000,000 |
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Any unpaid balance of the aforementioned excess portion of U.S. tariffs and customs duties and the corresponding customs bond expenses shall be settled based on the actual amount incurred, within one (1) week after such actual incurrence.
“Commissioning” means the Initial Services as defined in that certain Technical Services Agreement, dated as of the date hereof, by and between Seller and Buyer (as may be amended from time to time). Notwithstanding anything to the contrary, no portion of the Purchase Price is paid in respect of Commissioning and all terms and conditions in respect of and compensation for the Commissioning scope of services is as set forth in the aforementioned Technical Services Agreement.
“Equipment” means those items included in the Purchased Assets set forth on Exhibit B that are identified.
“Standard of Care” means in compliance with (a) Prudent Industry Standards; (b) the terms of this Agreement; (c) applicable Laws; (d) any Equipment documentation, manufacturer’s specifications; (e) all specifications and descriptions set forth herein and therein; (f) a safe, expeditious, good, diligent and workmanlike manner that complies with the safety regulations and standards adopted under the Occupational Safety and Health Act of 1970, as amended from time to time and any corresponding state laws applicable to the Facilities; and (g) Buyer’s policies, standards, codes, guidelines or procedures, which have been delivered to Seller prior to the date hereof.
“Prudent Industry Standards” means the prudent practices applicable from time to time to a Person engaging in inspection and technical service of equipment which is similar in size and kind to the Facility nationally. Prudent Industry Standards are not limited to optimum practices, methods or acts to the exclusion of all others, but rather refers to a spectrum of possible practices, methods and acts employed by private power producers which could have been expected to accomplish the desired result at reasonable cost consistent with reliability and safety.
(b) Delivery, Title and Risk of Loss for Equipment.
All Equipment shall be delivered to Shanghai Port or such other location as mutually agreed by the Parties (the “Delivered”). Notwithstanding anything to the contrary herein, the risk of loss with respect to the Equipment shall remain borne by Seller until the Equipment (or any portion thereof) is delivered to (i) Shanghai Port, or (ii) such other location designated by Buyer for receipt of the Equipment.
(c) Freight, tariffs, customs bond and related logistics costs. All post-delivery logistics costs incurred after arrival at the Delivered Location, as well as the non-excess portion of U.S. tariffs and customs duties imposed in connection with the import of the Equipment under this Agreement and the corresponding customs bond expenses, shall be borne solely by Buyer.
Title to the Equipment shall transfer to Buyer upon Seller’s receipt of the full Purchase Price from Buyer.
(d) Title Transfer Free of Liens. With respect to the transfer of title to any Equipment or any other personal property from Seller to Buyer as provided for under this Agreement, Seller warrants that such transfer to Buyer shall be free and clear of all liens, claims, security interests or other encumbrances.
Section 1.05 Delayed Payments. If Buyer fails to pay any portion of the Purchase Price when due, such unpaid amount shall bear interest from the date such payment was due until the date of actual payment at a rate per annum equal to the prime rate as published in The Wall Street Journal on the date such payment was due (or, if not published on such date, on the most recent preceding date on which such rate was published), plus two percent (2%). Such interest shall be calculated on the basis of a 365-day year and the actual number of days elapsed. The payment of interest pursuant to this Section 1.05 shall not limit or affect any other rights or remedies available to Seller under this Agreement or at law or in equity with respect to such failure to pay.
Section 1.06 Non-Assignable Assets.
(a) Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute a sale, assignment, or transfer of any Purchased Asset if such sale, assignment, or transfer: (i) violates applicable Law; or (ii) requires the consent or waiver of a Person who is not a party to this Agreement or an Affiliate of a party to this Agreement and such consent or waiver has not been obtained prior to the Closing.
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(b) Following the Closing, Seller and Buyer shall use commercially reasonable efforts, and shall cooperate with each other, to promptly obtain any such required consent or waiver, or any release, substitution, or amendment required to obtain in writing the unconditional release of all parties to such arrangements, so that, in any case, Buyer shall be solely responsible for such Liabilities from and after the Closing Date; provided, however, that neither Seller nor Buyer shall be required to pay any consideration therefor. Once such consent, waiver, release, substitution, or amendment is obtained, Seller shall sell, assign, and transfer to Buyer the relevant Purchased Asset to which such consent, waiver, release, substitution, or amendment relates for no additional consideration. Applicable sales, transfer, and other similar Taxes in connection with such sale, assignment, or transfer shall be paid by Buyer in accordance with Section 5.03.
(c) To the extent that any Purchased Asset cannot be transferred to Buyer pursuant to this Section 1.06 but the payment pursuant to Section 1.04 has been fully made by the Buyer, Buyer and Seller shall use commercially reasonable efforts to enter into such arrangements (such as subleasing, sublicensing, or subcontracting) to provide to the parties the economic and, to the extent permitted under applicable Law, operational equivalent of the transfer of such Purchased Asset to Buyer as of the Closing. Buyer shall, as agent or subcontractor for Seller, pay, perform, and discharge fully the liabilities and obligations of Seller thereunder from and after the Closing Date. To the extent permitted under applicable Law, Seller shall, at Buyer’s expense, hold in trust for and pay to Buyer promptly upon receipt thereof, all income, proceeds, and other monies received by Seller from and after the Closing Date, to the extent related to such Purchased Asset in connection with the arrangements under this Section 1.06. Seller shall be permitted to set off against such amounts all direct costs associated with the retention and maintenance of such Purchased Assets.
For purposes of this Agreement: (i) “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person; and (ii) “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
ARTICLE II
Closing
Section 2.01 Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place remotely by exchange of documents and signatures (or their electronic counterparts), simultaneously with the execution of this Agreement, or at such other time or place or in such other manner as Seller and Buyer may mutually agree upon in writing. The date on which the Closing is to occur is herein referred to as the “Closing Date.”Section 2.02Closing Deliverables.
(a) At the Closing, Seller shall deliver to Buyer the following:
(i) a certificate of the Secretary (or equivalent officer) of Seller certifying as to the names and signatures of the officers of Seller authorized to sign this Agreement and the other Transaction Documents; and
(ii) such other customary instruments of transfer or assumption, filings, or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to the transactions contemplated by this Agreement.
(b) At the Closing, Buyer shall deliver to Seller the following:
(i) the Purchase Price by wire transfer of immediately available funds; and
(ii) a certificate of the Secretary (or equivalent officer) of Buyer certifying as to the names and signatures of the officers of Buyer authorized to sign this Agreement and the other Transaction Documents.
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ARTICLE III
Representations and Warranties of Seller
Seller represents and warrants to Buyer that the statements contained in this ARTICLE III are true and correct as of the date hereof.
Section 3.01 Organization and Authority of Seller. Seller is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware. Seller has all necessary corporate power and authority to enter into this Agreement and the other Transaction Documents to which Seller is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and any other Transaction Document to which Seller is a party, the performance by Seller of its obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Seller. This Agreement and the Transaction Documents constitute legal, valid, and binding obligations of Seller enforceable against Seller in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 3.02 No Conflicts or Consents. The execution, delivery, and performance by Seller of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or breach any provision of the certificate of incorporation or bylaws of Seller; (b) violate or breach any provision of any Law or Governmental Order applicable to Seller or the Purchased Assets; (c) require the consent, notice, or other action by any Person; or (d) require any consent, permit, Governmental Order, filing, or notice from, with, or to any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any arbitrator, court, or tribunal of competent jurisdiction (each, a “Governmental Authority”) by or with respect to Seller in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby; except, in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration, or failure to obtain consent or give notice would not have a Material Adverse Effect and, in the case of clause (d), where such consent, permit, Governmental Order, filing, or notice which, in the aggregate, would not have a Material Adverse Effect. For purposes of this Agreement: (i) “Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, or other requirement or rule of law of any Governmental Authority, (ii) “Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination, or award entered by or with any Governmental Authority, (iii) “Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity, and (iv) “Material Adverse Effect” means any event, occurrence, fact, condition, or change that is materially adverse, or is reasonably likely to have a material adverse effect on, the Purchased Assets.
Section 3.03 Title to Tangible Personal Property. Seller has good and valid title to all tangible personal property included in the Purchased Assets, free and clear of any lien, charge, claim, pledge, security interest, or other similar encumbrance (each, an “Encumbrance”), except for: (a) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures; (b) mechanics’, carriers’, workmen’s, repairmen’s, or other like liens arising or incurred in the ordinary course of business; (c) liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business; and (d) other imperfections of title or Encumbrances, if any, that would not have a Material Adverse Effect.
Section 3.04 Legal Proceedings; Governmental Orders.
(a) There are no claims, actions, suits, investigations, or other legal proceedings (collectively, “Actions”) pending or, to Seller’s knowledge, threatened against or by Seller relating to or affecting the Purchased Assets, which if determined adversely to Seller would result in a Material Adverse Effect.
(b) There are no outstanding Governmental Orders against, relating to, or affecting the Purchased Assets, which would have a Material Adverse Effect.
Section 3.05 Compliance with Laws. Seller is in compliance with all Laws applicable to the use of the Purchased Assets, except where non-compliance would not have a Material Adverse Effect.
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Section 3.06 Taxes.
(a) Except as would not have a Material Adverse Effect, Seller has filed (taking into account any valid extensions) all material Tax Returns with respect to the Purchased Assets required to be filed by Seller for any tax periods prior to Closing and has paid all Taxes shown thereon as owing. Seller is not currently the beneficiary of any extension of time within which to file any material Tax Return other than extensions of time to file Tax Returns obtained in the ordinary course of business.
(b) The representations and warranties set forth in this Section 3.06 are Seller’s sole and exclusive representations and warranties regarding Tax matters.
(c) The term “Tax Return” means all returns, declarations, reports, information returns and statements, and other documents relating to Taxes (including amended returns and claims for refund).
(d) The term “Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, documentary, franchise, registration, profits, license, withholding, payroll, employment, unemployment, excise, severance, stamp, occupation, premium, property (real or personal), customs, duties, or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest, additions, or penalties with respect thereto.
Section 3.07 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Seller.
Section 3.08 Condition of the Purchased Assets. The Purchased Assets are, as of the Closing Date, (a) in good operating condition and repair, ordinary wear and tear excepted, and (b) suitable for the purposes for which they are currently used. Seller has maintained the Purchased Assets in a manner consistent with past practice, subject to ordinary wear and tear.
Section 3.09 No Other Representations and Warranties. Except for the representations and warranties contained in this ARTICLE III, neither Seller nor any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller, including any representation or warranty as to the accuracy or completeness of any information, documents, or material regarding the Purchased Assets furnished or made available to Buyer and its Representatives in any form (including any information, documents, or material delivered to Buyer on behalf of Seller for purposes of this Agreement or any management presentations made in expectation of the transactions contemplated hereby), or as to the future revenue, profitability, or success of the business of manufacturing battery energy storage systems, or any representation or warranty arising from statute or otherwise in Law. For purposes of this Agreement, “Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants, and other agents of such Person.
ARTICLE IV
Representations and Warranties of Buyer
Buyer represents and warrants to Seller that the statements contained in this ARTICLE IV are true and correct as of the date hereof.
Section 4.01 Organization and Authority of Buyer. Buyer is a limited liability company duly organized, validly existing, and in good standing under the Laws of the State of Delaware. Buyer has all necessary corporate power and authority to enter into this Agreement and the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and the other Transaction Documents constitute legal, valid, and binding obligations of Buyer enforceable against Buyer in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
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Section 4.02 No Conflicts; Consents. The execution, delivery, and performance by Buyer of this Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) violate or breach any provision of the certificate of formation or bylaws of Buyer; (b) violate or breach any provision of any Law or Governmental Order applicable to Buyer; (c) require the consent, notice, or other action by any Person, conflict with, violate or breach, constitute a default under, or result in the acceleration of any agreement to which Buyer is a party; or (d) require any consent, permit, Governmental Order, filing, or notice from, with or to any Governmental Authority by or with respect to Buyer in connection with the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby; except, in the cases of clauses (b) and (c), where the violation, breach, conflict, default, acceleration, or failure to obtain consent or give notice would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby and, in the case of clause (d), where such consent, permit, Governmental Order, filing, or notice which, in the aggregate, would not have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.
Section 4.03 Legal Proceedings. There are no Actions pending or, to Buyer’s knowledge, threatened against or by Buyer that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement.
Section 4.04 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of Buyer.
Section 4.05 Independent Investigation. Buyer has conducted its own independent investigation, review, and analysis of the Purchased Assets and acknowledges that it has been provided adequate access to the assets, books and records, and other documents and data of Seller for such purpose. Buyer acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, it (i) has relied solely upon its own investigation and the express representations and warranties of Seller set forth in ARTICLE III of this Agreement and (ii) has not relied, is not relying, and disclaims reliance on any and all express or implied representations or warranties, whether written or oral, made by Seller or any of its Representatives, other than the express representations and warranties of Seller set forth in ARTICLE III of this Agreement; and (b) neither Seller nor any other Person has made any representation or warranty as to Seller, the Purchased Assets, or this Agreement, except as expressly set forth in ARTICLE III of this Agreement.
ARTICLE V
Covenants
Section 5.01 Confidentiality. The Parties acknowledge and agree that Section 10.01 of that certain Operating Agreement of Buyer, dated as of January 13, 2026, and as may be amended from time to time, shall govern the confidentiality of this Agreement and the transactions contemplated herein, mutatis mutandis.
Section 5.02 Public Announcements. Unless otherwise required by applicable Law, neither Party shall make any public announcements in respect of this Agreement or the transactions contemplated hereby without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned, or delayed), and the Parties shall cooperate as to the timing and contents of any such announcement.
Section 5.03 Transfer Taxes. All transfer, sales, use, registration, documentary, stamp, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction Documents, if any, shall be borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Seller shall cooperate with respect thereto as necessary).
Section 5.04 Further Assurances. Following the Closing, each of the Parties shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the other Transaction Documents.
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ARTICLE VI
Indemnification
Section 6.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is twelve (12) months following the Closing Date. None of the covenants or other agreements contained in this Agreement shall survive the Closing Date other than those which by their terms contemplate performance after the Closing Date, and each such surviving covenant and agreement shall survive the Closing for the period contemplated by its terms. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching Party to the breaching Party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of such survival period and such claims shall survive until finally resolved.
Section 6.02 Indemnification by Seller. Subject to the other terms and conditions of this ARTICLE VI, Seller shall indemnify Buyer against, and shall hold Buyer harmless from and against, any and all losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys’ fees (collectively, “Losses”), incurred or sustained by, or imposed upon, Buyer based upon, arising out of, with respect to, or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement;
(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Seller pursuant to this Agreement; or
(c) any Excluded Asset or any Liability of Seller.
Section 6.03 Indemnification by Buyer. Subject to the other terms and conditions of this ARTICLE VI, Buyer shall indemnify Seller against, and shall hold Seller harmless from and against, any and all Losses incurred or sustained by, or imposed upon, Seller based upon, arising out of, or with respect to:
(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement; or
(b) any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement.
Section 6.04 Certain Limitations. The Party making a claim under this ARTICLE VI is referred to as the “Indemnified Party,” and the Party against whom such claims are asserted under this ARTICLE VI is referred to as the “Indemnifying Party.” The indemnification provided for in Section 6.02 and Section 6.03 shall be subject to the following limitations:
(a) The Indemnifying Party shall not be liable to the Indemnified Party for indemnification under Section 6.02(a) or Section 6.03(a), as the case may be, until the aggregate amount of all Losses in respect of indemnification under Section 6.02(a) or Section 6.03(a) exceeds one percent (1%) of the Purchase Price (the “Deductible”), in which event the Indemnifying Party shall only be required to pay or be liable for Losses in excess of the Deductible.
(b) The aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 6.02(a) or Section 6.03(a), as the case may be, shall not exceed fifteen percent (15%) of the Purchase Price.
(c) In no event shall any Indemnifying Party be liable to any Indemnified Party under this ARTICLE VI for any punitive, incidental, consequential, special, or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.
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Section 6.05 Indemnification Procedures. Whenever any claim shall arise for indemnification hereunder, the Indemnified Party shall promptly provide written notice of such claim to the Indemnifying Party. Such notice by the Indemnified Party shall: (a) describe the claim in reasonable detail; (b) include copies of all material written evidence thereof; and (c) indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any Action by a Person who is not a party to this Agreement, the Indemnifying Party, at its sole cost and expense and upon written notice to the Indemnified Party, may assume the defense of any such Action with counsel reasonably satisfactory to the Indemnified Party. The Indemnified Party shall be entitled to participate in the defense of any such Action, with its counsel and at its own cost and expense, subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party does not assume the defense of any such Action, the Indemnified Party may, but shall not be obligated to, defend against such Action in such manner as it may deem appropriate, including settling such Action, after giving notice of it to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate and no action taken by the Indemnified Party in accordance with such defense and settlement shall relieve the Indemnifying Party of its indemnification obligations herein provided with respect to any damages resulting therefrom. Seller and Buyer shall cooperate with each other in all reasonable respects in connection with the defense of any claim, including: (i) making available (subject to the provisions of Section 5.01) records relating to such claim; and (ii) furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending Party, management employees of the non-defending Party as may be reasonably necessary for the preparation of the defense of such claim. The Indemnified Party shall not settle any Action without the Indemnifying Party’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).
Section 6.06 Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement shall be treated by the Parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
Section 6.07 Exclusive Remedies. The parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud on the part of a Party in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement, or obligation set forth herein or otherwise relating to the subject matter of this Agreement shall be pursuant to the indemnification provisions set forth in this ARTICLE VI. In furtherance of the foregoing, each Party hereby waives, to the fullest extent permitted under Law, any and all rights, claims, and causes of action for any breach of any representation, warranty, covenant, agreement, or obligation set forth herein or otherwise relating to the subject matter of this Agreement it may have against the other Party and their Affiliates and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions set forth in this ARTICLE VI. Nothing in this Section 6.07 shall limit any Person’s right to seek and obtain any equitable relief to which such Person shall be entitled or to seek any remedy on account of any fraud by any Party.
ARTICLE VII
Miscellaneous
Section 7.01 Notices. All notices, claims, demands, and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 7.01):
| If to Seller: | [***] Email: [***] |
| If to Buyer: | 12195 Dearborn Place Poway, CA 92064 Email: [***] |
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Section 7.02 Interpretation; Headings. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
Section 7.03 Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement.
Section 7.04 Entire Agreement. This Agreement and the other Transaction Documents constitute the sole and entire agreement of the Parties with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous representations, warranties, understandings, and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Exhibits, schedules, the statements in the body of this Agreement will control.
Section 7.05 Successors and Assigns; Assignment. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and permitted assigns. Neither Party may assign any of its rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any purported assignment in violation of this Section shall be null and void. No assignment shall relieve the assigning Party of any of its obligations hereunder.
Section 7.06 Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each Party. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No failure to exercise, or delay in exercising, any right or remedy arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy.
Section 7.07 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to the conflict of law provisions thereof to the extent such provisions would require or permit the application of laws of any jurisdiction other than the State of Delaware. Any legal suit, action, proceeding, or dispute arising out of or relating to this Agreement, the other Transaction Documents, or the transactions contemplated hereby or thereby shall be brought in the United States District Court for the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, in the Superior Court of the State of Delaware), so long as one of such courts shall have subject matter jurisdiction over such suit, action, or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware, and each Party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding, or dispute.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING, CAUSE OF ACTION, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING ANY EXHIBITS AND SCHEDULES ATTACHED TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION; (II) EACH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) EACH PARTY MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY; AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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Section 7.08 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Section 7.09 Non-Recourse. Except with respect to claims arising from fraud on the part of a Person in connection with the transactions contemplated by this Agreement, this Agreement may only be enforced against, and any claim, action, suit, or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution, or performance of this Agreement, may only be brought against the entities that are expressly named as Parties hereto and then only with respect to the specific obligations set forth herein with respect to such Party. No past, present, or future director, officer, employee, incorporator, organizer, manager, member, partner, shareholder, Affiliate, agent, attorney, or other Representative of any Party or of any Affiliate of any Party, or any of their successors or permitted assigns, shall have any liability for any obligations or liabilities of any Party under this Agreement or for any claim, action, suit, or other legal proceeding based on, in respect of, or by reason of the transactions contemplated hereby (other than claims arising from fraud on the part of a Person in connection with the transactions contemplated by this Agreement).
[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
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CAN CURRENT CORPORATION
By /s/ [***]
| |
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NEOVOLTA POWER, LLC
By /s/ Steve Bond
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[Signature Page to Asset Purchase Agreement]
EXHIBIT A
DEFINITIONS CROSS-REFERENCE TABLE
The following terms have the meanings set forth in the location in this Agreement referenced below:
| Term | Section |
| Actions | Section 3.04(a) |
| Affiliate | Section 1.06 |
| Agreement | Preamble |
| Buyer | Preamble |
| Closing | Section 2.01 |
| Closing Date | Section 2.01 |
| Control | Section 1.06 |
| Deductible | Section 6.04(a) |
| Encumbrance | Section 3.03 |
| Equipment | Section 1.04(a) |
| Excluded Assets | Section 1.02 |
| Port | Section 1.01 |
| Governmental Authority | Section 3.02 |
| Governmental Order | Section 3.02 |
| Indemnified Party | Section 6.04 |
| Indemnifying Party | Section 6.04 |
| Law | Section 3.02 |
| Liabilities | Section 1.03 |
| Losses | Section 6.02 |
| Material Adverse Effect | Section 3.02 |
| Person | Section 3.02 |
| Prudent Industry Standards | Section 1.04(a) |
| Purchased Assets | Section 1.01 |
| Purchase Price | Section 1.04 |
| Representative | Section 3.09 |
| Seller | Preamble |
| Standard of Care | Section 1.04(a) |
| Taxes | Section 3.06(d) |
| Tax Returns | Section 3.06(c) |
| Transaction Documents | Section 2.02(a)(i) |
Exhibit 10.4
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is made and entered into as of April 15th , 2026 (the “Effective Date”), by and between POTISEDGE TECHNOLOGY PTE LTD., a Singapore Private Limited (“PT”), and NeoVolta Inc., a Nevada corporation (the “Company”). PT and the Company are referred to herein individually as a “Party” and collectively as the “Parties”. Capitalized terms used and not otherwise defined herein have the respective meanings given to such terms in SECTION 1.1.
RECITALS
A. The Company’s primary business is engaging in the commercial and industrial battery energy storage business (the “Business”), and the Company is a major shareholder of an energy storage manufacturing enterprise. The Company conducts all lawful activities necessary or incidental to the Business (the “Business Purpose”).
B. The Company desires that PT provide sales and marketing coordination services (the “Core Services”) as necessary to further the Business Purpose, and PT is willing to provide such services in consideration for an equity grant from the Company as set forth in this Agreement.
C. The Parties desire to enter into this Agreement in order to set forth the definitive terms and conditions upon which PT will render the Services to the Company and the Company will grant equity to PT as compensation for such Services.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE Ⅰ
DEFINITIONS
SECTION 1.1 Defined Terms.
For purposes of this Agreement, the terms set forth below will have the following respective meanings:
| · | “Affiliate” means any Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For the avoidance of doubt, PT shall not be considered an Affiliate of the Company or any of its Affiliates under this Agreement. | |
| · | “Agreement” has the meaning set forth in the preamble. | |
| · | “Business” has the meaning set forth in the recitals. | |
| · | “Business Purpose” has the meaning set forth in the recitals. | |
| · | “PT” means POTISEDGE TECHNOLOGY PTE LTD.. | |
| · | “Company” has the meaning set forth in the preamble. |
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| · | “Company Indemnified Parties” has the meaning set forth in SECTION 5.3. | |
| · | “Core Services” has the meaning set forth in Recital B. | |
| · | “Effective Date” has the meaning set forth in the preamble. | |
| · | “PT Indemnified Parties” has the meaning set forth in SECTION 5.2(a). | |
| · | “Non-Party Persons” has the meaning set forth in SECTION 7.13. | |
| · | “Party” and “Parties” have the meanings set forth in the preamble. | |
| · | “Person” means an individual, or a corporation, limited liability company, partnership (whether general or limited), joint venture, trust, unincorporated organization, joint stock company, association, or other entity, or any government, or any agency or subdivision thereof. | |
| · | “Services” means all services provided by PT pursuant to this Agreement, including the Core Services. | |
| · | “Share Grant” means the grant of 1,200,000 shares of the Company’s common stock to PT as set forth in SECTION 3.1. | |
| · | “Term” has the meaning provided in SECTION 6.1. | |
| · | “Unreleased Claims” has the meaning set forth in SECTION 5.1. | |
| · | “Vesting Period” means each of the 6-month, 12-month, 18-month, and 24-month anniversaries of the Effective Date. | |
| · | “Vesting Date” means, the 6-month, 12-month, 18-month, and 24-month anniversaries of the Effective Date. | |
| · | “Vesting Schedule” means that the Share Grant shall vest in four (4) equal semi-annual installments of 25% on each Vesting Date. |
ARTICLE Ⅱ
SERVICES
SECTION 2.1 PT’s Service Obligations
During the Term, PT will provide the Core Services to the Company in a professional, diligent and commercially reasonable manner, including but not limited to the following specific obligations:
(a) Coordinate all sales and marketing activities of the Company related to the Business, including developing sales strategies, identifying target markets and customers, coordinating marketing campaigns and promotional activities for the Company’s commercial and industrial battery energy storage business;
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SECTION 2.2 PT Personnel Matters
Subject to the terms of this Agreement, PT will, in its sole discretion, select, employ or retain, remove, supervise, and direct all employees, independent contractors, or other personnel of PT necessary for the satisfactory performance of the Services. PT will determine all wages, benefits, and other compensation for such personnel and will be solely responsible for paying all such compensation, providing all benefits, and complying with all applicable federal, state, and local labor and employment laws (including wage and hour laws, anti-discrimination laws, and workers’ compensation laws) in connection with such personnel. All such personnel shall be the sole employees/agents of PT, and the Company shall have no liability or obligation with respect to their employment or engagement.
ARTICLE Ⅲ
PT COMPENSATION – SHARE GRANT
SECTION 3.1 Share Grant as Consideration
In full and complete consideration for all Services provided by PT to the Company pursuant to this Agreement during the Term, the Company hereby irrevocably agrees to issue and deliver to PT 1,200,000 (one million two hundred thousand) fully paid and non-assessable shares of the Company’s common stock (the “Share Grant”) on the Effective Date, subject to the vesting and forfeiture terms set forth in this Article III.
SECTION 3.2 Vesting of the Share Grant
The Share Grant shall be issued to PT fully on the Effective Date and shall vest in four (4) equal semi-annual installments of 300,000 shares (25%) on each Vesting Date (the 6-month, 12-month, 18-month, and 24-month anniversaries of the Effective Date).
SECTION 3.3 Representations Regarding the Share Grant
The Company represents and warrants that as of the Effective Date and on the Vesting Date:
(a) The 1,200,000 shares of common stock underlying the Share Grant are duly authorized and available for issuance, and no additional shareholder approval is required for the issuance of the Share Grant;
(b) The Share Grant, when issued on the Vesting Date, will be duly authorized, validly issued, fully paid, and non-assessable;
(c) The Share Grant will be free and clear of all liens, encumbrances, charges, security interests, restrictions on transfer (other than restrictions imposed by applicable federal and state securities laws), and any other adverse claims of any third party.
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ARTICLE Ⅳ
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of PT
PT represents and warrants to the Company that the following are true and correct as of the Effective Date:
(a) Organization and Authority: PT is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with all requisite corporate power and authority to enter into this Agreement and perform all of its obligations hereunder. The execution, delivery, and performance of this Agreement by PT have been duly authorized by all necessary corporate action (including the approval of PT’s board of directors, as applicable), and no other corporate proceedings are necessary for such execution, delivery, or performance.
(b) No Conflicts: The execution, delivery, and performance of this Agreement by PT do not and will not (i) conflict with or result in a breach of PT’s certificate of incorporation, bylaws, or any other organizational documents of PT; (ii) conflict with, or result in a breach or default under, any material contract, agreement, or instrument to which PT is a party or by which PT or its assets are bound; or (iii) violate any applicable federal, state, or local law, rule, regulation, order, judgment, or decree applicable to PT.
(c) Valid and Binding Obligation: This Agreement constitutes a valid, legal, and binding obligation of PT, enforceable against PT in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors’ rights generally and equitable principles of general application.
(d) No Adverse Claims: There are no pending or, to the knowledge of PT, threatened claims, actions, suits, proceedings, or investigations against PT that would materially impair PT’s ability to perform its obligations under this Agreement. PT is not in default under any applicable law, order, judgment, or decree that would materially affect the provision of the Services.
SECTION 4.2 Representations and Warranties of the Company
The Company represents and warrants to PT that the following are true and correct as of the Effective Date:
(a) Organization and Authority: The Company is a corporation duly organized, validly existing, and in good standing under the laws of Neveda, with all requisite corporate power and authority to enter into this Agreement and perform all of its obligations hereunder, including the authority to grant the Share Grant to PT. The execution, delivery, and performance of this Agreement by the Company have been duly authorized by all necessary corporate action (including the approval of the Company’s board of directors and any required shareholder approval for the Share Grant), and no other corporate proceedings are necessary for such execution, delivery, or performance.
(b) No Conflicts: The execution, delivery, and performance of this Agreement by the Company do not and will not (i) conflict with or result in a breach of the Company’s certificate of incorporation, by laws, or any other organizational documents of the Company; (ii) conflict with, or result in a breach or default under, any material contract, agreement, or instrument to which the Company is a party or by which the Company or its assets are bound; or (iii) violate any applicable federal, state, or local law, rule, regulation, order, judgment, or decree applicable to the Company.
(c) Valid and Binding Obligation: This Agreement constitutes a valid, legal, and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors’ rights generally and equitable principles of general application.
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(d) Share Authorization: The Company has duly authorized the issuance of the 1,200,000 shares of common stock underlying the Share Grant, and such shares are duly authorized and available for issuance on the Vesting Date. All necessary corporate action has been taken to approve the Share Grant to PT, and no further shareholder or board approval is required for such issuance.
(e) No Adverse Claims: There are no pending or, to the knowledge of the Company, threatened claims, actions, suits, proceedings, or investigations against the Company that would materially impair the Company’s ability to perform its obligations under this Agreement, including the issuance of the Share Grant on the Vesting Date. The Company is not in default under any applicable law, order, judgment, or decree that would materially affect its obligations under this Agreement.
(f) Business Validity: The Company’s Business (as set forth in the recitals) is lawfully conducted by the Company in all material respects, and the Company has all necessary permits, licenses, and authorizations required to conduct the Business in all jurisdictions where the Business is currently operated.
ARTICLE Ⅴ
INDEMNIFICATION
SECTION 5.1 Exculpation from Liability
Except as otherwise set forth herein, PT will have no liability whatsoever to the Company for any loss, damage, cost, expense, or claim suffered or incurred by the Company if such loss, damage, cost, expense, or claim arises out of an action taken, or failure to take an action, by PT in good faith and within the scope of its authority in the course of providing the Services pursuant to this Agreement. This Section 5.1 shall not eliminate or limit the liability of PT for fraud, gross negligence, willful misconduct, or a material breach of this Agreement by PT (collectively, the “Unreleased Claims”), as determined by a final, non-appealable order of a court of competent jurisdiction.
SECTION 5.2 Indemnification by the Company
(a) Indemnification Obligation: The Company will indemnify, defend, and hold harmless PT, its officers, directors, employees, agents, and independent contractors (the “PT Indemnified Parties”), who are or were a party or are threatened to be made a party to any threatened, pending, or completed action, suit, proceeding, or investigation (whether civil, criminal, administrative, investigative, or otherwise, and whether formal or informal), by reason of the fact that such PT Indemnified Party is or was providing, or has provided, the Services pursuant to this Agreement, against all expenses (including reasonable attorneys’ fees and disbursements), losses, damages, judgments, fines, penalties, and amounts paid in settlement incurred by such PT Indemnified Party in connection with such proceeding or investigation, if:
(i) Such PT Indemnified Party acted in good faith and in a manner believed by such party to be in, or not opposed to, the best interests of the Company; and
(ii) Such PT Indemnified Party’s conduct did not constitute an Unreleased Claim (as determined by a final, non-appealable order of a court of competent jurisdiction).
(b) Defense and Settlement: The Company shall have the right, at its sole option and expense, to assume and control the defense of any such proceeding or investigation with counsel of its own choice (who shall be reasonably acceptable to the applicable PT Indemnified Party). The Company shall have the exclusive right to approve any settlement of such proceeding or investigation, and such approval shall not be unreasonably withheld, conditioned, or delayed. The PT Indemnified Party shall cooperate with the Company in the defense of such proceeding or investigation and shall be entitled to participate in the defense at its own expense with counsel of its own choice.
(c) Limitation: The Company shall have no indemnification or defense obligation under this Section 5.2 with respect to any Unreleased Claim by a PT Indemnified Party.
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SECTION 5.3 Indemnification by PT
(a) Indemnification Obligation: PT will indemnify, defend, and hold harmless the Company, its officers, directors, shareholders, employees, agents, and independent contractors (the “Company Indemnified Parties”), each of whom is an intended third-party beneficiary of this Section 5.3, from and against any and all losses, damages, costs, expenses (including reasonable attorneys’ fees and disbursements), judgments, fines, penalties, and amounts paid in settlement arising out of or directly or indirectly relating to any Unreleased Claim by PT or any PT Indemnified Party.
(b) Defense and Settlement: PT shall have the right, at its sole option and expense, to assume and control the defense of any claim, action, or proceeding arising out of an Unreleased Claim with counsel of its own choice (who shall be reasonably acceptable to the applicable Company Indemnified Party). PT shall have the exclusive right to approve any settlement of such claim, action, or proceeding, and such approval shall not be unreasonably withheld, conditioned, or delayed. The Company Indemnified Party shall cooperate with PT in the defense of such claim, action, or proceeding and shall be entitled to participate in the defense at its own expense with counsel of its own choice.
(c) Limitation: The PT shall have no indemnification or defense obligation under this Section 5.3 for any claim, loss, or liability that is primarily caused by fraud, gross negligence, willful misconduct, or a material breach of this Agreement by a Company Indemnified Party.
ARTICLE VI
Ⅵ TERM AND TERMINATION
SECTION 6.1 Term
This Agreement shall commence on the Effective Date and shall continue in full force and effect until the expiration of the Vesting Period (the “Term”). This Agreement may only be extended for any additional period by a written agreement signed by both Parties, which shall set forth the terms and conditions of such extension (including any additional compensation, if applicable).
SECTION 6.2 Termination Rights
(a) For Cause Termination: Either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party commits a material breach of any material provision of this Agreement, and such material breach is not cured within thirty (30) days after the non-breaching Party provides written notice of such breach to the breaching Party (the “Cure Period”). For the avoidance of doubt, the following shall constitute a material breach : (i) the persistent failure to provide the Core Services in a professional, diligent, or commercially reasonable manner exceeding sixty (60) days by PT; (ii) the abandonment of the performance of the Services by PT; .(iii)any fraud, gross negligence, or willful misconduct by either Party in this agreement; or (iv) the failure to issue or vest any installment of the Share Grant when due by the Company .
(b) Termination for Insolvency: Either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party (i) files a voluntary petition for bankruptcy or insolvency; (ii) has an involuntary petition for bankruptcy or insolvency filed against it that is not dismissed within sixty (60) days; (iii) makes an assignment for the benefit of its creditors; (iv) consents to the appointment of a receiver, trustee, or custodian for all or a substantial portion of its assets; or (v) ceases to conduct its ordinary course of business.
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SECTION 6.3 Effect of Termination
(a) Termination Prior to Vesting Date: If this Agreement is terminated prior to the Vesting Date (whether for cause or insolvency):
(i) PT shall immediately cease providing all Services to the Company and shall have no further obligation to perform any Services under this Agreement;
(ii) If this agreement is terminated for a material breach by PT under Section 6.2(a), the unvested portion of the Share Grant shall be forfeited and repurchased by the Company ; if this Agreement is terminated for a material breach by the Company under Section 6.2(a), any and all unvested portions of the Share Grant shall automatically vest as of the date of such termination, and PT shall retain all shares of the Share Grant without any forfeiture or repurchase by the Company.
(iii) PT shall comply with the requirements of Section 6.3(d) (Return of Company Property).
(b) Termination After Vesting Date: If this Agreement is terminated for any reason whatsoever after the Vesting Date:
(i) The Company’s obligation to issue the Share Grant shall have been fully performed (or shall be performed in accordance with Section 3.2 if the Vesting Date has occurred but the Share Grant has not yet been delivered);
(ii) PT shall cease providing all Services to the Company upon the effective date of termination; and
(iii) Neither Party shall have any further monetary or performance obligations under this Agreement, except for the survival provisions set forth in Section 6.3(c).
(c) Survival: The following provisions of this Agreement shall survive the expiration or termination of this Agreement for any reason and shall remain in full force and effect: Article V (Indemnification) and Article VII (Miscellaneous Provisions). All survival provisions shall remain in effect for the maximum period permitted by applicable law.
(d) Return of Company Property: Upon any expiration or termination of this Agreement (whether prior to or after the Vesting Date), PT shall promptly (but in no event more than ten (10) business days following such expiration or termination) surrender and deliver to the Company all books, records, documents, data, files, materials, and any other property of the Company (in both physical and electronic form) that is in PT’s possession or control and that relates to the Business or the provision of the Services. PT shall not retain any copies of such property (except for copies required to be retained by applicable law).
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ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1 Notices
Any notice or other communication required or permitted hereunder will be in writing and will be delivered by hand, by certified or registered mail, postage prepaid and return receipt requested, or by email transmission. Notices will be deemed to have been given upon delivery, if delivered by hand or electronic mail, three days after mailing, if mailed, and upon receipt of an appropriate electronic confirmation (other than an automatic “read receipt”), if delivered by email or other means of electronic transmission. Notices will be delivered to the Company and PT at the addresses set forth below:
if to PT:
[***]
Email: [***]
if to the Company:
12195 Dearborn Place
Poway, CA 92064
Email: [email protected]
Any Party may from time to time change its address or designee for notification purposes by giving the other Parties prior notice in the manner specified above of the new address or the new designee and the subsequent date upon which the change will be effective.
SECTION 7.2 Relationship of the Parties
In performing the Services hereunder, PT will have the status of an independent contractor. Employees or other persons whose services are made available by PT hereunder that are not employees or contractors of the Company will be employees or agents of PT, and will be under the sole and exclusive direction and control of PT for all purposes.
SECTION 7.3 Amendment and Modification
This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each Party hereto.
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SECTION 7.4 Waiver
No waiver by a Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by a Party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
SECTION 7.5 Assignment
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Neither Party may assign, transfer, delegate, or otherwise convey this Agreement, or any of its rights, obligations, or interests hereunder, in whole or in part, without the prior written consent of the other Party. Any purported assignment, transfer, delegation, or conveyance without such prior written consent shall be null and void and of no legal effect. Notwithstanding the foregoing, either Party may assign this Agreement to a wholly owned subsidiary or to a successor in interest in connection with a merger, consolidation, or sale of all or substantially all of its assets, provided that the assigning Party provides written notice to the other Party and the assignee assumes all of the assigning Party’s obligations under this Agreement.
For the avoidance of doubt, PT shall have the unrestricted right to transfer any vested Shares issued pursuant to Article III, and such transfer shall not constitute an assignment of this Agreement.
SECTION 7.6 No Third Party Beneficiaries
Except for the PT Indemnified Parties and Company Indemnified Parties identified in Article V (who are intended third-party beneficiaries of Article V), this Agreement is intended for the sole and exclusive benefit of the Parties, and no other Person, firm, corporation, or entity shall have any right, title, interest, or remedy under or by reason of this Agreement. No third party shall be deemed a third-party beneficiary of this Agreement for any purpose other than as expressly set forth in Article V.
SECTION 7.7 Severability
If any term, provision, clause, or section of this Agreement is held to be invalid, illegal, or unenforceable in any jurisdiction by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term, provision, clause, or section of this Agreement, nor shall it invalidate or render unenforceable such term, provision, clause, or section in any other jurisdiction. The Parties shall negotiate in good faith to replace any invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that most nearly achieves the original intent and economic purpose of the invalid provision.
SECTION 7.8 Headings and Interpretation
(a) The headings, subheadings, and section numbers in this Agreement are for reference and organizational purposes only and shall not affect the interpretation, construction, or enforcement of this Agreement.
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(b) For the purposes of this Agreement, the words “include,” “includes,” and “including” shall be deemed to be followed by the words “without limitation.”
(c) The singular form of any term shall include the plural form, and vice versa, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context may require.
(d) References to “days” shall mean calendar days, unless the term “business days” is used, which shall mean Monday through Friday, excluding federal and state holidays in the United States.
(e) This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party who drafted or caused the drafting of this Agreement.
SECTION 7.9 Entire Agreement
This Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter hereof (including the provision of the Services and the Share Grant as compensation therefor) and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties (both written and oral) between the Parties with respect to such subject matter. There are no oral or written side agreements, understandings, or representations between the Parties that are not expressly set forth in this Agreement.
SECTION 7.10 Governing Law
This Agreement and all disputes, claims, or causes of action arising out of or relating to this Agreement, the provision of the Services, or the transactions contemplated hereby (whether for breach of contract, tort, or otherwise) shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to its conflict of laws principles or any other state’s laws.
SECTION 7.11 Dispute Resolution
Any legal suit, action, or proceeding arising out of or relating to this Agreement, the provision of the Services, or the transactions contemplated hereby shall be instituted exclusively in the federal courts of the United States of America for the District of Delaware or the state courts of the State of Delaware (the “Delaware Courts”). Each Party irrevocably submits to the exclusive personal jurisdiction and venue of the Delaware Courts for the resolution of any such dispute, claim, or cause of action, and waives any objection to the exercise of personal jurisdiction or venue by the Delaware Courts (including any objection based on forum non conveniens). Each Party irrevocably waives the right to a trial in any court other than the Delaware Courts for any such dispute, claim, or cause of action.
SECTION 7.12 Waiver of Jury Trial
EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION, SUIT, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THIS WAIVER APPLIES TO ALL DISPUTES, CLAIMS, AND CAUSES OF ACTION, WHETHER BASED ON CONTRACT, TORT, STATUTE, EQUITY, OR ANY OTHER LEGAL THEORY. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL TERM OF THIS AGREEMENT AND THAT THE PARTIES WOULD NOT HAVE ENTERED INTO THIS AGREEMENT WITHOUT THIS WAIVER.
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SECTION 7.13 Non-Party Liability
No past, present, or future shareholder, officer, director, employee, agent, independent contractor, or representative of either Party (the “Non-Party Persons”) shall have any liability (whether in contract, tort, equity, or otherwise) under or in connection with this Agreement, the provision of the Services, or the transactions contemplated hereby, except for Non-Party Persons who commit fraud in connection with this Agreement or the transactions contemplated hereby. No claim, action, suit, or proceeding shall be brought against any Non-Party Person by the other Party for any breach of this Agreement, any Unreleased Claim, or any other claim arising out of or relating to this Agreement or the provision of the Services. This Section 7.13 shall survive the expiration or termination of this Agreement.
SECTION 7.14 Counterparts
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
SECTION 7.15 Legal Counsel
Each Party hereto acknowledges that such Party has been advised that it should seek, and has had the opportunity to seek, independent legal counsel to review this Agreement and the transactions contemplated hereby and to obtain advice of such legal counsel relating to such documentation and the matters contemplated hereby. This Agreement has been prepared by Holland & Knight LLP (“HK”) at the request of PT and Company.
EXECUTED as of the date first set forth above.
| NEOVOLTA Inc. | ||
| By: | /s/ Steve Bond | |
| Name: Steve Bond | ||
| Title: Chief Financial Officer | ||
| POTISEDGE TECHNOLOGY PTE LTD. | ||
| By: | /s/ [***] | |
| Name: [***] | ||
| Title: [***] | ||
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