Rivian Automotive, Inc 8-K, filed Nov 12, 2024
Rivian Automotive, Inc. (RIVN)
About this 8-K
Rivian Automotive, Inc filed this 8-K on November 12, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
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
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
(Address of principal executive offices) (Zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange on which registered | ||
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).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 - Entry into a Material Definitive Agreement.
Transaction Agreement
On November 12, 2024, Rivian Automotive, Inc., a Delaware corporation (the “Company”), entered into a transaction agreement (the “Transaction Agreement”) with Volkswagen International America, Inc. (“VW”) and Volkswagen AG (“VW AG” and together with its affiliates the “Volkswagen Group”), providing for the creation of a joint venture, Rivian and VW Group Technology, LLC (the “Joint Venture”), between Rivian JV SPV, LLC, a wholly-owned subsidiary of the Company (“Rivian SPV”) and Volkswagen Specter LLC (“VW SPV”), a wholly-owned subsidiary of Volkswagen AG (“VW AG” and together with its affiliates the “Volkswagen Group”). Closing is planned to occur on November 13, 2024 (the “Closing”). The Joint Venture will be established as an electrical architecture technology company with a focus on software, electronic control units and related network architecture design and development. In connection with the establishment of the Joint Venture, the Volkswagen Group will pay cash consideration in the amount of $1.32 billion to the Company as consideration for its Joint Venture interest and licensing of applicable intellectual property by the Company.
The Company, through Rivian SPV, and VW SPV will each own 50% of the ownership interests in the Joint Venture. Each of the Company and VW will contribute $30 million to the Joint Venture as a capital contribution for working capital, together with the contribution of certain relevant assets and personnel. The Joint Venture’s operations will be funded through development fees to be paid by the Company and VW AG. Fees payable in respect of development services that benefit the general technology stack usable by both the Company and the Volkswagen Group will be paid 75% by VW AG, and 25% by the Company, through 2028. Starting from 2029, the parties will bear such fees equally, with VW AG paying $100 million per year in excess of its equal share. Development fees for the benefit of one specific party will be borne entirely by such party.
The Joint Venture will have a Board of Directors consisting of four directors, with the Company and VW each appointing two directors. The Joint Venture will be managed day-to-day by two Co-CEOs, with each of the Company and VW appointing one Co-CEO.
The Joint Venture may be terminated by the mutual agreement of both parties. Either party will become entitled to purchase all Joint Venture equity held by the party upon the occurrence of certain events, such as material breaches after a party’s change of control or events indicating impending insolvency of a party.
The Transaction Agreement provides for representations, warranties, and indemnities by each party relevant to the creation of the Joint Venture and the license of IP in connection therewith. The parties also agreed to certain additional cooperation, including the future creation of a jointly owned sales joint venture to jointly license technology developed by the Joint Venture to third parties. The Company also agreed to provide certain transition services to the Joint Venture for a limited period of time.
The foregoing description of the Transaction Agreement does not purport to be complete and is qualified in its entirety by reference to the Transaction Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
VW Investment Agreement
Upon closing of the formation of the Joint Venture, the Company will enter into an investment agreement (“Investment Agreement”) by and among the Company, VW and VW AG for investment by VW in the Company through the sale and issuance of shares of the Company’s Class A common stock, par value $0.001 per share (the “Common Stock”), and/or a note convertible into shares of Common Stock, subject to certain terms and conditions set forth in the Investment Agreement.
The investment by VW in the Company will occur in three separate tranches:
(1) upon and subject to the later to occur of (A) June 30, 2025 and (B) the occurrence of certain Financial Milestones (as defined in the Investment Agreement), the Company will, upon payment of $1 billion therefor, at a 33% premium, issue a number of shares of Common Stock equal to $750 million divided by the price per share of Common Stock based on the Company’s 30-trading day volume-weighted average price prior to, but not including, the date of the Financial Milestone Closing (as defined in the Investment Agreement);
(2) upon and subject to the occurrence of certain Testing Milestones (as defined in the Investment Agreement), the Company will (depending upon the Testing Milestones achieved in connection with a testing session) upon payment of the purchase price therefor, either: (A) issue a number of shares of Common Stock equal to $1.0 billion divided by the price per share of Common Stock based on the Company’s 30-trading day volume-weighted average price prior to but not including the closing date of such investment; (B) issue both (i) a number of shares of Common Stock equal to $750 million divided by the price per share of Common Stock based on the Company’s 30-trading day volume-weighted average price prior to but not including the closing date of such investment and (ii) a 4.75% convertible promissory note in a principal amount of $250 million in the form attached to the Investment Agreement (the “Convertible Note”), or (iii) issue a number of shares of Common Stock equal to $250 million divided by the price per share of Common Stock based on the Company’s 30-trading day volume-weighted average price prior to but not including the closing date of such investment, in which case a subsequent closing would occur upon further Testing Milestone achievement where the Company will issue a number of shares of Common Stock equal to $750 million divided by the price per share of Common Stock based on the Company’s 30-trading day volume-weighted average price prior to but not including the closing date of such investment. The principal amount of the Convertible Note if issued, together with any accrued and unpaid interest thereon, (a) upon satisfaction of certain Testing Milestones outstanding at the time of its issuance, would be convertible into shares of Common Stock at a price per share of Common Stock based on the Company’s 30-trading day volume weighted average price prior to, but not including, the conversion date (which such conversion price would be subject to adjustment in connection with certain transactions), or (b) if not earlier converted, would mature on September 30, 2027; and
(3) upon and subject to the earlier to occur of (A) the SOP Milestone (as defined in the Investment Agreement) and (B) January 3, 2028, the Company will, upon payment of $460 million therefor, at a 84% premium, issue a number of shares of Common Stock equal to $250 million divided by the price per share of Common Stock based on the Company’s 30-trading day volume-weighted average price prior to, but not including, the date of the SOP Closing (as defined in the Investment Agreement).
The Company or VW may terminate the Investment Agreement with respect to any obligation of the Company to issue, and of VW to purchase, shares of Common Stock (or, if applicable, the Convertible Note) in respect of any (1) Financial Milestone Closing; (2) Testing Milestone Closing (as defined in the Investment Agreement) or (3) SOP Closing (as defined in the Investment Agreement), if such closing shall not have occurred by a date that is 5 years after the date of the Investment Agreement. The obligations of each party under the Investment Agreement are also subject to the satisfaction of certain conditions, including satisfaction of certain regulatory approvals.
Pursuant to the Investment Agreement, VW has agreed to certain limitations with respect to the transfer or disposition of shares of the Company’s Common Stock that will apply so long as it, together with its affiliates, beneficially owns (or holds securities convertible into), in the aggregate, equity securities of the Company representing 5% or more of the outstanding Common Stock. In addition, VW has agreed to certain limitations with respect to the voting of shares of Common Stock held by it and certain of its affiliates, and future acquisitions of shares of Common Stock by it and certain of its affiliates.
Pursuant to the Investment Agreement, at any time following any Milestone Closing Date (as defined in the Investment Agreement), VW may deliver to the Company a written request (a “Demand Request”) that the Company prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-3, or such other form as required to effect a registration of any Common Stock issued or issuable upon conversion of or pursuant to the Convertible Note (the “Registrable Securities”), covering the resale of the Registrable Securities. The obligations of the Company in respect of a Demand Request are subject to certain exceptions, including that if such Demand Request relates to an underwritten offering, then it must be in respect of shares of Common Stock with an aggregate offering value equal to at least $100.0 million.
The foregoing description of the Investment Agreement does not purport to be complete and is qualified in its entirety by reference to the Investment Agreement, a copy of which is filed herewith as Exhibit 10.2 and incorporated herein by reference.
VW Loan Agreements
Upon closing of the formation of the Joint Venture, (1) the Joint Venture, as borrower, and VW SPV, as lender, entered into that certain Loan A Agreement (the “Loan A Agreement”) and (2) Rivian SPV, as borrower, the Joint Venture, as lender, and the Company will enter into that certain Loan B Agreement (the “Loan B Agreement”, and together with the Loan A Agreement, the “Loan Agreements”).
Each of the Loan Agreements provides for a committed $1.0 billion term loan facility, available in a single draw on any business day during the period beginning on October 1, 2026 and ending on October 30, 2026, subject to customary conditions to funding. When and if funded, the proceeds of the term loan (“Loan A”) under the Loan A Agreement will be used by the Joint Venture to fund the concurrent borrowing by Rivian SPV of the term loan (“Loan B” and together with Loan A, the “Loans”) under the Loan B Agreement. Rivian SPV will use the proceeds of Loan B to make a distribution to the Company, which intends to use such proceeds for general corporate purposes.
Each of the Loans will mature on the tenth anniversary of the funding date. Each of the Loan Agreements provide that beginning on the third anniversary of the funding date, $100.0 million of principal will be repaid each year, payable in instalments of $50.0 million twice a year, with the balance of the principal amount due on the final maturity date. Each of the Loans may be prepaid at any time, in whole or in part, without any prepayment premium or penalty. Interest on each of the Loans will accrue at a fixed rate per annum that is determined at the time of funding. The per annum rate will be equal to (a) the interpolated all-in yield for Volkswagen Group USD debt securities having a maturity of seven years on date of determination, plus (b) 25 basis points, in the case of Loan A, or 15 basis points, in the case of Loan B. Interest on each of the Loans will be paid on a semi-annual basis, except that the first interest payment on each of the Loans will be due on the second anniversary of the funding date. It is expected that interest and principal payments made by Rivian SPV to the Joint Venture under the Loan B Agreement will be used by the Joint Venture to make the corresponding payments to VW SPV under the Loan A Agreement, and for general corporate purposes.
Loan A will be secured by all assets of the Joint Venture. Loan B will be secured only by the equity interests in the Joint Venture owned by Rivian SPV. Neither of the Loans will be guaranteed by the Company or any other person or entity. The Company is a party to the Loan B Agreement only for the purpose of certain limited agreements, representations and warranties contained therein. The sole recourse for any event of default under the Loan B Agreement will be to the collateral, and the Company will not have any liability thereunder.
The Loan Agreements provide for customary representations and warranties, covenants, and events of default with respect to the respective borrowers under each Loan Agreement. The Loan B Agreement will contain additional covenants generally consistent with (and applicable to the same entities as) the covenants in our senior secured asset-based revolving credit facility, as amended at the time of funding of Loan B.
The foregoing description of the Loan Agreements does not purport to be complete and is qualified in its entirety by reference to the Loan Agreements, copies of which are filed herewith as Exhibits 10.3 and 10.4 and are incorporated herein by reference.
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the expected closing of the Joint Venture, payments made under the agreements discussed herein, the achievement of specified milestones, the expected benefits from the partnership, the future investments in Rivian shares and the investments related to the JV and potential borrowings under the Loan Agreements. You can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements use these words or expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part II, Item 1A, “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, and its other filings with the Securities and Exchange Commission. The forward-looking statements in this press release are based upon information available to us as of the date of this Current Report on Form 8-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
Item 9.01 - Financial Statements and Exhibits.
(d) Exhibits:
| † | Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv). |
| ^ | Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant undertakes to provide copies of any of the omitted exhibits upon request by the Securities and Exchange Commission. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RIVIAN AUTOMOTIVE, INC. | ||||||
| Date: November 12, 2024 | By: | /s/ Claire McDonough | ||||
| Name: | Claire McDonough | |||||
| Title: | Chief Financial Officer | |||||
Exhibit 10.1
EXECUTION VERSION
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
TRANSACTION AGREEMENT
among
VOLKSWAGEN INTERNATIONAL AMERICA INC.,
RIVIAN AUTOMOTIVE, INC.,
RIVIAN AND VW GROUP TECHNOLOGY, LLC
and
VOLKSWAGEN AKTIENGESELLSCHAFT
(solely with respect to Section 2.05 and Article VIII)
Dated as of November 12, 2024
TABLE OF CONTENTS
| Page | ||||||
| Article I Definitions |
2 | |||||
| SECTION 1.01. |
Certain Defined Terms | 2 | ||||
| SECTION 1.02. |
Definitions | 11 | ||||
| SECTION 1.03. |
Interpretation and Rules of Construction | 13 | ||||
| Article II Closing | 15 | |||||
| SECTION 2.01. |
Closing | 15 | ||||
| SECTION 2.02. |
Closing Actions | 15 | ||||
| SECTION 2.03. |
Closing Deliveries by Rivian | 17 | ||||
| SECTION 2.04. |
Closing Deliveries by VW | 17 | ||||
| SECTION 2.05. |
Closing Deliveries by VW AG | 17 | ||||
| SECTION 2.06. |
Post-Closing Actions | 18 | ||||
| Article III Representations and Warranties of Rivian | 18 | |||||
| SECTION 3.01. |
Organization, Authority and Qualification of Rivian; Interests | 18 | ||||
| SECTION 3.02. |
No Conflict | 20 | ||||
| SECTION 3.03. |
Governmental Consents and Approvals | 20 | ||||
| SECTION 3.04. |
Properties and Assets. | 21 | ||||
| SECTION 3.05. |
Intellectual Property; Open Source Software | 21 | ||||
| SECTION 3.06. |
Employee and Labor Matters | 25 | ||||
| SECTION 3.07. |
Taxes | 27 | ||||
| SECTION 3.08. |
Material Contracts | 28 | ||||
| SECTION 3.09. |
Litigation | 29 | ||||
| SECTION 3.10. |
Compliance with Laws | 29 | ||||
| SECTION 3.11. |
Solvency | 29 | ||||
| SECTION 3.12. |
Brokers | 29 | ||||
| SECTION 3.13. |
No Other Representations or Warranties; Non-Reliance | 29 | ||||
| Article IV Representations and Warranties of VW | 30 | |||||
| SECTION 4.01. |
Organization, Authority and Qualification of VW | 30 | ||||
| SECTION 4.02. |
No Conflict | 31 | ||||
| SECTION 4.03. |
Governmental Consents and Approvals | 32 | ||||
| SECTION 4.04. |
Employee and Labor Matters | 32 | ||||
| SECTION 4.05. |
Intellectual Property | 33 | ||||
| SECTION 4.06. |
Taxes | 34 | ||||
-i-
TABLE OF CONTENTS
(continued)
| Page | ||||||
| SECTION 4.07. |
Solvency | 35 | ||||
| SECTION 4.08. |
Brokers | 35 | ||||
| SECTION 4.09. |
No Other Representations or Warranties; Non-Reliance | 35 | ||||
| Article V Additional Agreements |
36 | |||||
| SECTION 5.01. |
Confidentiality | 36 | ||||
| SECTION 5.02. |
Further Action | 36 | ||||
| SECTION 5.03. |
Employee Matters | 37 | ||||
| SECTION 5.04. |
Compliance Program | 38 | ||||
| SECTION 5.05. |
Third Party Business | 39 | ||||
| SECTION 5.06. |
[***] | 43 | ||||
| SECTION 5.07. |
Joint Sourcing | 43 | ||||
| SECTION 5.08. |
Other Restrictions | 43 | ||||
| SECTION 5.09. |
[***] | 43 | ||||
| SECTION 5.10. |
[***] | 43 | ||||
| SECTION 5.11. |
Material IP Contract Consents | 43 | ||||
| SECTION 5.12. |
Insurance | 44 | ||||
| SECTION 5.13. |
Temporary Access to E/E Architecture Source Code | 44 | ||||
| SECTION 5.14. |
Segregation of Background Source Code. | 44 | ||||
| SECTION 5.15. |
[***] | 45 | ||||
| SECTION 5.16. |
Name of the Company | 45 | ||||
| SECTION 5.17. |
[***] | 45 | ||||
| Article VI Tax Matters |
45 | |||||
| SECTION 6.01. |
Cooperation | 45 | ||||
| SECTION 6.02. |
Transfer Taxes | 45 | ||||
| SECTION 6.03. |
Intended Tax Treatment | 45 | ||||
| Article VII INDEMNIFICATION |
46 | |||||
| SECTION 7.01. |
Survival of Representations, Warranties and Covenants | 46 | ||||
| SECTION 7.02. |
Indemnification by Rivian | 47 | ||||
| SECTION 7.03. |
Indemnification by VW | 48 | ||||
| SECTION 7.04. |
Claims of Indemnification by Rivian. | 51 | ||||
-ii-
TABLE OF CONTENTS
(continued)
| Page | ||||||
| SECTION 7.05. |
Limitations on Indemnification | 49 | ||||
| SECTION 7.06. |
Notice of Loss; Third-Party Claims | 52 | ||||
| SECTION 7.07. |
Remedies | 53 | ||||
| Article VIII General Provisions |
54 | |||||
| SECTION 8.01. |
Expenses | 54 | ||||
| SECTION 8.02. |
Notices | 54 | ||||
| SECTION 8.03. |
Public Announcements | 56 | ||||
| SECTION 8.04. |
Severability | 56 | ||||
| SECTION 8.05. |
Entire Agreement | 56 | ||||
| SECTION 8.06. |
Assignment | 56 | ||||
| SECTION 8.07. |
Amendment | 56 | ||||
| SECTION 8.08. |
Waiver | 56 | ||||
| SECTION 8.09. |
No Third-Party Beneficiaries | 57 | ||||
| SECTION 8.10. |
Other Payment Terms | 57 | ||||
| SECTION 8.11. |
Specific Performance | 57 | ||||
| SECTION 8.12. |
Governing Law | 57 | ||||
| SECTION 8.13. |
Dispute Resolution | 57 | ||||
| SECTION 8.14. |
Waiver of Jury Trial | 59 | ||||
| SECTION 8.15. |
Counterparts | 59 | ||||
| SECTION 8.16. |
Other Payment Terms | 59 | ||||
-iii-
EXHIBITS
| A | Form of Amended and Restated Limited Liability Company Agreement of the Company | |
| B | Form of Local Conveyances | |
| C | (1) Form of Background Unregistered IP License Agreement | |
| (2) Form of Background Patent License Agreement | ||
| (3) Form of SDV Hub Concepts and Documentation License Agreement | ||
| D | Form of Development and Services Agreement | |
| E | Form of Amended and Restated Limited Liability Company Agreement of Rivian SPV | |
| F | Form of Amended and Restated Limited Liability Company Agreement of VW SPV | |
| G | Form of Investment Agreement | |
| H | Form of Loan A Agreement | |
| I | Form of Loan B Agreement | |
| J | Form of Main Services Agreement | |
| K | SalesCo Term Sheet | |
| L | Form of Information Sharing Agreement | |
SCHEDULES
| 1.01(A)(1) | Rivian’s Knowledge | |
| 1.01(A)(2) | VW’s Knowledge | |
| 1.01(A)(3) | Specified Rivian Direct Reports | |
| 1.01(A)(4) | Specified VW Direct Reports | |
| 1.01(B) | Transaction Documents | |
| 1.01(C)(1) | Rivian Contributed Assets | |
i
| 1.01(D)(1) | Rivian In-Scope Employees | |
| 1.01(D)(2) | VW In-Scope Employees | |
| 1.01(D)(3) | Closing Transfer Employees | |
| 1.01(E) | Specified Matters | |
| 1.01(F) | Specified Countries | |
| 5.03(F) | Form of Confidentiality and Work Product Assignment Agreement | |
| 5.04 | Compliance Program Enhancements | |
| 5.05 | SalesCo Structure | |
ii
TRANSACTION AGREEMENT, dated as of November 12, 2024, among Volkswagen International America Inc., a Delaware corporation (“VW”), Rivian Automotive, Inc., a Delaware corporation (“Rivian”), Rivian and VW Group Technology, LLC, a Delaware limited liability company (the “Company”), and, solely with respect to Section 2.05 and Article VIII, Volkswagen Aktiengesellschaft, a joint stock company duly established under the laws of Germany, having its registered office at Berliner Ring, 2, 38440 Wolfsburg, Germany (“VW AG”), each a “Party,” and together the “Parties” (in the case of VW AG, solely with respect to Section 2.05 and Article VIII).
WHEREAS, prior to the date hereof, (a) VW, a wholly owned Subsidiary of VW AG, formed Volkswagen Specter LLC, a Delaware limited liability company (“VW SPV”), (b) VW SPV formed Volkswagen Specter 2 LLC, a Delaware limited liability company (“VW SPV 2”), (c) Rivian formed Rivian JV SPV, LLC, a Delaware limited liability company (“Rivian SPV”), (d) Rivian SPV formed the Company, (e) the Company formed Rivian and VW Group Technology Canada, Inc., a corporation formed under the Laws of the Province of British Columbia, Canada (the “Canadian Subsidiary”), (f) VW SPV 2 formed SDV Technology doo Beograd-Novi Beograd, a limited liability company established under the Laws of the Republic of Serbia (the “Serbian Subsidiary”), and (g) VW SPV 2 acquired all of the shares in a shelf company in the form of a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws of Germany, registered with the Commercial register (Handelregister) of the local court (Amtsgericht) in Berlin, Germany under number HRB 267403, which was renamed as Rivian & VW Group Tech GmbH (the “German Subsidiary”);
WHEREAS, the Parties or their respective Affiliates intend to enter into, on the Closing Date, among other Transaction Documents, (a) that certain Background Unregistered IP License Agreement in the form attached as Exhibit (C)(1) (“Background Unregistered IP License Agreement”), (b) that certain Background Patent License Agreement in the form attached as Exhibit (C)(2) (“Background Patent License Agreement”, together with the Background Unregistered IP License Agreement and the license agreement proposed to be entered into as contemplated under Section 5.09(b) in connection with the [***] IP, the “Rivian Background IP Agreements”), (c) that certain SDV Hub Concepts and Documentation License Agreement in the form attached as Exhibit (C)(3) (“SDV Hub Concepts and Documentation License Agreement”), and (d) that certain Development and Services Agreement in the form attached as Exhibit D (the “Development and Services Agreement”);
WHEREAS, in exchange for their respective membership interests in the Company (to be jointly held by Rivian SPV and VW SPV) (a) VW desires to contribute to the Company the VW Contribution, and (b) Rivian desires to contribute to the Company the Rivian Contribution; and
WHEREAS, the Parties desire to enter into this Agreement setting forth the terms and conditions governing the transactions contemplated hereby, and acknowledging the obligations of the Parties and their Affiliates relating to disclosure of information in accordance with the Information Sharing Agreement and applicable Laws, including applicable Antitrust Laws.
1
NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes of this Agreement:
“Action” means any claim, action, charge, suit, inquiry, proceeding, audit, arbitration, or investigation by or before any Governmental Authority.
“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For the avoidance of doubt, neither the Company nor any of its Subsidiaries shall be deemed an Affiliate of a Party; provided, that the Company and its Subsidiaries shall be deemed Affiliates of each Party for purposes of Article VII, as applicable.
“Agreement” means this Transaction Agreement among the Parties (including the Exhibits and Schedules hereto) and all amendments hereto made in accordance with the provisions of Section 8.07.
“Antitrust Laws” means any Law designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization, lessening of competition or restraint of trade.
“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Wolfsburg, Germany or Irvine, California, USA.
“CFR” means the United States Code of Federal Regulations.
“Climbtech 1+2 Technology” has the meaning set forth in the Rivian Background IP Agreements.
“Closing Transfer Employee” means each employee set forth on Schedule 1.01(D)(3), which reflects each Rivian In-Scope Employee who, at or prior to Closing, is intended to transfer to the Company and be a Company Employee and, except with respect to the Dual Role Employees (as defined in the Information Sharing Agreement), not employed by a Rivian Entity (other than a Company Employer) after the Closing Date.
“Company Employee” means any Rivian In-Scope Employee or VW In-Scope Employee who is employed by a Company Employer following the Closing Date.
“Company Employer” means the Company or any Subsidiary thereof.
2
“Contract” means any contract, agreement, arrangement, indenture, note, bond, mortgage, loan, instrument, lease, warranty, commitment, license or other instrument or understanding to which a Person is bound.
“control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract or otherwise.
“Current Employer” means the applicable Party or its Affiliate that is employing the Rivian In-Scope Employees or the VW In-Scope Employees, as the case may be.
“Data” means any Personal Data or business proprietary or confidential data.
“Data Privacy and Security Obligations” means all internal and external privacy policies, Contractual obligations, applicable industry standards, applicable Laws or Governmental Orders of any Governmental Authority, in each case, relating to the collection, use, transfer, import, export, storage, protection, disposal and disclosure by a Rivian Entity or VW Entity, as the case may be, of Personal Data.
“Databases” means all databases, data compilations, data collections, data files and data repositories of any type and any form, whether machine readable or otherwise, including all corresponding data, classification structures, procedures used in connection with the selection, collection, arrangement, processing and distribution of data contained therein, attributes of the data, data structures and formats, file structures and formats, data models, data specifications, data definitions and data relationships, and all related documentation, manuals, memoranda and records.
“Designs” means drawings, blueprints, patterns, tools, gauges, equipment, sketches, layouts, plans, prototypes, architecture, interface designs, operations designs, hardware designs, samples, and all other documents relating thereto.
“Disclosure Schedules” means the Rivian Disclosure Schedule and the VW Disclosure Schedule.
“Employee Leasing Agreements” means those certain employee leasing agreements pursuant to which Rivian In-Scope Employees (except the Closing Transfer Employees and the Delayed Transfer Employees) shall provide services to the Company until such Rivian In-Scope Employees’ employment has been transferred, or caused to be transferred, by Rivian to the Company.
“Encumbrance” means any security interest, pledge, hypothecation, mortgage, lien or encumbrance (other than any Permitted Encumbrance or any license of, option to license, or covenant not to assert claims of infringement, misappropriation or other violation with respect to, Intellectual Property Rights).
3
“Excluded Rivian Liabilities” means all Liabilities of Rivian and its Subsidiaries (a) that are unrelated to the Rivian In-Scope Operations, (b) that are related to the Rivian In-Scope Operations (including any Taxes with respect to any taxable period (or portion thereof) ending on or before the Closing Date) and attributable to a period prior to the Closing, or (c) that are related to any Specified Matters.
“Excluded VW Liabilities” means all Liabilities of VW and its Subsidiaries (a) that are unrelated to the VW In-Scope Employees, or (b) that are related to the VW In-Scope Employees and attributable to a period prior to the Closing.
“Fundamental Representations” means the VW Fundamental Representations and the Rivian Fundamental Representations.
“GAAP” means United States generally accepted accounting principles.
“Governmental Authority” means any federal, national, foreign, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency, commission or any court of competent jurisdiction or arbitral body.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
“Hardware” means any hardware, machinery, tools, circuits, control units, physical components and devices, including telecommunications, electronic, computing and network components and equipment.
“Indemnified Party” means a VW Indemnified Party or a Rivian Indemnified Party, as the case may be.
“Indemnifying Party” means (a) Rivian pursuant to Section 7.02(a), as the case may be, and (b) VW pursuant to Section 7.03(a).
“Information Sharing Agreement” means that certain Information Sharing Agreement, among Rivian, VW AG and the Company, in the form attached as Exhibit L.
“Intellectual Property Rights” means all rights, title and interests in and to all intellectual property rights and intangible industrial property rights of every kind and nature however denominated, throughout the world, and all related priority rights protected, created or arising under the Laws of the United States or any other jurisdiction or under any international convention, including (i) Patents, (ii) copyrights, registrations and applications for registration thereof, and any equivalent rights in copyrightable works and works of authorship, (iii) rights in Software and Databases, (iv) rights in Designs, and (v) Trade Secrets, but excluding any rights in trademarks, service marks, trade names, trade dress, brand names, product names, logos, internet domain names and other indicia of source or origin and all registrations and applications for registration thereof together with the goodwill associated therewith.
“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended.
4
“Inventions” means all ideas, designs, concepts, techniques, methods, processes, inventions (including invention disclosures), innovations, discoveries or improvements, whether or not patentable or registerable or protected by any Intellectual Property Rights (such as Patents).
“IT Systems” means computers, servers, workstations, desktops, laptops and handheld devices, Software, applications, websites, hardware, networks, firmware, middleware, routers, hubs, switches, data communications lines, data storage devices, data centers, systems and other information technology equipment and assets and related services, in each case that are used in Rivian In-Scope Operations.
“Laws” means federal, state and local laws, statutes, acts, ordinances, rules, codes and regulations, executive orders and other official releases of or by any Governmental Authority, including those in any jurisdiction in which Rivian, VW or any of their respective Affiliates operate.
“Liabilities” means any and all debts, liabilities and obligations, whether accrued or unaccrued, fixed or variable, known or unknown, absolute or contingent, matured or unmatured or determined or determinable, including those arising under any Law, Action or Governmental Order and those arising under any contract, lease, agreement, arrangement, commitment or undertaking.
“Loan A Agreement” means that certain Loan A Agreement between VW SPV as lender and the Company as borrower, in the form attached as Exhibit H.
“Loan B Agreement” means that certain Loan B Agreement, between the Company as lender and Rivian SPV as borrower, in the form attached as Exhibit I.
“LLCA” means that certain Amended and Restated Limited Liability Company Agreement of the Company, in the form attached as Exhibit A.
“Local Conveyances” means contribution agreements, in the forms attached as Exhibit B, between a Rivian Entity or a VW Entity, on the one hand, and the Company or any of its Subsidiaries (as of immediately after the Closing), on the other hand, pursuant to which Rivian Contributed Assets, entities that will become Subsidiaries of the Company, or the right to hire certain Rivian In-Scope Employees, as the case may be, are transferred to the Company or any of such Subsidiaries.
“Main Services Agreement” means that certain Main Services Agreement, between Rivian and the Company, in the form attached as Exhibit J.
“Material Defect” means any persistent, widespread, reproducible defect in the Rivian Software that either (i) impacts the functionality of the Rivian vehicle to the degree that the use of the vehicle is not possible or is materially limited, (ii) impacts the successful operation of a feature essential to the primary functionality or successful operation of the Climbtech 1+2 Technology in accordance with applicable specifications as of the Closing Date, (iii) adversely impacts in any material respect the safety or security of Rivian vehicles, or (iv) causes Rivian vehicles to violate an applicable regulatory requirement.
5
“Material Rivian Infringement Breach” means a breach of the representation and warranty made by Rivian in Section 3.05(d) as of the date hereof only if both of the following conditions are met: (a) such breach is a result of (i) the Climbtech 1+2 Technology actually infringing, as of the date hereof, the Intellectual Property Rights of a third party, or (ii) Rivian having actually misappropriated, prior to or as of the Closing Date, Climbtech 1+2 Technology from a third party, and (b) such breach results in the inability of the Company to operate the Business (as defined in the LLCA) substantially in the manner contemplated by the Parties.
“Material VW Infringement Breach” means a breach of the representation and warranty made by VW in Section 4.05(d) as of the date hereof (to the extent made as of a specific date, as of such date) only if both of the following conditions are met: (a) such breach is a result of (i) the VW SDV Hub Concepts as used by a VW Entity on or prior to the date hereof actually infringing, as of the date hereof, the Intellectual Property Rights of a third party, or (ii) VW having actually misappropriated, prior to or as of the Closing Date, VW SDV Hub Concepts as used by a VW Entity on or prior to the date hereof from a third party (except Rivian or a Rivian Affiliate), and (b) such breach results in the inability of the Company to operate the Business (as defined in the LLCA) substantially in the manner contemplated by the Parties.
“NPE” means any Person that has as its principal source of revenue the licensing, assertion, or enforcement of Patents, without itself or an associated Person (i) practicing such Patents and/or (ii) performing the underlying technical development work.
“Open Source Software” means any Software (including any portion of a Software program) that is distributed as “free software” (as defined by the Free Software Foundation), “open source software” (i.e., Software distributed under any license by the Open Source Initiative as set forth in www.opensource.org), or under similar licensing or distribution terms.
“Patents” means all issued or pending U.S. and foreign patents and patent applications, including any provisional applications, extensions, reexaminations and reissues, divisionals, continuations and continuations-in-part, statutory invention registrations, registered designs, utility models or similar rights anywhere in the world in Inventions.
“Permit” means any permit, certificate, license, approval or other authorization issued by or obtained from any Governmental Authority.
“Permitted Encumbrances” means (a) any non-exclusive licenses or other rights granted to Intellectual Property Rights in the ordinary course of business, (b) in relation to Intellectual Property Rights only, any lien, charge, mortgage, pledge, or security interest, or other encumbrance granted to a financial institution or lender as security for borrowed money or other financial obligations in the ordinary course of business, and (c) any liens for Taxes not yet delinquent or which are being contested in good faith in appropriate proceedings and for which adequate reserves with respect thereto are maintained in accordance with GAAP.
“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity.
6
“Personal Data” means any information relating to or capable of being associated with an identified or identifiable Person or household, or information that is defined as “personal data”, “personal information”, “personally identifiable information”, “protected health information”, “special category data”, “sensitive personal information”, or similar terms under Data Privacy and Security Obligations.
“Registered” means, in reference to any Intellectual Property Rights, that such Intellectual Property Rights have been issued by, registered or filed with, renewed by or are the subject of a pending application before any Governmental Authority or Internet domain name registrar.
“Representatives” means, with respect to any Person, such Person’s Affiliates and its and their respective directors, officers, employees, agents and advisors.
“Rivian Contributed Assets” means the assets of Rivian and its Affiliates set forth on Schedule 1.01(C)(1).
“Rivian Disclosure Schedule” means the Disclosure Schedule, dated as of the date of this Agreement, delivered by Rivian to VW in connection with the execution of this Agreement.
“Rivian E/E Architecture” means Rivian’s E/E architecture in the form existing as of the Closing.
“Rivian Entity” means Rivian and any of its Affiliates.
“Rivian Excluded Technology” has the meaning set forth in the Development and Services Agreement.
“Rivian Fundamental Representations” means the representations and warranties made by Rivian in Section 3.01, Section 3.02(a), Section 3.06(a), Section 3.11 and Section 3.12.
“Rivian In-Scope Employees” means the employees of Rivian and its Affiliates who will be transferred to the Company as set forth on Schedule 1.01(D)(1).
“Rivian In-Scope Operations” means the development of Software, Software interfaces, Hardware, Tools, Designs and Training (each as defined in the Rivian Background IP Agreements) for the Rivian E/E Architecture as conducted by the Rivian Entities immediately prior to the Closing, but excluding, in all cases, any development or other activities with respect to the Rivian Excluded Technology.
“Rivian IP Representation” means the representations and warranties made by Rivian in Section 3.05.
“Rivian Licensed Intellectual Property” means the ‘Background IP’ as set forth in the Rivian Background IP Agreements and Tools owned by Rivian or any of its current Affiliates (including, for clarity, (a) from the [***] Completion Date, the [***] IP, and (b) from the date on which any relevant license becomes effective, any other Intellectual Property Rights that, after the Closing Date, are owned by Rivian or any of its current Affiliates and agreed pursuant to Section 5.02(c) to be licensed by Rivian or any of its Affiliates to VW on terms substantially the same as those of the Rivian Background IP Agreements), but excluding any Intellectual Property Rights in and to Rivian Excluded Technology.
7
“Rivian Material Adverse Effect” means a material adverse effect on the properties, operations, or condition of the Rivian In-Scope Operations, taken as a whole, or on Rivian’s ability to perform its obligations under this Agreement.
“Rivian Software” means the ‘Background Software’ as set forth in the Rivian Background IP Agreements and Tools owned by Rivian or any of its current Affiliates (including, for clarity, (a) any Software owned by the [***] and transferred to Rivian IP Holdings, LLC following the [***] Completion Date, and (b) from the date on which any relevant license becomes effective, any other Software that, after the Closing Date, is owned by Rivian or any of its current Affiliates and agreed pursuant to Section 5.02(c) to be licensed by Rivian or any of its Affiliates to VW on terms substantially the same as those of the Rivian Background IP Agreements, but excluding any Software contained in the Rivian Excluded Technology).
“Rivian’s Actual Knowledge”, “Actual Knowledge of Rivian” or similar terms used in this Agreement means the actual, personal knowledge of the Persons identified on Schedule 1.01(A)(1) as of the date of this Agreement, without any obligation of inquiry.
“Rivian’s Knowledge,” “Knowledge of Rivian” or similar terms used in this Agreement means the actual knowledge of the Persons identified on Schedule 1.01(A)(1) as of the date of this Agreement after reasonable inquiry of their applicable direct reports set forth on Schedule 1.01(A)(3).
“Sanctioned Person” means any Person, organization or vessel (a) designated on any sanctions or restricted party lists, including the list of Specially Designated Nationals and Blocked Persons, the Consolidated List of Persons, Groups and Entities Subject to EU Financial Sanctions or on any other list of targeted individuals or entities (or equivalent) issued under any Trade Compliance Law, (b) that is, or is part or an official of, a government of a Sanctioned Territory, (c) directly or indirectly owned or controlled (as such terms, including any applicable ownership and control requirements, are defined and construed in the applicable Trade Compliance Laws or in any related official guidance) by, or acting on behalf of, any of the foregoing, (d) located or organized within, ordinarily resident in, incorporated under the Laws of or operating from any Sanctioned Territory, or (e) otherwise targeted under any Trade Compliance Law, or acting on behalf of any of the persons listed in clauses (a) to (d) above, for the purpose of evading or avoiding, or having the intended effect of or intending to evade or avoid, or facilitating the evasion or avoidance of, any Trade Compliance Laws.
“Sanctioned Territory” means a country or other territory subject to a general export, import, financial or investment embargo under any Trade Compliance Law.
“Software” means any computer programs and software, whether in Source Code or object code, including (a) all software implementations of algorithms, models and methodologies, including as used in (i) machine-based systems that are designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as
8
predictions, content, recommendations, or decisions (“AI Systems”), and (ii) software applications that use AI Systems to perform specific tasks and solve problems, (b) program files, program and system logic, program interfaces, program modules, program routines and sub-routines, program architecture, program design concepts, program system designs, program structure, program sequence and organization, and program screen displays and report layouts, and (c) screens, user interfaces, firmware, menus, buttons and icons included in computer programs.
“Source Code” means the human readable source code of the Software to which it relates, in the programming language in which such Software was written.
“Specified Countries” means the countries set forth on Schedule 1.01(F).
“Specified Matters” means any Actions by or against any Rivian Entity, including such Actions set forth on Schedule 1.01(E).
“Subsidiary” of any Person means any corporation, partnership, limited liability company or other organization, whether incorporated or unincorporated, which is controlled by such Person.
“Tax” or “Taxes” means (a) any U.S. federal, state, local or non-U.S. income, gross receipts, gross income, gains, license, royalty, payroll, employment, excise, production, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, goods and services, ad valorem, registration, value added, alternative or add-on minimum, workers’ compensation, employer health, pension plan, anti-dumping, countervail, estimated, or other tax of any kind whatsoever, including any interest, penalties, or additions thereto, imposed by a Governmental Authority, and (b) any Liability for any amount described in the immediately preceding subclause (a) as a result of being a transferee or successor, by contract or otherwise, or as a result of being or having been a member of an affiliated, consolidated, combined, unitary, aggregate, or similar group for Tax purposes, or pursuant to a Tax Sharing Agreement.
“Tax Return” means any Tax return, statement, report, election, declaration, disclosure, schedule, form or other document (including any schedule or attachment thereto) filed or required to be filed with any Governmental Authority with respect to Taxes, including information returns, claims for refunds of Taxes and any amendments or supplements to any of the foregoing.
“Tax Sharing Agreement” means any agreement or arrangement (whether or not written) entered into prior to the Closing that provides for the allocation, apportionment, sharing or assignment of any Liability for Taxes.
“Technology” means, collectively, all Software, hardware, tools, materials, specifications, processes, inventions, creations, improvements, designs, formulas, algorithms, procedures, methods, techniques, ideas, know-how, research and development, technical data, works of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses, and other writings, and other tangible embodiments of the foregoing, in any form whether or not specifically listed herein, and all related technology.
9
“Third-Party Background IP” has the meaning set forth in the Rivian Background IP Agreements.
“Tools” means all development tools, analysis tools, auxiliary systems and other tools or systems required for the analysis, update capability, parameterization, application, hosting and integration of any Rivian Licensed Intellectual Property.
“Trade Compliance Laws” means any export control, economic and financial sanctions, import control, foreign investment, or other related Laws or trade embargoes imposed, administered or enforced from time to time by the United States, the United Nations Security Council, the European Union or any member state thereof and other applicable jurisdictions, including the U.S. Export Control Reform Act of 2018, and any economic or financial sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Commerce Department or State Department (or any other agency of the U.S. government), any applicable customs or import Laws administered by the U.S. Customs and Border Protection (including the Uyghur Forced Labor Prevention Act) or any other similar Law of any relevant jurisdiction; “Compliance with Trade Compliance Laws” includes abiding by U.S. economic sanctions, embargoes and prohibitions on transactions or dealings involving Sanctioned Persons and Sanctioned Territories, including the prohibition on the transfer of commodities, materials, services, software and technology to, procurement from, or transit through U.S. sanctioned countries and regions (currently including Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk and Luhansk regions of Ukraine).
“Trade Secrets” means trade secrets and other confidential information, know-how, and materials, including confidential drawings, prototypes, models, designs, manufacturing information, production information, processes, techniques, schematics, engineering information, and business methods, in each case, whether or not patentable or copyrightable.
“Transaction Documents” means this Agreement and each of the documents identified on Schedule 1.01(B).
“Transfer Taxes” means all transfer, documentary, sales, use, stamp, value added, recordation, stamp duty, stamp duty reserve, stamp duty land, registration, real property transfer and other such similar Taxes and fees (including any penalties and interest) incurred in connection with the execution of this Agreement or the consummation of any of the transactions required for the establishment of the Company as contemplated by, this Agreement, but excluding in each case any such amounts as are reclaimable or recoverable by the payor of such amounts.
“VW Associated Entities” means any VW Affiliate and any other Person in which VW and VW Affiliates either alone or collectively hold at least 35% ownership but excluding the Company.
“VW Disclosure Schedule” means the Disclosure Schedule, dated as of the date of this Agreement, delivered by VW to Rivian in connection with the execution of this Agreement.
10
“VW Entity” means VW and any of its Affiliates.
“VW Fundamental Representations” means the representations and warranties made by VW in Section 4.01, Section 4.02, Section 4.07 and Section 4.08.
“VW Contributed Employees” means the VW In-Scope Employees that are currently being employed by CARIAD SE or CARIAD, Inc. that the Company hires as contemplated by Section 5.03(a) in the period from the Closing to June 30, 2025.
“VW Contribution” means the contributions described in Section 2.02(a)(i), and the commitments pursuant to Section 5.03(a).
“VW In-Scope Employees” means the employees of VW and its Affiliates described on Schedule 1.01(D)(2).
“VW IP Representations” means the representations and warranties made by VW in Section 4.05.
“VW Material Adverse Effect” means a material adverse effect on VW’s ability to perform its obligations under this Agreement.
“VW Payment Amount” means an amount equal to $92,000,000.
“VW SDV Hub Concepts” has the meaning set forth in the SDV Hub Concepts and Documentation License Agreement.
“VW SDV Hub IP” has the meaning set forth in the SDV Hub Concepts and Documentation License Agreement.
“VW’s Actual Knowledge”, “Actual Knowledge of VW” or similar terms used in this Agreement means the actual, personal knowledge of the Persons identified on Schedule 1.01(A)(2) as of the date of this Agreement, without any obligation of inquiry.
“VW’s Knowledge,” “Knowledge of VW” or similar terms used in this Agreement means the actual knowledge of the Persons identified on Schedule 1.01(A)(2) as of the date of this Agreement after reasonable inquiry of their applicable direct reports set forth on Schedule 1.01(A)(4).
SECTION 1.02. Definitions. The following terms have the meanings set forth in the Sections set forth below:
| Definition |
Location | |
| “2024 Annual Bonus” |
5.03(h) | |
| [***] |
[***] | |
| “Accounting Referee” |
6.03 | |
| [***] |
[***] | |
| “Allocation Statement” |
6.03 | |
| “Background Patent License Agreement” |
Recitals |
11
| Definition |
Location | |
| “Background Unregistered IP License Agreement” |
Recitals | |
| “Basket” |
7.05(b)(i) | |
| “Bonus Continuation Period” |
5.03(h) | |
| “Canadian Subsidiary” |
Recitals | |
| “Canadian Subsidiary Contribution” |
2.02(b)(iv) | |
| “Closing” |
2.01 | |
| “Closing Date” |
2.01 | |
| “Company” |
Preamble | |
| “Confidentiality Agreement” |
5.01 | |
| “Covered Agreements” |
7.07 | |
| “Current Cap” |
7.05(b)(iii)B | |
| “Data Incident” |
3.05(o) | |
| “Delayed Transfer Employee” |
5.03(b) | |
| “Development and Services Agreement” |
Recitals | |
| “Dispute” |
8.13(a) | |
| “Dispute Notice” |
8.13(a) | |
| “E/E Architecture Source Code” |
5.13 | |
| “German Subsidiary” |
Recitals | |
| “ICC Rules” |
8.13(c) | |
| “Indemnity Response Period” |
7.06(a) | |
| “Interests” |
2.02(b)(ii) | |
| “Loss” |
7.02(a) | |
| “Malicious Code” |
3.05(l)(ii) | |
| “Material Contracts” |
3.08(a) | |
| “Material IP Contract Consent” |
5.11 | |
| “Max Cap” |
7.05(b)(iii)I | |
| “Parties” or “Party” |
Preamble | |
| “Priority Measures” |
Schedule 5.04 | |
| “Reentry Notice” |
5.05(g)(i) | |
| “Rivian” |
Preamble | |
| “Rivian Background IP Agreements” |
Recitals | |
| “Rivian Canada” |
2.06(b) | |
| “Rivian Canadian Payment” |
2.02(b)(iv) | |
| “Rivian Cash Contribution” |
2.02(a)(ii)D | |
| “Rivian Contribution” |
2.02(a)(ii)D | |
| “Rivian In-Licensed Intellectual Property” |
3.05(m) | |
| “Rivian Indemnified Party” |
7.03(a) | |
| “Rivian IP In-License” |
3.05(m) | |
| “Rivian Retained Asset” |
5.02(c) | |
| “Rivian Serbia” |
2.02(b)(iv) | |
| “Rivian Serbian Payment” |
2.02(b)(iv) | |
| “Rivian SPV” |
Recitals | |
| “SalesCo” |
5.05(a)(i) | |
| “SalesCo Antitrust Approvals” |
5.05(b)(i) | |
| “SalesCo CEOs” |
5.05(c) |
12
| Definition |
Location | |
| “SalesCo Failure Event” |
5.05(e) | |
| “SalesCo Failure Notice” |
5.05(f) | |
| “SalesCo LLCA” |
5.05(a)(ii) | |
| “SalesCo Winddown” |
5.05(f) | |
| “SDV Hub Concepts and Documentation License Agreement” |
Recitals | |
| “Section 5.05 Breach” |
5.05(e)(i) | |
| “Serbian Subsidiary” |
Recitals | |
| “Serbian Subsidiary Contribution” |
2.02(b)(iv) | |
| “Shares” |
5.03(h) | |
| “Source Code Segregation” |
5.14(a) | |
| [***] |
[***] | |
| “Third Party Business” |
5.05(a)(i) | |
| “Third Party Business Customers” |
5.05(a)(i) | |
| “Third-Party Claim” |
7.06(b) | |
| “Third Party Development” |
5.05(a)(i) | |
| “Visa Application” |
5.03(d) | |
| “VW” |
Preamble | |
| “VW AG” |
Preamble | |
| “VW Contributed Subsidiaries” |
4.01 | |
| “VW Indemnified Party” |
7.02(a) | |
| “VW Skateboard/Chassis Business” |
5.05(a)(i) | |
| “VW SPV” |
Recitals | |
| “VW SPV 2” |
Recitals |
SECTION 1.03. Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
(i) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement;
(ii) a reference to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented or modified from time to time to the extent permitted by the provisions thereof;
(iii) a reference to any Law means such Law as amended and in effect from time to time and includes any successor legislation thereto and any rules and regulations promulgated thereunder;
(iv) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
(v) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
13
(vi) the word “or” is not exclusive unless expressly indicated otherwise;
(vii) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
(viii) all terms defined in this Agreement have the defined meanings when used in any certificate or other document delivered or made available pursuant hereto, unless otherwise defined therein;
(ix) where used with respect to information, the phrases “delivered” or “made available” shall mean that the information referred to has been physically or electronically delivered to the relevant parties or their respective Representatives, including, in the case of “made available” to VW, material that has been posted in a “data room” (virtual or otherwise) established by Rivian or its Affiliates (including in an electronic data room available at https://login.global.datasite.com) at least two (2) Business Days prior to the date hereof;
(x) references to “day” or “days” are to calendar days;
(xi) “writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form;
(xii) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;
(xiii) whenever words of one gender are used in this Agreement, they are deemed to include the other gender;
(xiv) references to a Person are also to its successors and permitted assigns;
(xv) the Parties have each participated in the negotiation and drafting of this Agreement and the other Transaction Documents, and if an ambiguity or question of interpretation should arise, this Agreement and the other Transaction Documents shall be construed as if drafted jointly by the parties thereto, as applicable, and no presumption or burden of proof shall arise favoring or burdening any party by virtue of the authorship of any of the provisions in this Agreement or the other Transaction Documents;
(xvi) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded; if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day; and
(xvii) references to sums of money are expressed in lawful currency of the United States of America, and “$” refers to U.S. dollars.
14
ARTICLE II
CLOSING
SECTION 2.01. Closing. Subject to the terms and conditions of this Agreement, the implementation of the transactions contemplated by this Agreement (the “Closing”) shall be effected by the exchange of documents and signatures by electronic transmission or, if the Parties otherwise agree, such Closing shall be held at the offices of Linklaters LLP, 1290 Avenue of the Americas, New York, New York one (1) calendar day after the date hereof; provided, that if the Closing does not occur on such date, then the Parties shall cause the Closing to occur promptly thereafter (the date on which the Closing occurs being “Closing Date”).
SECTION 2.02. Closing Actions. Upon the terms and subject to the conditions of this Agreement, the Parties shall cause the following transactions to occur:
(a) at the Closing (or in the case of Section 2.02(a)(ii)A and Section 2.02(a)(ii)B, prior to the Closing), among other things, and pursuant to the Local Conveyances, as applicable:
(i) VW shall, or shall cause its Affiliates to:
| A. | contribute all of its membership interests in VW SPV 2 to the Company, with VW SPV 2 becoming a wholly-owned subsidiary of the Company; and |
| B. | contribute the VW Payment Amount to the Company; and |
| C. | effect the amendment and restatement of VW SPV’s limited liability company agreement in the form attached hereto as Exhibit F. |
(ii) Rivian shall, or shall cause its Affiliates on its behalf to:
| A. | permit the Company to employ each Closing Transfer Employee located in the United States, waive or otherwise relinquish any and all rights at law or in equity to object to the hiring of any or all of such Closing Transfer Employees by the Company, and otherwise transfer the employment of each such Closing Transfer Employee to the Company, and provide to VW documents evidencing such actions; |
| B. | permit the Canadian Subsidiary to employ each Closing Transfer Employee located in Canada, waive or otherwise relinquish any and all rights at law or in equity to object to the hiring of any or all of such Closing Transfer Employees by the Canadian Subsidiary, in exchange for the Rivian Canadian Payment, and otherwise transfer the employment of each such Closing Transfer Employee to the Canadian Subsidiary, and provide to VW documents evidencing such actions; |
15
| C. | contribute to the Company the Rivian Contributed Assets free and clear of all Encumbrances; |
| D. | contribute an amount equal to $30,000,000 to the Company currently intended to be used for working capital of the Company (the “Rivian Cash Contribution”, and together with the actions described in Sections 2.02(a)(ii)(A) and (C), the “Rivian Contribution”); |
| E. | pay an amount equal to $[***] to VW AG as required under the SDV Hub Concepts and Documentation License Agreement; and |
| F. | effect the amendment and restatement of (1) the Company’s limited liability company agreement in the form of the LLCA, and (2) Rivian SPV’s limited liability company agreement in the form attached hereto as Exhibit E. |
(b) At the Closing (or, with respect to payments of cash, promptly following the Closing), the Company shall, or shall cause its Affiliates on its behalf to, among other things, and pursuant to the Local Conveyances, as applicable:
(i) issue to Rivian SPV an amount of Membership Units (as defined in the LLCA) such that immediately after the issuances contemplated under this Section 2.02(b)(i) and Section 2.02(b)(ii), VW SPV shall own fifty percent (50%) of the Company’s Membership Units, and Rivian SPV shall own fifty percent (50%) of the Company’s Membership Units;
(ii) issue to VW SPV an amount of Membership Units (the “Interests”) such that, immediately after the issuances contemplated under Section 2.02(b)(i) and this Section 2.02(b)(ii), VW SPV shall own fifty percent (50%) of the Company’s Membership Units, and Rivian SPV shall own fifty percent (50%) of the Company’s Membership Units;
(iii) pay to Rivian SPV $[***] in respect of the employment of the persons described in Section 2.02(a)(ii)A;
(iv) first, retain an aggregate amount of $[***] for (A) a future contribution to the Canadian Subsidiary in the amount required to enable the Canadian Subsidiary to make the payment to Rivian Canada that is required by it pursuant to the Local Conveyances (the “Rivian Canadian Payment”) (with such contribution being the “Canadian Subsidiary Contribution”) and (B) a future contribution to the Serbian Subsidiary in the amount required to enable the Serbian Subsidiary to make the payment to Rivian SE Europe d.o.o. Beograd – Novi Beograd (“Rivian Serbia”) required by it pursuant to the Local Conveyances (the “Rivian Serbian Payment”) (with such
16
contribution being the “Serbian Subsidiary Contribution”), and second upon final determination by Rivian of the exact amounts required for the purposes described in the foregoing clauses (A) and (B), distribute an amount equal to $[***] less the total of the amounts required by clauses (A) and (B) to Rivian SPV or its designated Affiliates; and
(v) pay an amount equal to $[***], on behalf of the Company’s German Subsidiary, to VW AG in exchange for VW’s commitments pursuant to Section 5.03(a).
SECTION 2.03. Closing Deliveries by Rivian. At the Closing, Rivian shall deliver or cause to be delivered:
(a) to the Company, the Rivian Cash Contribution;
(b) to VW, executed counterparts of each Transaction Document to which a Rivian Entity or the Company is a party;
(c) to VW, Internal Revenue Service Form W-9s, duly executed by each of Rivian Automotive, LLC and Rivian IP Holdings, LLC;
(d) to the Company, an amount equal to $[***] owed by Rivian as of the Closing pursuant to Section 21.2.4(i) of the Development and Services Agreement;
(e) to VW AG, an amount equal to $[***] in exchange for VW AG’s commitments pursuant to Section 5.1 of the SDV Hub Concepts and Documentation License Agreement; and
(f) to VW, documents (other than Local Conveyances) entered into in connection with implementation of the employee transfers described in Section 2.02(a)(ii).
SECTION 2.04. Closing Deliveries by VW. At the Closing, VW shall deliver, or cause to be delivered:
(a) to the Company, the VW Payment Amount;
(b) to Rivian, executed counterparts of each Transaction Document to which a VW Entity is a party; and
(c) to Rivian, (i) an Internal Revenue Service Form W-9, duly executed by VW, and (ii) an Internal Revenue Service Form W-8 BEN, duly executed by VW AG.
SECTION 2.05. Closing Deliveries by VW AG. At the Closing, VW AG shall deliver, or cause to be delivered:
(a) to the Company, an amount equal to $[***] owed by VW AG as of the Closing pursuant to Section 21.2.4(i) of the Development and Services Agreement;
17
(b) to Rivian Automotive LLC, an amount equal to $[***] owed by VW AG as of the Closing pursuant to Section 4.1 of the Background Unregistered IP License Agreement; and
(c) to Rivian IP Holdings, LLC, an amount equal to $[***] owed by VW AG as of the Closing pursuant to Section 6.1 of the Background Patent License Agreement.
SECTION 2.06. Post-Closing Actions. Upon the terms and subject to the conditions of this Agreement, the Parties shall cause each of the following transactions to occur pursuant to the Local Conveyances, after the Closing:
(a) Promptly following, and in any event no later than three (3) Business Days after, the determination by Rivian of the amount of the Serbian Subsidiary Contribution, and employment by the Serbian Subsidiary of each Rivian In-Scope Employee located in Serbia who is currently employed by Rivian Serbia, the Company shall, on behalf of the Serbian Subsidiary (as a contribution to such Serbian Subsidiary), pursuant to the Local Conveyances, make a payment to Rivian Serbia in an amount equal to the Rivian Serbian Payment.
(b) Promptly following, and in any event no later than three (3) Business Days after, the determination by Rivian of the amount of the Canadian Subsidiary Contribution, the Company shall, on behalf of the Canadian Subsidiary (as a contribution to such Canadian Subsidiary), pursuant to the Local Conveyances, make a payment to Rivian Automotive Canada, Inc. (“Rivian Canada”) in an amount equal to the Rivian Canadian Payment.
(c) Promptly following the Closing, the Parties shall cause VW SPV 2 to merge with and into the Company, with the Company surviving the merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF RIVIAN
Rivian hereby represents and warrants to VW, subject to such exceptions as are disclosed in the Rivian Disclosure Schedule (it being agreed that disclosure of any item in any schedule, section or subsection of the Rivian Disclosure Schedule shall be deemed disclosure with respect to any other schedule, section or subsection of such Rivian Disclosure Schedule to the extent that the relevance of such item is reasonably apparent on its face), as follows:
SECTION 3.01. Organization, Authority and Qualification of Rivian; Interests. Rivian (a) is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware, USA, and (b) has all necessary corporate power and authority to (i) enter into this Agreement and each of the other Transaction Documents to which it is a party, (ii) carry out its obligations hereunder and thereunder, (iii) consummate the transactions contemplated hereby and thereby, (iv) own, lease, operate or otherwise hold its properties and assets, and (v) conduct its business as it is now being conducted, except as would not have a Rivian Material Adverse Effect. Each other Rivian Entity that will be a party to a Transaction Document (x) is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation (to the extent that such concept is applicable) and (y) has all
18
necessary organizational power and authority to (i) enter into the Transaction Documents to which it will be a party, (ii) carry out its obligations thereunder, (iii) consummate the transactions contemplated thereby, (iv) own, lease, operate or otherwise hold its properties and assets, and (v) conduct its business as it is now being conducted, except in the case of the foregoing clauses (y)(iv) and (v), as would not have a Rivian Material Adverse Effect. The execution and delivery by Rivian of this Agreement and the execution of the applicable Rivian Entities to each of the other Transaction Documents to which a Rivian Entity will be a party, the performance by Rivian and the other Rivian Entities of its obligations hereunder and thereunder and the consummation by Rivian and the other Rivian Entities of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the applicable Rivian Entities. No other proceeding on the part of Rivian or any other Rivian Entity is necessary to approve and authorize the execution and delivery of this Agreement or any other Transaction Document to which a Rivian Entity is a party, by a Rivian Entity and the consummation of the transactions contemplated hereby and thereby. Each of this Agreement and the other Transaction Documents has been duly executed and delivered by Rivian and the other Rivian Entities party thereto, as applicable, and, assuming due authorization, execution and delivery by VW and the other VW Entities, as applicable, each of this Agreement and the other Transaction Documents constitutes a legal, valid and binding obligation of Rivian or other Rivian Entities, enforceable against Rivian or other Rivian Entities in accordance with its respective terms, subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to, or affecting, creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity). Prior to the Closing, Rivian SPV is the sole member of the Company, and the Company is the owner 100% of the issued and outstanding capital stock of the Canadian Subsidiary. Except for the rights of VW SPV to acquire the Interests under this Agreement, as of the Closing, there are no outstanding (a) securities of the Company that are convertible into, or exchangeable for, at any time, membership interests of the Company, or (b) options, warrants, scrip, equity appreciation, phantom units, rights to subscribe to, purchase rights, calls, puts, exchange rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, conversion rights, stock appreciation rights, preemptive rights, repurchase rights, rights to acquire from the Company, or obligations of the Company to issue, or any other commitments of any character whatsoever relating to, or any membership interests, rights or securities convertible into, exercisable or exchangeable for, or evidencing the right to subscribe for or purchase, any membership interests of the Company, or Contracts, commitments, understandings or arrangements, by which the Company is or may become bound to issue additional membership interests of the Company or options, warrants, scrip, equity appreciation, phantom units, rights to subscribe to, purchase rights, calls, puts, exchange rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, conversion rights, stock appreciation rights, preemptive rights, repurchase rights, rights to acquire from the Company or any other commitments of any character whatsoever relating to, or securities convertible into or exchangeable for, or evidencing the right to subscribe for or purchase, any membership interests of the Company, or repurchase, redeem or otherwise acquire any membership interests of the Company. As of the Closing, there are no outstanding or promised appreciation rights, phantom equity or similar rights that are valued in whole or in part in reference to the Company or any membership interests of the Company. As of the Closing, there are no outstanding (a) securities of the Canadian Subsidiary that are convertible into, or exchangeable for, at any time, shares of capital stock of the Canadian Subsidiary, or (b) options,
19
warrants, scrip, equity appreciation, phantom units, rights to subscribe to, purchase rights, calls, puts, exchange rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, conversion rights, stock appreciation rights, preemptive rights, repurchase rights, rights to acquire from the Canadian Subsidiary, or obligations of the Canadian Subsidiary to issue, or any other commitments of any character whatsoever relating to, or any capital stock, rights or securities convertible into, exercisable or exchangeable for, or evidencing the right to subscribe for or purchase, any shares of capital stock of the Canadian Subsidiary, or Contracts, commitments, understandings or arrangements, by which the Canadian Subsidiary is or may become bound to issue additional capital stock of the Canadian Subsidiary or options, warrants, scrip, equity appreciation, phantom units, rights to subscribe to, purchase rights, calls, puts, exchange rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, conversion rights, stock appreciation rights, preemptive rights, repurchase rights, rights to acquire from the Canadian Subsidiary or any other commitments of any character whatsoever relating to, or securities convertible into or exchangeable for, or evidencing the right to subscribe for or purchase, any shares of capital stock of the Canadian Subsidiary, or repurchase, redeem or otherwise acquire any shares of capital stock of the Canadian Subsidiary. As of the Closing, there are no outstanding or promised appreciation rights, phantom equity or similar rights that are valued in whole or in part in reference to the Canadian Subsidiary or any capital stock of the Canadian Subsidiary.
SECTION 3.02. No Conflict. Assuming that all consents, approvals, authorizations and other actions described in Section 3.03 below or set forth in Section 3.03 of the Rivian Disclosure Schedule have been obtained, all filings and notifications listed in Section 3.03 below or in Section 3.03 of the Rivian Disclosure Schedule have been made, any applicable waiting period has expired or been terminated, and except as may result from any facts or circumstances relating solely to VW or its Affiliates, the execution, delivery and performance by Rivian and other Rivian Entities, as applicable, of this Agreement and the other Transaction Documents, do not (a) violate, conflict with, or result in the breach of, any provision of the certificate of incorporation or bylaws (or similar organizational documents) of Rivian or such other applicable Rivian Entity, (b) conflict with, or violate, any Law or Governmental Order applicable to Rivian or such other applicable Rivian Entity, (c) conflict with, result in any breach of, constitute a default (or an event which, with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, acceleration or cancellation of, any Material Contract to which Rivian or such other applicable Rivian Entity is a party, or (d) result in the creation or imposition of any Encumbrance on the Rivian Contributed Assets other than Permitted Encumbrances, except, in the case of clauses (b), (c) and (d), as would not have a Rivian Material Adverse Effect.
SECTION 3.03. Governmental Consents and Approvals. The execution, delivery and performance by Rivian of this Agreement does not, and by the Rivian Entities of the other Transaction Documents will not, require any consent, approval, authorization or other order or declaration of, action by, filing with or notification to, any Governmental Authority, other than (a) compliance with, and filings under, any applicable Antitrust Laws, foreign investment Laws and national security Laws, (b) where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not have a Rivian Material Adverse Effect, or (c) as a result of any facts or circumstances relating to any VW Entity. As of the date of this Agreement, the Rivian Entities (i) do not produce, design, test, manufacture, fabricate, or develop one or more “critical technologies” as defined in 31 CFR § 800.215, (ii) do not perform any
20
functions relating to “covered investment critical infrastructure” set forth in column 2 of Appendix A to 31 CFR Part 800, (iii) have not, at any point during the twelve (12) months preceding the date of this Agreement, maintained or collected “identifiable data” (as defined in 31 CFR § 800.226) within one (1) or more categories described in 31 CFR § 800.241(a)(1)(ii) on greater than one (1) million individuals, and (iv) do not have a demonstrated business objective to maintain or collect, directly or indirectly, “identifiable data” (as defined in 31 CFR § 800.226) within one (1) or more categories described in 31 CFR § 800.241(a)(1)(ii).
SECTION 3.04. Properties and Assets.
(a) Each Rivian Entity has good and marketable title to all real property and personal property owned by it that is material to the Rivian In-Scope Operations, in each case free and clear of all Encumbrances other than Permitted Encumbrances. Any real property and buildings held under lease by any Rivian Entity transferred or subleased to the Company as of the date hereof are held by each such Rivian Entity under valid, subsisting and, to Rivian’s Knowledge, enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Rivian Entities, taken as a whole.
(b) The Rivian Entities are the record and beneficial owners of all of the Rivian Contributed Assets, free and clear of all Encumbrances except Permitted Encumbrances. The Rivian Contributed Assets that are tangible personal property are in all material respects in good operating condition and repair (ordinary wear and tear excepted).
(c) The Rivian Contributed Assets, together with the Rivian In-Scope Employees, the services and assets to be provided and the licenses and rights to be granted under the Transaction Documents, in the aggregate, constitute all of the assets and employees necessary for the Company to conduct, in all material respects, the Rivian In-Scope Operations immediately after the Closing in the same manner as conducted by the Rivian Entities immediately prior to Closing.
SECTION 3.05. Intellectual Property; Open Source Software.
(a) Section 3.05(a) of the Rivian Disclosure Schedule sets forth a true and complete list of all Registered Rivian Licensed Intellectual Property as of the date of this Agreement, including for each item, true and complete, in all material respects, details, as applicable, of the record owner, application or registration number, filing, issuance, applicable filing jurisdiction, registration or application date, and current status. All filings, payments and other actions required to be made or taken by any Rivian Entity to maintain registration, prosecution and/or maintenance of such Registered Rivian Licensed Intellectual Property have been made by the applicable deadline, including by payment when due of all maintenance fees and annuities and the filing of all necessary renewals, statements and certifications. The Rivian Entities have complied with all other material procedural requirements of the United States Patent and Trademark Office and any relevant foreign Intellectual Property Rights office to maintain the validity of such Registered Rivian Licensed Intellectual Property, including properly identifying inventors on all patents, filing all necessary and applicable affidavits of inventorship, ownership, use and continuing use and other filings in a timely manner.
21
(b) To the extent any Rivian Licensed Intellectual Property is owned by an Affiliate of Rivian, Rivian has the requisite right and authority to grant (and there are no restrictions on the ability of any Rivian Entity to grant) the licenses and other rights under such Intellectual Property Rights, as provided for under the Transaction Documents (including the licenses under Rivian Licensed Intellectual Property and use of Climbtech 1+2 Technology pursuant to the Rivian Background IP Agreements). In respect of the Rivian In-Licensed Intellectual Property, where Rivian does not have the right to grant sublicenses under, or assign, the relevant Rivian IP In-Licenses to the Company in accordance with the Transaction Documents, Rivian has accurately and adequately disclosed all such Rivian IP In-Licenses and whether each such Rivian IP In-License is non-sublicensable and/or non-assignable. Immediately prior to the Closing Date, a Rivian Entity owns or has a valid license to all Intellectual Property Rights reasonably necessary to the conduct the Rivian In-Scope Operations (provided that, for clarity, the foregoing does not constitute a representation or warranty with respect to infringement of any third party’s Intellectual Property Rights, which is addressed solely in subsection (d)). The Rivian Licensed Intellectual Property, together with (i) the Rivian In-Licensed Intellectual Property and (ii) the [***] IP (from the [***] Completion Date), constitutes all material Intellectual Property Rights necessary for the conduct of the Rivian In-Scope Operations in substantially the same manner as conducted by Rivian immediately prior to the Closing Date. The consummation of the transactions contemplated by this Agreement and the Transaction Documents will provide the Company with the right to use the Rivian Licensed Intellectual Property in all material respects as used by the Rivian Entities in relation to the Rivian In-Scope Operations immediately prior thereto, subject to the limitations and restrictions set forth in the Transaction Documents. The Rivian Licensed Intellectual Property is subsisting and enforceable and, to Rivian’s Knowledge, valid.
(c) There is no pending or, to Rivian’s Knowledge, threatened Action challenging the validity, scope, ownership or enforceability of any Rivian Licensed Intellectual Property (other than ordinary course proceedings related to the prosecution or maintenance of any item of Intellectual Property Rights) and, none of the Rivian Licensed Intellectual Property is subject to any Governmental Order adversely affecting the use thereof or rights thereto by or of any Rivian Entity. To Rivian’s Knowledge, no third party is infringing, misappropriating or otherwise violating, or has infringed, misappropriated or otherwise violated, any material Rivian Licensed Intellectual Property.
(d) The Climbtech 1+2 Technology (in the form existing as of the date hereof without modification and without combination with any other software or other technology or materials) does not infringe or misappropriate any third party’s Intellectual Property Rights.
(e) A Rivian Entity is the sole and exclusive owner of each item of the Rivian Licensed Intellectual Property, free and clear of any Encumbrances.
(f)
| (i) | The conduct of the Rivian In-Scope Operations as currently conducted by the Rivian Entities immediately prior to the Closing does not infringe or misappropriate, and in the past three (3) years has not infringed or misappropriated, any third party’s Intellectual |
22
| Property Rights; provided, that the foregoing representation shall not apply to the conduct of any Rivian In-Scope Operations infringing or misappropriating any Standard Essential Patent. |
| (ii) | Except as set forth in Section 3.05(f) of the Rivian Disclosure Schedule, no Rivian Entity has received any cease and desist letter or offer to take a license or any notice alleging that the Rivian In-Scope Operations infringe or misappropriate any third party’s Intellectual Property Rights. There are no restrictions on the ability of Rivian to grant the non-exclusive licenses under Rivian Licensed Intellectual Property expressly granted to the Company and VW in the applicable Transaction Documents. |
(g) Each of the Rivian Entities has taken all reasonably necessary steps to protect and maintain any material Trade Secrets owned by the Rivian Entities and included in the Rivian Licensed Intellectual Property or otherwise used by or held for use by the Rivian In-Scope Operations, including requiring all current and former employees and other Persons provided with access to such Trade Secrets to execute written agreements that contain confidentiality provisions, and to the Knowledge of Rivian, there have been no unauthorized uses or disclosures of any such Trade Secrets. All current and former employees and independent contractors and other Persons who contributed to or are engaged for the development or creation of any material Intellectual Property Rights that protect or are embodied in, or are necessary for the use of, the Climbtech 1+2 Technology and [***] IP (as of the [***] Completion Date) and were developed or created for or on behalf of a Rivian Entity have executed and delivered to the applicable Rivian Entity a valid and enforceable written contract containing a valid assignment of all of such Person’s respective right, title and interest in and to such Intellectual Property Rights, except where ownership of Intellectual Property Rights in such development or creation would vest exclusively in the applicable Rivian Entity by operation of Law. To the Knowledge of Rivian, none of the activities of the employees of any Rivian Entity within the scope of any Rivian Entities’ business violates any agreement or arrangement which any such employees have with former employers.
(h) No government funding was used, nor government, academic or non-profit research facilities or personnel were used, directly or indirectly, to develop or create, in whole or in part, any of the Rivian Licensed Intellectual Property.
(i) No Source Code of any Rivian Software has been disclosed, escrowed or made available to or for any third Person (except to a Rivian Affiliate and Rivian’s and their employees and contractors involved in the development of the Rivian Software under a duty of confidentiality) and no other Person has a copy of the Source Code of any Rivian Software or any portion thereof. To the Knowledge of Rivian, no Person has gained unauthorized access to any Rivian Software. No Person has used the Source Code of any Rivian Software in a manner not authorized by Rivian. Neither this Agreement, nor the transactions contemplated hereby will result in (i) any third Person other than the SalesCo and Rivian Affiliates being granted rights or access to, or the placement in or release from escrow, of any Source Code for any Rivian Software, or (ii) Rivian granting to any third Person other than the SalesCo and Rivian Affiliates any right, title or interest to or with respect to any Rivian Software. Rivian possesses a current and complete copy of the Source Code to all the Rivian Software. Rivian has in place and
23
complies with adequate protocols and procedures reasonably designed to protect the Source Code of Rivian Software from disclosure to unauthorized Persons, including maintaining a secure Source Code repository, and has in place and complies with procedures for tracking access to, development and use of Rivian Software by its own personnel and any other Person. The Rivian Entities have used industry standard measures to develop, operate, maintain and update the Rivian Software (provided that the foregoing does not constitute a representation or warranty with respect to any lack of defects or Malicious Code, which is addressed solely in subsection (l)).
(j) Section 3.05(j) of the Rivian Disclosure Schedule sets out a true and complete list of all (i) Open Source Software that are used in the Rivian In-Scope Operations, and (ii) copyright notices and license terms required to be adhered to by Rivian in connection with such Open Source Software, as well as copies of all such notices and license terms. Each Rivian Entity uses and has used all Open Source Software in the Rivian Software in compliance with all license terms applicable to such Open Source Software. No Rivian Entity embeds, links to, uses or distributes or has embedded, linked to, used or distributed any such Open Source Software in any manner that requires, with respect to Rivian Software that is licensed, distributed or made available to any third party: (x) any Rivian Entity to permit reverse engineering of such Rivian Software, (y) that such Rivian Software be (i) disclosed or distributed in Source Code form, (ii) licensed for the purpose of making derivative works, or (iii) redistributed at no charge or (z) the grant to any third Person of any rights or immunities under any Intellectual Property Rights in the Rivian Software. The consummation of the transactions contemplated by the Transaction Documents will not trigger any of the events set out at clauses (x) to (z) above.
(k) The IT Systems included in the Rivian Contributed Assets are owned, leased, licensed by or otherwise validly used pursuant to a written agreement with a Rivian Entity that is in full force and effect; and in relation to all such material agreements relating to the IT Systems, neither entering into, nor compliance with, nor contemplation of this Agreement, will entitle a party to terminate it, vary it and/or make a claim. In all material respects, the IT Systems included in the Rivian Contributed Assets or provided under the Transaction Documents are adequate for, and operate and perform as required in connection with, the Rivian In-Scope Operations as currently conducted.
(l) The Rivian Software used by Rivian for the operation of Rivian vehicles as of the Closing Date is free from:
(i) Material Defects (other than Material Defects that have been remedied and that did not, individually or in the aggregate, cause any Rivian Entity or any customer of a Rivian Entity to suffer any material harm); and
(ii) unauthorized malware, contaminants, viruses, “trojan horses,” worms, time bombs, malware, spyware, or malicious code, software routines or hardware components, or other software, malicious device or code designed to cause or permit unauthorized access to, or disruption, impairment, disablement, damage or destruction of, Software, hardware, IT System or Data or the normal and authorized operation of any of the foregoing (“Malicious Code”).
24
(m) Section 3.05(m) of the Rivian Disclosure Schedule sets forth a true and complete list of all Contracts under which any third-party Intellectual Property Rights (excluding Open Source Software) reasonably necessary to conduct the Rivian In-Scope Operations (excluding commercially available administrative and back-office software) are in-licensed to Rivian or any Rivian Entity (the “Rivian In-Licensed Intellectual Property”). Each such Contract (each, a “Rivian IP In-License”), which is material, is valid and binding on the applicable Rivian Entity and, to the Knowledge of Rivian, the counterparty thereto, and is in full force and effect, and no Rivian Entity, nor, to the Knowledge of Rivian, any other party thereto, is in material breach of, or material default under, any Rivian IP In-License.
(n) Except as would not have a Rivian Material Adverse Effect, (i) each Rivian Entity has complied and is presently in compliance with, in all material respects, all applicable requirements of the Data Privacy and Security Obligations, (ii) Rivian has not received any notification of or complaint alleging non-compliance with any Data Privacy and Security Obligations, and (iii) there is no Action by or before any Governmental Authority pending or, to Rivian’s Knowledge, threatened alleging non-compliance with any Data Privacy and Security Obligations.
(o) In the last three (3) years, the Rivian Entities, to the extent related to Rivian Software, the IT Systems and the operations of the Rivian In-Scope Operations, have not suffered a Data Incident that required notification to a Governmental Authority or Person, or otherwise had a Rivian Material Adverse Effect. Each Rivian Entity has taken commercially reasonable technical and organizational measures designed to protect the confidentiality, integrity, and security of IT Systems and Data used directly or indirectly in connection with the operation of the Rivian In-Scope Operations. Without limiting the foregoing, each Rivian Entity has taken reasonable steps to establish and maintain, and has established, maintained, implemented and complied with, reasonable information technology, information security, cyber security and data protection controls, policies and procedures in line with industry standards, that are designed to protect against and prevent breach, destruction, loss, unauthorized distribution, use, access, disablement, misappropriation or modification, or other compromise or misuse of or relating to any IT System or Data used directly or indirectly in connection with the operation of the Rivian In-Scope Operations (a “Data Incident”) in each case at least in accordance with its Data Privacy and Security Obligations. Except as would not have a Rivian Material Adverse Effect, the Rivian Entities regularly test the effectiveness of their physical, organizational, and technical data safeguards and promptly remediate any material vulnerabilities identified. Except as would not have a Rivian Material Adverse Effect, in the last three (3) years, there have been no failures or other adverse events affecting any of the IT Systems.
SECTION 3.06. Employee and Labor Matters.
(a) On or prior to the date hereof, Rivian has caused (i) Rivian Automotive, LLC to transfer to the Company the employment of each Closing Transfer Employee located in the United States, and (ii) Rivian Automotive Canada, Inc. to transfer to the Canadian Subsidiary the employment of each Closing Transfer Employee located in Canada. Immediately after the completion of the transfers of employment set forth in (i) and (ii) of the preceding sentence of this Section 3.06(a), none of the Closing Transfer Employees (except the Dual Role Employees (as defined in the Information Sharing Agreement)) will be employed by any Rivian Entity other than a Company Employer, and, in each case, Rivian has provided to VW documents evidencing such transfer.
25
(b) As of the date of this Agreement, Schedule 1.01(D)(1) sets forth an accurate and complete list of each Rivian In-Scope Employee (including all Closing Transfer Employees), including name, current business title, country, current Rivian organization, and employee type.
(c) Except as required by applicable Law or as set forth in Section 3.06(c) of the Rivian Disclosure Schedule, neither the execution of this Agreement or any of the Transaction Documents, nor the consummation of the transactions contemplated hereby (whether alone or together with any other events) will (i) result in any material payment becoming due to any Rivian In-Scope Employee (including any Closing Transfer Employee), (ii) materially increase any compensation or benefits otherwise payable to any Rivian In-Scope Employee (including any Closing Transfer Employee), (iii) result in any severance or material increase in severance pay upon any termination of employment of a Rivian In-Scope Employee (including any Closing Transfer Employee) after the date of this Agreement, or (iv) result in the acceleration of the time of payment, funding or vesting of any compensation or benefits due or payable to any Rivian In-Scope Employee (including any Closing Transfer Employee).
(d) No Rivian In-Scope Employee (including any Closing Transfer Employee) is covered by a collective bargaining agreement or other labor-related agreement with, or otherwise represented by, a labor union, trade union, works council, staff association or other employee representative body with respect to their employment by any Rivian Entity.
(e) There are, and for the past three (3) years have been, no strikes, organized work slowdowns, lockouts, organized work stoppages or picketing pending or, to the Knowledge of Rivian, threatened against any Rivian Entity by any Rivian In-Scope Employee, in each case, that would have Rivian Material Adverse Effect. To the Knowledge of Rivian, no claim, complaint, charge, audit or investigation by a Governmental Authority for a violation by any Rivian Entity with respect to hours worked and payments made to the Rivian In-Scope Employees of any such Rivian Entity or violation of any other applicable Law dealing with such matters has been made or initiated, in each case, that would have a Rivian Material Adverse Effect.
(f) No Rivian In-Scope Employee (including any Closing Transfer Employee) has pending or, to the Knowledge of Rivian, threatened any Action against a Rivian Entity that is unresolved.
(g) Except as would not have a Rivian Material Adverse Effect, to the extent required by applicable Law, a Rivian Entity has collected and maintained all necessary and applicable immigration and work documents, including employment visas, work permits and residence permits, required for (i) each Rivian In-Scope Employee to be employed in the relevant jurisdiction, and (ii) for each Closing Transfer Employee to, at or prior to Closing, transfer to the Company and be a Company Employee and not employed by a Rivian Entity (other than a Company Employer) after the Closing Date.
26
(h) To the Knowledge of Rivian, no Rivian In-Scope Employee (including any Closing Transfer Employee) is in violation in any material respect of any non-competition, non-solicitation, restrictive covenant, non-disclosure, or intellectual property agreement with any third party in connection with such Rivian In-Scope Employee’s employment by a Rivian Entity.
(i) Each Rivian Entity is, and for the past three (3) years has been, in material compliance with all applicable Laws relating to any Rivian In-Scope Employees (including any Closing Transfer Employee) respecting labor, employment and employment practices, including to Laws relating to the hiring, promotion, assignment and termination of employees; service provider classification (both with respect to independent contractor versus employee classification, as well as exemptions from overtime); discrimination; harassment; retaliation; fair pay; equal employment opportunities; disability; labor relations; wages and hours; applicable wage and hour laws; hours of work; immigration; work permits, visas, or authorization; workers’ compensation; employee benefits; background and credit checks; working conditions; occupational safety and health; family and medical leave; employee terminations; privacy; data privacy and data protection; any applicable traditional labor obligations (including any applicable bargaining or notice requirements); and any applicable termination notice or severance obligations (including those under the Worker Adjustment and Retraining Notification Act and the regulations promulgated thereunder, or any similar international, state or local Law).
SECTION 3.07. Taxes. Except as would not have a Rivian Material Adverse Effect:
(a) (i) All income and all other Tax Returns that are required to have been filed by or with respect to any Rivian Contributed Assets, the Company or the Canadian Subsidiary have been timely filed in accordance with applicable Law and such Tax Returns are true, correct and complete in all respects, and (ii) all Taxes imposed on or with respect to any Rivian Contributed Assets, the Company or the Canadian Subsidiary (whether or not shown as due on any Tax Return) have been timely paid in full.
(b) Each of the Company and the Canadian Subsidiary has complied in all respects with all applicable Laws relating to the payment and withholding of Taxes, including with respect to payments (including in securities) made to any employee, independent contractor, creditor, stockholder, partner or other third party, and has, within the time and manner prescribed, withheld and paid to the appropriate Governmental Authority all amounts required to be withheld and paid over under all applicable Laws.
(c) There is no action, dispute, claim, investigation, proceeding or audit with respect to Taxes currently pending or threatened in writing against or with respect to any Rivian Contributed Assets, the Company or the Canadian Subsidiary.
(d) There are no currently effective waivers or comparable consents of any applicable statute of limitations with respect to, or extensions of the period of assessment of, any Taxes or Tax Return with respect to any Rivian Contributed Assets, the Company or the Canadian Subsidiary.
27
(e) There are no Tax liens on or with respect to any Rivian Contributed Assets, the Company or the Canadian Subsidiary, other than Permitted Encumbrances.
(f) No written claim has been received from any Governmental Authority in a jurisdiction where no Rivian Entity files Tax Returns that any Rivian Contributed Assets, the Company or the Canadian Subsidiary are, or may be, subject to taxation by that jurisdiction.
(g) Neither the Company nor the Canadian Subsidiary (i) is treated as a resident for Tax purposes in a jurisdiction other than the jurisdiction under the laws of which it is organized, or (ii) has a permanent establishment or otherwise has an office or fixed place of business in a country other than the country in which it is organized.
(h) Neither the Company nor the Canadian Subsidiary has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any similar provision of state, local or non-U.S. Law).
(i) There are no active rulings from, or agreements with, any Governmental Authority with respect to Taxes that have been requested or received by, or with respect to, any Rivian Contributed Assets, the Company or the Canadian Subsidiary.
(j) Neither the Company nor the Canadian Subsidiary (i) is bound by any Tax Sharing Agreement, (ii) is or was a member of a consolidated group, combined, or unitary or affiliated Tax Return group (other than a member of a group that included Rivian), or (iii) is liable under any applicable law to pay to a Governmental Authority an amount in respect of a Tax liability which is the primary liability of another Person.
(k) Since its formation through immediately prior to Closing, the Company has been treated as an entity disregarded from its owner for U.S. federal income tax purposes.
SECTION 3.08. Material Contracts.
(a) Section 3.08 of the Rivian Disclosure Schedule lists each of the Contracts of the Rivian Entities that are included as Rivian Contributed Assets (such Contracts, together with all amendments, addendums, exhibits, schedules, and letter agreements thereto, being “Material Contracts”).
(b) Each Material Contract, prior to any transfer to the Company, is valid and binding on the applicable Rivian Entity and, to the Knowledge of Rivian, the counterparty thereto, and is in full force and effect, subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to, or affecting, creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity). No Rivian Entity, nor, to the Knowledge of Rivian, any other party thereto, is in material breach of, or material default under, any Material Contract to which it is a party, except as would not be material to the Rivian In-Scope Operations. No Rivian Entity has received written, or, to the Knowledge of Rivian, oral notice of termination, cancellation or non-renewal of any Material Contract. Rivian has made available to VW a copy of each Material Contract.
28
SECTION 3.09. Litigation.
(a) Except as would not have a Rivian Material Adverse Effect, there is no Action by or against Rivian or any other Rivian Entity pending or, to Rivian’s Knowledge, threatened in writing, before any Governmental Authority relating to the Rivian Contributed Assets.
(b) No Rivian Entity is subject to any Governmental Order, any outstanding injunction, writ judgment, order or decree of any arbitration tribunal or any settlement or similar agreement relating to the Rivian Contributed Assets.
SECTION 3.10. Compliance with Laws. The Rivian Entities are conducting the Rivian In-Scope Operations in compliance with all applicable Laws, except to the extent that any such non-compliance would not reasonably be expected to have a Rivian Material Adverse Effect. The Rivian Entities possess all material Permits necessary for the ownership and use of all of the assets necessary to conduct the Rivian In-Scope Operations, and the Rivian Entities are, in all material respects, in compliance with all terms and conditions of all such Permits and such Permits are in full force and effect. No Action is pending or, to the Knowledge of Rivian, threatened in writing, to suspend, revoke, withdraw, modify or limit any such Permit in a manner that has had or would reasonably be expected to have a material impact on the ability of Rivian to use any such Permits. No written notices have been received by any Rivian Entity from any Governmental Authority alleging a material violation of any such Permits.
SECTION 3.11. Solvency. Upon the consummation of the transactions contemplated by this Agreement and the other Transaction Documents, (a) Rivian will not be insolvent, (b) Rivian will not be left with unreasonably small capital, (c) Rivian will not have incurred debts or other Liabilities beyond its ability to pay such debts or other Liabilities as they mature, and (d) the capital of Rivian will not be impaired.
SECTION 3.12. Brokers. Except as set forth on Section 3.12 of the Rivian Disclosure Schedule, 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 the other Transaction Documents based upon arrangements made by or on behalf of Rivian.
SECTION 3.13. No Other Representations or Warranties; Non-Reliance. Except for the express written representations and warranties made by Rivian in this Article III or in the other Transaction Documents, neither Rivian nor any other Person makes any express or implied representation or warranty regarding Rivian or any other Rivian Entity or any of its or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects or its or their respective Representatives in connection with this Agreement or the transactions contemplated hereby, and Rivian expressly disclaims any other representations or warranties and VW acknowledges and agrees that it has relied solely on the results of its and its Affiliates’ and their respective Representatives’ independent investigations, and neither VW nor any of its Affiliates, or their respective Representatives, has relied on and none are relying on any representations or warranties regarding Rivian or any other Rivian Entity or any of its or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects or its or their respective Representatives in connection with this Agreement or the
29
transactions contemplated hereby, other than the express written representations and warranties expressly set forth in this Article III or in the other Transaction Documents; provided that notwithstanding the foregoing provisions of this Section 3.13, nothing in this Section 3.13 shall limit VW’s remedies with respect to claims of fraud.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF VW
VW hereby represents and warrants to Rivian, subject to such exceptions as are disclosed in the VW Disclosure Schedule (it being agreed that disclosure of any item in any schedule, section or subsection of the VW Disclosure Schedule shall be deemed disclosure with respect to any other schedule, section or subsection of such VW Disclosure Schedule to the extent that the relevance of such item is reasonably apparent on its face), as follows:
SECTION 4.01. Organization, Authority and Qualification of VW. VW is a (a) corporation duly organized and validly existing under the laws of the State of Delaware, USA, and (b) has all necessary power and authority to (i) enter into this Agreement and each of the other Transaction Documents to which it is a party, (ii) carry out its obligations hereunder and thereunder, (iii) consummate the transactions contemplated hereby and thereby, (iv) own, lease, operate or otherwise hold its properties and assets, and (v) conduct its business as it is now being conducted, except in the case of the foregoing clauses (b)(iv) and (v), as would not have a VW Material Adverse Effect. Each other VW Entity that will be a party to a Transaction Document (x) is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation (to the extent that such concept is applicable) and (y) has all necessary organizational power and authority to (i) enter into the Transaction Documents to which it will be a party, (ii) carry out its obligations thereunder, (iii) consummate the transactions contemplated thereby, (iv) own, lease, operate or otherwise hold its properties and assets, and (v) conduct its business as it is now being conducted, except in the case of the foregoing clauses (y)(iv) and (v), as would not have a VW Material Adverse Effect. The execution and delivery by VW of this Agreement and the execution of the applicable VW Entities to each of the other Transaction Documents to which a VW Entity will be a party, the performance by VW and the other VW Entities of its obligations hereunder and thereunder and the consummation by VW and the other VW Entities of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the applicable VW Entities. No other proceeding on the part of VW or any other VW Entity is necessary to approve and authorize the execution and delivery of this Agreement or any other Transaction Document to which a VW Entity is a party, by a VW Entity and the consummation of the transactions contemplated hereby and thereby. Each of this Agreement and the other Transaction Documents has been or will be duly executed and delivered by VW and the other VW Entities party thereto, as applicable, and, assuming due authorization, execution and delivery by Rivian and the other Rivian Entities, as applicable, each of this Agreement and the other Transaction Documents constitutes or will constitute a legal, valid and binding obligation of VW or other VW Entities, enforceable against VW or other VW Entities in accordance with its respective terms, subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to, or affecting, creditors’ rights generally and subject to the effect of general principles of equity
30
(regardless of whether considered in a proceeding at law or in equity). As of the Closing, there are no outstanding (a) securities of VW SPV 2, the Serbian Subsidiary, or Rivian & VW Group Tech GmbH (collectively, the “VW Contributed Subsidiaries”) that are convertible into, or exchangeable for, at any time, equity interests of a VW Contributed Subsidiary, or (b) options, warrants, scrip, equity appreciation, phantom units, rights to subscribe to, purchase rights, calls, puts, exchange rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, conversion rights, stock appreciation rights, preemptive rights, repurchase rights, rights to acquire from a VW Contributed Subsidiary, or obligations of a VW Contributed Subsidiary to issue, or any other commitments of any character whatsoever relating to (excluding the merger contemplated in Section 2.06(c)), or any capital stock, rights or securities convertible into, exercisable or exchangeable for, or evidencing the right to subscribe for or purchase, any equity interest of a VW Contributed Subsidiary, or Contracts, commitments, understandings or arrangements, by which a VW Contributed Subsidiary is or may become bound to issue additional equity interests a VW Contributed Subsidiary or options, warrants, scrip, equity appreciation, phantom units, rights to subscribe to, purchase rights, calls, puts, exchange rights, rights of first refusal, rights of first offer, tag-along rights, drag-along rights, conversion rights, stock appreciation rights, preemptive rights, repurchase rights, rights to acquire from a VW Contributed Subsidiary or any other commitments of any character whatsoever relating to, or securities convertible into or exchangeable for, or evidencing the right to subscribe for or purchase, any equity interests of a VW Contributed Subsidiary, or repurchase, redeem or otherwise acquire any equity interests of a VW Contributed Subsidiary. As of the Closing, there are no outstanding or promised appreciation rights, phantom equity or similar rights that are valued in whole or in part in reference to a VW Contributed Subsidiary or any equity interests of a VW Contributed Subsidiary. Immediately following the VW Contribution, the Company will be the direct or indirect, as applicable, owner of 100% of the issued and outstanding equity interests of the VW Contributed Subsidiaries.
SECTION 4.02. No Conflict. Assuming that all consents, approvals, authorizations and other actions described in Section 4.03 below or set forth in Section 4.03 of the VW Disclosure Schedule have been obtained, all filings and notifications listed in Section 4.03 below or in Section 4.03 of the VW Disclosure Schedule have been made, any applicable waiting period has expired or been terminated, and except as may result from any facts or circumstances relating solely to Rivian or its Affiliates, the execution, delivery and performance by VW and other VW Entities, as applicable, of this Agreement and the other Transaction Documents, do not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or bylaws (or similar organizational documents) of VW or such other applicable VW Entity, (b) conflict with or violate any Law or Governmental Order applicable to VW or such other applicable VW Entity, or (c) conflict with, result in any breach of, constitute a default (or an event which, with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, acceleration or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which VW or any of its Affiliates is a party, except, in the case of clauses (b) and (c), as would not have a VW Material Adverse Effect.
31
SECTION 4.03. Governmental Consents and Approvals. The execution, delivery and performance by VW of this Agreement does not, and by the VW Entities of the other Transaction Documents will not, require any consent, approval, authorization or other order or declaration of, action by, filing with or notification to, any Governmental Authority, other than (a) compliance with, and filings under, any applicable Antitrust Laws, foreign investment Laws and national security Laws, (b) where the failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not prevent or materially delay the consummation by VW of the transactions contemplated by this Agreement and the other Transaction Documents, or (c) as a result of any facts or circumstances relating to any Rivian Entity. No national or subnational governments of a single foreign state have, directly or indirectly, a “voting interest” (as defined in 31 CFR § 800.255) in VW of forty-nine percent (49%) or more.
SECTION 4.04. Employee and Labor Matters.
(a) Except as required by applicable Law, neither the execution of this Agreement or any of the Transaction Documents, nor the consummation of the transactions contemplated hereby (whether alone or together with any other events) will (i) result in any material payment becoming due to any VW In-Scope Employee, (ii) materially increase any compensation or benefits otherwise payable to any VW In-Scope Employee, (iii) result in any severance or material increase in severance pay upon any termination of employment of a VW In-Scope Employee after the date of this Agreement, or (iv) result in the acceleration of the time of payment, funding or vesting of any compensation or benefits due or payable to any VW In-Scope Employee.
(b) No VW In-Scope Employee is covered by a collective bargaining agreement or other labor-related agreement with, or otherwise represented by, a labor union, trade union, works council, staff association or other employee representative body with respect to their employment by any VW Entity.
(c) There are, and for the past three (3) years (or, for any such VW Entity formed within the past three (3) years, since the date of its formation) have been, no strikes, organized work slowdowns, lockouts, organized work stoppages or picketing pending or, to the Knowledge of VW, threatened against any VW Entity by any VW In-Scope Employee, and in each case, that have a VW Material Adverse Effect. To the Knowledge of VW, no claim, complaint, charge, audit or investigation by a Governmental Authority for a violation by any VW Entity with respect to hours worked and payments made to the VW In-Scope Employees of any such VW Entity or violation of any other applicable Law dealing with such matters has been made or initiated, in each case, that would have a VW Material Adverse Effect.
(d) No VW In-Scope Employee has pending or, to the Knowledge of VW, threatened, any Action against any VW Entity that is unresolved.
(e) Except as would not have a VW Material Adverse Effect, to the extent required by applicable Law, a VW Entity has collected and maintained all necessary and applicable immigration and work documents, including employment visas, work permits and residence permits, required for each VW In-Scope Employee to be employed in the relevant jurisdiction.
32
(f) To the Knowledge of VW, no VW In-Scope Employee is in violation in any material respect of any non-competition, non-solicitation, restrictive covenant, non-disclosure, or intellectual property agreement with any third party in connection with such VW In-Scope Employee’s employment by a VW Entity.
(g) Each VW Entity is, and for the past three (3) years (or, for any such VW Entity formed within the past three (3) years, since the date of its formation) has been, in material compliance with all applicable Laws relating to any VW In-Scope Employees respecting labor, employment and employment practices, including to Laws relating to the hiring, promotion, assignment and termination of employees; service provider classification (both with respect to independent contractor versus employee classification, as well as exemptions from overtime); discrimination; harassment; retaliation; fair pay; equal employment opportunities; disability; labor relations; wages and hours; applicable wage and hour laws; hours of work; immigration; work permits, visas, or authorization; workers’ compensation; employee benefits; background and credit checks; working conditions; occupational safety and health; family and medical leave; employee terminations; privacy; data privacy and data protection; any applicable traditional labor obligations (including any applicable bargaining or notice requirements); and any applicable termination notice or severance obligations (including those under the Worker Adjustment and Retraining Notification Act and the regulations promulgated thereunder, or any similar international, state or local Law).
SECTION 4.05. Intellectual Property
(a) The VW SDV Hub Concepts and VW SDV Hub IP developed or created by the VW Contributed Employees as part of their employment with a VW Entity are solely and exclusive owned by such VW Entity, free and clear of any Encumbrances.
(b) VW has the requisite right and authority to grant the licenses, sublicenses, covenants and other rights under the VW SDV Hub Concepts and VW SDV Hub IP as provided for under the Transaction Documents.
(c) There is no pending or, to VW’s Knowledge, threatened Action challenging the ownership of any VW SDV Hub Concepts and VW SDV Hub IP and, none of the VW SDV Hub Concepts and VW SDV Hub IP is subject to any Governmental Order adversely affecting the use thereof or rights thereto by VW.
(d) The VW SDV Hub Concepts and VW SDV Hub IP (in each case in the form existing as of the date hereof without modification), do not infringe or misappropriate any third party’s Intellectual Property Rights. For avoidance of doubt, the foregoing representation does not extend to misappropriation or infringement of the Intellectual Property Rights of Rivian or any Rivian Affiliates.
(e) No VW Entity has received any cease and desist letter or offer to take a license or any notice alleging that the VW SDV Hub Concepts or VW SDV Hub IP infringes or misappropriates any third party’s Intellectual Property Rights. There are no restrictions on the ability of any VW Entity to grant the non-exclusive licenses expressly granted to the Company and Rivian in the applicable Transaction Documents.
33
(f) All current and former employees and independent contractors and other Persons who contributed to or were engaged in the development or creation of any material Intellectual Property Rights that are embodied in the VW SDV Hub Concepts and VW SDV Hub IP for or on behalf of a VW Entity have executed and delivered to the applicable VW Entity a valid and enforceable written contract containing a valid assignment of all of such Person’s respective right, title and interest in and to such Intellectual Property Rights, except where ownership of Intellectual Property Rights in such development or creation would vest exclusively in the applicable VW Entity by operation of Law.
SECTION 4.06. Taxes. Except as would not have a VW Material Adverse Effect:
(a) (i) All income and all other Tax Returns that are required to have been filed by or with respect to VW SPV 2, the German Subsidiary, and the Serbian Subsidiary have been timely filed in accordance with applicable Law and such Tax Returns are true, correct and complete in all respects, and (ii) all Taxes imposed on or with respect to VW SPV 2, the German Subsidiary, or the Serbian Subsidiary (whether or not shown as due on any Tax Return) have been timely paid in full.
(b) Each of VW SPV 2, the German Subsidiary, and the Serbian Subsidiary has complied in all respects with all applicable laws relating to the payment and withholding of Taxes, including with respect to payments (including in securities) made to any employee, independent contractor, creditor, stockholder, partner, or other third party, and has, within the time and manner prescribed, withheld and paid to the appropriate Governmental Authority all amounts required to be withheld and paid over under all applicable Laws.
(c) There is no action, dispute, claim, investigation, proceeding or audit with respect to Taxes currently pending or threatened in writing against or with respect to VW SPV 2, the German Subsidiary, or the Serbian Subsidiary.
(d) There are no currently effective waivers or comparable consents of any applicable statute of limitations with respect to, or extensions of the period of assessment of, any Taxes or Tax Return with respect to VW SPV 2, the German Subsidiary, or the Serbian Subsidiary.
(e) There are no Tax liens on or with respect to VW SPV 2, the German Subsidiary, or the Serbian Subsidiary, other than Permitted Encumbrances.
(f) No written claim has been received from any Governmental Authority in a jurisdiction where no VW Entity files Tax Returns that VW SPV 2, the German Subsidiary, or the Serbian Subsidiary are or may be subject to taxation by that jurisdiction.
(g) Neither VW SPV 2, the German Subsidiary, nor the Serbian Subsidiary (i) is treated as a resident for Tax purposes in a jurisdiction other than the jurisdiction under the laws of which it is organized or (ii) has a permanent establishment or otherwise has an office or fixed place of business in a country other than the country in which it is organized.
34
(h) Neither VW SPV 2, the German Subsidiary, nor the Serbian Subsidiary has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any similar provision of state, local or non-U.S. Law).
(i) There are no active rulings from or agreements with any Governmental Authority with respect to Taxes that have been requested or received by or with respect to VW SPV 2, the German Subsidiary, or the Serbian Subsidiary.
(j) Neither VW SPV 2, the German Subsidiary, nor the Serbian Subsidiary (i) is bound by any Tax Sharing Agreement, (ii) is or was a member of a consolidated group, combined, or unitary or affiliated Tax Return group (other than a member of a group that included VW), or (iii) is liable under any applicable law to pay to a Governmental Authority an amount in respect of a Tax liability which is the primary liability of another Person.
SECTION 4.07. Solvency. Upon the consummation of the transactions contemplated by this Agreement and the other Transaction Documents, (a) VW will not be insolvent, (b) VW will not be left with unreasonably small capital, (c) VW will not have incurred debts or other Liabilities beyond its ability to pay such debts or other Liabilities as they mature, and (d) the capital of VW will not be impaired.
SECTION 4.08. Brokers. Except for Goldman Sachs Bank Europe SE, 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 the other Transaction Documents based upon arrangements made by or on behalf of VW.
SECTION 4.09. No Other Representations or Warranties; Non-Reliance. Except for the express written representations and warranties made by VW in this Article IV or in the other Transaction Documents, neither VW nor any other Person makes any express or implied representation or warranty regarding VW or any other VW Entity or any of its or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects or its or their respective Representatives in connection with this Agreement or the transactions contemplated hereby, and VW expressly disclaims any other representations or warranties and Rivian acknowledges and agrees that it has relied solely on the results of its and its Affiliates’ and their respective Representatives’ independent investigations, and neither Rivian nor any of its Affiliates, or their respective Representatives, has relied on and none are relying on any representations or warranties regarding VW or any other VW Entity or any of its or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects or its or their respective Representatives in connection with this Agreement or the transactions contemplated hereby, other than the express written representations and warranties expressly set forth in this Article IV or in the other Transaction Documents; provided, that notwithstanding the foregoing provisions of this Section 4.09, nothing in this Section 4.09 shall limit Rivian’s remedies with respect to claims of fraud.
35
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Confidentiality. The terms of the Confidentiality Agreement, dated November 23, 2023 (the “Confidentiality Agreement”), among VW AG, Rivian and the other parties thereto, are hereby incorporated herein by reference and shall apply to the Parties mutatis mutandis and shall continue in full force and effect until their expiration in accordance with the terms of the Confidentiality Agreement.
SECTION 5.02. Further Action.
(a) Except as otherwise provided in this Agreement, the Parties shall, and shall cause their respective Affiliates to, use commercially reasonable efforts to take, or cause to be taken, all appropriate action, to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable Law to execute and deliver the Transaction Documents and such other documents and other papers as may be required to carry out the provisions of this Agreement and to consummate and make effective the transactions contemplated by this Agreement, including the obtaining of all necessary waivers, consents, approvals and authorizations from any third party.
(b) From time to time after the Closing, without additional consideration, each Party shall, and shall cause its Affiliates to, execute and deliver such further instruments and take such other action as may be necessary or is reasonably requested by any other Party to make effective the transactions contemplated by this Agreement and the other Transaction Documents.
(c) If after the Closing, (i) a Party discovers that a Rivian Entity owns or has rights to any asset that is (A) currently used in the Rivian In-Scope Operations and reasonably necessary for the conduct of the Rivian In-Scope Operations immediately after the Closing, (B) not held or owned by, licensed to, or leased to, the Company or any of its Subsidiaries, or in the case of Intellectual Property Rights, to VW, and (C) the benefit of which is not made available to the Company or its Subsidiaries, or in the case of Intellectual Property Rights, to VW, by another Transaction Document (each, a “Rivian Retained Asset”), and (ii) if the Parties had been aware of such Rivian Retained Asset on the date hereof, they would have agreed, acting in good faith, that such Rivian Retained Asset would have been contributed to the Company or its Subsidiaries, or in the case of Intellectual Property Rights, should be licensed to VW, then the Parties shall, discuss in good faith (in consultation with the Company’s Co-CEOs), whether the criteria set forth in subclauses (A) through (C) above have been met. If, after such good faith discussion, the Parties so agree, the Parties shall enter into an arrangement on customary terms pursuant to which such Rivian Retained Asset is transferred to, or the benefit associated with such Rivian Retained Asset is provided to the Company or its Subsidiaries, at no cost, or in the case of Intellectual Property Rights, such rights are granted to VW under the Rivian Background IP Agreements and made available to the Company or its Subsidiaries under the Transaction Documents. For clarity and without limitation of the generality of the foregoing, any granting or making available of rights with respect to Intellectual Property Rights owned by a third party will be subject to the applicable terms regarding sublicensing of third party Intellectual Property Rights under the Rivian Background IP Agreements. The foregoing provisions shall apply,
36
mutatis mutandis, with respect to any rights to any asset that a Party discovers has been transferred to the Company or any of its Subsidiaries but in fact is not necessary for the conduct of the Rivian In-Scope Operations immediately after the Closing.
SECTION 5.03. Employee Matters.
(a) VW Employee Transfers. Except as otherwise provided in Section 5.03(b) or Section 5.03(e) of this Agreement and subject to the terms of the LLCA, VW shall permit the Company or its Subsidiaries (including the German Subsidiary) to solicit, interview and offer employment to any VW In-Scope Employee on terms and conditions otherwise consistent with this Section 5.03 and applicable Law, and hereby waives and otherwise relinquishes (on behalf of itself and the applicable employer of each VW In-Scope Employee) any and all rights at law or in equity to object to the hiring of any or all of such VW In-Scope Employees by the Company or its Subsidiaries.
(b) Delayed Transfer Employees. Notwithstanding Section 2.02(a)(ii), in the case of any Rivian In-Scope Employee who would have been a Closing Transfer Employee but for such employee’s leave of absence, whose employment the Parties mutually determine is impractical to transfer at the Closing Date (a “Delayed Transfer Employee”), Rivian shall use its reasonable efforts to cause the employment of such Delayed Transfer Employee to transfer to the Company or its applicable Subsidiary as soon as reasonably practicable following the Closing Date on terms and conditions otherwise consistent with this Section 5.03 and applicable Law; provided, however, that the Current Employer shall be responsible for all Liabilities related to any Delayed Transfer Employees until the transfer of employment of such Delayed Transfer Employees to the Company or its Subsidiary is effective.
(c) Equity Incentives. Any outstanding unvested stock awards granted before the Closing Date to Rivian In-Scope Employees shall continue to remain outstanding and vest following the Closing Date in accordance with the terms of such award, except that service with the Company shall be considered service with Rivian for purposes of such award.
(d) Employee Visas. The Parties shall procure that the applicable Current Employers and the applicable Company Employer, as applicable, shall cooperate with the applicable Company Employer in the preparation and submission (on an expedited or priority application basis) of all necessary documents required to transfer any visa, work permit, residence permit (and other immigration and/or employment documents required to employ the Rivian In-Scope Employees and base them in the relevant jurisdictions) (a “Visa Application”), if applicable, in respect of each Rivian In-Scope Employee requiring such work authorization such that such Rivian In-Scope Employee may commence employment with the Company following the Closing. Promptly after any such Rivian In-Scope Employees obtain requisite work authorization to commence employment with a Company Employer as contemplated in the foregoing sentence, Rivian shall use its reasonable efforts to cause such Rivian In-Scope Employee to become an employee of a Company Employer.
(e) Employee Leasing Agreements. After the Closing, any Rivian In-Scope Employee (except for the Rivian In-Scope Employees who are Delayed Transfer Employees) who would have been a Closing Transfer Employee but for such employee’s visa or work authorization
37
status, and whose employment has not yet been transferred, or caused to be transferred, by Rivian to the Company, shall perform services to the Company pursuant to an Employee Leasing Agreement until the date that such Rivian In-Scope Employee (except for the Rivian In-Scope Employees who are Delayed Transfer Employees), commences employment with the applicable Company Employer.
(f) Employee Work Product. Rivian shall, or shall cause its Affiliates to, cause each Rivian In-Scope Employee, as a condition of such Rivian In-Scope Employee’s employment with the Company or its Subsidiaries, to enter into a Confidentiality and Work Product Assignment Agreement in favor of the Company and its Affiliates, in the form attached hereto at Schedule 5.03(F).
(g) No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to, or shall confer upon, any current or former employee of a Party or any of its Affiliates, any Rivian In-Scope Employee, any VW In-Scope Employee, any Company Employee or any beneficiary or dependent of any of the foregoing any right (including any third-party beneficiary rights), benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement. Nothing contained in this Agreement (express or implied) is intended to create, amend or terminate any employee benefit or compensation plan or arrangement or confer upon any individual any right to employment or service for any period of time, or any right to a particular term or condition of employment or service. No current or former employee of any Current Employer or Company Employee, including any beneficiary or dependent thereof, or any permitted transferee or permitted assign thereof, shall be entitled to assert any claim against the Company, any Current Employer, or any of their respective Affiliates under this Article V.
(h) 2024 Bonuses. From the Closing Date until December 31, 2024 (the “Bonus Continuation Period”), Rivian shall, or cause its Affiliates with respect to the Rivian In-Scope Employees to provide to each Company Employee who remains employed by the Company or its Affiliates during the Bonus Continuation Period, no less favorable short-term annual incentive compensation for the calendar year 2024 than such Company Employee was eligible to receive prior to the Closing Date (the “2024 Annual Bonus”). The Company shall reimburse Rivian in an amount equal to, with respect to each Rivian In-Scope Employee, a pro-rated portion of the 2024 Annual Bonuses paid to such Rivian In-Scope Employee for the portion of the 2024 calendar year that such Rivian In-Scope Employee was employed by the Company. In the event that any 2024 Annual Bonus is paid in fully vested shares of Rivian common stock pursuant to a Rivian equity incentive plan (the “Shares”), the value of such 2024 Annual Bonus shall be determined based on the closing price of a Share on the date of issuance of such Shares.
SECTION 5.04. Compliance Program. Rivian shall, and shall cause its Subsidiaries to, implement the measures to be taken in respect of the compliance program as further described on Schedule 5.04, within the time periods specified therein.
38
SECTION 5.05. Third Party Business.
(a) Formation of SalesCo.
(i) The Parties shall use their commercially reasonable efforts to, as soon as practicable but in any event within [***] following receipt of the last applicable SalesCo Antitrust Approval (as defined below), form a Delaware limited liability company (“SalesCo”) for the purpose of engaging in (i) licensing of Climbtech 1+2 Technology (as updated and further developed from time to time by the Company) or portions thereof (excluding the sale of accompanying hardware) to third party customers that are not Affiliates of Rivian or VW Associated Entities (as defined in the Rivian Background IP Agreements) for incorporation into passenger vehicles sold by such third party customers (such customers, the “Third Party Business Customers”), (ii) licensing Climbtech 1+2 Technology (as updated and further developed from time to time by the Company) or portions thereof for integration into VW’s platform, skateboard and chassis component sales programs (the “VW Skateboard/Chassis Business”) or any other platform, skateboard and chassis component sales program, (iii) solely to the extent that the [***] is integrated into the Company in accordance with Section 5.09, the non-consumer business of the [***], (iv) development of Software and Technology for the Third Party Business Customers in connection with the foregoing, all of such development being subcontracted exclusively to the Company (the “Third Party Development”), and (v) such other activities as may mutually be agreed by VW and Rivian, it being understood that (x) the sale of hardware components that may incorporate Software that is part of Climbtech 1+2 Technology which is developed specifically for such hardware components but that does not require the licensing or use of (A) the core platform or other unrelated elements of Software of Climbtech 1+2 Technology, or (B) any hardware designed or developed by the Company for Climbtech 1+2 Technology, and (y) other businesses and technologies of either Party that are not Third Party Business (including any Rivian Excluded Technology) will not be subject to these provisions or be managed by SalesCo, nor will any revenues or liabilities deriving therefrom be shared between the Parties (collectively, the “Third Party Business”).
(ii) The equity interests of SalesCo will be owned equally by VW and Rivian or a wholly owned Subsidiary of each of them as each shall determine in their sole discretion, but in no event shall Rivian SPV or VW SPV own the equity interests of SalesCo. The organizational documents of SalesCo, including its Limited Liability Company Agreement (the “SalesCo LLCA”), shall be derived from the Company’s organizational documents, subject to mutually agreed modifications thereto. The SalesCo LLCA will include a schedule setting forth certain regions of origin for customers and specific third parties who will not qualify as Third Party Business Customers based on jurisdictions in which US or international sanctions apply.
(b) Regulatory Filings.
(i) Promptly following the Closing Date, and in any event no later than [***], Rivian and VW shall each use their commercially reasonable efforts to make the regulatory filings as may be necessary to obtain the required approvals, consents, actions
39
or nonactions, or the expiration or termination of applicable waiting periods under applicable Antitrust Laws with respect to the formation and operations of SalesCo in a manner such that SalesCo may be formed and operate the Third Party Business as a fully functional joint venture (the “SalesCo Antitrust Approvals”). The Parties shall use commercially reasonable efforts to make an appropriate response as promptly as reasonably practicable to any requests for additional information or documents by any competent Governmental Authority. The filing fees required in respect of filings required under applicable Antitrust Laws undertaken pursuant to this Section 5.05(b) shall be borne fifty percent (50%) by Rivian and fifty percent (50%) by VW.
(ii) Rivian and VW shall cooperate with one another in connection with any such filing and in connection with resolving any investigations or other inquiries of any Governmental Authority to achieve the satisfaction of the SalesCo Antitrust Approvals as soon as practicable following such filings. Rivian and VW shall jointly determine and direct the strategy and process by which the parties will seek required approvals. To the extent not prohibited by law, Rivian and VW each shall furnish to the other party information reasonably required to resolve and respond to any such investigation, shall give each other reasonable prior notice of any communication with any Governmental Authority and permit representatives of the other party to attend any such meeting or teleconference, and shall provide reasonable opportunity to review in advance and comment on drafts of filings and submissions.
(iii) For the avoidance of doubt, neither Rivian nor VW shall be obligated to accept any remedies (i.e., conditions, obligations or other requirements, including any requirement to sell, license, assign, transfer, divest, hold, separate or otherwise dispose of any assets, business or portion of its business, conduct, restrict, operate, invest or otherwise change the assets, business or portions of its business in any manner, or impose any restriction, requirement or limitation on the operation its business or portion of its business) to which the SalesCo Antitrust Approvals are subject, and any such non-acceptance shall not constitute a breach of their obligations set forth in this Section 5.05(b).
(c) Personnel. Unless otherwise agreed in writing by VW and Rivian, the Co-Chief Executive Officers of SalesCo (the “SalesCo CEOs”) and the Head of Finance shall initially be the same individuals serving as Co-CEOs (as defined in the LLCA) and the Chief Financial Officer of the Company, respectively, and the directors serving on SalesCo’s board of directors shall initially be the same individuals serving as Directors (as defined in the LLCA) of the Company’s Board (as defined in the LLCA). Subject to the approval, not to be unreasonably withheld, of the SalesCo CEOs, Rivian and VW shall identify and appoint certain officers and employees of SalesCo, including, by [***], a Head of Business Development and three additional business development employees, with two business development employees being nominated by each of VW and Rivian (each such individual may be a secondee of VW or Rivian, or may become a direct employee of SalesCo, in each case, as determined by the Party appointing each such individual). SalesCo shall not be permitted to order development services or otherwise engage resources from the Company (except for employees with roles at both the Company and SalesCo) until [***] after the Closing Date.
40
(d) Operationalization of SalesCo
(i) In connection with the formation of SalesCo, Rivian and VW shall put in place a license structure and business model substantially in the form attached hereto as Schedule 5.05, to enable SalesCo to operate the Third Party Business and to enter into agreements with Third Party Business Customers as contemplated by Section 5.05(d)(ii).
(ii) Unless otherwise agreed to in writing by Rivian and VW, the terms of SalesCo’s commercial agreements with Third Party Business Customers shall be consistent with the terms attached hereto as Exhibit K, and SalesCo shall have the sole authority to negotiate the terms of such commercial agreement (without participation of VW or Rivian or any of their Affiliates) with Third Party Business Customers so long as (A) the material terms of such commercial agreement are negotiated within the parameters agreed by the Parties in such Exhibit, (B) any changes not contemplated by Exhibit K are determined by SalesCo to be substantially similar to such Exhibit K, and (C) if such Third Party Business Customer requires its own form of agreement to be used, SalesCo, in consultation with outside counsel, reasonably determines that the terms of such agreement are consistent with those set forth in Exhibit K.
(iii) As soon as practicable after the later of SalesCo formation or [***], SalesCo’s board of directors (as constituted in accordance with the SalesCo LLCA) shall meet at least quarterly to, among other things, evaluate SalesCo’s sales roadmap, progress, and re-confirm the viability of SalesCo’s ability to support the growth of the Third Party Business.
(iv) Notwithstanding anything to the contrary herein, unless otherwise unanimously approved by SalesCo’s board of directors, SalesCo shall not permit use by Third Party Business Customers of Technology relating to hardware architecture developed by the Company or any of its Subsidiaries, unless such hardware architecture Technology has been available for use by VW for at least [***].
(e) SalesCo Failure Events. The occurrence of any of the following shall be deemed a “SalesCo Failure Event”:
(i) Failure of the filings contemplated by the first sentence of Section 5.05(b) to have been made by [***], but only if (i) such failure is the direct result of a breach by VW of its obligations set forth in the first sentence of Section 5.05(b) (a “Section 5.05 Breach”), and (ii) not a direct result of Rivian’s failure to comply with its obligations under the first sentence of Section 5.05(b);
(ii) Failure of all SalesCo Antitrust Approvals to have been obtained within [***] following the date of filing the last of the applicable regulatory filings under Section 5.05(b)(i);
(iii) Mutual determination of the Parties to discontinue pursuit of Third Party Business through SalesCo; or
41
(iv) SalesCo’s failure to secure contracts in respect of the Third Party Business providing for aggregate future revenue to SalesCo of at least $[***] by [***].
(f) Consequences of SalesCo Failure Event. Following the occurrence of a SalesCo Failure Event, and in the case of Section 5.05(e)(i), notification thereof delivered by Rivian to VW with such SalesCo Failure Event remaining uncured for [***] after delivery of a written notice by Rivian to VW, Rivian may, at its sole option, deliver a notice to VW (the “SalesCo Failure Notice”) setting forth its desire to wind-down the operation of the Third Party Business through SalesCo (a “SalesCo Winddown”). Following the delivery of the SalesCo Failure Notice, Rivian and VW shall take such actions as may be reasonably necessary to ensure that:
(i) Rivian shall have the right to operate the Third Party Business (other than the VW Skateboard/Chassis Business) independently of VW and SalesCo, and none of VW or SalesCo shall have any right to operate or participate in the revenue or profits of such portion of the Third Party Business that is operated by Rivian; in any such event, the Company shall remain the sole subcontractor for Third Party Development services requested by Third Party Business Customers; and
(ii) VW shall have the right to operate the VW Skateboard/Chassis Business (but not any other portion of the Third Party Business, which shall be the exclusive right of Rivian) independently of Rivian and SalesCo, and none of Rivian or SalesCo shall have any right to operate or participate in the revenue or profits of the VW Skateboard/Chassis Business; in any such event, the Company shall remain the sole subcontractor for Third Party Development services requested by VW Skateboard/Chassis Business customers.
(g) Reentry into Third Party Business.
(i) Notwithstanding the provisions of Section 5.05(f), if, following a SalesCo Winddown, the aggregate revenues of the Third Party Business or the VW Skateboard/Chassis Business, as operated by Rivian or VW, respectively, in accordance with Section 5.05(f), exceed $[***], then either Party shall have the right, upon written notice to the other Party (the “Reentry Notice”), to request that the Third Party Business (including the VW Skateboard/Chassis Business) be operated by a newly formed entity jointly-owned by the Parties and intended to conduct the Third Party Business or otherwise pursuant to a structure to be determined by the Parties in good faith (subject to receipt of any necessary regulatory approvals).
(ii) Promptly following the delivery of a Reentry Notice, the Parties shall use their commercially reasonable efforts to, within [***] of a Party’s delivery of such Reentry Notice mutually agree on a structure pursuant to which the Third Party Business could be operated, with the profits and liabilities of the Third Party Business following the implementation of such structure to be shared in proportion to the Parties’ respective ownership of such new entity. Following agreement on such structure, the Parties shall promptly implement such structure, entering into such agreements with, and transferring such assets or employees to, such entity jointly-owned by the Parties and intended to conduct the Third Party Business as may be necessary.
42
SECTION 5.06. [***]
SECTION 5.07. Joint Sourcing. From and after the Closing, the Parties shall reasonably cooperate to identify opportunities for joint sourcing in a manner that maximizes efficiency and is otherwise compliant with applicable Laws, including applicable Antitrust Laws.
SECTION 5.08. Other Restrictions.
(a) The Parties shall not, and shall cause their Subsidiaries not to, provide, export or re-export, directly or indirectly, to the Specified Countries or for use in the Specified Countries any goods, Software or technology supplied under or in connection with this Agreement or any of the Transaction Documents, including by way of the sale, licensing or transfer in any manner of Intellectual Property Rights or Trade Secrets, and to the granting of rights to access or re-use any material or information protected by Intellectual Property Rights or protected as a Trade Secret.
(b) The Parties shall, and shall cause their Subsidiaries to, use commercially reasonable efforts to cause third-party customers and suppliers, including resellers or sublicensees, to comply with the foregoing.
(c) The Parties shall, and shall cause their Subsidiaries to, promptly inform each Party about any actual or potential breach of the requirements set forth in this Section 5.08.
SECTION 5.09. [***]
SECTION 5.10. [***]
SECTION 5.11. Material IP Contract Consents. If the assignment, transfer or sublicensing to the Company of any Rivian IP In-License, in each case, requires any permission, consent, agreement, authorization or waiver of a third party (each a “Material IP Contract Consent”), Rivian shall use commercially reasonable efforts to obtain each such Material IP Contract Consent, and the Parties shall procure that the Company provides reasonable cooperation to obtain such Material IP Contract Consents. Rivian shall bear its own administrative costs of seeking and obtaining any Material IP Contract Consent. If any other costs, fees and expenses are required to be incurred to obtain any Material IP Contract Consents, the Parties shall negotiate in good faith the allocation of such costs, fees and expenses as between Rivian and the Company, provided that (x) in relation to any Rivian IP In-License being assigned to the Company, any royalties or other payments due under such Rivian IP In-License (i) prior to and (ii) on or following, the date on which such Rivian IP In-License is assigned to the Company shall be borne by Rivian and the Company, respectively, and (y) in relation to any Rivian IP In-License being sublicensed to the Company, Rivian shall bear any royalties or other payments due under such Rivian IP In-License prior to, on and following the date on which the such Rivian IP In-License is sublicensed to the Company, subject to the Company reimbursing Rivian for any royalties or other payments due under such Rivian IP In-License on or following such date which are directly attributable to the Company’s sublicense under such Rivian IP In-License (such as volume-based
43
or user-based payments). If Rivian is unable to obtain any Material IP Contract Consent, the Parties shall co-operate in good faith to enter into a mutually acceptable alternative arrangement that is sufficient to enable the Company to receive the relevant benefit or rights under the relevant Rivian IP In-License without such Material IP Contract Consent. Until such alternative arrangement is agreed upon or the problem is otherwise resolved to the satisfaction of the Parties, Rivian shall use commercially reasonable efforts to provide to the Company the relevant benefit or rights under the relevant Rivian IP In-License.
SECTION 5.12. Insurance. Rivian shall cause the Company to initially be insured by the insurance policies of Rivian.
SECTION 5.13. Temporary Access to E/E Architecture Source Code. On the Closing Date, Rivian shall electronically transmit (or shall ensure that it has transmitted) a copy of the Source Code for the Rivian E/E Architecture (for the avoidance of doubt, other than with respect to any Rivian Excluded Technology) in the form that such Source Code exists as of the Closing Date (“E/E Architecture Source Code”) to a secure cloud repository (such as Gitlab) and grant access to the Company to such repository. Such access to Source Code will be granted at a “read and write” access level. Any access and use of such E/E Architecture Source Code by the Company shall be limited to the extent required for the Company to comply with its obligations under the Development and Services Agreements. Any access by VW shall at all times be subject to any applicable restrictions in the Rivian Background IP Agreements and the Development and Services Agreements.
SECTION 5.14. Segregation of Background Source Code.
(a) No later than [***] after the Closing Date, Rivian shall segregate the portion of the E/E Architecture Source Code corresponding to the Source Code of the Background Software (as defined in the Background Unregistered IP License Agreement) (the “Source Code Segregation”).
(b) Promptly following the Source Code Segregation, Rivian shall deliver to the Company, (i) a complete, commented (to the extent such commenting is in existence as of the Closing Date) copy of the Background Software in existence as of the Closing Date, (ii) a copy of all documentation necessary or useful for the development or exploitation of the Rivian Licensed Intellectual Property in the possession or control of Rivian or its Affiliates as of the Closing Date, (but, with respect to any documentation owned by a third party, only to the extent that Rivian is permitted by the relevant third party to provide such documentation), in each case which are necessary and required for the Company to comply with its obligations under the Development and Services Agreement, and to the extent that, as of the Closing Date, Rivian is permitted under the terms of the relevant Rivian IP In-Licenses to deliver such Software to the Company and (iii) complete instances of all Software (including Tools) included in the Rivian In-Licensed Intellectual Property, to the extent that, as of the Closing Date, Rivian is permitted under the terms of the relevant Rivian IP In-Licenses to deliver such Software to the Company.
44
(c) Promptly following the Source Code Segregation, Rivian shall deliver to VW a copy of the Background Software and Software protected by the Third-Party Background IP in accordance with and subject to the terms set forth in Section 2.4.1 of the Background Unregistered IP License Agreement.
(d) Following the Source Code Segregation and the delivery of the Background Software to the Company and VW as set forth above in subsections (b) and (c), Company and VW shall have no further rights to access the E/E Architecture Source Code through Rivian’s repository and Rivian shall restrict such access.
SECTION 5.15. [***]
SECTION 5.16. Name of the Company. The Parties shall cooperate in good faith to rename each of (a) the Company to “Rivian and VW Group Tech, LLC”, and (b) the Canadian Subsidiary to “Rivian and VW Group Tech Canada, Inc.”, and amend the respective organizational documents of the Company and Canadian Subsidiary accordingly, in each case, as promptly as practicable and in a manner not to materially disrupt the operations of the Company or the Canadian Subsidiary, and in any event not later than [***].
SECTION 5.17. [***]
ARTICLE VI
TAX MATTERS
SECTION 6.01. Cooperation. Each Rivian Entity, the Company and each VW Entity shall cooperate fully as and to the extent reasonably requested by the other Parties in connection with the preparation and filing of any Tax Return, and the resolution or defense of any claim, audit, litigation or other proceeding relating to Liability for Taxes, and each Party will retain and provide the other with any records or information which may be relevant to such Tax Return, audit, or examination or proceedings to the extent that the same are not otherwise reasonably available to the requesting party. Each Rivian Entity, the Company and each VW Entity shall use commercially reasonable efforts to make its employees available on a mutually convenient basis to provide explanations of any documents or information provided hereunder as may be reasonably requested by a Party.
SECTION 6.02. Transfer Taxes. Notwithstanding any other provision of this Agreement, all Transfer Taxes shall be borne and paid in equal amounts by VW and Rivian. The Parties shall reasonably cooperate in providing each other with any appropriate documentation related to Transfer Taxes, including resale exemption certifications and other similar documentation. All Tax Returns with respect to Transfer Taxes shall be prepared and filed by the Party required under applicable Law to file such Tax Returns, and the Party that filed such Tax Return shall provide to the other Party a true copy of each such Tax Return as filed and evidence of the timely filing thereof. If required by applicable Law, each Party shall, and shall cause their respective Affiliates to, cooperate in preparing and filing, and join in the execution of, any such Tax Returns.
SECTION 6.03. Intended Tax Treatment. The Parties acknowledge and agree that, for U.S. federal income tax purposes, the transactions contemplated herein shall be treated as the formation of a partnership accompanied by a “disguised sale” of partnership assets
45
in accordance with Sections 721 and 707 of the Internal Revenue Code and Section 1.707-3 of the Treasury Regulations promulgated thereunder. At Closing, (a) the Company will be treated as a newly created partnership for U.S. federal income tax purposes in accordance with Section 301.7703-3(b) of the Treasury Regulations, (b) the contribution by Rivian and VW of their respective assets, as contemplated by this Agreement, to the Company in exchange for the Company’s membership interests, shall be treated as a transaction described in Sections 721(a), 722, 723 and 1223(1) of the Internal Revenue Code, and (c) the payment to VW AG pursuant to Section 2.02(b)(v) shall be treated as resulting from the payment by the German Subsidiary to VW in respect of the rights granted by VW in accordance with Section 5.03(a) hereof to permit the German Subsidiary to solicit, interview, and offer employment to the VW In-Scope Employees and as such shall be treated as sourced outside the United States for U.S. federal income tax purposes. The Parties further agree not to take any action or position on any Tax Return that is inconsistent with such treatment unless otherwise required to do so by applicable Law or a determination (as defined in Section 1313(a) of the Internal Revenue Code). For purposes of applying Section 704(c) of the Internal Revenue Code and establishing the opening capital accounts of the Company, and for all other Tax purposes, as soon as practicable after Closing, Rivian shall prepare and deliver to VW a statement in accordance with Article VI (Allocations) of the LLCA (the “Allocation Statement”). If within ten (10) days after the delivery of the Allocation Statement, VW notifies Rivian in writing that VW objects to the allocation set forth in the Allocation Statement, Rivian and VW shall use their best efforts to revise the allocation specified in the Allocation Statement to the mutual satisfaction of the Parties within twenty (20) days. In the event that VW and Rivian are unable to resolve such dispute within twenty (20) days, VW and Rivian shall jointly retain a nationally recognized accounting firm mutually agreed by the Parties (the “Accounting Referee”) to resolve the disputed items. Upon resolution of the disputed items, the allocation reflected on the Allocation Statement shall be adjusted to reflect such resolution. The costs, fees and expenses of such Accounting Referee shall be borne equally by VW and Rivian. The Parties shall, and shall cause their respective Affiliates to, report, act and file all required Tax Returns (including Internal Revenue Service Forms 1065) in all respects and for all purposes consistent with such Allocation Statement (as finalized). None of VW, the Company or Rivian shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with such Allocation Statement unless required to do so by applicable Law.
ARTICLE VII
INDEMNIFICATION
SECTION 7.01. Survival of Representations, Warranties and Covenants.
(a) Except in the case of fraud, the representations and warranties of the Parties contained in this Agreement shall survive the Closing for a period of [***] after the Closing, except for:
(i) the Fundamental Representations, which shall survive the Closing until the expiration of the applicable statute of limitations;
46
(ii) the representations and warranties of Rivian contained in Section 3.05(d), which shall survive the Closing for a period of: (a) [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(iv), and (b) [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(v) and Section 7.02(a)(vi);
(iii) the representations and warranties of Rivian contained in Section 3.05(e), Section 3.05(j), and Section 3.05(l), which shall survive the Closing for a period of [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(v) and Section 7.02(a)(vi); and
(iv) the representations and warranties of VW contained in Section 4.05(d), which shall survive the Closing for a period of [***] after the Closing.
(b) The covenants or agreements contained in this Agreement shall survive the Closing until fully performed in accordance with their terms or until the expiration of the term of the undertaking set forth in such covenants and agreements, whichever is earlier.
(c) Any claim made with reasonable specificity by the party seeking to be indemnified within the time periods set forth in this Section 7.01 shall survive until such claim is finally resolved.
SECTION 7.02. Indemnification by Rivian.
(a) VW and the VW Associated Entities (each a “VW Indemnified Party”) shall from and after the Closing be indemnified and held harmless by Rivian from and against any and all losses, liabilities, damages, claims, Taxes, costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys’ fees and expenses) actually suffered or incurred by them (hereinafter a “Loss”), to the extent arising out of, or resulting from:
(i) the breach of any representation or warranty made by Rivian contained in Article III, other than a Rivian Fundamental Representation or Rivian IP Representation, as of the date hereof (or, to the extent made as of a specific date, as of such date);
(ii) the breach of any Rivian Fundamental Representation as of the date hereof (or, to the extent made as of a specific date, as of such date);
(iii) the breach of any covenant by Rivian contained in this Agreement;
(iv) any Material Rivian Infringement Breach where such breach is within Rivian’s Actual Knowledge;
(v) Rivian’s breach of the representations made as of the date hereof by Rivian in (A) Section 3.05(d), where such breach is not within Rivian’s Actual Knowledge and is a result of the Climbtech 1+2 Technology infringing or misappropriating a third party’s Intellectual Property Rights other than a third party that
47
is an NPE, and (B) Section 3.05(e) (excluding [***] IP), but in each case, only where such breach results in the inability of the Company to operate the Business (as defined in the LLCA) substantially in the manner contemplated by the Parties;
(vi) (A) any claim or action brought against the Company, VW and/or any VW Associated Entities by a third party (but excluding any claim or action brought by an NPE) that the use of any part of the Climbtech 1+2 Technology (in the form existing as of the date hereof without modification and without combination with any other software or other technology or materials) infringes, misappropriates or otherwise violates such third party’s Intellectual Property Rights, where such infringement, misappropriation or violation is not within Rivian’s Actual Knowledge, and (B) Rivian’s breach of the representations made by Rivian as of the date hereof in Section 3.05(e), Section 3.05(j) and Section 3.05(l), but with respect to Section 3.05(l)(ii), only where such breach renders any material portion of the Climbtech 1+2 Technology unusable or unexploitable, in each case excluding representations relating to the [***] IP;
(vii) the breach of any Rivian IP Representation (but excluding Section 3.05(l)(i) and any claims covered by Section 7.02(a)(iv) to Section 7.02(a)(vi) above and any Rivian IP Representation relating to the [***] IP);
(viii) any claim or action brought against the Company, VW and/or any VW Associated Entities by an NPE that the use of any part of the Climbtech 1+2 Technology infringes, misappropriates or otherwise violates any third party’s Patents; and
(ix) from the [***] Completion Date, any breach of any Rivian IP Representation relating to the [***] IP.
(b) The Company and its Subsidiaries shall from and after the Closing be indemnified and held harmless by Rivian from and against any and all Losses, to the extent arising out of, or resulting from, any Excluded Rivian Liabilities.
SECTION 7.03. Indemnification by VW
(a) Rivian and its Affiliates (each a “Rivian Indemnified Party”) shall from and after the Closing be indemnified and held harmless by VW from and against any and all Losses, to the extent arising out of, or resulting from:
(i) the breach of any representation or warranty made by VW contained in Article IV other than the VW Fundamental Representations or the VW IP Representations as of the date hereof (or, to the extent made as of a specific date, as of such date);
(ii) the breach of any VW Fundamental Representations as of the date hereof (or, to the extent made as of a specific date, as of such date);
(iii) any Material VW Infringement Breach where such breach is within VW’s Actual Knowledge;
48
(iv) the breach of any VW IP Representations (but excluding any claims covered by Section 7.03(a)(iii)) as of the date hereof (or, to the extent made as of a specific date, as of such date); and
(v) the breach of any covenant by VW contained in this Agreement.
(b) The Company and its Subsidiaries shall from and after the Closing be indemnified and held harmless by VW from and against any and all Losses, to the extent arising out of, or resulting from, Excluded VW Liabilities.
SECTION 7.04. Claims of Indemnification by Rivian.
(a) A VW Indemnified Party may bring a claim for indemnification for a period of: (i) [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(iv), (ii) [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(v) and Section 7.02(a)(vi), and (iii) [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(vii), and (iv) [***] after the Closing with respect to claims for indemnification under Section 7.02(a)(viii).
SECTION 7.05. Limitations on Indemnification.
(a) No claim may be asserted nor may any Action be commenced against a Party for breach of any representation, warranty or covenant contained herein, unless written notice of such claim or Action is received by such party describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or Action on or prior to the date on which the representation, warranty, covenant or agreement on which such claim or Action is based ceases to survive as set forth in Section 7.01or 7.04.
(b) Notwithstanding anything to the contrary contained in this Agreement, and except in the case of fraud:
(i) Rivian shall not be liable for any Losses pursuant to Section 7.02(a)(i) or 7.02(a)(vii), unless and until the aggregate amount of indemnifiable Losses which may be recovered from Rivian exceeds $[***] (the “Basket”) whereupon VW shall be entitled to indemnification for the entire amount of such Losses (including the Basket), subject to the limitations set forth in this Article VII;
(ii) no Losses may be claimed under Section 7.02(a)(i) or Section 7.03(a)(i) or shall be reimbursable by or shall be included in calculating the aggregate Losses set forth in clause (i), above other than Losses in excess of $[***] resulting from any single claim or series of related claims arising out of the same facts, events or circumstances; and
(iii) Rivian’s aggregate Liability for indemnification under Section 7.02(a) shall be limited as follows:
A. pursuant to the terms of Section 7.02(a)(i) shall not exceed $[***];
49
B. pursuant to the terms of Section 7.02(a)(ii) shall not exceed $[***]; provided, that such amount shall increase by an additional $[***] concurrently with each $[***] payment received by the Company from VW pursuant to Section 21.1.4(ii) of the Development and Services Agreement, up to a maximum aggregate amount of $[***] (the amount as calculated pursuant to this section as of any specific date, the “Current Cap”);
C. pursuant to the terms of Section 7.02(a)(iv) shall not exceed $[***];
D. pursuant to the terms of Section 7.02(a)(v) shall not exceed $[***];
E. pursuant to the terms of Section 7.02(a)(vi) shall not exceed $[***];
F. pursuant to the terms of Section 7.02(a)(vii) shall not exceed $[***];
G. pursuant to the terms of Section 7.02(a)(viii) shall not exceed $[***]; and
H. pursuant to the terms of Section 7.02(a)(ix) shall not exceed $[***].
I. Notwithstanding the foregoing, Rivian’s aggregate Liability for indemnification with respect to all obligations for indemnification under Section 7.02(a) shall in no event exceed $[***] (the “Max Cap”); provided, that, except for claims under Section 7.02(a)(iii) or Section 7.02(a)(iv), if the then Current Cap is lower than $[***], then claims for indemnification under Section 7.02(a) shall be indemnifiable up to the amount of the then Current Cap; provided, further, that in respect of any portion of a claim for which indemnification would have been available under this Article VII but for application of the Current Cap, such portion of such claim shall be indemnifiable to the extent the Current Cap is increased from time to time (but in any event, only up to the Current Cap as of such time), and for claims under Section 7.02(a)(vi) and Section 7.02(a)(vii) relating to Section 3.05(l)(ii), Rivian’s aggregate Liability for indemnification shall not exceed $[***];
(iv) Notwithstanding anything to the contrary in Section 7.02, (A) any claim for indemnification that may be brought under Section 7.02(a)(iv) shall only be brought thereunder (and not under Sections 7.02(a)(v) to 7.02(a)(vii)), (B) any claim for indemnification that may (subject to the foregoing clause (A)) be brought under Section 7.02(a)(v) shall only be brought thereunder (and not under Sections 7.02(a)(vi) to 7.02(a)(vii)), (C) any claim for indemnification that may be brought under either Section 7.02(a)(iv) or Section 7.02(a)(v) shall only be brought under Section 7.02(a)(iv) (and not under Section 7.02(a)(v)), and (D) any claim for indemnification that may be brought under either Section 7.02(a)(vi) or Section 7.02(a)(vii) shall only be brought under Section 7.02(a)(vi) (and not under Section 7.02(a)(vii)).
50
(c) Notwithstanding anything to the contrary contained in this Agreement, and except in the case of fraud,
(i) VW shall not be liable for any Losses pursuant to Section 7.03(a)(i), unless and until the aggregate amount of indemnifiable Losses which may be recovered from VW exceeds the Basket whereupon Rivian shall be entitled to indemnification for the entire amount of such Losses (including the Basket); and
(ii) VW’s aggregate Liability for indemnification pursuant to Section 7.03(a)(i) shall in no event exceed $[***];
(iii) VW’s aggregate Liability for indemnification pursuant to Section 7.03(a)(ii) shall in no event exceed $[***];
(iv) VW’s aggregate Liability for indemnification pursuant to Section 7.03(a)(iii) shall in no event exceed $[***]; and
(v) VW’s aggregate Liability for indemnification pursuant to Section 7.03(a)(iv) shall in no event exceed $[***];
(d) No Party shall be entitled to any payment, adjustment or indemnification more than once with respect to the same matter or series of related matters regardless of such matter being attributed to more than one indemnity provision or more than one indemnified party, or to breach of several representations, warranties or covenants.
(e) For purposes of this Article VII, and notwithstanding anything herein to the contrary, the determination of Loss (but not the determination of any breach) in respect of a representation or warranty (other than the term “Material Contract”) shall be determined without giving effect to any qualifications regarding materiality, including by the use of the terms “material”, “Rivian Material Adverse Effect”, “VW Material Adverse Effect” or similar qualifications contained in or otherwise applicable to such representation or warranty.
(f) For all purposes of this Article VII, “Losses” shall be net of (i) any recovery or benefit (including insurance and indemnification) that may be paid to the Indemnified Party or any of its Affiliates in connection with the facts giving rise to the right of indemnification and, if the Indemnified Party or any of its Affiliates receives such recovery or benefit after receipt of payment from the Indemnifying Party, then the amount of such recovery or benefit, net of reasonable expenses incurred in obtaining such recovery or benefit, shall be paid to the Indemnifying Party up to the amount paid to the Indemnified Party by the Indemnifying Party, and (ii) any Tax benefit that is actually realized by the Indemnified Party or any of its Affiliates in the taxable year such Loss was incurred arising in connection with the accrual, incurrence or payment of any such Losses. Losses shall in no event include diminution in value or other damage suffered as a result of an Indemnified Party being a stockholder or other holder of equity of any Indemnifying Party. Losses shall in no event include diminution in value or other damage suffered solely as a result of an Indemnified Party being a stockholder or other holder of equity of any Indemnifying Party.
51
(g) The Parties agree to mitigate Losses, but only to the extent required under applicable Law.
SECTION 7.06. Notice of Loss; Third-Party Claims.
(a) An Indemnified Party shall promptly give the Indemnifying Party written notice in reasonable detail of any matter which an Indemnified Party has determined has given, or could give, rise to a right of indemnification under this Agreement, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises. The Indemnifying Party shall then have a period of [***] after the receipt of such claim (the “Indemnity Response Period”) to notify the Indemnified Party as to whether the Indemnifying Party disputes its Liability to the Indemnified Party with respect to such claim. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or fails to notify the Indemnified Party within the Indemnity Response Period as to whether the Indemnifying Party dispute the claim described in such claim notice, then the corresponding Loss will be conclusively deemed to be a Liability of the Indemnifying Party under this Article VII and the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party within [***] thereafter (or, in the event of a Third-Party Claim, upon final judgment or settlement with respect to such claim in accordance with this Article VII). If the Indemnifying Party notifies the Indemnified Party within the Indemnity Response Period that the Indemnifying Party disputes its Liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations within a period of [***] from the date of such notice or such longer period as may be agreed to in writing, either of the Indemnifying Party or the Indemnified Party shall be entitled to initiate any action to pursue such remedies as may be available to such party on the terms and subject to the provisions of this Agreement. Following final resolution of any disputed claim and the determination of the corresponding Loss under the applicable dispute resolution procedures, the Indemnifying Party shall pay the amount of such Loss to the Indemnified Party within [***] thereafter.
(b) If an Indemnified Party shall receive notice of any Action, audit, demand or assessment against it (each, a “Third-Party Claim”), that could give rise to a claim for Loss under this Agreement, the Indemnified Party shall promptly give the Indemnifying Party written notice in reasonable detail of such Third-Party Claim, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises, together with copies of all notices and documents served on or received by the Indemnified Party and its Representatives in respect thereof. A failure by the Indemnified Party to give notice in a timely manner pursuant to this Section 7.06(b) shall not limit the obligations of the Indemnifying Party under this Agreement, except (i) to the extent such Indemnifying Party is actually and materially prejudiced thereby, or (ii) to the extent advisory or other out-of-pocket, third-party expenses are incurred with respect to the conduct of the Third-Party Claim during the period in which notice was not provided.
52
(c) The Indemnifying Party shall be entitled to assume and control the defense of such Third-Party Claim at its expense and through counsel of its choice, if it gives notice of its intention to do so to the Indemnified Party within [***] of the receipt of such notice from the Indemnified Party, it being understood that such election shall be without prejudice to the rights of the Indemnifying Party to dispute whether such claim involves recoverable or indemnifiable Losses under this Agreement. If the Indemnifying Party elects to undertake any such defense against a Third-Party Claim, the Indemnified Party may participate in such defense at its own expense, to the extent permitted by applicable Law; provided, that the Indemnifying Party shall not be entitled to assume control of such defense if the claim for indemnification relates to or arises in connection with any criminal proceeding. The Indemnified Party shall reasonably cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto (or in the possession or control of any of its Representatives) as is reasonably requested by the Indemnifying Party or its counsel. If the Indemnifying Party so elects to direct the defense of any such Third-Party Claim, the Indemnified Party shall not pay, or permit to be paid, any part of such Third-Party Claim unless (i) the Indemnifying Party consents in writing to such payment, or (ii) a final judgment from which no appeal may be taken by or on behalf of the Indemnifying Party is entered against the Indemnified Party for such Third-Party Claim. If the Indemnified Party assumes the defense of any such Third-Party Claim pursuant to this Section 7.06(c), the Indemnifying Party shall have the right at its expense (A) to participate in the defense assisted by counsel of its own choosing, and (B) to participate in the settlement or assume or reassume the defense of such Third-Party Claim. The Indemnified Party shall not admit any Liability with respect to, or settle, compromise or discharge any Third-Party Claim without the Indemnifying Party’s prior written consent. The Indemnifying Party shall keep the Indemnified Party updated on all material matters relating to the Third-Party Claim, and the Indemnifying Party shall not settle the subject claim without the prior written consent of the Indemnified Party unless it obtains a full and unconditional release of the Indemnified Party in respect of such Third-Party Claim. In the event of any settlement entered into by the Indemnifying Party without the Indemnified Parties’ consent, the Indemnifying Party shall pay all settlement costs in full, including any ongoing royalty and license payments. In the event of any settlement entered into with the consent of the Indemnified Party, the Indemnifying Party shall pay all settlement costs, including any ongoing royalty and license payments, subject to the limitations on indemnification set forth herein.
SECTION 7.07. Remedies. Each of the Parties acknowledges and agrees that following the Closing, except in the case of fraud (a) other than as provided in Section 8.11, (i) the indemnification provisions of this Article VII shall be the sole and exclusive remedies of the Indemnified Parties, and the parties to any Local Conveyance and the Rivian Background IP Agreements for any Losses that the Indemnified Parties may at any time suffer or incur, or become subject to, as a result of, or in connection with this Agreement, any Local Conveyance and the Rivian Background IP Agreements (collectively, the “Covered Agreements”) or the transactions contemplated in the Covered Agreements, including any failure to perform and comply with any covenant or agreement in the Covered Agreements, and (ii) any and all claims arising out of, or
53
in connection with the transactions contemplated in the Covered Agreements must be brought under, and in accordance with the terms of, this Agreement, and (b) notwithstanding anything herein to the contrary, no breach of any representation, warranty, covenant or agreement contained in any of the Covered Agreements shall give rise to any right on the part of any Party after the consummation of the transactions contemplated by the Covered Agreements to rescind the Covered Agreements or any of the transactions contemplated hereby or thereby. Each Party shall cause its Affiliates to comply with this Section 7.07.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including fees and disbursements of counsel, financial and other advisors and accountants, incurred in connection with this Agreement and the transactions contemplated by this Agreement, shall be borne by the party incurring such costs and expenses.
SECTION 8.02. Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed to have been given or made (w) when delivered personally by hand, (x) two (2) Business Days after mailing, if sent by a nationally-recognized overnight delivery service (unless the records of the delivery service indicate otherwise), (y) on the date sent by electronic mail (with confirmation of transmission), or (z) three (3) Business Days after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Party 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 8.02):
| (a) | if to VW: |
Volkswagen International America Inc.
c/o Volkswagen Aktiengesellschaft
Berliner Ring 2, 38440
Wolfsburg, Germany
Attention: [***]
Email: [***]
with a copy (which shall not constitute notice) to:
Volkswagen Aktiengesellschaft
Berliner Ring 2, 38440
Wolfsburg, Germany
Attention: [***]
Email: [***]
54
Linklaters LLP
1290 Avenue of the Americas
New York, NY 10104
Attention: [***]
Email: [***]
| (b) | if to Rivian: |
Rivian Automotive, Inc.
14600 Myford Road
Irvine, California 92606
Attention: Chief Executive Officer; and
General Counsel
Email: [***]
with a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
755 Page Mill Road
Palo Alto, CA 94304-1018
Attention: [***]
Email: [***]
| (c) | if to the Company: |
Rivian and VW Group Technology, LLC
607 Hansen Way
Palo Alto, CA 94304
Attention: [***]
E-mail: [***]
| (d) | if to VW AG: |
Volkswagen Aktiengesellschaft
Berliner Ring 2, 38440
Wolfsburg, Germany
Attention: [***]
Email: [***]
with a copy (which shall not constitute notice) to:
Linklaters LLP
1290 Avenue of the Americas
New York, NY 10104
Attention: [***]
Email: [***]
55
SECTION 8.03. Public Announcements. None of the Parties shall make, or cause to be made, any press release or public announcement in respect of this Agreement, the other Transaction Documents or the transactions contemplated hereby and thereby or otherwise communicate with any news media regarding this Agreement, the other Transaction Documents or the transactions contemplated hereby and thereby without the prior written consent of the other Parties, unless such press release or public announcement is required by Law or applicable stock exchange regulation, in which case the Parties shall, to the extent legally permissible, consult with each other as to the timing and contents of any such press release, public announcement or communication; provided that the prior written consent of the other Parties shall not be required hereunder with respect to any press release, public announcement or communication that is substantially similar to a press release, public announcement or communication previously issued with the prior written consent of such other parties.
SECTION 8.04. Severability. If any term or other provision of this Agreement is declared invalid, illegal or incapable of being enforced by any Governmental Authority, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect for so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, 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 by this Agreement are consummated as originally contemplated to the greatest extent possible.
SECTION 8.05. Entire Agreement. This Agreement, the Disclosure Schedules, the other Transaction Documents and the Confidentiality Agreement constitute the entire agreement of the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof and thereof.
SECTION 8.06. Assignment. This Agreement and the rights and obligations hereunder may not be assigned by any Party by operation of law or otherwise without the express written consent of the other Parties (which consent may be granted or withheld in the sole discretion of the non-assigning Parties), and any attempted assignment that is not in accordance with this Section 8.06 shall be null and void.
SECTION 8.07. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Parties that expressly references the Section of this Agreement to be amended, or (b) by a waiver in accordance with Section 8.08.
SECTION 8.08. Waiver. Any Party may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties of the other Parties contained herein or in any document delivered by the other Parties pursuant to this Agreement, or (c) waive compliance with any of the agreements of the other Parties or conditions to such obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Parties
56
to be bound thereby. Notwithstanding the foregoing, no failure or delay by any Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercise of any other right hereunder. Any waiver of any term or condition hereof shall not be construed as a waiver of any subsequent breach or as a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement.
SECTION 8.09. No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of, and be enforceable by, only the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.
SECTION 8.10. Other Payment Terms. Except as otherwise provided herein, all payments made pursuant to this Agreement shall be made by wire transfer in immediately available funds in U.S. dollars without any setoff, deduction or counterclaim whatsoever, including with respect to payments due pursuant to this Agreement, any other agreement among the Parties or any other Transaction Document.
SECTION 8.11. Specific Performance. The Parties acknowledge and agree that the Parties would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that any non-performance or breach of this Agreement by any Party could not be adequately compensated by monetary damages alone and that the Parties would not have any adequate remedy at law. Accordingly, in addition to any other right or remedy to which any Party may be entitled, at law or in equity (including monetary damages), such Party shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement, without proof of actual damages or posting any bond or other undertaking. The Parties agree that they will not contest the availability of specific performance as a remedy hereunder to prevent or restrain breaches of this Agreement by the Parties, as applicable, and to specifically enforce the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the respective covenants and obligations of the Parties under this Agreement, all in accordance with the terms of this Section 8.11.
SECTION 8.12. Governing Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without giving effect to any choice-of-law rules thereof that may direct the application of the Laws of another jurisdiction.
SECTION 8.13. Dispute Resolution.
(a) Arbitration. Any Party alleging any controversy, claim or dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination (a “Dispute”), shall give written notice (a “Dispute Notice”) to the other Parties which includes information on (i) the substance of the Dispute, (ii) the dollar amount at issue, (iii) key areas of disagreement, and (iv) any applicable time sensitivities associated with resolving the Dispute. All applicable statutes of limitations with respect to such Dispute shall be tolled as of the date of the Dispute Notice and until the end of the applicable time period for resolving the Dispute as provided in Section 8.13(b).
57
(b) Upon receipt of the Dispute Notice, the Parties shall attempt to resolve such Dispute in good faith within thirty (30) days after receipt of the Dispute Notice. If so requested by one of the Parties, the Parties shall use reasonable best efforts to cause the each of their respective Chief Executive Officers to meet within ten (10) days after receipt of the Dispute Notice in furtherance of resolving the Dispute.
(c) Any Dispute not resolved as provided in Section 8.13(b) shall be referred to and resolved exclusively and finally by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules”) as are then in effect.
(i) The number of arbitrators shall be three (3), and they shall endeavor to complete the final hearing in the arbitration within six (6) months after the appointment of the last arbitrator; provided that any delay or failure to do so shall not be a basis for challenge or removal of the arbitral tribunal or setting aside any arbitral award.
(ii) If there are only two (2) Parties to the Dispute, then each Party to the Dispute shall nominate one (1) arbitrator within thirty (30) days of the filing of the arbitration, and the two (2) arbitrators so nominated shall select the president of the arbitral tribunal within thirty (30) days after the latter of the two (2) party-appointed arbitrators has been nominated. If there are more than two Parties to the Dispute, then within thirty (30) days of the filing of the arbitration, all claimants shall jointly appoint one (1) arbitrator and all respondents shall jointly appoint one (1) arbitrator, and the two arbitrators so appointed shall select the president of the arbitral tribunal within thirty (30) days after the latter of the two (2) party-appointed arbitrators has been nominated by the parties to the Dispute. If either all claimants or all respondents fail to make a joint appointment of an arbitrator, or if the party-appointed arbitrators cannot reach an agreement on the president of the arbitral tribunal within the applicable time period, then the ICC International Court of Arbitration as the appointing authority shall make the prescribed appointment.
(iii) The seat, or legal place, of arbitration shall be London, England.
(iv) The arbitration proceedings shall be conducted in the English language.
(v) The award of the arbitral tribunal shall be final and binding. Judgment on the award of the arbitral tribunal may be entered and enforced by any court of competent jurisdiction. The Parties agree that service of process for any action to enforce an award may be accomplished according to the procedures of Section 8.02, as well as any other procedure authorized by Law.
(vi) All notices required for any arbitration proceeding shall be deemed properly given if given in accordance with the ICC Rules or this Agreement.
58
(vii) The award shall include pre-award and post-award interest, as determined in the arbitral award, from the date of any default or other breach of this Agreement until the arbitral award is paid in full.
(viii) Any arbitral award for the payment of money shall be made payable in U.S. dollars, free of any Tax or other deduction.
(ix) Any arbitration (including (i) a settlement during the course of the arbitration or resulting from an arbitral award or documents exchanged or produced during an arbitration proceeding, (ii) memorials, briefs or other documents prepared for the arbitration, and (iii) the fact or existence of arbitration) shall be confidential and may not be disclosed by the Parties, their employees, officers, directors, counsel, consultants and expert witnesses, except to the extent necessary to enforce any arbitration award or as required by applicable Law; provided, however, that breach of this confidentiality provision shall not void any settlement, expert determination or award.
(d) Conflict. In the event of a conflict between this Section 8.13 and the ICC Rules, the terms of this Section 8.13 shall prevail.
SECTION 8.14. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING, DIRECTLY OR INDIRECTLY, ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH ACTION OR LIABILITY, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 8.14.
SECTION 8.15. Counterparts. This Agreement may be executed and delivered (including by facsimile or other means of electronic transmission, such as by electronic mail in “pdf” form) in two (2) or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.
SECTION 8.16. Other Payment Terms. VW AG shall cause (a) VW to make (and shall make available or cause to be made available to VIA the amounts necessary to make) all payments required by VIA under this Agreement, including payments under Section 2.04 and any indemnification payments by VW that may arise under Article VII, and (b), if the conditions to funding set forth in Section 4.02 of the Loan A Agreement and Section 4.02 of the Loan B Agreement have, in each case, been satisfied or waived, VW SPV to make (and shall make available or cause to be made available to VW SPV the amounts necessary to make)
59
the Loan (as defined in the Loan A Agreement) to the Company. VW AG hereby represents and warrants to Rivian as follows: (x) VW AG has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder, (y) the execution and delivery by VW AG of this Agreement and the performance by VW AG of its obligations hereunder have been duly authorized by all requisite action on the part of VW AG, and (z) this Agreement has been duly executed and delivered by VW AG, and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes a legal, valid and binding obligation of VW AG, enforceable against VW AG in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).
[Signature Pages Follow]
60
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first written above by its respective officers thereunto duly authorized.
| VOLKSWAGEN INTERNATIONAL AMERICA INC. | ||
| By: | /s/ Christopher McGee | |
| Name: Christopher McGee | ||
| Title: Director | ||
| By: | /s/ Lauren Kincaid | |
| Name: Lauren Kincaid | ||
| Title: Secretary | ||
[Signature Page to Transaction Agreement]
| RIVIAN AUTOMOTIVE, INC. | ||
| By: | /s/ Claire McDonough | |
| Name: Claire McDonough | ||
| Title: Chief Financial Officer | ||
[Signature Page to Transaction Agreement]
| RIVIAN AND VW GROUP TECHNOLOGY, LLC | ||
| By: | /s/ Wassym Bensaid | |
| Name: Wassym Bensaid | ||
| Title: Co-Chief Executive Officer | ||
[Signature Page to Transaction Agreement]
| Solely with respect to Section 2.05 and Article VIII: | ||
| VOLKSWAGEN AKTIENGESELLSCHAFT | ||
| By: | /s/ Arno Antlitz | |
| Name: Dr. Arno Antlitz | ||
| Title: Member of Management Board | ||
| By: | /s/ Manfred Döss | |
| Name: Dr. Manfred Döss | ||
| Title: Member of Management Board | ||
[Signature Page to Transaction Agreement]
Exhibit 10.2
EXECUTION VERSION
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed.
INVESTMENT AGREEMENT
among
VOLKSWAGEN INTERNATIONAL AMERICA INC.,
RIVIAN AUTOMOTIVE, INC.,
and
VOLKSWAGEN AKTIENGESELLSCHAFT
(solely with respect to Article VII)
Dated as of November 13, 2024
TABLE OF CONTENTS
| ARTICLE I | ||||||
| DEFINITIONS | ||||||
| SECTION 1.01. |
Certain Defined Terms | 1 | ||||
| SECTION 1.02. |
Definitions | 7 | ||||
| SECTION 1.03. |
Interpretation and Rules of Construction | 8 | ||||
| ARTICLE II | ||||||
| PURCHASE AND SALE OF THE SUBJECT SHARES | ||||||
| SECTION 2.01. |
Purchase and Sale | 10 | ||||
| SECTION 2.02. |
Financial Milestone Closing | 10 | ||||
| SECTION 2.03. |
Financial Milestone Closing Deliveries by Rivian | 10 | ||||
| SECTION 2.04. |
Financial Milestone Closing Deliveries by VIA | 11 | ||||
| SECTION 2.05. |
Testing Milestone Closing | 11 | ||||
| SECTION 2.06. |
Testing Milestone Closing Deliveries by Rivian | 14 | ||||
| SECTION 2.07. |
Testing Milestone Closing Deliveries by VIA | 14 | ||||
| SECTION 2.08. |
SOP Milestone Closing | 15 | ||||
| SECTION 2.09. |
SOP Milestone Closing Deliveries by Rivian | 15 | ||||
| SECTION 2.10. |
SOP Milestone Closing Deliveries by VIA | 15 | ||||
| SECTION 2.11. |
Conditions to Obligations of Each Party | 16 | ||||
| SECTION 2.12. |
Conditions to Obligations of Rivian | 16 | ||||
| SECTION 2.13. |
Conditions to Obligations of VIA | 17 | ||||
| SECTION 2.14. |
Regulatory and Other Authorizations; Notices and Consents | 17 | ||||
| ARTICLE III | ||||||
| REPRESENTATIONS AND WARRANTIES OF RIVIAN |
||||||
| SECTION 3.01. |
Organization and Validity | 18 | ||||
| SECTION 3.02. |
Authority | 19 | ||||
| SECTION 3.03. |
Enforceability | 19 | ||||
| SECTION 3.04. |
No Conflict | 19 | ||||
| SECTION 3.05. |
SEC Documents | 19 | ||||
| SECTION 3.06. |
Consents and Approvals | 19 | ||||
| SECTION 3.07. |
Capitalization | 19 | ||||
| SECTION 3.08. |
No Litigation | 20 | ||||
| SECTION 3.09. |
Financial Statements; Controls; Listing Requirements | 20 | ||||
| SECTION 3.10. |
Absence of Certain Changes or Events | 21 | ||||
| SECTION 3.11. |
Permits | 21 | ||||
| SECTION 3.12. |
Compliance with Contracts | 22 | ||||
| SECTION 3.13. |
Properties | 22 | ||||
| SECTION 3.14. |
Intellectual Property; Open Source Software; IT Systems; Data | 22 | ||||
i
| SECTION 3.15. |
Compliance with Laws | 24 | ||||
| SECTION 3.16. |
Anti-Corruption Law and Sanctions | 24 | ||||
| SECTION 3.17. |
Money Laundering | 25 | ||||
| SECTION 3.18. |
Insurance | 25 | ||||
| SECTION 3.19. |
Labor | 25 | ||||
| SECTION 3.20. |
Solvency | 26 | ||||
| SECTION 3.21. |
Brokers and Other Advisors | 26 | ||||
| SECTION 3.22. |
No “Bad Actor” Disqualification | 26 | ||||
| ARTICLE IV | ||||||
| REPRESENTATIONS AND WARRANTIES OF VIA |
||||||
| SECTION 4.01. |
Authority; Enforceability | 27 | ||||
| SECTION 4.02. |
No Conflict | 27 | ||||
| SECTION 4.03. |
Restricted Securities; Purchase Entirely for Own Account; Status | 27 | ||||
| SECTION 4.04. |
Legend | 28 | ||||
| SECTION 4.05. |
Information | 28 | ||||
| SECTION 4.06. |
Brokers and Other Advisors | 28 | ||||
| ARTICLE V | ||||||
| ADDITIONAL AGREEMENTS | ||||||
| SECTION 5.01. |
Confidentiality | 28 | ||||
| SECTION 5.02. |
Further Action | 29 | ||||
| SECTION 5.03. |
Exchange Act Reporting | 29 | ||||
| SECTION 5.04. |
Registration Rights | 29 | ||||
| SECTION 5.05. |
Requisite Stockholder Approval | 34 | ||||
| SECTION 5.06. |
Orderly Market; Standstill; Voting Agreement | 34 | ||||
| ARTICLE VI | ||||||
| TERMINATION | ||||||
| SECTION 6.01. |
Termination | 34 | ||||
| SECTION 6.02. |
Effect of Termination | 35 | ||||
| ARTICLE VII | ||||||
| GENERAL PROVISIONS | ||||||
| SECTION 7.01. |
Notices | 35 | ||||
| SECTION 7.02. |
Successors and Assigns | 37 | ||||
| SECTION 7.03. |
Amendment | 37 | ||||
| SECTION 7.04. |
Severability | 37 | ||||
| SECTION 7.05. |
Entire Agreement | 37 | ||||
| SECTION 7.06. |
Governing Law | 37 | ||||
| SECTION 7.07. |
Dispute Resolution | 38 | ||||
ii
| SECTION 7.08. |
Waiver of Jury Trial | 39 | ||||
| SECTION 7.09. |
Specific Performance | 39 | ||||
| SECTION 7.10. |
Attorneys’ Fees | 39 | ||||
| SECTION 7.11. |
Counterparts | 40 | ||||
| SECTION 7.12. |
Expenses | 40 | ||||
| SECTION 7.13. |
Public Announcements | 40 | ||||
| SECTION 7.14. |
Waiver | 40 | ||||
| SECTION 7.15. |
No Third-Party Beneficiaries | 40 | ||||
| SECTION 7.16. |
Other Payment Terms | 40 |
iii
EXHIBITS
| A | Testing Milestone | |
| B | Form of Convertible Note |
SCHEDULES
| 2.11(b) | Governmental Approvals | |
| 2.13(d) | Specified Funding Conditions |
RIVIAN DISCLOSURE SCHEDULE
| 3.08 | No Litigation | |
| 3.14 | Intellectual Property; Open Source Software; IT Systems; Date | |
| 3.21 | Brokers and Other Advisors |
VIA DISCLOSURE SCHEDULE
| 4.01 | Authority; Enforceability | |
| 4.02 | No Conflict | |
| 4.03 | Restricted Securities; Purchase Entirely for Own Account; Status | |
| 4.06 | Brokers and Other Advisors |
iv
INVESTMENT AGREEMENT, dated as of November 13, 2024, among Volkswagen International America Inc. (“VIA”), Rivian Automotive, Inc. (“Rivian”), and, solely with respect to Article VII, Volkswagen Aktiengesellschaft (“VW AG”), each a “Party”, and together the “Parties” (in the case of VW AG, solely with respect to Article VII).
WHEREAS, prior to the execution of this Agreement, the Parties entered into a Transaction Agreement (the “Transaction Agreement”) pursuant to which, among other things, the Parties agreed to establish Rivian and VW Group Technology, LLC, a new jointly-owned limited liability company under the laws of the State of Delaware for the purpose of the joint development of software for electric vehicles (the “Company”);
WHEREAS, VIA desires to purchase from Rivian, and Rivian desires to issue and sell to VIA, the Subject Shares on the terms and conditions set forth in this Agreement; and
WHEREAS, the Parties desire to enter into this Agreement setting forth the terms and conditions governing their agreement to enter into the transactions contemplated hereby and acknowledging the obligations of the Parties and their Affiliates relating to disclosure of information in accordance with the Information Sharing Agreement and applicable Laws, including applicable Antitrust Laws.
NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. For purposes of this Agreement:
“Action” means any claim, action, suit, inquiry, proceeding or investigation by or before any Governmental Authority or arbitral tribunal.
“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person.
“Agreement” means this Investment Agreement among the Parties (including the Schedules and Exhibits hereto) and all amendments hereto made in accordance with the provisions of Section 7.03.
“Antitrust Laws” means any Law designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization, lessening of competition or restraint of trade.
“Background Unregistered IP License Agreement” means that certain Background Unregistered Intellectual Property License Agreement, dated as of the date hereof, between Rivian and VW AG.
1
“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in Wolfsburg, Germany or Irvine, California, USA.
“Call Event” has the meaning ascribed to such term in the LLC Agreement.
“Call Option Exercise Period” has the meaning ascribed to such term in the LLC Agreement.
“Call Right” has the meaning ascribed to such term in the LLC Agreement.
“Continuing Breach” means, with respect to a representation, warranty, or covenant, an ongoing breach of such representation, warranty, or covenant which breach has not been cured or remediated such that such representation or warranty is then accurate in all material respects or such covenant is then being complied with in all material respects, in each case, as of the applicable Milestone Closing Date; provided, that for the purpose of determining whether such breach has been cured or remediated, any representations or warranties relating to historical matters (such as lookback periods or representations as to compliance with any matter in the past) shall be disregarded, such that if such representation, warranty or covenant is accurate or complied with in all material respects at the present time, then no such Continuing Breach shall be in effect or continuing.
By way of illustration, for the purposes of determining whether a Continuing Breach is occurring with respect to Section 3.09(e), such section shall be deemed to read as “Rivian is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the Nasdaq Global Select Market”.
It is the intention of the Parties that any representation, warranty or covenant subject to Section 2.13(a), 2.13(b), or 2.13(d) shall be permitted to be cured or otherwise remediated any time prior to termination of this Agreement in accordance with Article VI.
“control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract or otherwise.
“Convertible Note” means a convertible promissory note, issued by Rivian to VIA, in a principal amount of $250,000,000, in substantially the form attached hereto as Exhibit B.
“Development and Services Agreement” means that certain Development and Services Agreement, dated as of the date hereof, by and among Rivian Automotive, LLC, VW AG and the Company, as may be amended from time to time.
“Financial Milestone” means the earlier to occur of (a) Rivian achieving two consecutive quarters in which Rivian has earned a Gross Profit of at least $1,000,000 per quarter, or (b) Rivian achieving two quarters (which quarters need not be consecutive) in which Rivian has
2
earned a Gross Profit of at least $50,000,000 per quarter, in each case which shall be determined by reference to publicly released or filed financial statements of Rivian with respect to such quarter(s), when available.
“Financial Milestone Aggregate Cash Amount” shall the Financial Milestone Shares Amount plus the Financial Milestone Fixed Premium Amount.
“Financial Milestone Closing Price” means the arithmetic average of the daily volume-weighted average sale price of one Share (calculated to the nearest one-hundredth of one cent) as displayed under the heading “Bloomberg VWAP” on the Bloomberg AQR screen page of Rivian (or, if such screen page is not available, its equivalent successor page) in respect of the period beginning at 9:30:01 a.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official open of trading) and ending at 4:00:00 p.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official close of trading) for the thirty (30) consecutive trading days ending on the trading day immediately preceding the Financial Milestone Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“Financial Milestone Fixed Premium Amount” shall mean $250,000,000.
“Financial Milestone Shares Amount” shall mean $750,000,000.
“Financial Milestone Shares” shall mean a number of Shares (rounded up to the nearest whole number) equal to (a) the Financial Milestone Shares Amount divided by (b) the Financial Milestone Closing Price.
“Governmental Authority” means any federal, national, foreign, supranational, state, provincial, local or other government, governmental, regulatory or administrative authority, agency, commission or any court of competent jurisdiction.
“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.
“Gross Profit” means the gross profits of the Company, determined in accordance with United States generally accepted accounting principles, as in effect at the time of calculation and consistently applied; provided, however, that if Rivian determines to consolidate the financial information of the Company into Rivian’s financial statements, then the Gross Profit for purposes of the calculation of the Financial Milestone shall be calculated as if Rivian did not consolidate such financial information of the Company.
“Information Sharing Agreement” means that certain Information Sharing Agreement, dated as of the date hereof, by and among Rivian, VW AG and the Company, as may be amended from time to time.
“Law” means any federal, national, foreign, supranational, state, provincial or local statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law).
3
“Limited Testing Milestone Closing Price” means the arithmetic average of the daily volume-weighted average sale price of one Share (calculated to the nearest one-hundredth of one cent) as displayed under the heading “Bloomberg VWAP” on the Bloomberg AQR screen page of Rivian (or, if such screen page is not available, its equivalent successor page) in respect of the period beginning at 9:30:01 a.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official open of trading) and ending at 4:00:00 p.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official close of trading) for the thirty (30) consecutive trading days ending on the trading day immediately preceding the Limited Testing Milestone Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of the Company, dated as of the date hereof.
“Loan B Agreement” means that certain Loan B Agreement, dated as of the date hereof, among the Company, as lender thereunder, Rivian JV SPV, LLC, as borrower thereunder, and Rivian, as parent thereunder.
“Main Services Agreement” means that certain Main Services Agreement, dated as of the date hereof, by and between the Company and Rivian, as may be amended from time to time.
“Milestone” means the Financial Milestone, the Testing Milestone or the SOP Milestone, as the case may be.
“Milestone Closing” means the Financial Milestone Closing, the Limited Testing Milestone Closing, the Testing Milestone Closing or the SOP Milestone Closing, as the case may be.
“Milestone Closing Date” means the Financial Milestone Closing Date, the Limited Testing Milestone Closing Date, the Testing Milestone Closing Date or the SOP Milestone Closing Date, as the case may be.
“Nasdaq Listing Rules” means the rules and regulations promulgated by the Nasdaq Stock Market LLC (or any successor entity) governing the qualification, listing and delisting of companies, as may be amended from time to time.
“Person” means any individual, partnership, firm, corporation, limited liability company, association, trust, unincorporated organization or other entity.
“Representatives” means, with respect to any Person, such Person’s Affiliates and its and their respective directors, officers, employees, agents and advisors.
“Requisite Stockholder Approval” means such approval of Rivian’s stockholders as may be required by the Nasdaq Listing Rules (including Rule 5635(b) and Rule 5635(d)) or any comparable successor stock exchange listing rules.
4
“Rivian Disclosure Schedule” means the disclosure schedule, dated as of the date of this Agreement, delivered by Rivian to VIA in connection with the execution of this Agreement.
“Rivian Fundamental Representations” means the representations and warranties made by Rivian in Section 3.01 (Organization and Validity), Section 3.02 (Authority), Section 3.03 (Enforceability), Section 3.04(c) (No Conflict), Section 3.05 (SEC Documents), Section 3.07 (Capitalization), Section 3.08(a) (No Litigation), Section 3.09 (Financial Statements; Controls; Listing Requirements), Section 3.15 (Compliance with Laws), Section 3.16 (Anti-Corruption Law and Sanctions), Section 3.17 (Money Laundering), Section 3.20 (Solvency) and Section 3.21 (Brokers and Other Advisors).
“Rivian Specified Representations” means the representations and warranties made by Rivian in Section 3.11 (Permits), Section 3.14 (Intellectual Property; Open Source Software; IT Systems; Data), Section 3.18 (Insurance) and Section 3.19 (Labor).
“Shares” means shares of Rivian’s Class A common stock, $0.001 par value per share.
“SOP Milestone” means the earlier of (i) the commencement of series production of the first vehicle program produced by VW AG or any of its Affiliates that incorporates the E/E Architecture developed by the Company or (ii) January 3, 2028 (without further conditionality).
“SOP Milestone Aggregate Cash Amount” shall the SOP Milestone Shares Amount plus the SOP Milestone Fixed Premium Amount.
“SOP Milestone Closing Price” means the arithmetic average of the daily volume-weighted average sale price of one Share (calculated to the nearest one-hundredth of one cent) as displayed under the heading “Bloomberg VWAP” on the Bloomberg AQR screen page of Rivian (or, if such screen page is not available, its equivalent successor page) in respect of the period beginning at 9:30:01 a.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official open of trading) and ending at 4:00:00 p.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official close of trading) for the thirty (30) consecutive trading days ending on the trading day immediately preceding the SOP Milestone Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“SOP Milestone Fixed Premium Amount” shall mean $210,000,000.
“SOP Milestone Shares Amount” shall mean $250,000,000.
“SOP Milestone Shares” shall mean a number of Shares (rounded up to the nearest whole number) equal to (a) the SOP Milestone Shares Amount divided by (b) the SOP Milestone Closing Price.
“Subject Shares” means, in the aggregate, the Financial Milestone Shares, the Testing Milestone Shares, the SOP Milestone Shares and the Shares issuable upon conversion of the Convertible Note (if applicable).
5
“Subsidiary” or “Subsidiaries” of any Person means any corporation, partnership, limited liability company, joint venture or other legal entity of which such person (either alone or through or together with any other Subsidiary), owns, directly or indirectly, more than fifty percent (50%) of the stock or other equity interests, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.
“Testing Milestone” has the meaning set forth on Exhibit A.
“Testing Milestone Closing Price” means the arithmetic average of the daily volume-weighted average sale price of one Share (calculated to the nearest one-hundredth of one cent) as displayed under the heading “Bloomberg VWAP” on the Bloomberg AQR screen page of Rivian (or, if such screen page is not available, its equivalent successor page) in respect of the period beginning at 9:30:01 a.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official open of trading) and ending at 4:00:00 p.m., New York time (or such other time as the Nasdaq Global Select Market publicly announces is the official close of trading) for the thirty (30) consecutive trading days ending on the trading day immediately preceding the Testing Milestone Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“Testing Milestone Full Shares” shall mean a number of Shares (rounded up to the nearest whole number) equal to (a) $1,000,000,000 divided by (b) the Testing Milestone Closing Price.
“Testing Milestone Package 1 Shares” shall mean a number of Shares (rounded up to the nearest whole number) equal to (a) $750,000,000 divided by (b) the Testing Milestone Closing Price.
“Testing Milestone Package 2 Shares” shall mean a number of Shares (rounded up to the nearest whole number) equal to (a) $250,000,000 divided by (b) the Limited Testing Milestone Closing Price.
“Testing Milestone Shares” shall mean the Testing Milestone Full Shares, the Testing Milestone Package 1 Shares, or Testing Milestone Package 2 Shares, as applicable under the circumstances.
“Transaction Documents” has the meaning set forth in the Transaction Agreement.
“VIA Disclosure Schedule” means the disclosure schedule, dated as of the date of this Agreement, delivered by VIA to Rivian in connection with the execution of this Agreement.
“VIA Fundamental Representations” means the representations and warranties made by VIA in Section 4.01 (Authority; Enforceability), Section 4.02(c) (No Conflict) and Section 4.06 (Brokers and Other Advisors).
“VIA Specified Representations” means the representations and warranties made by VIA in Section 4.03 (Restricted Securities; Purchase Entirely for Own Account; Status).
6
SECTION 1.02. Definitions. The following terms have the meanings set forth in the Sections set forth below:
| Definition |
Location | |
| “Antitrust Conditions” | 2.11(b) | |
| “Breach” | 3.14(f) | |
| “Company” | Recitals | |
| “Confidentiality Agreement” | 5.01 | |
| “Contract” | 3.04 | |
| “Damages” | 5.04(h)(i) | |
| “Data” | 3.14(e) | |
| “Data Privacy and Security Obligations” | 3.14(e) | |
| “Demand Registration” | 5.04(a) | |
| “Demand Request” | 5.04(a) | |
| “Dispute” | 7.07(a) | |
| “Dispute Notice” | 7.07(a) | |
| “Disqualification Events” | 3.22(a) | |
| “E/E Architecture” | 2.05(a)(i) | |
| “Exchange Act” | 3.05 | |
| “Expert” | Exhibit A | |
| “Financial Milestone Achievement Notice” | 2.02(a) | |
| “Financial Milestone Closing” | 2.02(b) | |
| “Financial Milestone Closing Date” | 2.02(b) | |
| “Group” | 3.01 | |
| “Group Company” | 3.01 | |
| “ICC” | Exhibit A | |
| “ICC Rules” | 7.07(c) | |
| “Initial Objection Notice” | Exhibit A | |
| “Initial Testing Milestone Achievement Notice” | Exhibit A | |
| “Intellectual Property Rights” | 3.14(a) | |
| “IT Systems” | 3.14(d) | |
| “JV Background IP” | 3.14(b) | |
| “JV Potential Employees” | 3.19(b) | |
| “Lab Car” | 2.05(a)(ii) | |
| “Limited Testing Milestone” | 2.05(d)(iii) | |
| “Limited Testing Milestone Cash Amount” | 2.05(d)(iii) | |
| “Limited Testing Milestone Closing” | 2.05(g) | |
| “Limited Testing Milestone Closing Date” | 2.05(g) | |
| “Material Adverse Effect” | 3.01 | |
| “Money Laundering Laws” | 3.17 | |
| “Mule Vehicle” | 2.05(a)(ii) | |
| “Note Purchase Agreement” | 5.06 | |
| “Open Source Software” | 3.14(c) | |
| “Package 1 Vehicle” | 2.05(c) | |
| “Package 2 Prototype” | 2.05(b) |
7
| Definition |
Location | |
| “Party” | Preamble | |
| “Permit” | 3.11 | |
| “Prototype Vehicle” | 2.05(a)(i) | |
| “Registrable Shares” | 5.04(g) | |
| “Registration Statement” | 5.04(a) | |
| “Rivian” | Preamble | |
| “Rule 144” | 4.04 | |
| “Sanctions” | 3.16(b)(i) | |
| “SEC” | 3.05 | |
| “SEC Documents” | 3.05 | |
| “Second Objection Notice” | Exhibit A | |
| “Second Testing Milestone Achievement Notice” | Exhibit A | |
| “Second Testing Milestone Dispute” | Exhibit A | |
| “Securities Act” | 3.05 | |
| “Selling Expenses” | 5.04(h)(ii) | |
| “Solicitor” | 3.22(b) | |
| “Solvent” | 3.20 | |
| “SOP Milestone Achievement Notice” | 2.08(a) | |
| “SOP Milestone Closing” | 2.08(b) | |
| “SOP Milestone Closing Date” | 2.08(b) | |
| “Technical Dispute” | Exhibit A | |
| “Termination Date” | 6.01(a) | |
| “Test Vehicles” | 2.05(c) | |
| “Testing Milestone” | Exhibit A | |
| “Testing Milestone Cash Amount” | 2.07(b) | |
| “Testing Milestone Closing” | 2.05(f) | |
| “Testing Milestone Closing Date” | 2.05(f) | |
| “Testing Milestone Dispute” | Exhibit A | |
| “Transaction Agreement” | Recitals | |
| “U.S. GAAP” | 3.09(a) | |
| “VIA” | Preamble | |
| “VIA Requested Information” | Exhibit A | |
| “VW AG” | Preamble |
SECTION 1.03. Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise provided or that the context otherwise requires:
(i) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this Agreement;
(ii) a reference to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented or modified from time to time to the extent permitted by the provisions thereof;
8
(iii) a reference to any Law means such Law as amended and in effect from time to time and includes any successor legislation thereto and any rules and regulations promulgated thereunder;
(iv) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement;
(v) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without limitation”;
(vi) the word “or” is not exclusive unless expressly indicated otherwise;
(vii) the words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement;
(viii) all terms defined in this Agreement have the defined meanings when used in any certificate or other document delivered or made available pursuant hereto, unless otherwise defined therein;
(ix) where used with respect to information, the phrases “delivered” or “made available” shall mean that the information referred to has been physically or electronically delivered to the relevant parties or their respective Representatives, including, in the case of “made available” to VIA, material that has been posted in a “data room” (virtual or otherwise) established by Rivian or its Affiliates (including in an electronic data room available at Datasite.com) at least two (2) Business Days prior to the date of the Transaction Agreement;
(x) references to “day” or “days” are to calendar days;
(xi) “writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form;
(xii) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms;
(xiii) whenever words of one gender are used in this Agreement, they are deemed to include the other gender;
(xiv) references to a Person are also to its successors and permitted assigns;
(xv) the Parties have each participated in the negotiation and drafting of this Agreement, and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties, as applicable, and no presumption or burden of proof shall arise favoring or burdening any Party by virtue of the authorship of any of the provisions in this Agreement;
9
(xvi) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded; if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day; and
(xvii) references to sums of money are expressed in lawful currency of the United States of America, and “$” refers to U.S. dollars.
ARTICLE II
PURCHASE AND SALE OF THE SUBJECT SHARES
SECTION 2.01. Purchase and Sale. Subject to the terms and conditions of this Agreement, Rivian agrees to sell and issue to VIA, and VIA agrees to purchase from Rivian, (a) the Financial Milestone Shares for an aggregate purchase price equal to the Financial Milestone Aggregate Cash Amount, (b) the applicable Testing Milestone Shares for an aggregate purchase price equal to the Testing Milestone Cash Amount and/or, if applicable pursuant to Section 2.05, the Convertible Note or the Testing Milestone Package 2 Shares for an aggregate purchase price equal to the Limited Testing Milestone Cash Amount, and (c) the SOP Milestone Shares for an aggregate purchase price equal to the SOP Milestone Aggregate Cash Amount.
SECTION 2.02. Financial Milestone Closing.
(a) Following the achievement of the Financial Milestone, Rivian shall provide written notice to VIA certifying that the Financial Milestone has been achieved (such notice, the “Financial Milestone Achievement Notice”), which Financial Milestone Achievement Notice shall be delivered to VIA within [***] of the achievement of the Financial Milestone.
(b) The consummation of the purchase and sale of the Financial Milestone Shares (the “Financial Milestone Closing”) shall take place on the Financial Milestone Closing Date at the offices of Linklaters LLP, 1290 Avenue of the Americas, New York, New York 10104, or otherwise remotely via an exchange of electronic copies of documents and signatures, subject to the satisfaction or waiver of the conditions precedent to the Financial Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 as of the Financial Milestone Closing. The “Financial Milestone Closing Date” shall mean the later of (a) June 30, 2025 and (b) the [***] after the conditions precedent to the Financial Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 have been satisfied or waived (other than conditions that by their nature are to be satisfied at the Financial Milestone Closing, and subject to the satisfaction or waiver of such conditions), or such other date that the Parties may agree upon in writing.
SECTION 2.03. Financial Milestone Closing Deliveries by Rivian. At the Financial Milestone Closing, Rivian shall deliver or cause to be delivered to VIA:
(a) the certificate referenced in Section 2.13(e); and
(b) (i) a certificate or certificates representing the Financial Milestone Shares or (ii) if the Financial Milestone Shares are not certificated, an electronic direct registration system statement evidencing the registration of the Financial Milestone Shares in the name of VIA on the books and records of Rivian or its transfer agent.
10
SECTION 2.04. Financial Milestone Closing Deliveries by VIA. At the Financial Milestone Closing, VIA shall deliver or cause to be delivered to Rivian:
(a) an amount of cash equal to the Financial Milestone Aggregate Cash Amount, by wire transfer in immediately available funds for the account of Rivian to the bank account number designated by Rivian to VIA in writing at least [***] prior to the date on which the Financial Milestone Closing is planned to occur; and
(b) the certificate referenced in Section 2.12(a).
SECTION 2.05. Testing Milestone Closing.
(a)
(i) The winter testing contemplated under Annex I to Exhibit A shall be conducted using one or more prototype vehicles of VIA or its Affiliates which contemplate utilization of the electrical/electronic architecture (“E/E Architecture”) being developed by the Company (each, a “Prototype Vehicle”), which Prototype Vehicles shall be made available to the Company by VIA or its Affiliates, and which Prototype Vehicles shall contain such functions and capabilities that are reasonably necessary to conduct the winter testing contemplated under Annex I to Exhibit A.
(ii) If VIA or its Affiliate has not made any Prototype Vehicle available to the Company by delivery to the Company to a delivery point in the United States (including a bonded warehouse) by [***], it being understood that VIA shall have a grace period of [***] so long as it can demonstrate that it is making reasonable commercial efforts to transport the Prototype Vehicle to the United States but has suffered delays in such transport or due to regulations, then the winter testing contemplated under Annex I to Exhibit A shall be conducted using certain available VIA vehicles of such make and model as are already available at the Company or can be assembled at the Company ([***]), and containing such functions and capabilities that VIA determines are reasonably necessary to conduct the winter testing contemplated under Annex I to Exhibit A (each, a “Mule Vehicle”). If any such vehicle is designed to utilize an E/E Architecture that is not representative of that being developed by the Company for VIA vehicles, then, with the support of VIA, the Company will be responsible for integrating the E/E Architecture being developed by the Company, and VIA will be responsible for [***]. If VIA is incapable of providing such a vehicle, a subset of testing will be performed on a [***] (a “Lab Car”). VIA or its Affiliates shall notify the Company of any determination that they will not be able to make any Prototype Vehicle available to the Company by [***] as contemplated above at the time such determination is made.
(iii) With respect to subsections (i) and (ii) above, if a Prototype Vehicle, a Mule Vehicle, or a Lab Car, as applicable, is not equipped with the components or other attributes necessary to permit the testing of one or more individual milestones set forth on Annex I to Exhibit A, then Annex I to Exhibit A shall be automatically deemed amended so that such milestones that cannot be tested due to lack of components or other attributes
11
in the Prototype Vehicle, Mule Vehicle, or Lab Car, as applicable (including, for the avoidance of doubt, any individual milestones that are dependent on such milestones), are excluded from Annex I to Exhibit A for purposes of determining achievement of the Testing Milestone for such Prototype Vehicle, Mule Vehicle or Lab Car.
(b) The Company (which shall provide the software and E/E Architecture to be tested) and VIA and its Affiliates shall use commercially reasonable efforts to conduct winter testing concurrent with Winter 2025-2026 with both (i) a Prototype Vehicle of [***] that is a part of VW Group Package 1 (as described in the Roadmap (as defined in the LLC Agreement)) and on which the software and E/E Architecture SDV 0.1 shall be tested (and if both [***] are provided, then both such Prototype Vehicles shall be tested and the applicable Testing Milestone shall be satisfied if the criteria set forth in Exhibit A are satisfied with respect to either such Prototype Vehicle), and (ii) an [***] that is part of VW Group Package 2 (as described in the Roadmap) (the “Package 2 Prototype”) and on which the software and E/E Architecture SDV 1.0 shall be tested; provided, that such Prototype Vehicles are made available by VIA or its Affiliates as required by Section 2.05(a).
(c) If a Package 2 Prototype is not made available in the manner required by Section 2.05(a), then all testing for purposes of the Testing Milestone shall be conducted only on a Prototype Vehicle, Mule Vehicle or Lab Car that is part of VW Group Package 1 as determined in Section 2.05(a) (the “Package 1 Vehicle”, and, together with the Package 2 Prototype, the “Test Vehicles”), and (i) the achievement of the applicable criteria set forth in Exhibit A with respect to such Package 1 Vehicle shall constitute the satisfaction in full of the Testing Milestone, and (ii) Section 2.05(d) shall not apply.
(d) If a Package 2 Prototype is made available in the manner required by Section 2.05(a), then all testing for purposes of the Testing Milestone shall be conducted on both the Package 1 Vehicle and the Package 2 Prototype; provided, that after either such vehicle satisfies the applicable criteria, such vehicle shall not be retested for purposes of the Testing Milestone in any additional winter testing required pursuant to Section 2.05(e), and:
(i) The achievement of the applicable criteria set forth in Exhibit A with respect to the applicable Test Vehicles shall constitute the satisfaction of the Testing Milestone in full, and VIA shall purchase the Testing Milestone Full Shares at the Testing Milestone Closing and the Testing Milestone Cash Amount to be paid in respect of the Testing Milestone Full Shares shall be an amount of cash equal to $1,000,000,000 (One Billion Dollars).
(ii) If the Package 1 Vehicle satisfies the applicable criteria set forth in Exhibit A in any particular winter testing session (with the Package 2 Prototype failing such testing in such session), then the Testing Milestone shall be satisfied and VIA shall purchase at the Testing Milestone Closing (A) the Testing Milestone Package 1 Shares and (B) the Convertible Note and the Testing Milestone Cash Amount to be paid in respect of the Testing Milestone Package 1 Shares and the Convertible Note shall be an amount of cash equal to $1,000,000,000 (One Billion Dollars).
(iii) If only the Package 2 Prototype satisfies the applicable criteria set forth in Exhibit A in any particular winter testing session (with the Package 1 Vehicle
12
failing such testing in such session), then the Testing Milestone shall only be satisfied with respect to the Limited Testing Milestone Closing (the “Limited Testing Milestone”), and VIA shall purchase at the Limited Testing Milestone Closing the Testing Milestone Package 2 Shares for an amount of cash equal to $250,000,000 (Two Hundred Fifty Million Dollars) (the “Limited Testing Milestone Cash Amount”).
(iv) If the Package 1 Vehicle satisfies the applicable criteria set forth in Exhibit A in any particular winter testing session (with the Package 2 Prototype having already passed in a prior winter and the Testing Milestone Package 2 Shares having been previously purchased), then the Testing Milestone shall be satisfied and VIA shall purchase at the Testing Milestone Closing the Testing Milestone Package 1 Shares and the Testing Milestone Cash Amount to be paid in respect of the Testing Milestone Package 1 Shares shall be an amount of cash equal to $750,000,000 (Seven Hundred Fifty Million Dollars).
(v) If the Package 2 Prototype satisfies the applicable criteria set forth in Exhibit A in any particular winter testing session (with the Package 1 Vehicle having already passed in a prior winter and the Testing Milestone Package 1 Shares having been previously purchased and the Convertible Note having been previously issued), then the Convertible Note shall convert into Shares pursuant to the terms of the Convertible Note.
(e) If winter testing is conducted as contemplated herein but the Testing Milestone is not achieved, or is not achieved in full if Section 2.05(d)(ii) or 2.05(d)(iii) applies, then the Parties shall cause winter testing to reoccur, on the same vehicles originally made available that did not satisfy the applicable criteria set forth in Exhibit A, in each successive winter thereafter, including utilization of winters in both hemispheres, until full satisfaction of all applicable criteria, provided that, (i) in the case of a Package 1 Vehicle, no further testing shall be conducted after March 31, 2028 (and no Testing Milestone may be achieved after such date), and (ii) in the case of a Package 2 Prototype, if applicable in accordance with Section 2.05(d), no further testing shall be conducted after March 31, 2027 (and no Testing Milestone in respect of the Package 2 Prototype may be achieved after such date).
(f) Following the achievement of the Testing Milestone (other than a Limited Testing Milestone which shall be governed by Section 2.05(g) below), Rivian shall provide written notice to VIA certifying that the Testing Milestone has been achieved as set forth in Exhibit A. The consummation of the purchase and sale of the applicable Testing Milestone Shares and the Convertible Note (if applicable) (the “Testing Milestone Closing”) shall take place on the Testing Milestone Closing Date at the offices of Linklaters LLP, 1290 Avenue of the Americas, New York, New York 10104, or otherwise remotely via an exchange of electronic copies of documents and signatures, subject to the satisfaction or waiver of the conditions precedent to the Testing Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13. The “Testing Milestone Closing Date” shall mean the later of (a) January 31, 2026, and (b) [***] after the conditions precedent to the Testing Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 have been satisfied or waived (other than conditions that by their nature are to be satisfied at the Testing Milestone Closing, and subject to the satisfaction or waiver of such conditions), or such other date that the Parties may agree upon in writing.
13
(g) Solely in the case that Section 2.05(d)(iii) applies (i.e., only the Package 2 Prototype satisfies the applicable criteria set forth in Exhibit A in any particular winter testing session (with a Package 1 Vehicle failing such testing in such session)), following the achievement of the Limited Testing Milestone, Rivian shall provide written notice to VIA certifying that the Limited Testing Milestone has been achieved as set forth in Exhibit A. The consummation of the purchase and sale of the Testing Milestone Package 2 Shares (the “Limited Testing Milestone Closing”) shall take place on the Limited Testing Milestone Closing Date at the offices of Linklaters LLP, 1290 Avenue of the Americas, New York, New York 10104, or otherwise remotely via an exchange of electronic copies of documents and signatures, subject to the satisfaction or waiver of the conditions precedent to the Limited Testing Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13. The “Limited Testing Milestone Closing Date” shall mean the later of (a) January 31, 2026, and (b) the [***] after the conditions precedent to the Limited Testing Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 have been satisfied or waived (other than conditions that by their nature are to be satisfied at the Testing Milestone Closing, and subject to the satisfaction or waiver of such conditions), or such other date that the Parties may agree upon in writing.
SECTION 2.06. Testing Milestone Closing Deliveries by Rivian. At the Testing Milestone Closing and the Limited Testing Milestone Closing (if applicable), Rivian shall deliver or cause to be delivered to VIA:
(a) the certificate referenced in Section 2.13(e);
(b) (i) a certificate or certificates representing the applicable Testing Milestone Shares or (ii) if such Testing Milestone Shares are not certificated, an electronic direct registration system statement evidencing the registration of the Testing Milestone Shares in the name of VIA on the books and records of Rivian or its transfer agent; and
(c) if applicable pursuant to Section 2.05(d)(ii) in connection with the Testing Milestone Closing, an executed counterpart to the Convertible Note.
SECTION 2.07. Testing Milestone Closing Deliveries by VIA. At the Testing Milestone Closing and the Limited Testing Milestone Closing (if applicable), VIA shall deliver or cause to be delivered to Rivian:
(a) at the Limited Testing Milestone Closing (if applicable), the Limited Testing Milestone Cash Amount, by wire transfer in immediately available funds for the account of Rivian to the bank account number designated by Rivian to VIA in writing at least three (3) Business Days prior to the date on which the Limited Testing Milestone Closing is planned to occur;
(b) at the Testing Milestone Closing, the amount of cash specified in Section 2.05(d)(i), (ii) or (iv), as applicable (the “Testing Milestone Cash Amount”), by wire transfer in immediately available funds for the account of Rivian to the bank account number designated by Rivian to VIA in writing at least three (3) Business Days prior to the date on which the Testing Milestone Closing is planned to occur;
(c) the certificate referenced in Section 2.09(a); and
14
(d) if applicable pursuant to Section 2.05(d)(ii) in connection with the Testing Milestone Closing, an executed counterpart to the Convertible Note.
SECTION 2.08. SOP Milestone Closing.
(a) Following the achievement of the SOP Milestone, VIA shall provide written notice to Rivian certifying that the SOP Milestone has been achieved (such notice, the “SOP Milestone Achievement Notice”), which SOP Milestone Achievement Notice shall be delivered to Rivian within [***] of the achievement of the SOP Milestone.
(b) The consummation of the purchase and sale of the SOP Milestone Shares (the “SOP Milestone Closing”) shall take place on the SOP Milestone Closing Date at the offices of Linklaters LLP, 1290 Avenue of the Americas, New York, New York 10104, or otherwise remotely via an exchange of electronic copies of documents and signatures, subject to the satisfaction or waiver of the conditions precedent to the SOP Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 as of the SOP Milestone Closing. The “SOP Milestone Closing Date” shall mean the earlier of (i) January 3, 2028, so long as all conditions precedent to the SOP Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 have been satisfied or waived (other than conditions that by their nature are to be satisfied at the SOP Milestone Closing, and subject to the satisfaction or waiver of such conditions), and (ii) [***] after the conditions precedent to the SOP Milestone Closing set forth in Section 2.11, Section 2.12 and Section 2.13 have been satisfied or waived (other than conditions that by their nature are to be satisfied at the SOP Milestone Closing, and subject to the satisfaction or waiver of such conditions), or such other date that the Parties may agree upon in writing.
SECTION 2.09. SOP Milestone Closing Deliveries by Rivian. At the SOP Milestone Closing, Rivian shall deliver or cause to be delivered to VIA:
(a) the certificate referenced in Section 2.13(e); and
(b) (i) a certificate or certificates representing the SOP Milestone Shares or (ii) if the SOP Milestone Shares are not certificated, an electronic direct registration system statement evidencing the registration of the SOP Milestone Shares in the name of VIA on the books and records of Rivian or its transfer agent.
SECTION 2.10. SOP Milestone Closing Deliveries by VIA. At the SOP Milestone Closing, VIA shall deliver or cause to be delivered to Rivian:
(a) an amount of cash equal to the SOP Milestone Aggregate Cash Amount, by wire transfer in immediately available funds for the account of Rivian to the bank account number designated by Rivian to VIA in writing at least three (3) Business Days prior to the date on which the SOP Milestone Closing is planned to occur; and
(b) the certificate referenced in Section 2.12(a).
15
SECTION 2.11. Conditions to Obligations of Each Party. The respective obligations of Rivian and VIA to consummate the transactions contemplated under this Agreement in respect of a Milestone Closing are subject to the satisfaction or written waiver, at or prior to the applicable Milestone Closing, of each of the following conditions:
(a) Requisite Stockholder Approval. Any Requisite Stockholder Approval with respect to the issuance of the Subject Shares to VIA shall have been obtained.
(b) Governmental Approvals. Any consents, waivers, filings, approvals, clearances, termination or early termination of any waiting period, and authorizations or orders of, or nonactions by, any Governmental Authority under the Antitrust Laws, foreign investment laws or national security laws as set forth on Schedule 2.11(b) applicable to the transactions contemplated in this Agreement shall have been made or obtained (collectively, the “Antitrust Conditions”).
(c) No Order. There shall not be pending or in effect any Law or Governmental Order issued by a Governmental Authority of competent jurisdiction that enjoins the consummation of the transactions contemplated by this Agreement.
(d) Financial Milestone. In respect of the Financial Milestone Closing only, the Financial Milestone Achievement Notice shall have been delivered and the Financial Milestone shall have been achieved.
(e) Testing Milestone. In respect of the Testing Milestone Closing only, the Initial Testing Milestone Achievement Notice (and, if applicable, the Second Testing Milestone Achievement Notice) shall have been delivered and the Testing Milestone shall have been achieved in accordance with the terms and procedures set forth on Exhibit A by March 31, 2028.
(f) Limited Testing Milestone. In respect of the Limited Testing Milestone Closing only, if applicable, the Initial Testing Milestone Achievement Notice (and, if applicable, the Second Testing Milestone Achievement Notice) shall have been delivered and the Limited Testing Milestone shall have been achieved in accordance with the terms and procedures set forth on Exhibit A by March 31, 2027.
(g) SOP Milestone. In respect of the SOP Milestone Closing only, the SOP Milestone shall have been achieved.
SECTION 2.12. Conditions to Obligations of Rivian. The obligations of Rivian to consummate the transactions contemplated under this Agreement in respect of a Milestone Closing are subject to the satisfaction or written waiver, at or prior to the applicable Milestone Closing, of each of the following conditions:
(a) Representations and Warranties. (i) The VIA Fundamental Representations shall be true and correct in all material respects as though such representations and warranties had been made on and as of the applicable Milestone Closing Date (except to the extent any such VIA Fundamental Representations are, by their terms, made as of a specific date, in which case such representations and warranties shall be true and correct in all material respects as of such date), (ii) the VIA Specified Representations shall have been true and correct in all material respects as of the date of this Agreement (except to the extent any such VIA Specified Representations are, by their terms, made as of a specific date, in which case such representations and warranties shall be
16
true and correct in all material respects as of such date), and (iii) Rivian shall have received a certificate of VIA signed by a duly authorized representative thereof dated as of the applicable Milestone Closing Date certifying the matters set forth in clauses (i) and (ii) above.
SECTION 2.13. Conditions to Obligations of VIA. The obligations of VIA to consummate the transactions contemplated under this Agreement in respect of a Milestone Closing are subject to the satisfaction or written waiver, at or prior to the applicable Milestone Closing, of each of the following conditions:
(a) Fundamental Representations. There shall not be a Continuing Breach of any Rivian Fundamental Representation (it being understood that Rivian shall be entitled to remediate any such Continuing Breach (as provided within the definition of “Continuing Breach”) and thereby satisfy this condition).
(b) Specified Representations. The Rivian Specified Representations shall have been true and correct in all material respects as of the date of this Agreement (except to the extent any such Rivian Specified Representations are, by their terms, made as of a specific date, in which case such representations and warranties shall be true and correct in all material respects as of such date); provided, that if Rivian has cured or remediated any breach of a Rivian Specified Representation following the date of this Agreement such that such representation or warranty was, at any point after the date hereof, accurate in all material respects, this condition shall be satisfied; and, provided, further, that for the purpose of determining whether a breach of a Rivian Specified Representation has been cured or remediated, any representations or warranties relating to historical matters (such as lookback periods or representations as to compliance with any matter in the past) shall be disregarded.
(c) Call Events. (i) VIA shall not have exercised its call option pursuant to Section 9.04 of the LLC Agreement, and (ii) no Call Event shall have occurred, provided that the condition set forth in this clause (c)(ii) shall only apply during the applicable Call Option Exercise Period following the occurrence of a Call Event.
(d) Each of the conditions set forth on Schedule 2.13(d) shall have been satisfied.
(e) VIA shall have received a certificate of Rivian signed by a duly authorized representative thereof dated as of the applicable Milestone Closing Date certifying the matters set forth in Sections 2.13(a), 2.13(b), 2.13(c) and 2.13(d).
SECTION 2.14. Regulatory and Other Authorizations; Notices and Consents.
(a) Rivian and VIA shall each use their commercially reasonable efforts to obtain the required approvals, consents, actions or nonactions, or the expiration or termination of applicable waiting periods under the Antitrust Laws with respect to this Agreement, including using commercially reasonable efforts to make an appropriate response as promptly as reasonably practicable to any requests for additional information or documents by such Governmental Authority. For the avoidance of doubt, the terms set forth in this Section 2.14 shall also apply to any future required approvals, consents, actions or nonactions, and the expiration or termination of applicable waiting periods under the Antitrust Laws with respect to this Agreement, whether or
17
not contemplated or expected as of the date hereof. Any filing fees required in respect of applicable Antitrust Laws with respect to this Agreement shall be borne fifty percent (50%) by Rivian and fifty percent (50%) by VIA.
(b) Rivian and VIA shall cooperate with one another in connection with any such filing(s) and in connection with resolving any investigations or other inquiries of any Governmental Authority to achieve the satisfaction of the Antitrust Conditions as soon as practicable after the date of this Agreement. Rivian and VIA shall jointly determine and direct the strategy and process by which the Parties will seek required approvals. To the extent not prohibited by law, Rivian and VIA each shall furnish to the other Party information reasonably required to resolve and respond to any such investigation, shall give each other reasonable prior notice of any communication with any Governmental Authority and permit representatives of the other Party to attend any such meeting or teleconference, and shall provide reasonable opportunity to review in advance and comment on drafts of filings and submissions.
(c) For the avoidance of doubt, neither Rivian nor VIA shall be obliged to accept any remedies (i.e., conditions, obligations or other requirements, including any requirement to sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of its business, conduct, restrict, operate, invest or otherwise change the assets, business or portions of its business in any manner, or impose any restriction, requirement or limitation on the operation its business or portion of its business) to which the consents, approvals, orders and authorizations set out in Schedule 2.11(b) are subject, and any such non-acceptance shall not constitute a breach of their obligations set forth in this Section 2.14; provided, however, that any contemplated or proposed remedies notwithstanding, each of Rivian and VIA shall use their commercially reasonable efforts to achieve the satisfaction of the Antitrust Conditions as soon as practicable after the date of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF RIVIAN
Rivian hereby represents and warrants to VIA that all of the following statements are true and complete as of the date hereof, subject to (except with respect to the representation in Section 3.08(a)) such exceptions as are disclosed in the Rivian Disclosure Schedule:
SECTION 3.01. Organization and Validity. Rivian (i) has been duly incorporated, is validly existing as a corporation and in good standing under the laws of the State of Delaware; (ii) has the corporate power and authority to own or lease its property and carry on its business as now conducted; and (iii) is duly qualified to transact business and is in good standing in each jurisdiction (to the extent the concept of good standing or an equivalent concept is applicable in such jurisdiction) in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified would not reasonably be expected to have a material adverse effect on the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of Rivian and its Subsidiaries (together, the “Group” and each, a “Group Company”), taken as a whole, or on Rivian’s ability to perform its obligations under this Agreement (a “Material Adverse Effect”).
18
SECTION 3.02. Authority. The execution, the delivery by Rivian of, and the performance by Rivian of its obligations under this Agreement and the consummation of the transactions contemplated hereby, including delivery of the Subject Shares and Convertible Note (if applicable), have been duly authorized by all necessary actions on the part of Rivian.
SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered by Rivian and constitutes a valid and binding obligation of Rivian, enforceable against Rivian in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
SECTION 3.04. No Conflict. Rivian’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including delivery of the Subject Shares and the Convertible Note (if applicable), will not result in a breach or violation of any of the terms and provisions of, or constitute a default under (a) any applicable Law, (b) any agreement or other instrument binding upon any Group Company (collectively, the “Contracts” and each, a “Contract”), (c) any of the terms and provisions of the certificate of incorporation or bylaws of Rivian, or (d) any Governmental Order of any Governmental Authority having jurisdiction over any Group Company, except in the case of clauses (a), (b) and (d), such as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.05. SEC Documents. Rivian has timely filed or furnished all reports, schedules, forms, statements and other documents with the Securities and Exchange Commission (the “SEC”) required to be filed or furnished by Rivian (the “SEC Documents”) since January 1, 2022. As of their respective dates of filing, (i) the SEC Documents complied as to form in all material respects with the requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable thereto, and (ii) except to the extent amended or superseded by a subsequent filing with the SEC, none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
SECTION 3.06. Consents and Approvals. All consents, approvals, authorizations and orders of, and qualifications with, any Governmental Authority required on the part of Rivian in connection with the execution, delivery or performance of this Agreement, including delivery of the Subject Shares and Convertible Note, if applicable (other than those necessary to satisfy the condition to the applicable Milestone Closing set forth in Section 2.11(b)), have been obtained or made.
SECTION 3.07. Capitalization. All issued and outstanding Shares have been duly authorized and are validly issued, fully paid and non-assessable, and conform in all material respects to the description thereof in Rivian’s most recent SEC Documents. Rivian shall at all
19
times keep available out of its authorized but unissued Shares, solely for the purpose of effecting the issuance of the Subject Shares, such number of Shares as shall be sufficient to effect the issuance of the Subject Shares in accordance with the terms of this Agreement; and if at any time the number of authorized but unissued shares of Shares shall not be sufficient to effect the issuance of the Subject Shares in accordance with the terms of this Agreement, without limitation of such other remedies as shall be available to VIA, Rivian will use its best efforts to take such corporate action as may, in the opinion of counsel, be necessary to increase its authorized but unissued Shares to such number of Shares as shall be sufficient for such purposes.
SECTION 3.08. No Litigation.
(a) There are no Actions pending to which any Group Company is a party or to which any of the properties of the Group is subject, including those proceedings (i) described in Rivian’s SEC Documents, or (ii) as set forth on Section 3.08 of the Rivian Disclosure Schedule, that would, individually or in the aggregate, reasonably be expected (based on, among other things, an assessment of the facts, circumstances, and merits of the underlying claim or dispute) to materially and adversely affect the operations or condition (financial or otherwise) of Rivian and its Subsidiaries, taken as a whole, but in each case, excluding any Actions brought by VW AG or its Affiliates against Rivian.
(b) The Group is not subject to any notice, court decision, agency guideline, order, writ, injunction, award, judgment or decree of any federal, state, local or foreign government, any court of competent jurisdiction or any administrative, regulatory (including any stock exchange) or other governmental agency, commission or authority which would, individually or in the aggregate, reasonably be expected (based on, among other things, an assessment of the facts, circumstances, and merits of the underlying matter set forth therein) to materially and adversely affect the operations or condition (financial or otherwise) of Rivian and its Subsidiaries, taken as a whole.
SECTION 3.09. Financial Statements; Controls; Listing Requirements.
(a) The audited financial statements and the unaudited quarterly financial statements (including, in each case, the notes thereto) of the Group included in the SEC Documents comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act, as applicable, as well as the published rules and regulations of the SEC with respect thereto, and present fairly the consolidated financial position of the Group as of the dates shown and the Group’s results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) applied on a consistent basis throughout the periods covered thereby except for any normal year-end adjustments in the Group’s quarterly financial statements. The other financial information included in the SEC Documents has been derived from the accounting records of the Group and presents fairly in all material respects the information shown thereby. The statistical, industry-related and market-related data included in the SEC Documents are based on or derived from sources which Rivian reasonably and in good faith believes are reliable and accurate and such data is consistent with the sources from which they are derived, in each case in all material respects.
20
(b) Rivian has established and maintains disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act). Such disclosure controls and procedures are designed (i) to ensure that material information required to be disclosed in Rivian’s periodic reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the required time periods, and (ii) to timely alert Rivian’s principal executive officer and principal financial officer to material information required to be included in Rivian’s periodic reports required under the Exchange Act.
(c) Rivian has established and maintains a system of internal control over financial reporting (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange Act). Such internal controls are designed to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included in the SEC Documents are accurate. Except as described in the SEC Documents, since the end of Rivian’s most recent audited fiscal year, there has been (i) no material weakness in Rivian’s internal control over financial reporting (whether or not remediated) as defined in Rule 13(a)-15(f) under the Exchange Act and (ii) no change in Rivian’s internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely affect, Rivian’s internal control over financial reporting.
(d) The interactive data in eXtensible Business Reporting Language included in the SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance with the SEC’s rules and guidelines applicable thereto.
(e) Since January 1, 2022, Rivian has complied in all material respects with the applicable listing and corporate governance rules and regulations of the Nasdaq Global Select Market.
SECTION 3.10. Absence of Certain Changes or Events. Since March 31, 2024, no event, change or condition has occurred that has had, or would reasonably be expected to have, a Material Adverse Effect.
SECTION 3.11. Permits. Each Group Company possesses all certificates, authorizations and permits (collectively, “Permits” and each, a “Permit”) issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess any such certificate, authorization or permit would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and no Group Company has received any notice of proceedings relating to the revocation or modification of any Permit which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect, except as described in the SEC Documents.
21
SECTION 3.12. Compliance with Contracts. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, none of the Group Companies is in material breach of or default under any Contract, and, to the Group’s knowledge, no other party is in a material breach of or default under any such Contract, except as described in the SEC Documents.
SECTION 3.13. Properties. Each Group Company has good and marketable title to all real property and personal property owned by it that is material to the business of the Group, taken as a whole, in each case free and clear of all liens, encumbrances or defects, except such as are described in the SEC Documents or those that would not be reasonably likely to result in a Material Adverse Effect. Any real property and buildings held under lease by the Group are held by each Group Company under valid, subsisting and, to Rivian’s knowledge, enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Group, taken as a whole.
SECTION 3.14. Intellectual Property; Open Source Software; IT Systems; Data.
(a) Except as would not reasonably be expected to have a Material Adverse Effect, (i) each Group Company owns or has a valid license to all patents, inventions, copyrights, know how (including trade secrets and other unpatented or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names (collectively, “Intellectual Property Rights”) used in or reasonably necessary to the conduct of its business, (ii) to Rivian’s knowledge, the Intellectual Property Rights owned by the Group and, to Rivian’s knowledge, the Intellectual Property Rights licensed to the Group, are valid, subsisting and enforceable, and there is no pending or, to Rivian’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity, scope or enforceability of any such Intellectual Property Rights, (iii) no Group Company has received any notice alleging any infringement, misappropriation or other violation of Intellectual Property Rights by such Group Company, (iv) to Rivian’s knowledge, no third party is infringing, misappropriating or otherwise violating, or has infringed, misappropriated or otherwise violated, any Intellectual Property Rights owned by Rivian, (v) no Group Company infringes, misappropriates or otherwise violates, or in the past three (3) years has infringed, misappropriated or otherwise violated, any Intellectual Property Rights of any third party, (vi) all employees or contractors engaged in the development of Intellectual Property Rights on behalf of any Group Company have executed an invention assignment agreement whereby such employees or contractors presently assign all of their right, title and interest in and to such Intellectual Property Rights to the applicable Group Company if such Intellectual Property Rights are not assigned by operation of applicable law, and (vii) each Group Company uses, and has used, commercially reasonable efforts to appropriately maintain as confidential its trade secrets.
(b) (i) Those certain Intellectual Property Rights owned by, or licensed to, the Group as of the date of this Agreement and which are necessary or useful for the conduct of the business of developing and commercializing software for electric vehicles (the “JV Background IP”) are not subject to any security interest, pledge, hypothecation, mortgage, lien or encumbrance (other than (A) any license of, option to license, or covenant not to assert claims of infringement, misappropriation or other violation, (B) any non-exclusive licenses or other rights granted in the ordinary course of business and (C) restrictions on certain dispositions pursuant to the Group’s
22
senior secured notes indenture dated as of October 8, 2021 and senior secured revolving credit agreement dated as of April 19, 2023), and (ii) there are no restrictions on the ability of any Group Company to grant a non-exclusive, perpetual, fully paid-up and irrevocable license to use, copy, modify, adapt, improve or enhance the JV Background IP to the Company or to VIA (or an Affiliate thereof) on arm’s-length terms.
(c) Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) each Group Company uses and has used all software and other materials used in its businesses that are under a “free,” “open source,” or similar licensing model (including the MIT License, Apache License, GNU General Public License, GNU Lesser General Public License and GNU Affero General Public License) (“Open Source Software”) in compliance with all license terms applicable to such Open Source Software; and (ii) no Group Company uses or distributes or has used or distributed any Open Source Software in any manner that requires or has required (A) any Group Company to permit reverse engineering of any software code or other technology owned by any Group Company or (B) any software code or other technology owned by Group Company to be (1) disclosed or distributed in source code form, (2) licensed for the purpose of making derivative works or (3) redistributed at no charge.
(d) Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) the information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases owned or leased by the Group (collectively, “IT Systems”) are adequate for, and operate and perform as required in connection with, the operation of the business of the Group as currently conducted and, to the knowledge of Rivian, are free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants; (ii) each Group Company has implemented and maintained commercially reasonable controls, policies, procedures, and safeguards designed to maintain and protect the integrity, continuity, redundancy and security of all IT Systems used in connection with their businesses as currently conducted; and (iii) to the knowledge of Rivian, there has been no unauthorized access to the IT Systems.
(e) Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i) each Group Company has complied and is presently in compliance with all internal and external privacy policies, contractual obligations, applicable industry standards, applicable laws, statutes, judgments, orders, rules and regulations of any court or arbitrator or other Governmental Authority, in each case, relating to the collection, use, transfer, import, export, storage, protection, disposal and disclosure by such Group Company of personal, personally identifiable, household, sensitive or confidential (“Data Privacy and Security Obligations”, and such data, “Data”); (ii) Rivian has not received any notification of or complaint regarding and is unaware of any other facts that, individually or in the aggregate, would reasonably indicate non-compliance with any Data Privacy and Security Obligations; and (iii) there is no action, suit or proceeding by or before any court or Governmental Authority pending or, to the knowledge of Rivian, threatened alleging non-compliance with any Data Privacy and Security Obligations.
(f) Each Group Company has taken commercially reasonable technical and organizational measures designed to protect the information technology systems and Data used in connection with the operation of its businesses. Without limiting the foregoing, each Group Company has used commercially reasonable efforts to establish and maintain, and has established,
23
maintained, implemented and complied with commercially reasonable information technology, information security, cyber security and data protection controls, policies and procedures, including oversight, access controls, encryption, technological and physical safeguards and business continuity or disaster recovery and security plans that are designed to protect against and prevent breach, destruction, loss, unauthorized distribution, use, access, disablement, misappropriation or modification, or other compromise or misuse of or relating to any information technology system or Data used in connection with the operation of its businesses (“Breach”). Except as would not, individually or in the aggregate, have a Material Adverse Effect, there has been no such Breach, and no Group Company has been notified of any such Breach.
SECTION 3.15. Compliance with Laws. The Group has conducted and is conducting its business in material compliance with all applicable Law except to the extent that any such non-compliance would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.16. Anti-Corruption Law and Sanctions.
(a) (i) No Group Company or any of its controlled Affiliates, or any director or officer thereof, or to Rivian’s knowledge, any employee, agent or representative of any Group Company or any of its controlled Affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt of money, property, gifts or anything else of value, directly or indirectly, to any government official (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any Person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) in order to influence official action, or to any Person in violation of any applicable anti-corruption laws; (ii) each Group Company and each of its controlled Affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained and will continue to maintain policies and procedures reasonably designed to promote and achieve compliance with such laws and with the representations and warranties contained herein; and (iii) no Group Company will use, directly or knowingly indirectly, the proceeds of the offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any applicable anti-corruption laws.
(b) No Group Company, or any director or officer thereof, or to Rivian’s knowledge, any employee, agent, controlled Affiliate or representative of any Group Company, is a Person that is, or is owned or controlled by, one or more Persons that are:
(i) the subject of any sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the United Nations Security Council, the European Union, any European Union member state, His Majesty’s Treasury of the United Kingdom or any other relevant sanctions authority (collectively, “Sanctions”); or
(ii) located, organized or resident in a country, region or territory that is the subject of Sanctions (including Cuba, Iran, North Korea, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, Zaporizhzhia and Kherson Regions, or Syria).
24
(c) The Group will not, directly or, knowingly, indirectly, use the proceeds received pursuant to this Agreement or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person:
(i) to fund, finance or facilitate any activities, business or transaction of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or
(ii) in any other manner that could reasonably be expected to result in a violation of Sanctions by any Person.
(d) For the past five years, no Group Company has knowingly engaged in, is now knowingly engaged in, and will knowingly engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.
SECTION 3.17. Money Laundering. The operations of the Group are and have been conducted at all times in material compliance with all applicable financial record-keeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Group conducts business and the applicable rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority with jurisdiction over any Group Company (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or Governmental Authority or any arbitrator involving any Group Company with respect to the Money Laundering Laws is pending or, to the knowledge of Rivian, threatened.
SECTION 3.18. Insurance. Each Group Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are, in Rivian’s reasonable judgment, prudent and customary in the businesses in which the Group is engaged, taken as a whole; no Group Company has been refused any insurance coverage sought or applied for; and no Group Company has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.19. Labor.
(a) No material labor dispute with the employees of any Group Company exists, or, to the knowledge of Rivian, is imminent; and Rivian is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) There are no (i) collective bargaining agreements or other agreements with a labor union, trade union, works council, staff association or other employee representative body to which those certain employees of the Group who are employed in the business of developing
25
and commercializing software for electric vehicles and who are expected to be provided with offers of employment by the Company or Rivian for employment by the Company, in each case as of the date of this Agreement (such employees as a group, the “JV Potential Employees”) are subject, or (ii) existing or, to the knowledge of Rivian, pending disputes, claims or legal proceedings instituted by the JV Potential Employees against the Group that are unresolved which would, in the case of each of clauses (i) and (ii), prevent the employment of the JV Potential Employees by the Company in a material respect.
SECTION 3.20. Solvency. The Group is, and after giving effect to the transactions contemplated hereby, will be Solvent (as defined below). For purposes of this Section 3.20, “Solvent” means, with respect to the Group, that (a) the fair value and the present saleable value of any and all property of the Group is greater than the probable liability on existing debts of the Group as they become absolute and mature, (b) the Group is able to pay its debts (including contingent and subordinated liabilities) as they become absolute and mature, (c) the Group does not intend to, nor believes that it will, incur debts that would be beyond its ability to pay as such debts mature and (d) the Group is not engaged in businesses or transactions, nor about to engage in businesses or transactions, for which any property remaining would constitute unreasonably small capital. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.
SECTION 3.21. Brokers and Other Advisors. Except as set forth on Section 3.21 of the Rivian Disclosure Schedule, there is no broker, investment banker, financial advisor or other intermediary that has been retained by or is authorized to act on behalf of Rivian that is entitled to any broker’s, finder’s, financial advisor’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Rivian.
SECTION 3.22. No “Bad Actor” Disqualification.
(a) Rivian has exercised reasonable care, in accordance with SEC rules and guidance, to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act (“Disqualification Events”). To Rivian’s knowledge, no Covered Person is subject to a Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. Rivian has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act.
(b) For purposes of this Section 3.22, “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including Rivian; any predecessor or Affiliate of Rivian; any director, executive officer, other officer participating in the offering, general partner or managing member of Rivian; any beneficial owner of twenty percent (20%) or more of Rivian’s outstanding voting equity securities, calculated on the basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with Rivian in any capacity at any Milestone Closing Date; and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale and issuance of the Subject Shares or Convertible Note, if applicable (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor.
26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF VIA
VIA hereby represents and warrants to Rivian that all of the following statements are true and complete as of the date hereof and will be true and complete as of each Milestone Closing Date as though made on such Milestone Closing Date, subject to such exceptions as are disclosed in the VIA Disclosure Schedule:
SECTION 4.01. Authority; Enforceability. The execution, the delivery by VIA of, and the performance by VIA of its obligations under this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary actions on the part of VIA. This Agreement constitutes a valid and binding obligation of VIA, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
SECTION 4.02. No Conflict. VIA’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (a) any applicable Law, (b) any agreement or other instrument binding upon VIA, (c) any of the terms and provisions of the certificate of incorporation or bylaws of VIA, or (d) any Governmental Order of any Governmental Authority having jurisdiction over VIA, except in the case of clauses (a), (b) and (d), such as would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on VIA’s ability to perform its obligation under this Agreement.
SECTION 4.03. Restricted Securities; Purchase Entirely for Own Account; Status. VIA understands that Rivian intends for the Subject Shares and Convertible Note (if applicable) to be offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and Rivian is relying upon the truth and accuracy of, and VIA’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of VIA set forth herein in order to determine the availability of such exemptions and the eligibility of VIA to acquire the Subject Shares and Convertible Note (if applicable). VIA is making this investment and is acquiring the Subject Shares and Convertible Note (if applicable) for VIA’s own account as a principal, and not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part. VIA has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing VIA’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time. VIA is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act.
27
SECTION 4.04. Legend. VIA understands and agrees that until the Subject Shares issuable to VIA are registered or transferred pursuant to the provisions of Rule 144 under the Securities Act (“Rule 144”), the certificates representing such shares, whether upon initial issuance or upon any transfer thereof, shall bear a legend, prominently stamped or printed thereon, reading substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.
SECTION 4.05. Information. VIA acknowledges that no private placement memorandum or similar offering documents have been prepared or distributed in connection with this Agreement, but in lieu thereof VIA has had access to the SEC Documents. VIA has relied on the information contained therein and in such other documents as VIA has elected to review and has not relied upon any oral representations or been furnished any other offering literature or written information, except other information (if any) provided by Rivian at VIA’s request. VIA has been provided with adequate opportunity to ask questions of Rivian’s management and to review any documents that VIA deems material.
SECTION 4.06. Brokers and Other Advisors. Except as set forth on Schedule 4.06 of the VIA Disclosure Schedule, there is no broker, investment banker, financial advisor or other intermediary that has been retained by or is authorized to act on behalf of VIA that is entitled to any broker’s, finder’s, financial advisor’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of VIA.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Confidentiality. The terms of the Confidentiality Agreement dated November 23, 2023 (the “Confidentiality Agreement”) among VW AG, Rivian and the other parties thereto, are hereby incorporated herein by reference and shall apply to the Parties mutatis mutandis and shall continue in full force and effect until the later of the Milestone Closings and shall survive the Milestone Closings and remain in full force and effect until their expiration in accordance with the terms of the Confidentiality Agreement. If this Agreement is, for any reason, terminated prior to any Milestone Closing, the Confidentiality Agreement shall nonetheless continue in full force and effect in accordance with its terms.
28
SECTION 5.02. Further Action.
(a) Except as otherwise provided in this Agreement, the Parties shall, and shall cause their respective Affiliates to, use commercially reasonable efforts to take, or cause to be taken, all appropriate action, to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable Law to execute and deliver this Agreement and such other documents and other papers as may be required to carry out the provisions of this Agreement and to consummate and make effective the transactions contemplated by this Agreement, including the obtaining of all necessary waivers, consents, approvals and authorizations from any third party.
(b) From time to time after each Milestone Closing, without additional consideration, each Party hereto shall, and shall cause its Affiliates to, execute and deliver such further instruments and take such other action as may be necessary or is reasonably requested by any other Parties to make effective the transactions contemplated by this Agreement.
SECTION 5.03. Exchange Act Reporting. With a view to making available to VIA the benefits of certain rules and regulations of the SEC which may permit the resale of the Subject Shares, where such Subject Shares are not covered by a Demand Registration pursuant to the terms of this Agreement, to the public without registration, Rivian shall:
(a) make and keep public information available, as those terms are understood and defined in Rule 144 at all times after any Milestone Closing Date;
(b) use commercially reasonable efforts to file with the SEC, in a timely manner, all reports and other documents required of Rivian under the Exchange Act, at any time when Rivian is subject to such reporting requirements; and
(c) so long as VIA owns any Subject Shares, furnish to VIA forthwith upon request: a written statement by Rivian as to its compliance with the reporting requirements of the Exchange Act; a copy of the most recent annual or quarterly report of Rivian; and such other reports and documents as VIA may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such Subject Shares without registration (in each case to the extent not readily publicly available) or pursuant to Form S-3.
SECTION 5.04. Registration Rights.
(a) At any time following any Milestone Closing Date, VIA may deliver to Rivian a written request that Rivian file a registration statement on Form S-3 (or, if Rivian is not then eligible, on Form S-1) (a “Registration Statement”) under the Securities Act covering the resale of all of the Registrable Shares of VIA, which request shall specify the aggregate number of Registrable Shares proposed to be resold (the “Demand Request”). Rivian shall as soon as practicable thereafter, and in any event within twenty (20) calendar days after the date that such Demand Request is given, file and use its commercially reasonable efforts to (i) effect a Registration Statement covering the resale of the Registrable Shares specified in the Demand Request (a “Demand Registration”), and (ii) cause such Registration Statement to remain effective until such date as VIA has completed the distribution of Registrable Shares as described in the relevant Registration Statement; provided, that Rivian’s obligation to file a Registration Statement is contingent upon VIA furnishing in writing to Rivian such information regarding VIA, the
29
securities of Rivian held by VIA, and the intended method of disposition of such Registrable Shares, as shall be reasonably requested by Rivian to effect the registration of such Registrable Shares in compliance with applicable securities laws and which information shall be requested by Rivian from VIA at least five (5) trading days prior to the anticipated filing date of the Registration Statement; provided, further, that Rivian shall not be obligated to effect, or to take any action to effect, any Registration Statement pursuant to this Section 5.04 during the period that is twenty (20) days before Rivian’s good faith estimate of the date of filing of, and ending on a date that is forty-five (45) days after the effective date of, a Rivian-initiated registration, provided, that Rivian is actively employing in good faith commercially reasonable efforts to cause such Registration Statement to become effective; provided, however, that Rivian may not invoke this right more than twice in any twelve (12) month period. A Demand Registration shall not be counted as “effected” for purposes of this Section 5.04 until such time as the applicable Registration Statement has been declared effective by the SEC.
(b) VIA may request in its Demand Request that the resale of Registrable Shares be effectuated by means of an underwritten offering, provided, that the aggregate offering value of the Registrable Shares covered by such Demand Request is equal to at least $100,000,000. In the event of such an underwritten Demand Registration, VIA shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting by VIA and reasonably acceptable to Rivian. Notwithstanding any other provision of this Section 5.04, if the underwriter(s) advise(s) Rivian in writing that marketing factors require a limitation of the number of Registrable Shares to be underwritten, then Rivian shall so advise VIA, and the number of Registrable Shares that may be included in the underwritten offering shall be reduced as required by the underwriter(s). If VIA disapproves of the terms of any such underwriting, VIA may elect to withdraw therefrom by written notice to Rivian and the underwriter(s) delivered at least ten (10) Business Days prior to the effective date of the Registration Statement.
(c) Notwithstanding the foregoing obligations, if Rivian furnishes to VIA following a Demand Request a certificate signed by Rivian’s chief executive officer stating that in the good faith judgment of the board of directors of Rivian it would be materially detrimental to Rivian and its stockholders for such Registration Statement to be filed and it is therefore necessary to defer the filing of such Registration Statement, then Rivian shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than sixty (60) days after the Demand Request is given; provided, however, that Rivian may not invoke this right more than once in any twelve (12) month period; and provided, further, that Rivian shall not register any securities for its own account or that of any other stockholder during such sixty (60) day period.
(d) VIA acknowledges that there may be times when Rivian must suspend the use of the prospectus forming a part of the Registration Statement until such time as an amendment to the Registration Statement has been filed by Rivian and declared effective by the SEC, or until such time as Rivian has filed an appropriate report with the SEC pursuant to the Exchange Act. VIA hereby covenants that it will not sell any Registrable Shares pursuant to said prospectus forming part of the Registration Statement during the period commencing at the time at which Rivian gives VIA written notice of the suspension of the use of said prospectus and ending at the time Rivian gives VIA written notice that VIA may thereafter effect sales pursuant to said
30
prospectus; provided, that, (i) Rivian shall not suspend the use of the Registration Statement (A) on more than three (3) occasions for a period of more than thirty (30) consecutive days or (B) more than an aggregate total of sixty (60) days, in each case, in any 360-day period, (ii) the board of directors of Rivian shall have reasonably determined that, in order for such Registration Statement not to contain a material misstatement or omission, an amendment thereto would be needed to include information that would at that time not otherwise be required in a current, quarterly or annual report under the Exchange Act, (iii) Rivian shall have a bona fide business purpose for not making such information public and (iv) Rivian shall use commercially reasonable efforts to make such Registration Statement available for the sale by VIA of Registrable Shares as soon as practicable after the commencement of each such suspension.
(e) The costs, fees and expenses associated with a Demand Registration will be borne by Rivian; provided, that VIA shall bear all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Shares pursuant to such Demand Registration, and fees and disbursement of counsel for VIA.
(f) Whenever required to effect any Demand Registration, Rivian shall, as expeditiously as reasonably possible, furnish, at the request of VIA, on the date that the relevant Subject Shares are delivered to the underwriter(s) for sale, if such Subject Shares are being sold through underwriters, (i) an opinion and a “negative assurance letter”, each dated as of such date, of the counsel representing Rivian for the purposes of such Demand Registration, in form and substance as is customarily given to underwriters in an underwritten public offering addressed to the underwriters and (ii) “comfort” letters dated as of the closing date of the offering, from the independent certified public accountants of Rivian, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to the underwriters, addressed to the underwriters.
(g) The term “Registrable Shares” means the Subject Shares; provided, however, that a security shall cease to be a Registrable Share upon the earlier to occur of: (i) a Registration Statement registering such Registrable Shares under the Securities Act having been declared or becoming effective and such Registrable Shares having been sold or otherwise transferred by VIA to and in a manner contemplated by such Registration Statement, (ii) such Registrable Shares being sold pursuant to Rule 144 under circumstances in which any legend borne by such security relating to restrictions on transferability thereof, under the Security Act or otherwise, is removed by Rivian, (iii) the first date the Registrable Shares are eligible to be sold pursuant to Rule 144 without any limitation as to volume of sales or notice requirements under Rule 144 or (iv) such Registrable Shares cease to be outstanding following their issuance. Notwithstanding the foregoing, no Subject Shares shall be Registrable Shares following the three-year anniversary of the date the Registration Statement is declared effective.
(h) If any Registrable Shares are included in a Registration Statement under this Section 5.04:
(i) Rivian agrees to indemnify and reimburse and hold harmless, to the extent permitted by law, VIA against all losses, claims, damages and liabilities caused by any untrue or alleged untrue statement of material fact contained in a Registration Statement in connection with a Demand Registration or prospectus or any amendment
31
thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or any other violation or breach of the Securities Act, the Exchange Act, or any state securities (“Damages”) by Rivian or any other person acting on its behalf, and shall reimburse VIA for any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, provided, however, that the indemnity agreement contained in this Section 5.04(h)(i) shall not apply to amounts paid in any settlement of any claim or proceeding if such settlement is effected without the consent of Rivian, which consent shall not be unreasonably withheld, nor shall Rivian be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with information furnished in writing to Rivian by or on behalf of VIA expressly for use in the Registration Statement.
(ii) VIA agrees to indemnify and reimburse and hold harmless, to the extent permitted by law, Rivian against all Damages, to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of VIA expressly for use in the Registration Statement, and VIA will pay to Rivian any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result; provided, however, that the indemnity agreement contained in this Section 5.04(h)(ii) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of VIA, which consent shall not be unreasonably withheld; and, provided, further, that in no event shall the aggregate amounts payable by VIA by way of indemnity or contribution under this Section 5.04(h)(ii) and Section 5.04(h)(iii) exceed the proceeds from the offering received by VIA (net of any underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Shares, and fees and disbursements of counsel for VIA, except for any such fees and disbursements of counsel borne by Rivian (collectively, “Selling Expenses”) paid by VIA), except in the case of actual fraud or willful misconduct by VIA.
(iii) Promptly after receipt by an indemnified party under this Section 5.04 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.04, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the applicable parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to
32
the indemnified party under this Section 5.04 solely to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.04.
(iv) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 5.04 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 5.04 provides for indemnification in such case; or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 5.04, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) VIA shall not be required to contribute any amount in excess of the aggregate public offering price of all such Registrable Shares offered and sold by VIA pursuant to such Registration Statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to a contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided, further, that in no event shall VIA’s liability pursuant to this Section 5.04, when combined with the amounts paid or payable by VIA pursuant to Section 5.04(h)(ii), exceed the proceeds from the offering received by VIA (net of any Selling Expenses paid by VIA), except in the case of willful misconduct or actual fraud by VIA.
(v) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(vi) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of Rivian and VIA under this Section 5.04(h) shall survive the completion of any offering of Registrable Shares in a registration under this Section 5.04, and otherwise shall survive the termination of this Agreement.
33
SECTION 5.05. Requisite Stockholder Approval. Rivian shall use commercially reasonable efforts to hold a special stockholder meeting to obtain any Requisite Stockholder Approval with respect to the issuance of the Subject Shares to VIA.
SECTION 5.06. Orderly Market; Standstill; Voting Agreement. The terms and obligations of Section 8 of that certain Convertible Promissory Note Purchase Agreement, dated June 25, 2024 (the “Note Purchase Agreement”), between VIA and Rivian, are hereby incorporated herein by reference and shall apply to the Parties mutatis mutandis and shall continue in full force and effect in accordance with the terms thereof, and, for the avoidance of doubt, shall survive the Milestone Closings and any termination of the Note Purchase Agreement. If this Agreement is, for any reason, terminated prior to any Milestone Closing, the terms and obligations of Section 8 of the Note Purchase Agreement shall continue in full force and effect in accordance with its terms. Nothing contained in this Agreement (express or implied) shall be deemed to modify, amend or change any of the terms and conditions of the Note Purchase Agreement.
ARTICLE VI
TERMINATION
SECTION 6.01. Termination. This Agreement may be terminated:
(a) by either VIA or Rivian (i) solely in respect of the obligation to consummate the Financial Milestone Closing, if the Financial Milestone Closing shall not have occurred by the date that is five (5) years after the date hereof, (ii) solely in respect of the obligation to consummate the Testing Milestone Closing, if the Testing Milestone Closing shall have not occurred by the date that is five (5) years after the date hereof or (iii) solely in respect of the obligation to consummate the SOP Milestone Closing, if the SOP Milestone Closing shall have not occurred by the date that is five (5) years after the date hereof (each such date, a “Termination Date”), but in each case, other than in the event that the applicable Milestone Closing has not occurred by such date as a result of any failure on the part of terminating Party to comply with or perform any covenant or obligation of such Party set forth in this Agreement; provided, that the other Party is not then in breach of this Agreement so as to cause the applicable Milestone Closing not to occur;
(b) by either Rivian or VIA in the event that any Governmental Authority of competent jurisdiction in the United States shall have issued a Governmental Order that permanently enjoins the consummation of the transactions contemplated by this Agreement and such Governmental Order shall have become final and non-appealable; provided, however, that the right to terminate this Agreement under this Section 6.01(b) shall not be available to any Party whose action or failure to fulfill any obligation under this Agreement has been the cause of, or has resulted in, the issuance of such Governmental Order or other action;
(c) by Rivian if a breach of any covenant or agreement on the part of VIA set forth in this Agreement (including an obligation to consummate any Milestone Closing) shall have occurred that would, if occurring or continuing on any Milestone Closing Date, cause the conditions set forth in Section 2.11 or Section 2.12 not to be satisfied, and such breach is not cured, or is incapable of being cured, within thirty (30) days (but no later than the Termination Date) of receipt of written notice by Rivian to VIA of such breach; provided, that Rivian is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 2.11 or Section 2.13 not to be satisfied;
34
(d) by VIA if a breach of Sections 2.03, 2.06 or 2.09 on the part of Rivian shall have occurred and such breach is not cured within thirty (30) days (but no later than the Termination Date) of receipt of written notice by VIA to Rivian of such breach; provided, that VIA is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 2.11 or Section 2.12 not to be satisfied;
(e) by either VIA or Rivian if it has exercised a Call Right; or
(f) by the written consent of Rivian and VIA.
SECTION 6.02. Effect of Termination. In the event of termination of this Agreement as provided in Section 6.01, this Agreement shall forthwith become void and have no effect and there shall be no liability on the part of any Party or any of their respective Representatives; provided, that (a) Section 5.01, Section 5.04, Section 5.06, this Section 6.02 and Article VII shall survive any termination, and (b) nothing herein shall relieve any Party from liability for any intentional breach of this Agreement occurring prior to such termination.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.01. Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and in English, and shall be conclusively deemed to have been duly given (a) when hand-delivered, upon delivery; (b) when sent by facsimile or electronic mail, upon receipt of confirmation of error-free transmission; or (c) two (2) Business Days after being deposited with an overnight courier service of recognized international standing, provided, that the sending party receives a confirmation of delivery from the delivery service provider. All notices or other communications required or permitted under this Agreement shall be in writing and mailed, emailed or delivered to each party at the addresses indicated below.
VIA
Volkswagen International America Inc.
c/o Volkswagen Aktiengesellschaft
Berliner Ring 2, 38440
Wolfsburg, Germany
with a copy to (which shall not constitute notice):
Volkswagen Aktiengesellschaft
Berliner Ring 2, 38440
Wolfsburg, Germany
35
Attention: Head of Legal and Head of M&A; [***]
Email: [***]
Linklaters LLP
1290 Avenue of the Americas
New York, NY 10104
Attention: [***]
Email: [***]
RIVIAN
Rivian Automotive, Inc.
14600 Myford Road
Irvine, California 92606
Attention: [***]
Email: [***]
with a copy to (which shall not constitute notice):
Latham & Watkins LLP
140 Scott Drive
Menlo Park, CA 94025
Attention: [***]
Email: [***]
and with a copy to (which shall not constitute notice):
Morrison & Foerster LLP
755 Page Mill Road
Palo Alto, CA 94304-1018
Attention: [***]
Email: [***]
VW AG
Volkswagen Aktiengesellschaft
Berliner Ring 2, 38440
Wolfsburg, Germany
Attention: Head of Legal and Head of M&A; [***]
Email: [***]
36
with a copy to (which shall not constitute notice):
Linklaters LLP
1290 Avenue of the Americas
New York, NY 10104
Attention: [***]
Email: [***]
Any such notice shall be deemed given on the date received, except any notice received after 5:30 p.m. (in the time zone of the receiving party) on a Business Day or received on a non-Business Day shall be deemed to have been received on the next Business Day. A party may add, delete or change the person or address to which notices should be sent at any time upon written notice delivered to the other Parties in accordance with this Section 7.01.
SECTION 7.02. Successors and Assigns. The rights and obligations of Rivian and VIA under this Agreement will bind and benefit their respective successors and assigns. Neither this Agreement nor any rights, interests or obligations hereunder may be assigned or otherwise transferred by either Rivian or VIA, by operation of law or otherwise, in whole or in part, without the other’s prior written consent. Notwithstanding the foregoing, no consent of Rivian is required for an assignment or transfer by VIA of this Agreement or the Subject Shares, in whole or in part, to (i) an Affiliate of VIA, or (ii) a successor-in-interest of VIA by reason of merger or consolidation or sale of all or substantially all of the assets of VIA relating to the subject matter of this Agreement; provided, that following such transfer, the transferee shall be deemed “VIA” for all purposes under this Agreement, including all rights and obligations associated therewith.
SECTION 7.03. Amendment. No amendment, modification or supplement of any provision of this Agreement will be valid or effective unless made in writing and signed by a duly authorized officer of each Party.
SECTION 7.04. Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
SECTION 7.05. Entire Agreement. This Agreement, the other Transaction Documents and the Note Purchase Agreement constitute and contain the entire agreement between Rivian and VIA and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the Parties, whether written or oral, respecting the subject matter hereof.
SECTION 7.06. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice-of-law rules thereof that may direct the application of the laws of another jurisdiction.
37
SECTION 7.07. Dispute Resolution.
(a) Any Party alleging any controversy, claim or dispute arising out of or relating to this Agreement, including any question regarding its existence, validity or termination (a “Dispute”) shall give written notice (a “Dispute Notice”) to the other Parties which includes information on (i) the substance of the Dispute, (ii) the dollar amount at issue, (iii) key areas of disagreement, and (iv) any applicable time sensitivities associated with resolving the Dispute. All applicable statutes of limitations with respect to such Dispute shall be tolled as of the date of the Dispute Notice and until the end of the applicable time period for resolving the Dispute as provided in Section 7.07(b).
(b) Upon receipt of the Dispute Notice, the Parties shall attempt to resolve such Dispute in good faith within thirty (30) days after receipt of the Dispute Notice, including that the Parties may request that the Co-CEOs (as defined in the LLC Agreement) attempt to resolve any Disputes arising out of or relating to the Testing Milestone. If so requested by one of the Parties, the Parties shall use reasonable best efforts to cause the each of their respective Chief Executive Officers to meet within ten (10) days after receipt of the Dispute Notice in furtherance of resolving the Dispute.
(c) Except as provided under Exhibit A, any Dispute not resolved as provided in Sections 7.07(a) and (b) above shall be referred to and resolved exclusively and finally by arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules”) as are then in effect.
(d) Number of Arbitrators. The number of arbitrators shall be three (3), and they shall endeavor to complete the final hearing in the arbitration within six (6) months after the appointment of the last arbitrator; provided, that any delay or failure to do so shall not be a basis for challenge or removal of the arbitral tribunal or setting aside any arbitral award.
(e) Method of Appointment of the Arbitrators. If there are only two (2) parties to the Dispute, then each party to the Dispute shall nominate one (1) arbitrator within thirty (30) days of the filing of the arbitration, and the two (2) arbitrators so nominated shall select the president of the arbitral tribunal within thirty (30) days after the latter of the two (2) party-appointed arbitrators has been nominated. If there are more than two parties to the Dispute, then within thirty (30) days of the filing of the arbitration, all claimants shall jointly appoint one (1) arbitrator and all respondents shall jointly appoint one (1) arbitrator, and the two arbitrators so appointed shall select the president of the arbitral tribunal within thirty (30) days after the latter of the two (2) party-appointed arbitrators has been nominated by the parties to the Dispute. If either all claimants or all respondents fail to make a joint appointment of an arbitrator, or if the party-appointed arbitrators cannot reach an agreement on the president of the arbitral tribunal within the applicable time period, then the ICC International Court of Arbitration as the appointing authority shall make the prescribed appointment.
(f) Place of Arbitration. The seat, or legal place, of arbitration shall be London, England.
(g) Language. The arbitration proceedings shall be conducted in the English language.
38
(h) Entry of Judgment. The award of the arbitral tribunal shall be final and binding. Judgment on the award of the arbitral tribunal may be entered and enforced by any court of competent jurisdiction. The Parties agree that service of process for any action to enforce an award may be accomplished according to the procedures of Section 7.01, as well as any other procedure authorized by Law.
(i) Notice. All notices required for any arbitration proceeding shall be deemed properly given if given in accordance with the ICC Rules or this Agreement.
(j) Interest. The award shall include pre-award and post-award interest, as determined in the arbitral award, from the date of any default or other breach of this Agreement until the arbitral award is paid in full.
(k) Currency of Award. Any arbitral award for the payment of money shall be made payable in U.S. dollars, free of any tax or other deduction.
(l) Confidentiality. Any arbitration (including (i) a settlement during the course of the arbitration or resulting from an arbitral award or documents exchanged or produced during an arbitration proceeding, (ii) memorials, briefs or other documents prepared for the arbitration, and (iii) the fact or existence of arbitration) shall be confidential and may not be disclosed by the Parties, their employees, officers, directors, counsel, consultants and expert witnesses, except to the extent necessary to enforce any arbitration award or as required by applicable Law; provided, however, that breach of this confidentiality provision shall not void any settlement, expert determination or award.
(m) Conflict. In the event of a conflict between this Section 7.07 and the ICC Rules, the terms of this Section 7.07 shall prevail.
SECTION 7.08. Waiver of Jury Trial. THE PARTIES WAIVE (TO THE EXTENT PERMITTED BY APPLICABLE LAW) TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, OR THE MATTERS COVERED BY THIS AGREEMENT AND HEREBY AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THEY WOULD NOT ENTER INTO THIS AGREEMENT IF THIS SECTION WERE NOT PART OF THIS AGREEMENT.
SECTION 7.09. Specific Performance. The Parties agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the Parties shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy at law or equity without the necessity of demonstrating the inadequacy of monetary damages.
SECTION 7.10. Attorneys’ Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party reasonable fees and expenses of attorneys and accountants, which shall include all fees, costs and expenses of appeals.
39
SECTION 7.11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
SECTION 7.12. Expenses. Rivian and VIA are each liable for, and will pay, their own expenses incurred in connection with the negotiation, preparation, execution and delivery of this Agreement, including attorneys’ and consultants’ fees and expenses in connection with the foregoing.
SECTION 7.13. Public Announcements. None of the Parties shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media regarding this Agreement or the transactions contemplated hereby without the prior written consent of the other Parties, unless such press release or public announcement is required by Law or applicable stock exchange regulation, in which case the Parties shall, to the extent practicable, consult with each other as to the timing and contents of any such press release, public announcement or communication; provided, however, that the prior written consent of the other Parties shall not be required hereunder with respect to any press release, public announcement or communication that is substantially similar to a press release, public announcement or communication previously issued with the prior written consent of such other Parties.
SECTION 7.14. Waiver. Any Party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties of the other Parties contained herein or in any document delivered by the other Parties pursuant to this Agreement, or (c) waive compliance with any of the agreements of the other Parties or conditions to such obligations contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by any Party in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or future exercise of any other right hereunder. Any waiver of any term or condition hereof shall not be construed as a waiver of any subsequent breach or as a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement.
SECTION 7.15. No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of, and be enforceable by, only the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.
SECTION 7.16. Other Payment Terms.
(a) Except as otherwise provided herein, all payments made pursuant to this Agreement shall be made by wire transfer in immediately available funds in U.S. dollars without any setoff, deduction or counterclaim whatsoever, including with respect to payments due pursuant to this Agreement or any other agreement among the Parties.
40
(b) VW AG shall cause VIA to make (and shall make available or cause to be made available to VIA the amounts necessary to make) the payments required by VIA under Section 2.04(a), Section 2.07(a), Section 2.07(b), Section 2.10(a) or Section 2.14. VW AG hereby represents and warrants to Rivian as follows: (a) VW AG has all necessary corporate power and authority to enter into this Agreement and to carry out its obligations hereunder, (b) the execution and delivery by VW AG of this Agreement and the performance by VW AG of its obligations hereunder have been duly authorized by all requisite action on the part of VW AG, and (c) this Agreement has been duly executed and delivered by VW AG, and (assuming due authorization, execution and delivery by the other Parties) this Agreement constitutes a legal, valid and binding obligation of VW AG, enforceable against VW AG in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to or affecting creditors’ rights generally and subject to the effect of general principles of equity (regardless of whether considered in a proceeding at law or in equity).
[Signature Pages Follow]
41
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed as of the date first written above by its respective officers thereunto duly authorized.
| VOLKSWAGEN INTERNATIONAL AMERICA INC. | ||
| By: |
| |
| Name: | Christopher McGee | |
| Title: | Director | |
| By: |
| |
| Name: | Lauren Kincaid | |
| Title: | Secretary | |
[Signature Page to Investment Agreement]
| RIVIAN AUTOMOTIVE, INC. | ||
| By: |
| |
| Name: |
||
| Title: |
||
[Signature Page to Investment Agreement]
Solely with respect to Article VII:
| VOLKSWAGEN AKTIENGESELLSCHAFT | ||
| By: |
| |
| Name: |
||
| Title: |
||
| By: |
| |
| Name: |
||
EXECUTION VERSION
EXHIBIT B
FORM OF SENIOR CONVERTIBLE PROMISSORY NOTE
NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.
RIVIAN AUTOMOTIVE, INC.
SENIOR CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $250,000,000 | Issue Date: , |
For value received, Rivian Automotive, Inc., a Delaware corporation (“Rivian”), hereby promises to pay to Volkswagen International America Inc., a Delaware corporation (“Investor”), or its registered assigns, in lawful money of the United States of America the principal amount of two hundred fifty million and no/100 ($250,000,000) (the “Principal Amount”), plus any accrued Interest (as defined below). This senior convertible promissory note (this “Note”) is being issued pursuant to terms of that certain Investment Agreement among Rivian, Investor and, solely with respect to Article VII thereto, Volkswagen Aktiengesellschaft, dated as of November 13, 2024 (the “Investment Agreement”). This Note is subject to the following terms and conditions.
| 1 | Basic Terms; Repayment |
| 1.1 | Maturity |
Unless earlier converted pursuant to Section 2, the Outstanding Amount (as defined below) shall mature on and become immediately due and payable in full on September 30, 2027 (the “Maturity Date”).
| 1.2 | Interest |
Non-compounding interest on the Principal Amount shall accrue at the rate of 4.75% per annum (“Interest”). Interest shall be calculated based on a three hundred sixty-five (365) day year and charged for the actual number of days elapsed Interest shall accrue commencing upon the date hereof and shall continue until this Note is paid in full or converted pursuant to the terms hereof. Rivian shall have the option to pay Investor all accrued Interest in cash on a semiannual basis on June 15 and December 15 of each year (each, an “Interest Payment Date”) commencing on 15, 20 and continuing up to the earliest of the Maturity Date, the Conversion Date or such other date on which the Note is repaid in accordance with the terms hereof. For the avoidance of doubt, to the extent Rivian elects not to pay Investor accrued Interest in cash on an Interest Payment Date, such accrued Interest shall be included in the Outstanding Amount (as defined below) to be converted into Conversion Shares (as defined below) pursuant to Section 2.
A-1
| 1.3 | No Prepayment |
Rivian shall not have the right to prepay, redeem or otherwise acquire, in whole or in part, this Note at any time except:
| 1.3.1 | in accordance with the provisions of Section 3.3; |
| 1.3.2 | in accordance with the provisions of Section 4; or |
| 1.3.3 | in the event of a Change of Control, in which case (unless Investor has made an Early Conversion Request pursuant to Section 2.6.1) the Outstanding Amount (calculated to, but not including, the date of repayment) shall become immediately due and payable in full immediately prior to the closing of such Change of Control. |
For purposes of this Section 1.3.3:
“Change of Control” means (i) any “person” or “group” (within the meaning of Section 13(d) and 14(d) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than a Permitted Holder, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the outstanding voting securities of Rivian having the right to vote for the election of members of the board of directors of Rivian, (ii) any reorganization, merger or consolidation of Rivian in connection with which all of Rivian’s Common Stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive other securities, cash or other property, other than a transaction or series of related transactions in which the holders of the voting securities of Rivian outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of Rivian or such other surviving or resulting entity or (iii) a sale, lease or other disposition of all or substantially all of the assets of Rivian and any “person” or group” (as defined in clause (i)) is or becomes the “beneficial owner” (as defined in clause (i)) of more than 50% of the outstanding voting securities of the transferee in such sale, lease or disposition of assets, as the case may be. Notwithstanding the above, a financing or reincorporation transaction solely for purposes of changing Rivian’s state of incorporation shall not be deemed a Change of Control; and
“Permitted Holders” shall mean, (x) the holder(s) of outstanding capital stock of Rivian as of the Issue Date that are identified on Schedule 1.3(a) and their affiliates and (y) the entity identified on Schedule 1.3(b) that manages funds and accounts that own outstanding capital stock of Rivian as of the Issue Date (it being understood that such entity shall only be a Permitted Holder with respect to funds or accounts for which it has sole decision making control as to investments).
| 1.4 | No Setoff |
All payments shall be made in immediately available funds without setoff, counterclaim or other deduction of any nature whatsoever.
A-2
| 1.5 | Ranking |
Rivian and Investor agree that this Note is a senior unsecured obligation of Rivian ranking pari passu in right of payment with all other senior unsecured obligations of Rivian.
| 2 | Conversion |
| 2.1 | Conditions to Conversion; Automatic Conversion |
Upon the Package 2 Prototype (as defined in the Investment Agreement) satisfying the applicable criteria set forth in Exhibit A to the Investment Agreement in any particular winter testing session up to and including March 31, 2027 (with the Package 1 Vehicle (as defined in the Investment Agreement) having already passed in a prior winter testing session and the Testing Milestone Package 1 Shares (as defined in the Investment Agreement) having been previously issued) (the “Conversion Condition” and the date such Conversion Condition is satisfied, “Conversion Condition Satisfaction Date”), the Principal Amount plus any accrued and unpaid Interest (collectively, the “Outstanding Amount”) shall automatically be converted into a number of shares of Rivian’s Class A common stock, $0.001 par value per share (the “Conversion Shares”) to be determined in accordance with Section 2.2 hereof. The date on which the Outstanding Amount shall automatically convert into the Conversion Shares (the “Conversion”) shall be referred to as the “Conversion Date.”
| 2.2 | Calculation of Conversion Shares and Conversion Price |
The total number of Conversion Shares to be issued pursuant to the Conversion shall be the lesser of:
| 2.2.1 | The Outstanding Amount divided by the Conversion Price (as defined below); and |
| 2.2.2 | To the extent the Requisite Stockholder Approval (as defined in the Investment Agreement) has not yet been obtained, the maximum number of shares that may be issued upon Conversion that would result in the Investor, together with its affiliates, holding no greater than 19.99% of the outstanding Common Stock following such Conversion (the “Nasdaq 19.99% Cap” and such Conversion Shares up to the Nasdaq 19.99% Cap, the “Capped Conversion Shares”). |
To the extent the total number of Conversion Shares that would have been issuable pursuant to Section 2.2.1 above is greater than the number of Capped Conversion Shares (such number of Conversion Shares in excess of the Capped Conversion Shares, the “Excess Conversion Shares”), then Rivian shall issue the Capped Conversion Shares to Investor and, unless each of Rivian and Investor mutually agree otherwise (i) the portion of the Note attributable to the Excess Conversion Shares shall remain outstanding and otherwise subject to the terms of the Note and (ii) Rivian shall use commercially reasonable efforts to hold a special shareholder meeting seeking shareholder approval in respect of the issuance of the Excess Conversion Shares to Investor; provided that if such shareholder approval is not obtained within sixty (60) days after the Conversion Date, the Investor may elect by written notice to Rivian to require Rivian to instead pay in cash to Investor an amount equal to the product of (x) the Conversion Price and (y) the number of Excess Conversion Shares.
A-3
The “Conversion Price” shall mean the arithmetic average of the Daily VWAP for the thirty (30) consecutive trading days prior to but not including the Conversion Condition Satisfaction Date.
For purposes of this Section 2.2, “Daily VWAP” means the volume-weighted average price per Share (calculated to the nearest one-hundredth of one cent) as displayed under the heading “Bloomberg VWAP” on the Bloomberg AQR screen page of Rivian (or, if such page is not available, its equivalent successor page) in respect of the period beginning at 9:30:01 a.m., New York time (or such other time as the Nasdaq Global Select Market (the “Principal Market”) publicly announces is the official open of trading) and ending at 4:00:00 p.m., New York time (or such other time as the Principal Market publicly announces is the official close of trading) on a given trading day. If such volume-weighted average price per Share is unavailable, the Daily VWAP shall mean the market value per Share as determined, using a volume-weighted average price method, by a nationally recognized independent investment banking firm selected by Investor.
| 2.3 | Adjustment to Conversion Price |
If Rivian at any time prior to the Conversion Date: (1) subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding Shares into a greater number of Shares, (2) combines (by combination, reverse stock split or otherwise) its outstanding Shares into a smaller number of Shares, (3) pays a dividend on its Shares payable in Shares or otherwise makes a distribution on any class of capital stock that is payable in Shares, then in each such case the Conversion Price used in connection with the Conversion shall be proportionally adjusted by Rivian in good faith as necessary. Whenever the Conversion Price is adjusted pursuant to this Section 2.3, Rivian shall promptly deliver to Investor a written notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
| 2.4 | Conversion Procedure |
On the business day following the Conversion Condition Satisfaction Date, Rivian shall provide written notice to Investor (i) notifying Investor of the Conversion, (ii) specifying the Conversion Price, (iii) specifying the expected Conversion Date and number of Conversion Shares to be issued and (iv) certifying that the Conversion Conditions have been satisfied (the “Conversion Notice”). Promptly following receipt of the Conversion Notice, Investor shall deliver this Note to Rivian for cancellation. Rivian shall use commercially reasonable efforts to issue and deliver to Investor, as soon as practicable and in any event no later than five (5) business days thereafter, a certificate or certificates (or, if the Conversion Shares are not certificated, Rivian shall deliver, or cause its transfer agent to deliver, to Investor an electronic direct registration system statement evidencing the registration of the Conversion Shares in the name of Investor on the books and records of Rivian or its transfer agent) for the number of Conversion Shares to which Investor shall be entitled upon the Conversion.
No fractional Conversion Shares shall be issued upon the Conversion hereof. In lieu of issuing any fractional Conversion Shares to Investor upon the Conversion hereof, Rivian shall pay to Investor an amount equal to the product obtained by multiplying the applicable Conversion Price by the fraction of a Conversion Share not issued pursuant to the previous sentence. Upon Conversion of this Note in full, Rivian shall be forever released from all of its obligations and liabilities under this Note.
A-4
| 2.5 | Early Conversion |
| 2.5.1 | In the event of the announcement of a transaction constituting a Change of Control (as defined in Section 1.3.3) Investor may elect (assuming Investor has not elected to cause repayment of the Note pursuant to Section 1.3.3) by written notice to Rivian (the “Early Conversion Request”) to cause the Outstanding Amount (calculated to, but not including, the date of conversion) to be converted into a number of Conversion Shares to be determined in accordance with Section 2.2 hereof, except that, solely for purposes of a conversion under this Section 2.5 (the “Early Conversion”), the “Conversion Price” shall mean the arithmetic average of the Daily VWAP for the thirty (30) consecutive trading days prior to but not including the announcement of the transaction constituting such Change of Control. |
| 2.5.2 | The provisions of Section 2.3 and Section 2.4 shall apply to the Early Conversion as if such Early Conversion were the Conversion, except in the following respects: |
| (i) | On the business day following delivery of the Early Conversion Request, Rivian shall provide written notice to Investor specifying (i) the Conversion Price, (ii) the expected date on which the Conversion Shares will be delivered to Investor in connection with the Early Conversion and (iii) the expected date on which the transaction constituting the Change of Control is expected to be consummated (the “Early Conversion Notice”). |
| (ii) | Rivian shall use commercially reasonable efforts to issue and deliver to Investor, as soon as practicable and in any event no later than five (5) business days after delivery of the Early Conversion Notice, a certificate or certificates (or, if the Conversion Shares are not certificated, Rivian shall deliver, or cause its transfer agent to deliver, to Investor an electronic direct registration system statement evidencing the registration of the Conversion Shares in the name of Investor on the books and records of Rivian or its transfer agent) for the number of Conversion Shares to which Investor shall be entitled upon the Early Conversion. |
| 3 | Default |
| 3.1 | Events of Default |
The occurrence of any of the following prior to the Conversion of this Note constitutes an “Event of Default” hereunder: (a) Rivian fails or refuses to promptly effect the Conversion on the Conversion Date or to promptly deliver the Conversion Shares to Investor pursuant to Section 2 hereof; (b) if no Conversion has occurred, Rivian fails to pay the Outstanding Amount due hereunder on the Maturity Date and such payment has not been made within ten (10) business of Rivian’s receipt of written notice to Rivian of such failure to pay; (c) Rivian enters into Voluntary Bankruptcy or Insolvency Proceedings; or (d) Rivian enters into Involuntary Bankruptcy or Insolvency Proceedings.
A-5
For purposes of this Section 3.1: (a) “Voluntary Bankruptcy or Insolvency Proceedings” occur where Rivian (i) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admits in writing its inability to pay its debts generally as they mature, (iii) makes a general assignment for the benefit of its or any of its creditors, (iv) is dissolved or liquidated, (v) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) takes any action for the purpose of effecting any of the foregoing; (b) “Involuntary Bankruptcy or Insolvency Proceedings” occur where proceedings for the appointment of a receiver, trustee, liquidator or custodian of Rivian, or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Rivian or any of its “significant subsidiaries,” if any, or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and such involuntary case or other proceeding shall remain undismissed, unstayed or not fully bonded for a period of sixty (60) consecutive days.
For purposes of this Section 3.1, “significant subsidiary” means any subsidiary that constitutes a “significant subsidiary” (as defined in Rule 1-02(w) of Regulation S-X under the Exchange Act) of Rivian; provided, however, that, if a subsidiary meets the criteria of clause (1)(iii) of the definition of “significant subsidiary” in Rule 1-02(w) but not clause (1)(i) or (1)(ii) thereof (or, if applicable, the respective successor clauses to the aforementioned clauses), then such subsidiary will be deemed not to be a significant subsidiary of Rivian unless such subsidiary’s income from continuing operations before income taxes, exclusive of amounts attributable to any non-controlling interests, for the last completed fiscal year before the date of determination exceeds $100,000,000.
| 3.2 | Cross-Default |
Notwithstanding anything to the contrary contained in this Note, a breach or default by Rivian or any of its subsidiaries of any covenant or other term or condition contained in any of the Other Agreements, the principal amount of such other debt becomes accelerated and immediately due and payable as a result of such breach or default, after the passage of all applicable notice and cure or grace periods, shall, at the option of Investor, be considered an Event of Default under this Note, in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note by reason of a default under said Other Agreement or hereunder.
For purposes of this Section 3.2, “Other Agreements” means, collectively, all notes, loans, agreements or other instruments between, among or by Rivian or any of its subsidiaries and any other third party evidencing any indebtedness for borrowed money of Rivian or any of its subsidiaries in an amount exceeding $100,000,000.
| 3.3 | Investor’s Actions Upon Default |
Upon the occurrence of any Event of Default, Investor, at its option, may accelerate payment of the Outstanding Amount, causing the same to become immediately due and payable, upon
A-6
written notice to Rivian, but without further demand, notice or other action by Investor. In such case, Investor shall have all rights available to it under applicable law. This Section 3.3 shall not limit Investor’s rights to seek equitable relief, including specific performance, upon an Event of Default.
| 4 | Company’s Right to Call Note |
Notwithstanding anything to the contrary herein, in the event the Conversion Condition has not been satisfied as of March 31, 2027 (the “Final Testing Date”), the Company, at its option, may elect by written notice to Investor to prepay the Outstanding Amount in full (calculated to, but not including, the date of prepayment) at any time from such Final Testing Date and prior to the Maturity Date. Notice of any redemption will be mailed or electronically delivered (or otherwise transmitted) to Investor in the manner set forth in Section 7.01 of the Investment Agreement. Upon payment of the Outstanding Amount to Investor pursuant to this Section 4, this Note shall be terminated and deemed null and void.
| 5 | Miscellaneous |
| 5.1 | Notices |
Any notice to Rivian or Investor hereunder must be provided in the manner set forth in Section 7.01 of the Investment Agreement.
| 5.2 | Successors and Assigns |
The rights and obligations of Rivian and Investor under this Note will bind and benefit their respective successors and assigns. Neither this Note nor any rights, interests or obligations hereunder may be assigned or otherwise transferred by either Rivian or Investor, by operation of law or otherwise, in whole or in part, without the other’s prior written consent. Notwithstanding the foregoing, no consent of Rivian is required for an assignment or transfer by Investor of this Note or the Conversion Shares, in whole or in part, to (i) an affiliate of Investor or (ii) a successor-in-interest of Investor by reason of merger or consolidation or sale of all or substantially all of the assets of Investor relating to the subject matter of this Note; provided that following such transfer, the transferee shall be deemed an “Investor” for all purposes under this Agreement, including all rights and obligations associated therewith.
| 5.3 | Amendment and Waiver |
No amendment, modification or supplement of any provision of this Note will be valid or effective unless made in writing and signed by a duly authorized officer of each party hereto. Delay or failure to exercise any right may not be construed as waiver of such or any other right, nor will a waiver of a breach or provision constitute a continuing waiver or a waiver of any other breach or provision.
| 5.4 | Severability |
If any provision of this Note shall for any reason be invalid, illegal or unenforceable, such provision shall not affect any other provision of this Note, and the remaining provisions of this Note shall remain in full force and effect.
A-7
| 5.5 | Governing Law |
This Note shall be governed by the laws of New York, without regard to its principles of conflicts of law.
| 5.6 | Jurisdiction and Venue |
Each of the parties: (a) submits to the jurisdiction of any court of the United States located in the State of New York (or, if any such court of the United States located in the State of New York declines to accept jurisdiction over a particular matter, any state court located in the State of New York) in any legal suit, action or proceeding arising out of or relating to this Note; (b) agrees that all claims in respect of the action or proceeding shall be heard or determined in such court; and (c) agrees not to bring any action or proceeding arising out of or relating to this Note in any other court. Each of the parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety or other security that might be required of any other party with respect thereto. Any party may make service on any other party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided for the giving of notices in Section 7.01 of the Investment Agreement. Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law. Nothing in this Note shall affect the right to serve process in any other manner permitted by law, statute, rule or regulation. To the extent provided by any law, statute, rule or regulation, should either party, after being so served, fail to appear or answer to any summons, complaint, process or papers so served within the number of days prescribed by law after the mailing thereof, such party shall be deemed in default and an order or judgment may be entered by the court against such party as demanded or prayed for in such summons, complaint, process or papers.
| 5.7 | Waiver of Right to Jury Trial |
THE PARTIES TO THIS NOTE WAIVE (TO THE EXTENT PERMITTED BY APPLICABLE LAW) TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS NOTE, OR THE MATTERS COVERED BY THIS NOTE AND HEREBY AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND ACKNOWLEDGE THAT THEY WOULD NOT ENTER INTO THIS NOTE IF THIS SECTION WERE NOT PART OF THIS NOTE.
[Signatures on Following Page]
A-8
Rivian and Investor have caused this Note to be issued as of the date first written above.
| RIVIAN AUTOMOTIVE, INC.
| ||
| By: |
| |
| Name: | ||
| Title: | ||
| VOLKSWAGEN INTERNATIONAL AMERICA INC. | ||
| By: |
| |
| Name: | ||
| Title: | ||
| By: |
| |
| Name: | ||
Exhibit 10.3
EXECUTION VERSION
LOAN A AGREEMENT
Dated as of November 13, 2024
between
RIVIAN AND VW GROUP TECHNOLOGY, LLC,
as Borrower,
and
VOLKSWAGEN SPECTER LLC,
as Lender
Table of Contents
| Page | ||||||
| ARTICLE I DEFINITIONS |
1 | |||||
| Section 1.01 |
Certain Defined Terms | 1 | ||||
| Section 1.02 |
Other Interpretive Provisions | 8 | ||||
| Section 1.03 |
Accounting Terms; Changes in GAAP | 8 | ||||
| ARTICLE II THE LOAN, ETC. |
8 | |||||
| Section 2.01 |
The Loan | 8 | ||||
| Section 2.02 |
Disbursement | 8 | ||||
| Section 2.03 |
Repayment | 9 | ||||
| Section 2.04 |
Interest | 9 | ||||
| Section 2.05 |
Payments | 10 | ||||
| Section 2.06 |
Set-Off | 11 | ||||
| Section 2.07 |
Mandatory Prepayments | 11 | ||||
| Section 2.08 |
Determination of Interest Rate | 11 | ||||
| Section 2.09 |
Compensation for Losses | 12 | ||||
| ARTICLE III TAXES, ETC. |
13 | |||||
| Section 3.01 |
Taxes | 13 | ||||
| ARTICLE IV CONDITIONS PRECEDENT |
14 | |||||
| Section 4.01 |
Conditions to Effective Date | 14 | ||||
| Section 4.02 |
Conditions to Funding Date | 14 | ||||
| ARTICLE V REPRESENTATIONS AND WARRANTIES |
15 | |||||
| Section 5.01 |
Status and Licensing | 15 | ||||
| Section 5.02 |
Power and Authority; Enforceable Obligations | 16 | ||||
| Section 5.03 |
Compliance with Law and Other Instruments | 16 | ||||
| Section 5.04 |
Governmental Approvals | 16 | ||||
| Section 5.05 |
Taxes | 16 | ||||
| ARTICLE VI COVENANTS |
16 | |||||
| Section 6.01 |
Notice of Default or Litigation | 16 | ||||
| Section 6.02 |
Compliance with Law | 17 | ||||
| Section 6.03 |
No Modifications to Loan B Documents | 17 | ||||
| Section 6.04 |
Indebtedness | 17 | ||||
| Section 6.05 |
Liens | 17 | ||||
| Section 6.06 |
Restricted Payments | 17 | ||||
| Section 6.07 |
Investments | 17 | ||||
| Section 6.08 |
Further Assurances | 17 | ||||
| ARTICLE VII EVENTS OF DEFAULT |
18 | |||||
| Section 7.01 |
Events of Default | 18 | ||||
| Section 7.02 |
Remedies Upon an Event of Default | 19 | ||||
| ARTICLE VIII MISCELLANEOUS |
20 | |||||
| Section 8.01 |
Expenses; Indemnity; Damage Waiver | 20 | ||||
| Section 8.02 |
Amendments and Waivers, Etc. | 21 | ||||
| Section 8.03 |
Governing Law | 21 | ||||
| Section 8.04 |
Notices | 21 | ||||
| Section 8.05 |
Table of Contents; Headings | 21 | ||||
| Section 8.06 |
Survival | 22 | ||||
i
| Section 8.07 |
Successors and Assigns | 22 | ||||
| Section 8.08 |
Interest Rate Limitation | 22 | ||||
| Section 8.09 |
Submission to Jurisdiction; Venue; Waiver of Jury Trial | 22 | ||||
| Section 8.10 |
Judgment Currency | 23 | ||||
| Section 8.11 |
Execution in Counterparts | 23 | ||||
| Section 8.12 |
Severability | 23 | ||||
| Section 8.13 |
No Waiver; Remedies | 24 | ||||
| Section 8.14 |
Entire Agreement | 24 | ||||
| Section 8.15 |
Revival and Reinstatement | 24 | ||||
| Section 8.16 |
Confidentiality | 24 |
| SCHEDULES AND EXHIBITS | ||
| SCHEDULE 2.08 |
Approved Banks | |
| SCHEDULE 8.04 |
Addresses for Notices | |
| EXHIBIT A |
Form of Security Agreement | |
| EXHIBIT B |
Form of Borrowing Request | |
| EXHIBIT C |
Bloomberg Screen (VW USD Yield Curve) | |
ii
LOAN AGREEMENT
This LOAN AGREEMENT (this “Agreement”), is entered into as of November 13, 2024, between RIVIAN AND VW GROUP TECHNOLOGY, LLC, a limited liability company organized under the laws of Delaware, as the borrower (the “Borrower”), and VOLKSWAGEN SPECTER LLC, a limited liability company organized under the laws of Delaware, as the lender (the “Lender”).
RECITALS
WHEREAS, the Borrower desires to obtain the Loan (as defined below) in a principal amount equal to $1,000,000,000 on the Funding Date, and the Lender is willing, on the terms and subject to the conditions hereinafter set forth, to make the Loan in such amount to the Borrower on the Funding Date, subject to the satisfaction of all the conditions set forth in Article IV hereof, or the waiver thereof by the Lender; and
WHEREAS, all or substantially all of the proceeds of the Loan will be lent by the Borrower to Rivian SPV pursuant to the Loan B Agreement;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“Additional Amounts” shall have the meaning set forth in Section 3.01(a).
“Affiliate” shall mean, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under direct or indirect common Control with, such Person. Notwithstanding the foregoing, neither VW AG or any of its Affiliates will be deemed to be an Affiliate of any other Person as a result of the beneficial ownership of Equity Interests of Rivian Automotive, Inc.
“Agreement” shall have the meaning set forth in the introduction hereto.
“Agreement Currency” shall have the meaning set forth in Section 8.10.
“Applicable Law” shall mean, as to any Person, any applicable statute, law, regulation, ordinance, rule, judgment, rule of common law, order, decree, approval, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, rule, regulation or other governmental restriction or any similar form of decision of, or determination by (or any interpretation or administration of any of the foregoing by), any Governmental Authority binding upon such Person or to which such a Person is subject, whether in effect as of the date hereof or hereafter.
“Availability Period” shall mean the period from and including October 1, 2026 to and including October 30, 2026.
“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.
“Borrower” shall have the meaning set forth in the preamble hereto.
“Borrowing Request” shall have the meaning set forth in Section 4.02(a).
“Borrowing Request Date” shall mean the date on which the Borrowing Request is delivered to the Lender.
1
“Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions are authorized or required to close in New York, New York or in Lower Saxony, Germany.
“Capitalized Lease” shall mean, as applied to any Person, any lease of any Property (whether real, personal or mixed) with respect to which the discounted present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
“Collateral” shall mean all assets and property, now owned or hereafter acquired, subject to, or purported to be subject to, Liens created pursuant to any Collateral Document and shall include any assets or property subject to replacement Liens or adequate protection Liens in favor of the Lender; provided that, in no event shall Collateral include any Excluded Collateral (as defined in the Security Agreement).
“Collateral Documents” shall mean the Security Agreement and any other agreements, instruments or documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Loan and all other obligations hereunder.
“Commitment” shall mean the commitment of the Lender to make the Loan pursuant to Section 2.01 of this Agreement in a principal amount equal to $1,000,000,000.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Default” shall mean any of the events specified in Section 7.01, whether or not any requirement for the giving of notice or lapse of time or both has been satisfied.
“Development and Services Agreement” shall mean that certain Development and Services Agreement, dated as of the date hereof, among Rivian Automotive, LLC, VW AG and the Borrower.
“Dispute” shall have the meaning set forth in Section 2.08(e).
“Dollars” and the “$” sign shall mean the lawful currency of the United States of America.
“Effective Date” shall mean the date on which all of the conditions set forth in Section 4.01 hereof have been fulfilled or waived by the Lender.
“Eligible Assignee” shall mean an Affiliate of the Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“Equity Interests” shall mean, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Event of Default” shall have the meaning set forth in Section 7.01.
“Final Maturity Date” shall mean the date which is ten (10) years following the Funding Date.
2
“Finance Documents” shall mean this Agreement, the Collateral Documents, the Borrowing Request, the Payment Direction Agreement and any other documents executed and delivered by the Borrower in connection with the foregoing and stated to be a Finance Document pursuant to the terms of such document, as such documents may be amended, restated, supplemented and modified from time to time.
“Funding Date” shall mean the date the Loan is funded hereunder.
“GAAP” shall mean, subject to Section 1.03, United States generally accepted accounting principles as in effect as of the date of determination thereof.
“Governmental Authority” shall mean the government of the United States or any other nation or government, any state or municipality, any multi-lateral or similar organization or any other agency, instrumentality, authority, regulatory body, court, tribunal, central bank or political subdivision thereof and any entity exercising executive, legislative, judicial, taxing, monetary, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” shall mean any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing (whether pursuant to a guaranty or otherwise) any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any other manner the holder of such Indebtedness of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“Hedging Agreements” shall mean (a) any and all interest rate protection agreements, interest rate future agreements, interest rate option agreements, interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate hedge agreements, foreign exchange contracts, currency swap agreements, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts or any other similar transactions or any combination of the foregoing (including any option to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, traded at the over-the-counter or standardized markets and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or are governed by any form of master agreement published by the International Swaps and Derivative Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (such master agreement, together with any related schedules, a “Master Agreement”) including any such obligations or liabilities under any Master Agreement.
“Hedging Costs” means, in respect of any event set forth in Section 2.09, any costs, losses or expenses incurred by the Lender attributable or in connection with such event as a result of terminating, liquidating, settling or offsetting any hedging transactions previously entered into by the Lender to hedge any risks in connection with the Loan.
3
“Indebtedness” shall mean, with respect to any Person at any date of determination (without duplication): (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit, financial guaranty insurance policies or similar instruments; (d) to the extent reflected on the balance sheet of such Person in accordance with GAAP, all obligations of such Person for the deferred purchase price of Property or services, which purchase price is due more than 6 months after the date of taking delivery and title to such Property or completion of the services rendered, as applicable; provided that current trade payables incurred in the ordinary course of such Person’s business shall not constitute “Indebtedness”; (e) all obligations of such Person as lessee under Capitalized Leases (but not operating leases); (f) all net payment obligations of such Person in respect of Hedging Agreements (determined by reference to the marked-to-market value thereof); (g) all Guarantees of such Person in respect of obligations of the kind referred to in clauses (a) through (f); and (h) all Indebtedness of other Persons secured by a Lien on any Property of such Person, whether or not such Indebtedness is assumed by such Person; provided that the amount of such Indebtedness shall be the lesser of (i) the fair market value of such Property at such date of determination and (ii) the amount of such Indebtedness.
“Indemnified Taxes” shall have the meaning set forth in Section 3.01(a).
“Indemnitee” shall have the meaning set forth in Section 8.01(b).
“Information Sharing Agreement” shall mean that certain Information Sharing Agreement, dated as of the date hereof, among VW AG, Rivian Parent and the Borrower.
“Interest Payment Date” shall mean the last day of each Interest Period (including the Final Maturity Date).
“Interest Period” shall mean (a) initially, the period commencing on and including the Funding Date and ending on (but excluding) the numerically corresponding date twenty four (24) months thereafter and (b) thereafter, each period commencing on (and including) the last day of the preceding Interest Period and ending on (but excluding) the numerically corresponding day that is six (6) months thereafter; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) no Interest Period shall extend beyond the Final Maturity Date.
“Interest Rate” shall have the meaning set forth in Section 2.08.
“Investment” shall mean, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor incurs Indebtedness of the type referred to in clause (g) of the definition of “Indebtedness” in respect of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment but giving effect to any returns or distributions of capital or repayment of principal actually received in case by such Person with respect thereto.
“IRS” shall mean the United States Internal Revenue Service.
4
“Joint Venture Agreement” shall mean that certain Amended and Restated Limited Liability Company Agreement, dated as of the date hereof, among the Lender, Rivian SPV, and the Borrower.
“Joint Venture Documents” shall mean the Transaction Agreement, the Joint Venture Agreement and all other agreements, Organizational Documents and instruments entered into or agreed between the parties thereto or their respective Affiliates contemplated thereby or entered into in connection therewith (other than the Finance Documents), as such agreements, documents and instruments may be amended, restated, supplemented and modified from time to time.
“Lender” shall have the meaning set forth in the introduction hereto.
“Lien” shall mean any mortgage, deed of trust, lien, pledge, charge, hypothecation, assignment, deposit arrangement, security trust, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, or any other contractual or statutory arrangement or provision having substantially the same economic, financial or operational effect as any of the foregoing).
“Loan” shall have the meaning set forth in Section 2.01. All references to the Loan shall include any principal repayment instalments and interest payments capitalized and added to the principal amount thereof pursuant to Section 2.05(b).
“Loan B” shall have the meaning assigned to the term “Loan” in the Loan B Agreement.
“Loan B Agreement” shall mean that certain Loan Agreement, dated as of or about the date hereof, among the Borrower, as lender, Rivian SPV, as borrower, and Rivian Parent, as parent.
“Loan B Borrowing Request” shall have the meaning assigned to the term “Borrowing Request” in the Loan B Agreement.
“Loan B Collateral” shall have the meaning assigned to the term “Collateral” in the Loan B Agreement.
“Loan B Documents” shall have the meaning assigned to the term “Finance Documents” in the Loan B Agreement.
“Loan B Funding Date” shall have the meaning assigned to the term “Funding Date” in the Loan B Agreement.
“Material Adverse Effect” shall mean a material adverse effect on (a) the business, assets, operations, liabilities (actual or contingent) or financial condition of the Borrower and its Subsidiaries, taken as a whole, (b) the validity or enforceability of the Financing Documents, taken as a whole, (c) the ability of the Borrower to perform its material obligations under any Financing Document to which it is a party, or (d) the rights of, remedies of or benefits available to the Lender under the Financing Documents, taken as a whole.
“Maximum Rate” shall have the meaning set forth in Section 8.08.
“Obligations” shall mean all of the obligations and liabilities of the Borrower to the Lender under or in connection with any Finance Document (as any of the foregoing may from time to time be respectively amended, modified, substituted, extended or renewed), direct or indirect, absolute or contingent, due or to become due, now or hereafter existing (including interest which, but for the filing of a petition in bankruptcy with respect to the Borrower, would have accrued on any Obligation, whether or not a claim is allowed against the Borrower for such interest in the related bankruptcy proceeding).
5
“Organizational Documents” shall mean, with respect to any Person, as applicable, the charter, articles or certificate of organization or incorporation and bylaws, memorandum of association, articles of association, statute or other organizational or governing documents of such Person under Applicable Law, and any amendments thereof.
“Other Currency” shall have the meaning set forth in Section 8.10.
“Payment Direction Agreement” shall mean an agreement to be executed by the Borrower, the Lender and Rivian SPV pursuant to which the Borrower shall irrevocably direct Rivian SPV as lender under the Loan B Agreement to pay any principal and interest payments under the Loan B Agreement (other than any amounts by which any interest payments due under the Loan B Agreement exceed the interest payments due hereunder), which shall be applied to satisfy amounts due hereunder as set forth therein, directly to the Lender in form and substance reasonably satisfactory to the Lender and Rivian SPV.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, limited liability company, joint venture, trust, unincorporated organization, Governmental Authority or other entity of whatever nature.
“PIK Election” shall mean (a) with respect to principal repayment instalments due in accordance with Section 2.03, a PIK Election (as defined in the Loan B Agreement) with respect to the corresponding principal repayment instalments due in accordance with Section 2.03 of the Loan B Agreement, such that if a PIK Election (as defined in the Loan B Agreement) is made with respect to such principal repayment instalments under the Loan B Agreement, a PIK Election hereunder shall be deemed to have been made automatically with respect to the corresponding principal repayment instalments hereunder, and (b) with respect to interest payments due in accordance with Section 2.04, a PIK Election (as defined in the Loan B Agreement) with respect to the corresponding interest payments due in accordance with Section 2.04 of the Loan B Agreement, such that if a PIK Election (as defined in the Loan B Agreement) is made with respect to such interest payments under the Loan B Agreement, a PIK Election hereunder shall be deemed to have been made automatically with respect to the corresponding interest payments hereunder.
“Property” of any Person shall mean any property, asset, rights or revenues, or interest therein, of such Person, including any accounts receivable.
“Rate of Exchange” shall have the meaning set forth in Section 8.10.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Responsible Officer” of a Person shall mean the Chairman, Chief Executive Officer, President, any Executive Director, Director, Vice President, Treasurer, Assistant Treasurer or other similar officer of such Person, in each case authorized to the extent required by a board resolution or shareholder meeting; provided that such officer or director is then authorized to bind such Person.
“Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to such Person’s shareholders, partners or members (or the equivalent Persons thereof).
“Rivian Parent” shall mean Rivian Automotive, Inc., a Delaware corporation.
6
“Rivian SPV” shall mean Rivian JV SPV, LLC, a Delaware limited liability company.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Security Agreement” shall mean that certain Security Agreement governed by New York law to be executed by the Borrower and the Lender pursuant to Section 4.02, substantially in the form of Exhibit A hereto.
“Specified DSA Payments” means each payment due and owing from VW AG to the Borrower under Sections 21.1 and 21.2.4 of the Development and Services Agreement; provided that, for the avoidance of doubt, to the extent any such payment due thereunder is disputed by VW AG in good faith, such Specified DSA Payment shall be limited to the amount not so disputed.
“Specified DSA Deficiency” means, as of any date of determination, (a) the aggregate amount of Specified DSA Payments that were due and payable prior to such date of determination but have not been paid, minus (b) the aggregate amount of principal instalments and interest payments that have been deferred prior to such date of determination pursuant to the second sentence of each of Sections 2.03 and 2.04(b).
“Specified JV Account” shall mean the Deposit Account opened by the Borrower pursuant to Section 4.01(e)(ii) or, at any time after the Funding Date, any other Deposit Account opened by the Borrower at a Bank subject to an Account Control Agreement (in each case as defined in the Security Agreement) designated by the Borrower to the Lender and Rivian SPV in writing at least three (3) Business Days prior to any relevant payment date hereunder or under the Loan B Agreement; provided that, for avoidance of doubt, the Specified JV Account may be the general operating account of the Borrower or any other account of the Borrower which is used for purposes other than receiving payments in respect of Loan B.
“Subsidiary” shall mean, with respect to any Person, any corporation, association or other entity of which more than 50% of the voting power of the outstanding Voting Stock is owned, directly or indirectly, by such Person or by such Person and one or more other Subsidiaries of such Person.
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding) imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Transaction Agreement” shall mean that certain Transaction Agreement, dated as of November 12, 2024, among Volkswagen International America Inc., a Delaware corporation, Rivian Parent, the Borrower and VW AG.
“Transaction Documents” shall mean the Finance Documents and the Joint Venture Documents.
“Unasserted Obligations” shall mean, at any time, Obligations for indemnification or other contingent obligations for which a claim has not been asserted which survive pursuant to Section 8.06.
“Voting Stock” shall mean, with respect to any Person, capital stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.
“VW AG” shall mean Volkswagen Aktiengesellschaft, a joint stock company duly established under the laws of Germany, having its registered office at Berliner Ring, 2, 38440, Wolfsburg, Germany.
7
Section 1.02 Other Interpretive Provisions. Unless otherwise expressly provided herein: (a) references to agreements (including this Agreement) and other documents shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent that such amendments and other modifications are not prohibited hereby; (b) the term “including” is not limiting and means “including without limitation;” (c) the meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms; and (d) in the computation of periods of time from a specified date to a later specified date, unless otherwise specified, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.” Periods of days referred to in this Agreement shall be counted in calendar days unless Business Days are expressly prescribed.
Section 1.03 Accounting Terms; Changes in GAAP.
(a) Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed in conformity with GAAP.
(b) Changes in GAAP. If the Borrower notifies the Lender that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Lender notifies the Borrower that it requests an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE LOAN, ETC.
Section 2.01 The Loan. Subject to the terms and conditions set forth herein, including the occurrence of the Effective Date, the Lender agrees to make a loan (the “Loan”) on the Funding Date to the Borrower in Dollars in the principal amount equal to the Lender’s Commitment; provided that the Funding Date shall occur during the Availability Period, and if the Funding Date does not occur during the Availability Period, then the Lender’s Commitments shall automatically terminate immediately after the end of the Availability Period and, subject to Section 8.06, this Agreement shall be of no further force or effect. No amounts paid with respect to the Loan may be reborrowed.
Section 2.02 Disbursement. On the Funding Date, the Lender shall disburse the amount of the Loan to the Borrower by means of the transfer of the applicable amount to the bank account number designated by the Borrower to the Lender in writing at least three (3) Business Days prior to the Funding Date. The Commitment shall terminate immediately after the Loan is funded on the Funding Date. The parties hereby designate Rivian SPV as third-party beneficiary of this Section 2.02 and Rivian SPV shall have the right to enforce the Borrower’s rights under this Section 2.02 as though it were party to this Agreement (and this Section 2.02 may not be amended without the prior written consent of Rivian SPV in addition to each consent otherwise required hereunder) and, for avoidance of doubt, if the conditions to the occurrence of the Funding Date have been satisfied, Rivian SPV may enforce the obligation of Lender to fund its Commitment hereunder.
8
Section 2.03 Repayment. The Borrower shall repay to the Lender the aggregate principal amount of the Loans outstanding on the following dates in the respective amounts set forth opposite such dates:
| Date | Amount | |||
| Three (3) years after the Funding Date |
$ | 50,000,000 | ||
| Three (3) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Four (4) years after the Funding Date |
$ | 50,000,000 | ||
| Four (4) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Five (5) years after the Funding Date |
$ | 50,000,000 | ||
| Five (5) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Six (6) years after the Funding Date |
$ | 50,000,000 | ||
| Six (6) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Seven (7) years after the Funding Date |
$ | 50,000,000 | ||
| Seven (7) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Eight (8) years after the Funding Date |
$ | 50,000,000 | ||
| Eight (8) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Nine (9) years after the Funding Date |
$ | 50,000,000 | ||
| Nine (9) years and six months after the Funding Date |
$ | 50,000,000 | ||
provided, however, that the final principal repayment instalment of such Loans shall be repaid on the Final Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of the Loan outstanding on such date and all interest and any other amounts due under this Agreement. Notwithstanding the foregoing or anything herein to the contrary, (a) if there is a Specified DSA Deficiency on the date any principal repayment instalment is due and payable hereunder, the payment of such principal repayment instalment or a portion thereof may be deferred, on a dollar-for-dollar basis in the amount of the Specified DSA Deficiency as of such date, until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on any such principal repayment instalment or portion thereof during such period, and (b) to the extent VW AG has failed to make one or more Specified DSA Payments when due and such failure is continuing on (A) the Final Maturity Date, (B) the date of any mandatory prepayment pursuant to Section 2.07(b) or (C) the date on which the Loan and all accrued and unpaid interest thereon are paid in full after such amounts have become due and payable pursuant to Section 7.02, in each case, (i) the aggregate amount of unpaid principal repayment instalments hereunder shall be deemed paid to the extent of the aggregate amount of Specified DSA Payments which VW AG has failed to pay, without duplication of amounts applied to payments of interest pursuant to the second sentence of Section 2.04(b) and (ii) such Specified DSA Payment(s) shall be deemed paid in the amount such principal repayment instalment was deemed paid. For avoidance of doubt, if a PIK Election has been made with respect to a principal payment instalment (or portion thereof) that may be deferred as provided above, the additional borrowings and payments from the gross cash proceeds thereof in respect of such PIK Election shall not be deemed to have occurred until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on any such principal repayment instalment or portion thereof during such period. Any Specified DSA Deficiency will be applied to defer payment of interest pursuant to Section 2.04(b) first, and then will be applied to defer payment of principal pursuant to this Section 2.03.
Section 2.04 Interest.
(a) Interest Rates. The Borrower agrees to pay to the Lender interest on the unpaid principal amount of the Loan for each day from the date the Loan is made until the date on which the Loan is paid in full, at a rate per annum equal to the Interest Rate.
9
(b) Payment Dates. Accrued interest on the Loan shall be payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided that in the event of any repayment or prepayment of the Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. Notwithstanding the foregoing or anything herein to the contrary, (a) if there is a Specified DSA Deficiency on the date any interest payment is due and payable hereunder, the payment of such interest or a portion thereof may be deferred, on a dollar-for-dollar basis in the amount of the Specified DSA Deficiency as of such date, until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on such interest payment or portion thereof during such period, and (b) to the extent VW AG has failed to make one or more Specified DSA Payments when due and such failure is continuing on (A) the Final Maturity Date, (B) the date of any mandatory prepayment pursuant to Section 2.07(b) or (C) the date on which the Loan and all accrued and unpaid interest thereon are paid in full after such amounts have become due and payable pursuant to Section 7.02, in each case, (i) the aggregate amount of unpaid interest payments hereunder shall be deemed paid to the extent of the aggregate amount of Specified DSA Payments which VW AG has failed to pay, without duplication of amounts applied to payments of principal pursuant to the second sentence of Section 2.03, and (ii) such Specified DSA Payment(s) shall be deemed paid in the amount such interest payment was deemed paid. For avoidance of doubt, if a PIK Election has been made with respect to an interest payment (or portion thereof) that may be deferred as provided above, the aggregate outstanding principal amount of the Loan will not be increased until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on any such interest payment or portion thereof during such period. Any Specified DSA Deficiency will be applied to defer payment of interest pursuant to this Section 2.04(b) first, and then will be applied to defer payment of principal pursuant to Section 2.03.
(c) Interest Computation. All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). Subject to the second sentence of each of Section 2.03 and Section 2.04(b), all interest hereunder on the Loan shall be computed on a daily basis based upon the outstanding principal amount of the Loan as of the applicable date of determination.
Section 2.05 Payments.
(a) Except as provided in the second sentence of each of Section 2.03 and Section 2.04(b), all payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or set-off. Except as provided in Section 2.05(b) or as otherwise expressly provided herein or in the Payment Direction Agreement, all payments by the Borrower hereunder shall be made in Dollars to the Lender to the bank account number designated by the Lender to the Borrower in writing at least three (3) Business Days prior to the Funding Date, in immediately available funds, and shall be made not later than 2:00 p.m., New York City time, on the date specified herein. All payments received after 2:00 p.m., New York City time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment on the Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day for the Loan (and such extension of time shall be reflected in computing interest or fees, as the case may be) unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.
(b) Notwithstanding anything herein to the contrary, on not more than two separate occasions, a PIK Election may be made with respect to either interest or principal repayment instalments (it being understood that a PIK Election hereunder shall be deemed to have been made automatically if a PIK Election (as defined in the Loan B Agreement) is made in accordance with the Loan B Agreement).
10
If a PIK Election is made with respect to interest, then the interest payments due on the next two Interest Payment Dates following the date such PIK Election is made shall be paid by increasing the aggregate principal amount of the Loan outstanding by the amount of such interest payment as of the applicable Interest Payment Date. If a PIK Election is made with respect to principal repayment instalments, then the next two principal repayment instalments due following the date such PIK Election is made shall be deemed to have been paid from the gross cash proceeds of additional borrowings of the Loan, such that after giving effect thereto, the amount of the Loan outstanding remains unchanged. Notwithstanding the foregoing, in no event may a PIK Election be made with respect to any interest or principal due (i) prior to the date three (3) years after the Funding Date or (ii) later than nine (9) years and six months after the Funding Date.
Section 2.06 Set-Off. The Lender may in its sole discretion set off amounts due to the Borrower under the Joint Venture Agreement and any other Transaction Document against any amounts due from the Borrower hereunder, including, without limitation, amortization payments under Section 2.03(a) and mandatory prepayments under Section 2.07(a) hereof, without any further action or consent of any other party.
Section 2.07 Mandatory Prepayments. To the extent the Borrower receives a voluntary prepayment from Rivian SPV in respect of Loan B on a Business Day in accordance with Section 2.07 of the Loan B Agreement, the Borrower shall promptly prepay Loan A (in accordance with the Payment Direction Agreement or, otherwise, within one (1) Business Day), without premium or penalty, in an amount equal to (a) such Loan B prepayment, in the case of voluntary prepayments made pursuant to Section 2.07(a) of the Loan B Agreement, or (b) the amount required to pay in full all Obligations (other than Obligations contingent in nature or unliquidated at such time which survive pursuant to Section 8.06), in the case of voluntary prepayments made pursuant to Section 2.07(b) of the Loan B Agreement; provided that the Borrower shall not have the right to prepay the Loan without the consent of the Lender other than as set forth in this Section 2.07. All such prepayments of principal in respect of the Loan shall be applied to principal instalments on the Loans in the inverse order of maturity.
Section 2.08 Determination of Interest Rate.
(a) Interest Rate. The “Interest Rate” means a fixed rate per annum equal to the sum of (i) the VW USD 7-Yr Yield plus (ii) 0.15%.
(b) Determination Procedure. The Lender and Rivian SPV shall cooperate in good faith to calculate the VW USD 7-Yr Yield in accordance with this Section 2.08 and to deliver the Interest Rate Certificate to the other within two (2) Business Days after the Interest Rate Reference Date.
(c) Disputes. If there is a Dispute or the VW USD 7-Yr Yield has otherwise not been agreed on or prior to the second (2nd) Business Day following the Interest Rate Reference Date, then as soon as commercially practicable, Rivian SPV shall appoint three (3) Approved Banks as Reference Banks on reasonable terms consistent with market practice, to determine the VW USD 7-Yr Yield in consultation with the Lender and Rivian SPV in accordance with this Section 2.08 (and, for avoidance of doubt, such determination shall continue to be made as of the Interest Rate Reference Date) and such Reference Banks shall notify the Lender and Rivian SPV of such determination with reasonable detail thereof as soon as commercially practicable after such determination has been made, and for the purposes of this Section 2.08, the “VW USD 7-Yr Yield” shall be the average (mean) of the VW USD 7-Yr Yield determined by such Reference Banks; provided that if Rivian SPV fails to appoint three (3) Reference Banks within five (5) Business Days after the Interest Rate Reference Date, the Lender may appoint additional Reference Banks on reasonable terms consistent with market practice (acting reasonably and in consultation with Rivian SPV) until three (3) Reference Banks have been appointed; provided, further, to the extent the required Bloomberg Screen is not available, or any Reference Bank otherwise cannot reasonably determine the VW USD 7-Yr Yield using the procedure set forth herein, each such Reference Bank shall determine the VW USD 7-Yr Yield taking into account market practice
11
as observed by each such Reference Bank at such time. The determination of the VW USD 7-Yr Yield by each Reference Bank shall, absent manifest error, be binding upon each of the parties hereto and Rivian SPV.
(d) Third Party Beneficiary. The parties hereby designate Rivian SPV as third-party beneficiary of this 2.08 and Rivian SPV shall have the right to enforce this Section 2.08 as though it were party to this Agreement (and this Section 2.08 may not be amended without the prior written consent of Rivian SPV in addition to each consent otherwise required hereunder).
(e) Certain Defined Terms. As used in this Section titled “Determination of Interest Rate”:
“Approved Banks” shall mean each of the financial institutions (or any affiliate thereof) set forth in Schedule 2.08 hereto.
“Bloomberg Screen” shall mean, when used in connection with any designated page herein, the display page so designated on the Bloomberg service, or the successor display page that has been officially designated by Bloomberg thereof.
“Bloomberg Screen (VW USD Yield Curve)” means the Bloomberg Screen accessed via the Bloomberg Screen <NIA> <GO> for VW AG setting forth the all in yield curve in respect of all series of notes issued or guaranteed by VW AG with the following characteristics:
Currency: USD
Maturity Type: At Maturity and Callable
Coupon Type: Fixed
Payment Rank: Sr Unsecured
A copy of a specimen Bloomberg Screen (VW USD Yield Curve) as of 5:29 p.m., New York time on October 28, 2024, showing a VW USD 7-Yr Yield of 5.39% is set forth at Exhibit C for illustrative purposes.
“Dispute” shall mean any controversy, claim or dispute arising out of or relating to this Section 2.08.
“Interest Rate Certificate” shall mean a written instrument executed by a Responsible Officer of each of Borrower and Lender, setting forth the agreed Interest Rate and acknowledging there is no Dispute regarding its calculation or otherwise relating to this Section 2.08.
“Interest Rate Reference Date” shall mean August 31, 2026.
“Reference Banks” shall mean each Approved Bank appointed pursuant to Section 2.07(c).
“VW USD 7-Yr Yield” means the interpolated all in yield for a maturity of seven (7) years derived from the yield curve set forth on the Bloomberg Screen (VW USD Yield Curve) at 4:15 p.m., New York City time on the Interest Rate Reference Date (or, if such Bloomberg Screen is not accessible at such time, the first time such Bloomberg Screen is accessible thereafter).
Section 2.09 Compensation for Losses. In the event of the failure to borrow or prepay any principal of the Loan on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate the Lender for any out-of-pocket loss, cost and expense attributable to or connected with such event, including any out-of-pocket loss, cost or expense arising from the liquidation or redeployment of funds, from any fees payable or Hedging Costs. A certificate of the Lender setting forth any amount or amounts that the Lender is entitled to receive pursuant to this
12
Section 2.09 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on any such certificate within five (5) Business Days after receipt thereof.
ARTICLE III
TAXES, ETC.
Section 3.01 Taxes.
(a) The Lender shall deliver to the Borrower on or prior to the date on which the Lender becomes a Lender under this Agreement (and from time to time thereafter upon reasonable request of the Borrower or upon the expiration or obsolescence of any previously delivered copy) properly completed and executed copies of IRS Form W-9 certifying that the Lender is exempt from U.S. federal backup withholding for any Taxes. All payments made by or on account of any obligation of the Borrower under any Finance Document shall be made free and clear of, and without withholding or deduction for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment, then such withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority, and, any such amounts shall be treated for all purposes of this Agreement as having been paid to the Lender in respect of which such withholding was made, except that, if the deduction or withholding of any Tax is required to be made as a result of a change in (or in the interpretation, administration, or application of) any Applicable Law binding on the Lender after the date on which it becomes a party to this Agreement (each, an “Indemnified Tax”), then the sum payable by the Borrower shall be increased by additional amounts (the “Additional Amounts”) as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to Additional Amounts under this Section 3.01) the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b) The Borrower shall indemnify the Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by the Lender on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.
(c) If any Indemnified Tax arises, and the Lender is entitled to an exemption from or reduction of withholding of such Tax with respect to payments made under any Finance Document, then the Lender shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower pursuant to Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if (i) in the Lender’s reasonable judgment such completion, execution or submission is inconsistent with applicable legal and regulatory requirements, or would subject the Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of the Lender or (ii) such documentation or similar forms are not supplied by the Borrower to the Lender.
(d) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.01 (including by the payment of Additional Amounts pursuant to this Section 3.01(a)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made
13
under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this clause (d) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause (d), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this clause (d) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or Additional Amounts with respect to such Tax had never been paid. This clause shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(e) For the avoidance of doubt, the parties hereto agree that the Loan is treated as indebtedness for U.S. federal income tax purposes. The Lender represents it is the beneficial owner of the interest on the Loan for U.S. federal income tax purposes.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions to Effective Date. The occurrence of the Effective Date shall be subject to the satisfaction (or waiver thereof by the Lender) of all of the conditions specified below:
(a) Transaction Documents. The Lender shall have received each of the Joint Venture Agreement and the Transaction Agreement, which shall be an original unless otherwise agreed, in each case duly executed and delivered by each party thereto, each dated the Effective Date and each in form and substance reasonably satisfactory to the Lender;
(b) Representations and Warranties. The representations and warranties of the Borrower contained in this Agreement (other than any such representation or warranty which, by its term, speaks as of a particular date) and the other Finance Documents shall be true and correct in all material respects, on and as of the Effective Date; provided, however, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects; and
(c) No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing on the Effective Date.
Section 4.02 Conditions to Funding Date. The occurrence of the Funding Date shall be subject to the satisfaction (or waiver thereof by the Lender) of all of the conditions specified below:
(a) Effective Date. The Effective Date shall have occurred no later than December 31, 2024;
(b) Borrowing Request. Not later than twenty (20) calendar days prior to the Funding Date, the Borrower shall have provided to the Lender a Borrowing Request in the form attached as Exhibit B hereto with a Funding Date set forth therein during the Availability Period (the “Borrowing Request”);
(c) Representations and Warranties. The representations and warranties of the Borrower contained in this Agreement (other than any such representation or warranty which, by its term, speaks as of a particular date) and the other Finance Documents shall be true and correct in all material respects, on and as of the Funding Date, before and after giving effect to the making of the
14
Loan on the Funding Date and to the application of the proceeds therefrom; provided, however, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects;
(d) No Default, Event of Default or Call Event. No (i) Default, Event of Default or Other Event of Default (as defined in the Loan B Agreement) shall have occurred and be continuing on the Borrowing Request Date or in each case shall have occurred thereafter on or prior to the Funding Date, or shall result from the making of the Loan on the Funding Date or the use of the proceeds thereof, or (ii) Call Event shall have occurred for which the Call Option Exercise Period (as defined in Section 9.04(a)(ii) of the Joint Venture Agreement) has not expired prior to the Borrowing Request Date, or shall have occurred thereafter on or prior to the Funding Date;
(e) Perfection of Security Interests. The Lender shall have received (a) an original of the Collateral Documents, duly executed and delivered by the Borrower, and dated the Funding Date, and (b) evidence in form and substance reasonably satisfactory to it that on the Funding Date, (i) all Collateral will be subject to a first priority perfected security interest in favor of the Lender to the extent required by the Collateral Documents and (ii) the Borrower has opened a Deposit Account at a Bank subject to an Account Control Agreement (in each case as defined in the Security Agreement);
(f) Determination of Interest Rate. The Interest Rate shall have been determined in accordance with Section 2.08 (and, for the avoidance of doubt, any Dispute shall have been resolved in accordance with Section 2.08(d));
(g) Funding under Loan B Agreement. The Loan B Borrowing Request shall have been delivered by Rivian SPV to the Borrower in accordance with the Loan B Agreement and the conditions required to be satisfied before the Loan B Funding Date can occur shall have been satisfied;
(h) No Default or Event of Default under Loan B Agreement. No “Default” or “Event of Default” (as each such term is defined in the Loan B Agreement) shall have occurred and be continuing on the Funding Date, the Loan B Funding Date or shall result from the making of Loan B on such Loan B Funding Date or the use of the proceeds thereof;
(i) Perfection of Security Interests under Loan B Agreement. The Lender shall have received evidence in form and substance reasonably satisfactory to it that, on the Funding Date, all Loan B Collateral will be subject to a first priority perfected security interest in favor of the Borrower as lender under Loan B to the extent required by the Pledge Agreement (as defined in the Loan B Agreement); and
(j) Payment Direction Agreement. The Lender shall have received an original of the Payment Direction Agreement executed by the Borrower.
The borrowing of the Loan by the Borrower hereunder on the Funding Date shall constitute a representation and warranty by the Borrower as of the Funding Date that the conditions contained in clauses (a), (c), (d), (g), (h), and (i) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower hereby makes the following representations and warranties to the Lender as of the date hereof, the Effective Date and the Funding Date:
Section 5.01 Status and Licensing. The Borrower (i) is duly incorporated, validly existing and in good standing (if applicable) under the laws of its jurisdiction of incorporation and (ii) has all requisite power, governmental licenses, authorizations, consents and approvals to own its Property and carry on its business as now conducted except, in the case of clause (ii) only, where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
15
Section 5.02 Power and Authority; Enforceable Obligations. The Borrower has the power to execute, deliver and perform the terms and provisions of the Finance Documents to which it is a party, and has taken all necessary action required by its constitutional documents to authorize the execution, delivery and performance of the Finance Documents to which it is a party. The Finance Documents have been or will be, as applicable, duly executed and delivered by the Borrower and constitute or will constitute, as applicable, legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
Section 5.03 Compliance with Law and Other Instruments. Neither the execution, delivery or performance by the Borrower of the Finance Documents in accordance with their respective terms, nor the consummation of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or thereof, (a) will contravene the Borrower’s Organizational Documents, (b) will contravene any Applicable Law to which the Borrower is subject or any judgment, decree, order or permit applicable to the Borrower, or (c) will conflict with or will result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any Property of the Borrower pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which the Borrower is a party or bound or to which it may be subject (other than the Finance Documents), except in each case under clause (b) or (c) where such conflict, breach, default or violation could not reasonably be expected to have a Material Adverse Effect.
Section 5.04 Governmental Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or notice to or filing (other than UCC filings pursuant to the Finance Documents) with, or exemption by, any Governmental Authority is required to be made by Borrower to authorize, or is required to be made by Borrower in connection with, the execution, delivery and performance of the Finance Documents by the Borrower or the taking of any action by the Borrower contemplated by any Finance Document, or, if any of the foregoing are required, they have been obtained and are in full force and effect.
Section 5.05 Taxes. The Borrower has timely filed or caused to be filed all Tax returns, declarations, reports, estimates, information returns and statements and other information required to have been filed and have paid or caused to be paid all Taxes required to have been paid by it, except for (i) Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are being maintained in accordance with GAAP, or (ii) to the extent that failure to so file or pay could not reasonably be expected to have a Material Adverse Effect.
ARTICLE VI
COVENANTS
The Borrower covenants and agrees that, until the payment in full of all Obligations (other than Obligations contingent in nature or unliquidated at such time which survive pursuant to Section 8.06):
Section 6.01 Notice of Default or Litigation. The Borrower shall provide to the Lender promptly (and, in any event, within five (5) Business Days) after a Responsible Officer of the Borrower obtains knowledge thereof notice of any Default or Event of Default, signed by a Responsible Officer, manager or director of the Borrower, describing such Default or Event of Default and the steps that the Borrower proposes to take in connection therewith.
16
Section 6.02 Compliance with Law. The Borrower shall:
(a) comply with the requirements of all Applicable Laws and orders of any Governmental Authority to the extent that the failure to comply therewith could (in the aggregate) reasonably be expected to have a Material Adverse Effect, except where (and for so long as) the necessity of compliance therewith is being contested in good faith by appropriate proceedings; and
(b) shall not use the proceeds of the Loan in any manner that would, or that could reasonably be expected to, cause the Lender to be in violation of any Applicable Law (it being understood that if the proceeds are used to fund Loan B, the requirements of this covenant shall be satisfied).
Section 6.03 No Modifications to Loan B Documents. The Borrower will not consent to any amendment or other modification or waiver of any Loan B Document, or consent to any departure by Rivian Party or Rivian SPV therefrom, without the prior written consent of the Lender.
Section 6.04 Indebtedness. The Borrower will not create, incur, assume or suffer to exist any Indebtedness, other than Indebtedness permitted under the terms of the Joint Venture Agreement.
Section 6.05 Liens. The Borrower will not create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than Liens to the extent permitted to be incurred under the terms of the Joint Venture Agreement.
Section 6.06 Restricted Payments. The Borrower will not declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, other than to the extent permitted under the terms of the Joint Venture Agreement.
Section 6.07 Investments. The Borrower will not make any Investments, other than
(a) Investments made pursuant to the Loan B Documents; and
(b) Investments to the extent permitted under the terms of the Joint Venture Documents.
Section 6.08 Further Assurances. The Borrower hereby agrees promptly upon the reasonable request of the Lender:
(a) to correct any material defect or error that may be discovered in any Finance Document or in the execution, acknowledgement, filing or recordation thereof; and
(b) to do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances and other instruments from time to time to (i) carry out more effectively the purposes of the Finance Documents, (ii) to the fullest extent permitted by applicable law, subject the Collateral to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder, and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Lender for its benefit the rights granted or now or hereafter intended to be granted to the Lender for its benefit under any Finance Document or under any other instruments executed in connection with any Finance Document to which the Borrower is or is to be a party.
17
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. The following specified events shall be “Events of Default” for the purposes of this Agreement and the other Finance Documents:
(a) (i) any payment of any principal of the Loan shall not be made in accordance herewith or, to the extent in full force and effect, in accordance with the Payment Direction Agreement, in full when due(provided, that except in the case of principal due on the Final Maturity Date, if any such principal payment is not paid when due as a result of a technical or administrative error, it will not result in an Event of Default hereunder so long as such principal payment is made within three (3) Business Days of the date such principal payment was due), or (ii) the Borrower shall default for five (5) Business Days or more in the payment in accordance herewith or, to the extent in full force and effect, in accordance with the Payment Direction Agreement, of any interest or other amount whatsoever payable under this Agreement or any other Finance Document; or
(b) any representation or warranty made by the Borrower in any Finance Document or that is contained in any certificate, document or other statement furnished at any time pursuant to or in connection with any Finance Document shall prove to have been incorrect in any material respect on or as of the date made (and in the case of any representation or warranty made or deemed made on or after the Funding Date, such representation or warranty shall remain untrue (in any material respect or in any respect, as applicable) or uncorrected for a period of thirty (30) calendar days after the earlier of the date (i) a Responsible Officer of the Borrower obtains knowledge thereof and (ii) written notice thereof shall have been given to the Borrower by the Lender); or
(c) the Borrower shall default in the observance or performance of any covenant contained in Section 6.01, 6.03, 6.04, 6.05, 6.06 or 6.07; or
(d) the Borrower shall default in the observance or performance of any other covenant or agreement contained in the Finance Documents (other than as provided in clauses (a), (b) and (c)), and such default shall continue unremedied for a period of thirty (30) calendar days after the earlier of the date (i) a Responsible Officer of the Borrower obtains knowledge thereof and (ii) written notice thereof shall have been given to the Borrower by the Lender; or
(e) an Event of Default (as defined in the Loan B Agreement) has occurred and is continuing; or
(f) (i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed, in each case seeking liquidation, reorganization, arrangement, adjustment, an adjudication of bankruptcy, insolvency, judicial management, reorganization, administration or relief of debtors or other similar relief in respect of the Borrower or any of its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, including the Bankruptcy Code, or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator, or similar official for the Borrower or for a substantial part of its assets shall have been entered and, in any such case described in clause (i) or (ii) hereof, such proceeding or petition shall continue undismissed or shall be not stayed for a period of 60 or more days; or
(g) the Borrower shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization, arrangement, adjustment, an adjudication of bankruptcy, insolvency, judicial management, reorganization, administration or relief of debtors or other similar relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, including the Bankruptcy Code, (ii) consent to the institution of any proceeding or petition described in clause (i) above, apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Person, or for a substantial part of its assets, (iii) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (iv) make a general assignment for the benefit of creditors; or
18
(h) (i) the validity of any Finance Document shall be contested in writing by Rivian SPV, Rivian Parent or any Governmental Authority, or (ii) any Finance Document shall for any reason be terminated or become invalid, ineffective or unenforceable (in each case, other than in accordance with its terms), and such termination, invalidity or ineffectiveness, to the extent capable of being cured, is not cured (whether by entering into a new agreement, an amendment, modification, or otherwise correcting such defect) within thirty (30) days after notice thereof from the Lender; or
(i) any governmental or other authorization, consent, license, permit, concession, approval (including any foreign exchange approval) or authorization which is necessary or appropriate under any Applicable Law for the execution, delivery or performance by the Borrower of any obligation under any Finance Document or to make any Finance Document legal, valid, enforceable and admissible in evidence shall not be obtained or shall be withdrawn or shall cease to be in full force and effect or shall be modified in a manner, and such failure to obtain, withdrawal, failure to be in full force and effect, or modification, to the extent capable of being cured, is not cured (whether by entering obtaining a new authorization, consent, license, permit, concession, approval or authorization, or otherwise correcting such defect) within thirty (30) days after the earlier of the date (i) a Responsible Officer of the Borrower obtains knowledge thereof and (ii) written notice thereof shall have been given to the Borrower by the Lender); or
(j) (i) any Collateral Document or any Lien granted thereunder shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Borrower, (ii) Rivian SPV or Rivian Parent shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability, or (iii) except as permitted under the Collateral Documents, any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien (subject to Liens permitted pursuant to Section 6.05).
Section 7.02 Remedies Upon an Event of Default. If an Event of Default occurs (other than an event with respect to the Borrower described in Sections 7.01(f) or 7.01(g)), and at any time thereafter during the continuance of such Event of Default, the Lender may, by notice to the Borrower, take any or all of the following actions, at the same or different times:
(a) prior to the Borrowing Request Date, if (i) the Commitment (as defined in the Loan B Agreement) has been terminated in accordance with its terms or (ii) an Event of Default described in Section 7.01(h)(i) (if caused by actions of Rivian SPV or Rivian Parent and not a Governmental Authority) or Section 7.01(j)(ii) occurs, terminate the Commitment and thereupon the Commitment shall terminate immediately;
(b) on or after the Borrowing Request Date, if (i) the Commitment (as defined in the Loan B Agreement) has been terminated in accordance with its terms or (ii) an Event of Default occurs, terminate the Commitment and thereupon the Commitment shall terminate immediately;
(c) declare the Loan then outstanding (including any amount outstanding as a result of a PIK Election) to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loan so declared to be due and payable, together with accrued interest thereon and all other obligations of the Borrower accrued hereunder and under any other Finance Document including any break funding payment, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; or
(d) exercise all rights and remedies available to it under the Finance Documents and Applicable Law.
19
If an Event of Default described in Sections 7.01(f) or 7.01(g) occurs with respect to the Borrower, the Commitment shall automatically terminate and the principal of the Loan then outstanding, together with accrued interest thereon and other obligations of the Borrower accrued hereunder and under any other Finance Document including any break funding payment, shall automatically become due and payable, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
In addition to any other rights and remedies granted to the Lender in the Finance Documents, the Lender may exercise all rights and remedies of a secured party under the New York Uniform Commercial Code or any other Applicable Law. The Lender shall apply the net proceeds of any action taken by it pursuant to this Article VII, after deducting any costs and expenses payable to the Lender under Section 8.01, in such order as the Lender may elect, and only after such application and after the payment by the Lender of any other amount required by any provision of law, including Section 9-615(a)(3) of the New York Uniform Commercial Code, need the Lender account for the surplus, if any, to the Borrower.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. Except as otherwise agreed in writing by the Borrower and the Lender, each of the Borrower and Lender shall pay its own out-of-pocket expenses (including reasonable and documented fees and disbursements of external counsel) incurred in connection with the preparation, negotiation, execution and delivery of the Finance Documents (including any amendment, restatement, supplement or other modification thereof, or any consent or waiver thereunder), except as provided in the next sentence. Notwithstanding the foregoing, the parties hereto acknowledge and agree that, in the event of any dispute hereunder between the parties hereto resulting in litigation or arbitration proceedings, the legal expenses of the prevailing party shall be reimbursed by the other party thereto.
(b) Indemnification. The Borrower shall indemnify the Lender and each Related Party of the Lender (other than the Borrower and each of its directors, officers, employees, agents and advisors) (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) (“Losses”), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party (other than Rivian Parent and its Related Parties) arising out of, in connection with, or as a result of (i) the execution or delivery of each Finance Document or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, and the consummation of the transactions contemplated hereby or thereby, in each case, only to the extent relating to the Loan (and not the joint venture or the other transactions contemplated by the Joint Venture Documents), (ii) the Loan or the use or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. This Section 8.01(b) shall
20
not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. For avoidance of doubt, the last sentence of Section 8.01(a), and not the indemnity obligations in this Section 8.01(b), shall apply to any dispute hereunder between the parties hereto.
(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, each party hereto agrees that it will not assert, and hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Finance Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loan or the use of the proceeds thereof; provided that such waiver shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct. No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with any Finance Document or the transactions contemplated hereby or thereby, except to the extent that such damages are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee.
(d) Payments. All amounts due under this Section 8.01 shall be payable in Dollars to the Lender’s bank account specified by the Lender in writing, not later than ten Business Days after demand therefor.
(e) Survival. The agreements in this Section 8.01 shall survive the replacement of the Lender, the termination of the Commitment and the repayment, satisfaction or discharge of all other Obligations.
Section 8.02 Amendments and Waivers, Etc. Except as otherwise expressly set forth in this Agreement, no amendment or waiver of any provision of this Agreement, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Lender and the Borrower, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 8.03 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (NOT INCLUDING SUCH STATE’S CONFLICT OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 8.04 Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, sent by fax or e-mail to the address, fax number or e-mail address specified for such Person on Schedule 8.04. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by e-mail and fax shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Each of the Borrower and the Lender may change its address or fax number for notices and other communications hereunder by notice to the other parties hereto.
Section 8.05 Table of Contents; Headings. The table of contents and captions and section headings appearing herein are inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.
21
Section 8.06 Survival. All representations and warranties made hereunder or in any other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof until indefeasible payment in full of the Obligations. Such representations and warranties have been or will be relied upon by the Lender, regardless of any investigation made by it or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default at the time of the Loan, and shall continue in full force and effect as long as the Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or the Commitment shall remain outstanding. The obligations of the Borrower under Section 3.01 and Section 8.01 shall survive the repayment of the Loan and the termination of the Commitment and, in the case of any assignment of the Loan hereunder, shall survive the making of such assignment with respect to the assigning Lender.
Section 8.07 Successors and Assigns. The Lender and the Borrower may not assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of all parties hereto (and any attempted assignment or transfer by the Lender or Borrower without such consent shall be null and void), except that the Lender may assign or otherwise transfer all or a portion of the outstanding principal amount of the Loan (in an amount that is an integral multiple of $1,000,000 and not less than $25,000,000) or any of the Lender’s rights and obligations hereunder to an Eligible Assignee. Upon consummation of any such assignment or transfer of the outstanding principal amount of the Loan, the Eligible Assignee thereof shall become a “Lender” hereunder, and if there is more than one “Lender” hereunder as a result thereof, references herein to the “Lender” herein shall be references to one or more “Lenders” as the context may require.
Section 8.08 Interest Rate Limitation. Notwithstanding anything to the contrary contained herein, the interest paid or agreed to be paid hereunder shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (the “Maximum Rate”). In case the applicable interest rate payable hereunder exceeds the Maximum Rate at any time, the Borrower shall pay interest at the Maximum Rate at such time. If the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loan or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Lender exceeds the Maximum Rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
Section 8.09 Submission to Jurisdiction; Venue; Waiver of Jury Trial.
(a) THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE LENDER, OR ANY RELATED PARTY OF THE LENDER IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER FINANCE DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
22
AGREEMENT OR IN ANY OTHER FINANCE DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCE DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY FINANCE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.10 Judgment Currency. All payments made under the Finance Documents shall be made in the currency expressly required by the Finance Documents (to the extent required by the terms hereof, the applicable “Agreement Currency”). If for any reason any payment made hereunder is made in a currency (the “Other Currency”) other than the applicable Agreement Currency, then to the extent that the payment actually received by the Lender, when converted into the applicable Agreement Currency at the “Rate of Exchange” (as defined below) on the date of payment (or, if conversion on such date is not practicable, as soon thereafter as it is practicable for the Lender to purchase the applicable Agreement Currency) falls short of the amount due under the terms of this Agreement, the Borrower shall, as a separate and independent obligation of the Borrower, indemnify the Lender and hold the Lender harmless against the amount of such shortfall. All foreign exchange losses incurred in connection with the conversion of any Collateral in accordance with the Finance Documents or any proceeds thereof or any other amounts received by the Lender denominated in a currency other than the Agreement Currency to the applicable Agreement Currency specified therefor shall be borne by the Borrower. As used in this Section 8.10, the term “Rate of Exchange” means the rate at which the Lender is able on the relevant date to purchase the applicable Agreement Currency with the Other Currency and shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into, the applicable Agreement Currency.
Section 8.11 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Any signature to this Agreement may be delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by Applicable Law. For the avoidance of doubt, the foregoing also applies to any amendment, extension or renewal of this Agreement. Each of the parties hereto represents and warrants to the other parties hereto that it has the corporate or other organizational capacity and authority to execute this Agreement through electronic means and there are no restrictions for doing so in that party’s constitutive documents.
Section 8.12 Severability. To the fullest extent permitted by law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction, and the remaining portion of such provision and all other remaining provisions hereof will be construed to render them enforceable.
23
Section 8.13 No Waiver; Remedies. No failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 8.14 Entire Agreement. As of the date hereof, the Finance Documents constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior or contemporaneous agreements and understandings of such Persons, oral or written, relating to the subject matter hereof.
Section 8.15 Revival and Reinstatement. If the Lender repays, restores or returns, in whole or in part, any payment or property previously paid or transferred to the Lender in full or practical satisfaction of any Obligation, because the payment or transfer (the “Transfer”) was declared to be void, voidable, or otherwise recoverable under any Applicable Law, or because the Lender elects to repay, restore, or return, in whole or in part, in connection with a claim that the Transfer was void, is voidable, or is otherwise recoverable, then as to any amount that the Lender repays, restores, or returns, and as to all reasonable costs, expenses, and attorney’s fees of the Lender related to the Transfer or to the repayment, restoration, return, or voidability of the Transfer, the liability of the Borrower will automatically and immediately be reinstated and restored and will exist as though the Transfer had never been made.
Section 8.16 Confidentiality. Notwithstanding anything to the contrary herein or in the Finance Documents, the parties hereto agree that any exchange of information between the parties hereto shall be subject to applicable antitrust laws and the terms of the Information Sharing Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.
| RIVIAN AND VW GROUP TECHNOLOGY, LLC,
as Borrower | ||
| By: | ||
| Name: | ||
| Title: | ||
[Loan A Agreement – Signature Page]
| VOLKSWAGEN SPECTER LLC, | ||
| By: | Volkswagen International America Inc., in its capacity | |
| as Sole Member of Volkswagen Specter LLC | ||
| as Lender | ||
| By: | ||
| Name: | Christopher McGee | |
| Title: | Director |
| By: | ||
| Name: | Lauren Kincaid | |
| Title: | President and Secretary |
[Loan A Agreement – Signature Page]
Exhibit 10.4
EXECUTION VERSION
LOAN B AGREEMENT
Dated as of November 13, 2024
among
RIVIAN JV SPV, LLC,
as Borrower,
RIVIAN AUTOMOTIVE, INC.,
as Parent
and
RIVIAN AND VW GROUP TECHNOLOGY, LLC,
as Lender
Table of Contents
| Page | ||||||
| ARTICLE I DEFINITIONS | 1 | |||||
| Section 1.01 |
Certain Defined Terms |
1 | ||||
| Section 1.02 |
Other Interpretive Provisions |
11 | ||||
| Section 1.03 |
Accounting Terms; Changes in GAAP |
11 | ||||
| ARTICLE II THE LOAN, ETC. | 12 | |||||
| Section 2.01 |
The Loan |
12 | ||||
| Section 2.02 |
Disbursement |
12 | ||||
| Section 2.03 |
Repayment |
12 | ||||
| Section 2.04 |
Interest |
13 | ||||
| Section 2.05 |
Payments |
14 | ||||
| Section 2.06 |
Set-Off |
14 | ||||
| Section 2.07 |
Voluntary Prepayments |
14 | ||||
| Section 2.08 |
Interest Rate |
14 | ||||
| Section 2.09 |
Compensation for Losses |
14 | ||||
| ARTICLE III TAXES, ETC. | 15 | |||||
| Section 3.01 |
Taxes |
15 | ||||
| ARTICLE IV CONDITIONS PRECEDENT | 16 | |||||
| Section 4.01 |
Conditions to Effective Date |
16 | ||||
| Section 4.02 |
Conditions to Funding Date |
17 | ||||
| ARTICLE V REPRESENTATIONS AND WARRANTIES |
18 | |||||
| Section 5.01 |
Status and Licensing |
18 | ||||
| Section 5.02 |
Power and Authority; Enforceable Obligations |
18 | ||||
| Section 5.03 |
Compliance with Law and Other Instruments |
18 | ||||
| Section 5.04 |
Governmental Approvals |
19 | ||||
| Section 5.05 |
Solvency |
19 | ||||
| Section 5.06 |
Taxes |
19 | ||||
| Section 5.07 |
ABL Loan Documents and 2026 Notes Documents |
19 | ||||
| Section 5.08 |
Separateness |
19 | ||||
| ARTICLE VI COVENANTS | 19 | |||||
| Section 6.01 |
Notice of Default or Material Adverse Effect |
19 | ||||
| Section 6.02 |
Compliance with Law |
20 | ||||
| Section 6.03 |
Notices under ABL Loan Documents and 2026 Notes Documents |
20 | ||||
| Section 6.04 |
Indebtedness |
20 | ||||
| Section 6.05 |
Liens |
20 | ||||
| Section 6.06 |
Restricted Payments |
20 | ||||
| Section 6.07 |
Investments |
20 | ||||
| Section 6.08 |
Separateness |
21 | ||||
| Section 6.09 |
Further Assurances |
22 | ||||
| ARTICLE VII EVENTS OF DEFAULT | 22 | |||||
| Section 7.01 |
Events of Default |
22 | ||||
| Section 7.02 |
Remedies Upon an Event of Default |
25 | ||||
| ARTICLE VIII MISCELLANEOUS | 26 | |||||
| Section 8.01 |
Expenses; Indemnity; Damage Waiver |
26 | ||||
| Section 8.02 |
Amendments and Waivers, Etc. |
27 | ||||
| Section 8.03 |
Governing Law |
27 | ||||
| Section 8.04 |
Notices |
27 | ||||
| Section 8.05 |
Table of Contents; Headings |
27 | ||||
| Section 8.06 |
Survival |
27 | ||||
| Section 8.07 |
Successors and Assigns |
27 | ||||
| Section 8.08 |
Interest Rate Limitation |
28 | ||||
| Section 8.09 |
Submission to Jurisdiction; Venue; Waiver of Jury Trial |
28 | ||||
| Section 8.10 |
Judgment Currency |
29 | ||||
| Section 8.11 |
Execution in Counterparts |
30 | ||||
| Section 8.12 |
Severability |
30 | ||||
| Section 8.13 |
No Waiver; Remedies |
30 | ||||
| Section 8.14 |
Entire Agreement |
30 | ||||
| Section 8.15 |
Revival and Reinstatement |
30 | ||||
| Section 8.16 |
Confidentiality |
31 | ||||
| Section 8.17 |
No Liability |
31 |
| SCHEDULES AND EXHIBITS | ||
| SCHEDULE 1.01 | Surviving Covenants – Illustrative Examples | |
| SCHEDULE 8.04 | Addresses for Notices | |
| EXHIBIT A | Form of Pledge Agreement | |
| EXHIBIT B | Form of Borrowing Request | |
| EXHIBIT C | Form of Solvency Certificate | |
| EXHIBIT D | Form of Assignment and Assumption Notice | |
ii
LOAN AGREEMENT
This LOAN AGREEMENT (this “Agreement”), is entered into as of November 13, 2024, between RIVIAN JV SPV, LLC, a limited liability company organized under the laws of Delaware, as the borrower (the “Borrower”), RIVIAN AUTOMOTIVE, INC., a corporation organized under the laws of Delaware (the “Parent”) (it being understood that Parent is entering into this Agreement solely for the purposes of the sections specified on its signature page hereto) and RIVIAN AND VW GROUP TECHNOLOGY, LLC, a limited liability company organized under the laws of Delaware, as the lender (the “Lender”).
RECITALS
WHEREAS, the Borrower desires to obtain the Loan (as defined below) in a principal amount equal to $1,000,000,000 on the Funding Date, and the Lender is willing, on the terms and subject to the conditions hereinafter set forth, to make the Loan in such amount to the Borrower on the Funding Date, subject to the satisfaction or waiver of all the conditions set forth in Article IV hereof; and
WHEREAS, all or substantially all of the proceeds of the Loan will be distributed by the Borrower to the Parent for general corporate purposes;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“2026 Notes Documents” shall mean the 2026 Notes Indenture, each of the global note certificates issued thereunder, the Security Agreement (as defined in the 2026 Notes Indenture) and the Intercreditor Agreement (as defined in the 2026 Notes Indenture) or, in the case of any refinancing or replacement of the original 2026 Notes Indenture, all comparable definitive documentation with respect thereto.
“2026 Notes Indenture” shall mean that certain Indenture, dated as of October 8, 2021, between, among others, Rivian Holdings, Rivian, LLC, Rivian Automotive, LLC and Wilmington Trust, National Association as trustee and as collateral agent, as amended, restated, supplemented, or otherwise modified from time to time or as may be refinanced or replaced from time to time (whether such refinancing or replacement takes the form an indenture, term loan, revolving credit agreement or other credit facility); provided that any such refinancing or replacement thereof will only be deemed to be the “2026 Notes Indenture” hereunder if such refinancing or replacement constitutes Material Indebtedness, it being understood that if the 2026 Notes Indenture is refinanced or replaced with more than one credit facility that constitutes Material Indebtedness, each such credit facility shall be deemed to be the “2026 Notes Indenture” hereunder.
“ABL Credit Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of April 19, 2023, among, among others, Rivian Holdings, Rivian, LLC, Rivian Automotive, LLC and JPMorgan Chase Bank, N.A., as administrative agent, as amended, restated, supplemented, or otherwise modified from time to time or as may be refinanced or replaced from time to time (whether such refinancing or replacement takes the form of another revolving credit agreement, term loan, indenture or other credit facility); provided that any such refinancing or replacement thereof will only be deemed to be the “ABL Credit Agreement” hereunder if such refinancing or replacement constitutes Material Indebtedness, it being understood that if the ABL Credit Agreement is refinanced or replaced with more than one credit facility that constitutes Material Indebtedness, each such credit facility shall be deemed to be the “ABL Credit Agreement” hereunder.
1
“ABL Loan Documents” shall mean the ABL Credit Agreement, the Guarantee and Collateral Agreement (as defined in the ABL Credit Agreement) and the Intercreditor Agreement (as defined in the ABL Credit Agreement) or, in the case of any refinancing or replacement of the original ABL Credit Agreement, all comparable definitive documentation with respect thereto.
“Acceptable Bank” means a Bank that is reasonably acceptable to the Lender.
“Additional Amounts” shall have the meaning set forth in Section 3.01(a).
“Affiliate” shall mean, as applied to any Person, any other Person directly or indirectly Controlling, Controlled by, or under direct or indirect common Control with, such Person. Notwithstanding the foregoing, neither VW AG nor any of its Affiliates will be deemed to be an Affiliate of any other Person as a result of the beneficial ownership of Equity Interests of Parent.
“Agreement” shall have the meaning set forth in the introduction hereto.
“Agreement Currency” shall have the meaning set forth in Section 8.10.
“Applicable Law” shall mean, as to any Person, any applicable statute, law, regulation, ordinance, rule, judgment, rule of common law, order, decree, approval, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, rule, regulation or other governmental restriction or any similar form of decision of, or determination by (or any interpretation or administration of any of the foregoing by), any Governmental Authority binding upon such Person or to which such a Person is subject, whether in effect as of the date hereof or hereafter.
“Assigned Rights and Obligations” shall mean (i) all of the Lender’s rights and obligations in its capacity as a Lender under this Agreement and any other documents or instruments delivered pursuant hereto, and (ii) to the extent permitted to be assigned under Applicable Law, all claims, suits, causes of action and any other right of the Lender (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with this Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) hereof.
“Assignment and Assumption Notice” shall mean a notice from VW SPV substantially in the form of Exhibit D hereto.
“Availability Period” shall mean the period from and including October 1, 2026 to and including October 30, 2026.
“Bank” means a bank or other financial institution that solicits, receives, or accepts money or its equivalent for deposit as a business under authority granted by the appropriate U.S. federal regulatory agency.
“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.
“Borrower” shall have the meaning set forth in the preamble hereto.
“Borrowing Request” shall have the meaning set forth in Section 4.02(b).
“Borrowing Request Date” shall mean the date on which the Borrowing Request is delivered to the Lender.
2
“Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions are authorized or required to close in New York, New York or in Lower Saxony, Germany.
“Capitalized Lease” shall mean, as applied to any Person, any lease of any Property (whether real, personal or mixed) with respect to which the discounted present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.
“Change of Control” shall mean the Parent ceases to own, beneficially and of record, directly or indirectly, one hundred per cent. (100%) of the issued and outstanding Equity Interests of the Borrower (excluding any Equity Interests held by VW SPV (or any transferee thereof)).
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
“Collateral” shall mean all assets and property, now owned or hereafter acquired, subject to, or purported to be subject to, Liens created pursuant to any Collateral Document and shall include any assets or property subject to replacement Liens or adequate protection Liens in favor of the Lender.
“Collateral Documents” shall mean the Pledge Agreement and any other agreements, instruments or documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Loan and all other obligations hereunder.
“Commitment” shall mean the commitment of the Lender to make the Loan pursuant to Section 2.01 of this Agreement in a principal amount equal to $1,000,000,000.
“Compliance Certificate” shall mean a certification of Parent or any of its Subsidiaries as to its compliance with any financial covenant provided for in the 2026 Notes, the ABL Credit Agreement, or the definitive documentation for any other Material Indebtedness; provided that notwithstanding anything in this Agreement to the contrary, any financial information, operating data or competitively sensitive information contained therein may be redacted, and any schedule, attachment, or exhibit thereto may be redacted or excluded, so long as the unredacted information included therein is sufficient to demonstrate on its face the compliance or non-compliance, as the case may be, with the applicable financial covenant.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Default” shall mean any of the events specified in Section 7.01, whether or not any requirement for the giving of notice or lapse of time or both has been satisfied.
“Development and Services Agreement” shall mean that certain Development and Services Agreement, dated as of the date hereof, among Rivian Automotive, LLC, VW AG and the Lender.
“Dollars” and the “$” sign shall mean the lawful currency of the United States of America.
“Effective Date” shall mean the date on which all of the conditions set forth in Section 4.01 hereof have been fulfilled or waived by the Lender and VW SPV.
“Eligible Assignee” shall mean (i) VW SPV and any of VW SPV’s Affiliates that is a “United States person” within the meaning of Section 7701(a)(30) of the Code or (ii) any other Person approved by the Borrower, such approval not to be unreasonably withheld, conditioned or delayed.
“Equity Interests” shall mean, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in)
3
such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“Event of Default” shall have the meaning set forth in Section 7.01.
“Final Maturity Date” shall mean the date which is ten (10) years following the Funding Date.
“Finance Documents” shall mean this Agreement, the Collateral Documents, the Borrowing Request, the Payment Direction Agreement and any other documents executed and delivered by the Borrower in connection with the foregoing and stated to be a Finance Document pursuant to the terms of such document, as such documents may be amended, restated, supplemented and modified from time to time.
“Funding Date” shall mean the date the Loan is funded hereunder.
“GAAP” shall mean, subject to Section 1.03, United States generally accepted accounting principles as in effect as of the date of determination thereof.
“Governmental Authority” shall mean the government of the United States or any other nation or government, any state or municipality, any multi-lateral or similar organization or any other agency, instrumentality, authority, regulatory body, court, tribunal, central bank or political subdivision thereof and any entity exercising executive, legislative, judicial, taxing, monetary, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” shall mean any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing (whether pursuant to a guaranty or otherwise) any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any other manner the holder of such Indebtedness of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.
“Hedging Agreements” shall mean (a) any and all interest rate protection agreements, interest rate future agreements, interest rate option agreements, interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate hedge agreements, foreign exchange contracts, currency swap agreements, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts or any other similar transactions or any combination of the foregoing (including any option to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, traded at the over-the-counter or standardized markets and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or are governed by any form of master agreement published by the International Swaps
4
and Derivative Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (such master agreement, together with any related schedules, a “Master Agreement”) including any such obligations or liabilities under any Master Agreement.
“Hedging Costs” means, in respect of any event set forth in Section 2.09, any costs, losses or expenses attributable or in connection with such event as a result of terminating, liquidating, settling or offsetting any hedging transactions previously entered into by VW SPV or its Affiliates to hedge any risks in connection with Loan A, but only to the extent such costs, losses or expenses are reimbursable in accordance with Section 2.09 of the Loan A Agreement.
“Indebtedness” shall mean, with respect to any Person at any date of determination (without duplication): (a) all indebtedness of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit, financial guaranty insurance policies or similar instruments; (d) to the extent reflected on the balance sheet of such Person in accordance with GAAP, all obligations of such Person for the deferred purchase price of Property or services, which purchase price is due more than 6 months after the date of taking delivery and title to such Property or completion of the services rendered, as applicable; provided that current trade payables incurred in the ordinary course of such Person’s business shall not constitute “Indebtedness”; (e) all obligations of such Person as lessee under Capitalized Leases (but not operating leases); (f) all net payment obligations of such Person in respect of Hedging Agreements (determined by reference to the marked-to-market value thereof); (g) all Guarantees of such Person in respect of obligations of the kind referred to in clauses (a) through (f); and (h) all Indebtedness of other Persons secured by a Lien on any Property of such Person, whether or not such Indebtedness is assumed by such Person.
“Indemnified Taxes” shall have the meaning set forth in Section 3.01(a).
“Indemnitee” shall have the meaning set forth in Section 8.01(b).
“Information Sharing Agreement” shall mean that certain Information Sharing Agreement, dated as of the date hereof, among VW AG, Parent and the Lender.
“Interest Payment Date” shall mean the last day of each Interest Period (including the Final Maturity Date).
“Interest Period” shall mean (a) initially, the period commencing on and including the Funding Date and ending on (but excluding) the numerically corresponding date twenty four (24) months thereafter and (b) thereafter, each period commencing on (and including) the last day of the preceding Interest Period and ending on (but excluding) the numerically corresponding day that is six (6) months thereafter; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) no Interest Period shall extend beyond the Final Maturity Date.
“Interest Rate” shall have the meaning set forth in Section 2.08.
“Investment” shall mean, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any
5
arrangement pursuant to which the investor incurs Indebtedness of the type referred to in clause (g) of the definition of “Indebtedness” in respect of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment but giving effect to any returns or distributions of capital or repayment of principal actually received in case by such Person with respect thereto.
“IRS” shall mean the United States Internal Revenue Service.
“Joint Venture Agreement” shall mean that certain Amended and Restated Limited Liability Company Agreement, dated as of the date hereof, among the Lender, the Borrower and VW SPV.
“Joint Venture Documents” shall mean the Transaction Agreement, the Joint Venture Agreement and all other agreements, Organizational Documents and instruments entered into or agreed between the parties thereto or their respective Affiliates contemplated thereby or entered into in connection therewith (other than the Finance Documents), as such agreements, documents and instruments may be amended, restated, supplemented and modified from time to time.
“Lender” shall have the meaning set forth in the introduction hereto.
“Lien” shall mean any mortgage, deed of trust, lien, pledge, charge, hypothecation, assignment, deposit arrangement, security trust, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, or any other contractual or statutory arrangement or provision having substantially the same economic, financial or operational effect as any of the foregoing).
“Loan” shall have the meaning set forth in Section 2.01. All references to the Loan shall include any principal repayment instalments and interest payments capitalized and added to the principal amount thereof pursuant to Section 2.05(b).
“Loan A” shall have the meaning assigned to the term “Loan” in the Loan A Agreement.
“Loan A Agreement” shall mean that certain Loan Agreement, dated as of or about the date hereof, to be executed by VW SPV, as lender, and the Lender, as borrower.
“Loan A Borrowing Request” shall have the meaning assigned to the term “Borrowing Request” in the Loan A Agreement.
“Loan A Funding Date” shall have the meaning assigned to the term “Funding Date” in the Loan A Agreement.
“Loan Parties” shall mean each of the Borrower and the Parent.
“Material Adverse Effect” shall mean a material adverse effect on (a) the business, assets, operations, liabilities (actual or contingent) or financial condition of any Loan Party and its Subsidiaries taken as a whole, (b) the validity or enforceability of the Finance Documents, taken as a whole, (c) the ability of the Loan Parties, taken as a whole, to perform their material obligations under the Finance Documents, taken as a whole, or (d) the rights of, remedies of or benefits available to the Lender under the Finance Documents, taken as a whole.
“Material Indebtedness” shall have the meaning set forth in Section 7.01(e).
“Maximum Rate” shall have the meaning set forth in Section 8.08.
6
“Obligations” shall mean all of the obligations and liabilities of the Borrower to the Lender under or in connection with any Finance Document (as any of the foregoing may from time to time be respectively amended, modified, substituted, extended or renewed), direct or indirect, absolute or contingent, due or to become due, now or hereafter existing (including interest which, but for the filing of a petition in bankruptcy with respect to the Borrower, would have accrued on any Obligation, whether or not a claim is allowed against the Borrower for such interest in the related bankruptcy proceeding).
“Organizational Documents” shall mean, with respect to any Person, as applicable, the charter, articles or certificate of organization or incorporation and bylaws, memorandum of association, articles of association, statute or other organizational or governing documents of such Person under Applicable Law, and any amendments thereof.
“Other Currency” shall have the meaning set forth in Section 8.10.
“Other Event of Default” shall mean any default under any covenant, agreement or other provision of the ABL Credit Agreement, the 2026 Notes Indenture or the definitive documentation relating to other Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, the effect of which default results in the holder or holders or beneficiary or beneficiaries of the ABL Credit Agreement, the 2026 Notes Indenture or other Material Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) declaring, or being permitted to declare, such Indebtedness under the ABL Credit Agreement, the 2026 Notes Indenture or other Material Indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness under the ABL Credit Agreement, the 2026 Notes Indenture or other such Material Indebtedness to be made, prior to its stated maturity, it being understood that the foregoing does not apply to any change of control offer, asset sale offer, asset sale sweep, excess cash flow sweep, special mandatory redemption in connection with acquisition financing, or similar provision which does not constitute a default.
“Payment Direction Agreement” shall mean an agreement to be executed by the Borrower, the Lender and VW SPV pursuant to which the Lender shall irrevocably direct the Borrower to pay principal and interest payments under this Agreement (other than the amount, if any, by which any interest payments due hereunder exceed the interest payments due under the Loan A Agreement) directly to VW SPV in form and substance reasonably satisfactory to the Borrower and VW SPV.
“Permitted Investments” means any of the following types of Investments (including for the avoidance of doubt, cash), to the extent owned by the Borrower:
| (a) | Dollars to the extent held in a deposit account at an Acceptable Bank; and |
| (b) | investments in certificates of deposit, banker’s acceptances and time deposits issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, an Acceptable Bank. |
“Permitted Liens” shall mean:
| (a) | Liens securing Indebtedness under the Finance Documents; |
| (b) | Liens (i) of a collection bank arising under Section 4-208 or 4-210 of the UCC on the items in the course of collection, (ii) in favor of a banking or other financial institution arising as a matter of law encumbering deposits or other funds maintained with a financial institution (including the right of setoff) that are within the general parameters customary in the banking industry and (iii) that are customary rights of setoff relating to the establishment of depositary relations with banks or other deposit taking financial institutions in the ordinary course of business (and for, the avoidance of doubt, not given in connection with the issuance of Indebtedness); |
7
| (c) | Liens for taxes, assessments or governmental charges (i) that are not overdue for a period of more than sixty days, or (ii) that are being contested in good faith and by appropriate actions diligently conducted and for which appropriate reserves have been established in accordance with GAAP; |
| (d) | Liens arising from judgments or orders for the payment of money not constituting an Event of Default under Section 7.01; and |
| (e) | solely for purposes of Section 6.05(a), Liens imposed by law incurred in the ordinary course of business for sums not constituting borrowed money that are not overdue for a period of more than sixty days or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP (if so required). |
“Person” shall mean any individual, corporation, company, voluntary association, partnership, limited liability company, joint venture, trust, unincorporated organization, Governmental Authority or other entity of whatever nature.
“PIK Election” shall mean (a) with respect to principal repayment instalments due in accordance with Section 2.03, the election of the Borrower, by irrevocable written notice to the Lender and VW Specter, at least ten (10) Business Days in advance of the date any such principal repayment instalment is due, to be deemed to have paid such principal repayment instalment and the next succeeding principal repayment instalment with the gross cash proceeds of additional borrowings of the Loan, such that the aggregate principal amount of the Loan outstanding will remain unchanged after giving effect thereto, and (b) with respect to interest payments due in accordance with Section 2.04, the election of the Borrower, by irrevocable written notice to the Lender at least ten (10) Business Days in advance of any Interest Payment Date, to pay the interest due on such Interest Payment Date and the next succeeding Interest Payment Date by increasing the aggregate principal amount of the Loan outstanding by the amount of such interest payment. Written notice of each PIK Election shall specify whether such PIK Election is being made with respect to interest or with respect to principal repayment instalments (it being understood that the same PIK Election may not be made with respect to both interest and principal repayment instalments).
“Pledge Agreement” shall mean that certain Pledge Agreement governed by New York law to be executed by the Borrower and the Lender pursuant to Section 4.02, substantially in the form of Exhibit A hereto.
“Property” of any Person shall mean any property, asset, rights or revenues, or interest therein, of such Person, including any accounts receivable.
“Rate of Exchange” shall have the meaning set forth in Section 8.10.
“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Responsible Officer” of a Person shall mean the Chairman, Chief Executive Officer, President, any Executive Director, Director, Vice President, Treasurer, Assistant Treasurer or other similar officer of such Person, in each case authorized to the extent required by a board resolution or shareholder meeting; provided that such officer or director is then authorized to bind such Person.
8
“Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to such Person’s shareholders, partners or members (or the equivalent Persons thereof).
“Rivian Holdings” shall mean Rivian Holdings, LLC, a Delaware limited liability company.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“SEC” means the U.S. Securities Exchange Commission.
“Solvent (Borrower)” shall mean, when used with respect to the Borrower, as of any date of determination, (a) the Borrower will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (b) the Borrower will be able to pay its debts as they mature, assuming capital contributions in an amount sufficient for such purpose are received from time to time, and (c) the sum of the Borrower’s assets, at fair valuation, is greater than the sum of the Borrower’s debts. For purposes of clause (c) of this definition, “debts” does not include an obligation to the extent it is secured by a valid lien on property of the Borrower not included as an asset of the Borrower.
“Solvent (Parent)” shall mean, with respect to the Parent on any date of determination, (a) the fair value and the present saleable value of any and all property of the Parent and its subsidiaries, on a consolidated basis, is greater than the probable liability on existing debts of the Parent and its subsidiaries, on a consolidated basis, as they become absolute and mature, (b) the Parent and its subsidiaries, on a consolidated basis, are able to pay their debts (including contingent and subordinated liabilities) as they become absolute and mature, (c) the Parent and its subsidiaries do not intend to, nor believes that they will, incur debts that would be beyond their ability to pay as such debts mature and (d) the Parent and its subsidiaries, on a consolidated basis, are not engaged in businesses or transactions, nor about to engage in businesses or transactions, for which any property remaining would constitute unreasonably small capital. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.
“Specified DSA Payments” means each payment due and owing from VW AG to the Lender under Sections 21.1 and 21.2.4 of the Development and Services Agreement; provided that, for the avoidance of doubt, to the extent any such payment due thereunder is disputed by VW AG in good faith, such Specified DSA Payment shall be limited to the amount not so disputed.
“Specified DSA Deficiency” means, as of any date of determination, (a) the aggregate amount of Specified DSA Payments that were due and payable prior to such date of determination but have not been paid, minus (b) the aggregate amount of principal instalments and interest payments that have been deferred prior to such date of determination pursuant to the second sentence of each of Sections 2.03 and 2.04(b).
“Specified JV Account” shall have the meaning assigned to such term in the Loan A Agreement.
“Subsidiary” shall mean, with respect to any Person, any corporation, association or other entity of which more than 50% of the voting power of the outstanding Voting Stock is owned, directly or indirectly, by such Person or by such Person and one or more other Subsidiaries of such Person.
“Surviving Covenants” shall mean the covenants contained in Sections 5.03, 5.05, 5.14 and Article VI of the ABL Credit Agreement, and the relevant definitions and rules of interpretation set forth in Article I of the ABL Credit Agreement, in each case as the text thereof is set forth therein as of the date hereof; provided that (i) if the ABL Credit Agreement is refinanced or replaced, or amended,
9
amended and restated or otherwise modified (an “ABL Amendment”), in each case, in good faith, and such ABL Amendment is entered into consistent with market practice and not for the purpose of procuring the funding of the Loan hereunder, then in the case of any such ABL Amendment consummated before the Borrowing Request Date, “Surviving Covenants” shall mean the corresponding covenants, relevant definitions and rules of interpretation, if and to the extent contained in the definitive documentation in respect of such refinancing or replacement facility or facilities, or facility or facilities as so amended, amended and restated or otherwise modified, in each case as the text thereof is set forth therein as of the Borrowing Request Date; (ii) the Lender and the Borrower shall negotiate in good faith to agree amendments to this Loan B Agreement to give effect to modifications to the Surviving Covenants to reflect any corresponding ABL Amendments consummated after the Borrowing Request Date; (iii) if any ABL Amendments are required for Parent or any of its Subsidiaries to obtain financing from any Governmental Authority whether before or after the Borrowing Request Date, and any Governmental Authority consummates such financing, then the Surviving Covenants shall be deemed amended, but only to the extent of those ABL Amendments required for such financing from any Governmental Authority; and (iv) the Lender and the Borrower shall negotiate in good faith to agree amendments to this Loan B Agreement to give effect to modifications to the Surviving Covenants, whether prior to or after the Borrowing Request Date, solely to the extent such modifications are required to permit the construction of, or financing for, Parent’s and its Affiliate’s manufacturing plant and related facilities in the State of Georgia. The Surviving Covenants shall be interpreted consistent with the following principles (and in the event of a conflict, the principle stated in clause (IX) below will be given priority over the principles stated in clauses (I) through (VIII)): (I) any requirement in any Surviving Covenant to deliver a notice, designation or certification to the administrative agent, trustee, noteholders, lenders or similar party shall be deemed to be satisfied if a substantially similar notice, designation or certification is provided to the Lender, (II) any requirement in any Surviving Covenant to repay indebtedness or make an offer to repay indebtedness that is no longer outstanding shall be disregarded, (III) with respect to any Surviving Covenant that was originally contained in a credit facility that has been terminated or is no longer outstanding, any requirement that an entity become a guarantor of such credit facility shall be deemed to be satisfied, (IV) notwithstanding anything herein to the contrary, for purposes of determining compliance with an availability condition in any covenant, the determination of whether the condition is satisfied will be based on availability under revolving credit facilities then in effect, (V) notwithstanding anything else to the contrary herein, for so long as there is an ABL Credit Agreement outstanding that consists of an asset-based revolving loan facility, the determination of the borrowing base will generally follow the actual methodology used for such ABL Credit Agreement as then in effect, but without giving effect to any changes in the advance rates that are applicable to the Surviving Covenants, (VI) requirements the only purpose of which is to preserve ranking or lien priority, or which are only for the purpose of preventing structural or effective subordination, may be disregarded, (VII) requirements to enter into an intercreditor agreement, subordination agreement, or to provide collateral or enter into a security agreement may be disregarded, (VIII) a debt basket (and corresponding liens exception) contained in the Surviving Covenants that permits debt under the “Loan Documents” or similar term will be deemed to permit indebtedness under the definitive documentation for any replacement of the ABL Credit Agreement, but only in the amount that would be permitted to be incurred under the “Loan Documents” pursuant to the Surviving Covenants (including, if applicable, any incremental facility permitted thereunder), and (IX) any provision that, in light of circumstances at the time of determination of covenant compliance, otherwise is or becomes inconsistent or ambiguous or produces an anomalous result or unintended consequences, will be interpreted in good faith with regard to reasonable practical (and not purely technical) considerations. Certain example scenarios in relation to the Surviving Covenants are set forth in Schedule 1.01 for illustrative purposes.
“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding) imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
10
“Transaction Agreement” shall mean that certain Transaction Agreement, dated as of November 12, 2024, among Volkswagen International America Inc., a Delaware corporation, Parent, the Lender and VW AG.
“Transaction Documents” shall mean the Finance Documents and the Joint Venture Documents.
“Unasserted Obligations” shall mean, at any time, Obligations for indemnification or other contingent obligations to which claim has not been asserted, which survive pursuant to Section 8.06.
“Voting Stock” shall mean, with respect to any Person, capital stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.
“VW AG” shall mean Volkswagen Aktiengesellschaft, a joint stock company duly established under the laws of Germany, having its registered office at Berliner Ring, 2, 38440, Wolfsburg, Germany.
“VW SPV” shall mean Volkswagen Specter LLC, a Delaware limited liability company.
Section 1.02 Other Interpretive Provisions. Unless otherwise expressly provided herein: (a) references to agreements (including this Agreement) and other documents shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent that such amendments and other modifications are not prohibited hereby; (b) the term “including” is not limiting and means “including without limitation;” (c) the meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms; and (d) in the computation of periods of time from a specified date to a later specified date, unless otherwise specified, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.” Periods of days referred to in this Agreement shall be counted in calendar days unless Business Days are expressly prescribed.
Section 1.03 Accounting Terms; Changes in GAAP.
(a) Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed in conformity with GAAP.
(b) Changes in GAAP. If the Borrower notifies the Lender that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Lender notifies the Borrower that it requests an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
11
ARTICLE II
THE LOAN, ETC.
Section 2.01 The Loan. Subject to the terms and conditions set forth herein, including the occurrence of the Effective Date, the Lender agrees to make a loan (the “Loan”) on the Funding Date to the Borrower in Dollars in the principal amount equal to the Lender’s Commitment; provided that the Funding Date shall occur during the Availability Period, and if the Funding Date does not occur during the Availability Period, then the Lender’s Commitments shall automatically terminate immediately after the end of the Availability Period and, subject to Section 8.06, this Agreement shall be of no further force or effect. No amounts paid with respect to the Loan may be reborrowed.
Section 2.02 Disbursement. On the Funding Date, the Lender shall disburse the amount of the Loan to the Borrower by means of the transfer of the applicable amount to the bank account number designated by the Borrower to the Lender in writing at least three (3) Business Days prior to the Funding Date. The Commitment shall terminate immediately after the Loan is funded on the Funding Date.
Section 2.03 Repayment. The Borrower shall repay to the Lender the aggregate principal amount of the Loans outstanding on the following dates in the respective amounts set forth opposite such dates:
| Date | Amount | |||
| Three (3) years after the Funding Date |
$ | 50,000,000 | ||
| Three (3) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Four (4) years after the Funding Date |
$ | 50,000,000 | ||
| Four (4) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Five (5) years after the Funding Date |
$ | 50,000,000 | ||
| Five (5) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Six (6) years after the Funding Date |
$ | 50,000,000 | ||
| Six (6) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Seven (7) years after the Funding Date |
$ | 50,000,000 | ||
| Seven (7) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Eight (8) years after the Funding Date |
$ | 50,000,000 | ||
| Eight (8) years and six months after the Funding Date |
$ | 50,000,000 | ||
| Nine (9) years after the Funding Date |
$ | 50,000,000 | ||
| Nine (9) years and six months after the Funding Date |
$ | 50,000,000 | ||
provided, however, that the final principal repayment instalment of such Loans shall be repaid on the Final Maturity Date and in any event shall be in an amount equal to the aggregate principal amount of the Loan outstanding on such date and all interest and any other amounts due under this Agreement. Notwithstanding the foregoing or anything herein to the contrary, (a) if there is a Specified DSA Deficiency on the date any principal repayment instalment is due and payable hereunder, the payment of such principal repayment instalment or a portion thereof may be deferred, on a dollar-for-dollar basis in the amount of the Specified DSA Deficiency as of such date, until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on any such principal repayment
12
instalment or portion thereof during such period, and (b) to the extent VW AG has failed to make one or more Specified DSA Payments when due and such failure is continuing on (i) the Final Maturity Date, (ii) the date of any voluntary prepayment pursuant to Section 2.07(b) or (iii) the date on which the Loan and all accrued and unpaid interest thereon are paid in full after such amounts have become due and payable pursuant to Section 7.02, in each case the aggregate amount of unpaid principal repayment instalments hereunder shall be deemed paid to the extent of the aggregate amount of Specified DSA Payments which VW AG has failed to pay, without duplication of amounts applied to payments of interest pursuant to the second sentence of Section 2.04(b). For avoidance of doubt, if a PIK Election has been made with respect to a principal payment instalment (or portion thereof) that may be deferred as provided above, the additional borrowings and payments from the gross cash proceeds thereof in respect of such PIK Election shall not be deemed to have occurred until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on any such principal repayment instalment or portion thereof during such period. Any Specified DSA Deficiency will be applied to defer payment of interest pursuant to Section 2.04(b) first, and then will be applied to defer payment of principal pursuant to this Section 2.03.
Section 2.04 Interest.
(a) Interest Rates. The Borrower agrees to pay to the Lender interest on the unpaid principal amount of the Loan for each day from the date the Loan is made until the date on which the Loan is paid in full, at a rate per annum equal to the Interest Rate.
(b) Payment Dates. Accrued interest on the Loan shall be payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided that in the event of any repayment or prepayment of the Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. Notwithstanding the foregoing or anything herein to the contrary, (a) if there is a Specified DSA Deficiency on the date any interest payment is due and payable hereunder, the payment of such interest or portion thereof may be deferred, on a dollar-for-dollar basis in the amount of the Specified DSA Deficiency as of such date, until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on such interest payment or portion thereof during such period, and (b) to the extent VW AG has failed to make one or more Specified DSA Payments when due and such failure is continuing on (i) the Final Maturity Date, (ii) the date of any voluntary prepayment pursuant to Section 2.07(b) or (iii) the date on which the Loan and all accrued and unpaid interest thereon are paid in full after such amounts have become due and payable by the Lender pursuant to Section 7.02, in each case the aggregate amount of unpaid interest payments hereunder shall be deemed paid to the extent of the aggregate amount of Specified DSA Payments which VW AG has failed to pay, without duplication of amounts applied to payments of principal pursuant to the second sentence of Section 2.03. For avoidance of doubt, if a PIK Election has been made with respect to an interest payment (or portion thereof) that may be deferred as provided above, the aggregate outstanding principal amount of the Loan will not be increased until the first Business Day following the date, if any, on which VW AG complies with its obligation to make the Specified DSA Payment(s) it previously failed to pay, and no further interest shall accrue hereunder on any such interest payment or portion thereof during such period. Any Specified DSA Deficiency will be applied to defer payment of interest pursuant to this Section 2.04(b) first, and then will be applied to defer payment of principal pursuant to Section 2.03.
(c) Interest Computation. All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). Subject to the second sentence of each of Section 2.03 and Section 2.04(b), all interest hereunder on the Loan shall be computed on a daily basis based upon the outstanding principal amount of the Loan as of the applicable date of determination.
13
Section 2.05 Payments.
(a) Except as provided in the second sentence of each of Section 2.03 and Section 2.04(b), all payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or set-off. Except as provided in Section 2.05(b) or as otherwise expressly provided herein or in the Payment Direction Agreement, all payments by the Borrower hereunder shall be made in Dollars to the Lender to the Specified JV Account, in immediately available funds, and shall be made not later than 2:00 p.m., New York City time, on the date specified herein. All payments received after 2:00 p.m., New York City time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment on the Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day for the Loan (and such extension of time shall be reflected in computing interest or fees, as the case may be) unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day.
(b) Notwithstanding anything herein to the contrary, on not more than two separate occasions, the Borrower may make a PIK Election with respect to either interest or principal repayment instalments. If a PIK Election is made with respect to interest, then the interest payments due on the next two Interest Payment Dates following the date such PIK Election is made shall be paid by increasing the aggregate principal amount of the Loan outstanding by the amount of such interest payment as of the applicable Interest Payment Date. If a PIK Election is made with respect to principal repayment instalments, then the next two principal repayment instalments due following the date such PIK Election is made shall be deemed to have been paid from the gross cash proceeds of additional borrowings of the Loan, such that after giving effect thereto, the amount of the Loan outstanding remains unchanged. Notwithstanding the foregoing, in no event may a PIK Election be made with respect to any interest or principal due (i) prior to the date three (3) years after the Funding Date or (ii) later than nine (9) years and six months after the Funding Date.
Section 2.06 Set-Off. The Lender may in its sole discretion set off amounts due to the Borrower against any amounts due from the Borrower hereunder, including, without limitation, amortization payments under Section 2.03, without any further action or consent of any other party.
Section 2.07 Voluntary Prepayments. The Borrower may, upon no less than five (5) Business Days’ irrevocable prior written notice to the Lender and VW SPV, prepay the Loan without premium or penalty (a) on an Interest Payment Date prior to the Final Maturity Date in a principal amount that is an integral multiple of $1,000,000 and not less than $25,000,000, or (b) on any Business Day in the amount required to pay in full all Obligations (other than Unasserted Obligations); provided that the Borrower shall not have the right to prepay the Loan without the consent of the Lender and VW SPV other than as set forth in this Section 2.07. All such prepayments of principal in respect of the Loan shall be applied to principal instalments on the Loans in the inverse order of maturity.
Section 2.08 Interest Rate. The “Interest Rate” means a fixed rate per annum equal to the sum of (i) the VW USD 7-Yr Yield (as defined in the Loan A Agreement) plus (ii) 0.25%.
Section 2.09 Compensation for Losses. In the event of the failure to borrow or prepay any principal of the Loan on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate the Lender for any out-of-pocket loss, cost and expense attributable to or connected with such event, including any out-of-pocket loss, cost or expense arising from the liquidation or redeployment of funds, from any fees payable or Hedging Costs. A certificate of the Lender setting forth any amount or amounts that the Lender is entitled to receive pursuant to this Section 2.09 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay the Lender the amount shown as due on any such certificate within three (3) Business Days after receipt thereof.
14
ARTICLE III
TAXES, ETC.
Section 3.01 Taxes.
(a) The Lender shall deliver to the Borrower on or prior to the date on which the Lender becomes a Lender under this Agreement (and from time to time thereafter upon reasonable request of the Borrower or upon the expiration or obsolescence of any previously delivered copy) properly completed and executed copies of IRS Form W-9 certifying that Lender is exempt from U.S. federal backup withholding for any Taxes. All payments made by or on account of any obligation of the Borrower under any Finance Document shall be made free and clear of, and without withholding or deduction for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment, then such withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority, and, any such amounts shall be treated for all purposes of this Agreement as having been paid to the Lender in respect of which such withholding was made, except that, if the deduction or withholding of any Tax is required to be made as a result of a change in (or in the interpretation, administration, or application of) any Applicable Law binding on the Lender after the date on which it becomes a party to this Agreement (each, an “Indemnified Tax”), then the sum payable by the Borrower shall be increased by additional amounts (the “Additional Amounts”) as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to Additional Amounts under this Section 3.01) the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(b) The Borrower shall jointly and severally indemnify the Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by the Lender on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by the Lender shall be conclusive absent manifest error.
(c) If any Indemnified Tax arises and the Lender is entitled to an exemption from or reduction of withholding of such Tax with respect to payments made under any Finance Document, then the Lender shall deliver to the Borrower, at the time or times reasonably requested by the Borrower, such properly completed and executed documentation reasonably requested by the Borrower pursuant to Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if (i) in the Lender’s reasonable judgment such completion, execution or submission is inconsistent with applicable legal and regulatory requirements, or would subject the Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of the Lender or (ii) such documentation or similar forms are not supplied by the Borrower to the Lender.
(d) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 3.01 (including by the payment of Additional Amounts pursuant to this Section 3.01(a)), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request
15
of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this clause (d) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause (d), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this clause (d) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or Additional Amounts with respect to such Tax had never been paid. This clause shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(e) For the avoidance of doubt, the parties hereto agree that the Loan is treated as indebtedness for U.S. federal income tax purposes. The Lender represents it is the beneficial owner of the interest on the Loan for U.S. federal income tax purposes.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions to Effective Date. The occurrence of the Effective Date shall be subject to the satisfaction (or waiver thereof by the Lender and VW SPV (and for the purposes hereof the parties hereby designate VW SPV as third party beneficiary and VW SPV shall have the right to enforce the Lender’s rights under this Section 4.01 as though it were party to this Agreement (and this Section 4.01 may not be amended without the prior written consent of VW SPV in addition to each consent otherwise required hereunder))) of all of the conditions specified below:
(a) Transaction Documents. The Lender shall have received each of the Joint Venture Agreement and the Transaction Agreement, which shall be an original unless otherwise agreed, in each case duly executed and delivered by each party thereto, each dated the Effective Date and each in form and substance reasonably satisfactory to the Lender;
(b) Representations and Warranties. The representations and warranties of each of the Loan Parties contained in this Agreement (other than any such representation or warranty which, by its term, speaks as of a particular date) and the other Finance Documents shall be true and correct in all material respects, on and as of the Effective Date; provided, however, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects; provided, further, that to the extent such representations or warranties specifically refer to an earlier date, they shall be accurate in all material respects as of such earlier date;
(c) No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing on the Effective Date; and
(d) ABL Loan Documents and 2026 Notes Documents. The Lender shall have received a true, accurate and complete electronic copy of fully executed versions of the ABL Loan Documents and 2026 Notes Documents, in each case as in effect on the Effective Date.
16
Section 4.02 Conditions to Funding Date. The occurrence of the Funding Date shall be subject to the satisfaction (or waiver thereof by the Lender and VW SPV (and for the purposes hereof the parties hereby designate VW SPV as third party beneficiary and VW SPV shall have the right to enforce this Section 4.02 as though it were party to this Agreement (and this Section 4.02 may not be amended without the prior written consent of VW SPV in addition to each consent otherwise required hereunder)) of all of the conditions specified below:
(a) Effective Date. The Effective Date shall have occurred no later than December 31, 2024;
(b) Borrowing Request. Not later than twenty (20) calendar days prior to the Funding Date, the Borrower shall have provided to the Lender a Borrowing Request in the form attached as Exhibit B hereto with a Funding Date set forth therein during the Availability Period (the “Borrowing Request”), which shall attach the most recent Compliance Certificate provided (if any) to a holder or holders or a beneficiary or beneficiaries (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries), as applicable, under each of the ABL Credit Agreement, the 2026 Notes Indenture and other Material Indebtedness;
(c) Solvency Certificate. Each Loan Party shall have delivered a solvency certificate from the chief financial officer, chief accounting officer or other officer with equivalent duties of such Loan Party substantially in the form attached hereto as Exhibit C;
(d) Representations and Warranties. The representations and warranties of each of the Loan Parties contained in this Agreement (other than any such representation or warranty which, by its term, speaks as of a particular date) and the other Finance Documents shall be true and correct in all material respects, on and as of the Funding Date, before and after giving effect to the making of the Loan on the Funding Date and to the application of the proceeds therefrom; provided, however, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects;
(e) No Default, Event of Default or Other Event of Default; Call Events. No (i) Default, Event of Default or Other Event of Default shall have occurred and be continuing on the Borrowing Request Date, or in each case shall have occurred thereafter on or prior to the Funding Date, or shall result from the making of the Loan on the Funding Date or the use of the proceeds thereof and (ii) Call Event shall have occurred for which the Call Option Exercise Period (as defined in Section 9.04(a)(ii) of the Joint Venture Agreement) has not expired prior to the Borrowing Request Date, or shall have occurred thereafter on or prior to the Funding Date;
(f) ABL Loan Documents and 2026 Notes Documents. Unless the original such agreements have been repaid and terminated without being refinanced or replaced, the Lender shall have received a true, accurate and complete electronic copy of fully executed versions of the ABL Loan Documents and 2026 Notes Documents, in each case as in effect on the Funding Date;
(g) Perfection of Security Interests. The Lender shall have received (a) an original of the Pledge Agreement, duly executed and delivered by the Borrower, and dated the Funding Date, and (b) evidence in form and substance reasonably satisfactory to it that, on the Funding Date, all Collateral will be subject to a first priority perfected security interest in favor of the Lender;
(h) Determination of Interest Rate. The Interest Rate shall have been determined in accordance with Section 2.08 of the Loan A Agreement (and, for the avoidance of doubt, any Dispute (as defined in the Loan A Agreement) shall have been resolved in accordance with Section 2.08(c) of the Loan A Agreement);
(i) Funding under Loan A Agreement. The Loan A Borrowing Request shall have been delivered by the Lender to VW SPV in accordance with the Loan A Agreement; and
17
(j) Payment Direction Agreement. The Lender shall have received an original of the Payment Direction Agreement executed by the Borrower.
The borrowing of the Loan by the Borrower hereunder on the Funding Date shall constitute a representation and warranty by the Borrower as of the Funding Date that the conditions contained in clauses (a), (d) (solely as to itself) and (e) shall have been satisfied, and shall constitute a representation and warranty by the Parent as of the Funding Date that the condition contained in clause (d) and clause (e), in each case solely with respect to itself, shall have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of the Loan Parties, severally and not jointly, as to itself only and not the other, hereby makes the following representations and warranties to the Lender as of the date hereof, the Effective Date and the Funding Date:
Section 5.01 Status and Licensing. Each of the Loan Parties (i) is duly incorporated, validly existing and in good standing (if applicable) under the laws of its jurisdiction of incorporation and (ii) has all requisite power, governmental licenses, authorizations, consents and approvals to own its Property and carry on its business as now conducted except, in the case of clause (ii) only, where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
Section 5.02 Power and Authority; Enforceable Obligations. Each of the Loan Parties has the power to execute, deliver and perform the terms and provisions of the Finance Documents to which it is a party (and, with respect to Parent, solely the terms and provisions of such Finance Documents that are applicable to it), and has taken all necessary action required by its constitutional documents to authorize the execution, delivery and performance of the Finance Documents to which it is a party. The Finance Documents have been or will be, as applicable, duly executed and delivered by each of the Loan Parties and constitute or will constitute, as applicable, legal, valid and binding obligations of each such Loan Party enforceable in accordance with their respective terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
Section 5.03 Compliance with Law and Other Instruments. Neither the execution, delivery or performance by each Loan Party of the Finance Documents in accordance with their respective terms, nor the consummation of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof or thereof, (a) will contravene such Loan Party’s Organizational Documents, (b) will contravene any Applicable Law to which any Loan Party is subject or any judgment, decree, order or permit applicable to such Loan Party, or (c) will conflict with or will result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any Property of any Loan Party pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which such Loan Party is a party or bound or to which it may be subject (other than the Finance Documents), except in each case under clause (b) or (c) where such conflict, breach, default or violation could not reasonably be expected to have a Material Adverse Effect.
18
Section 5.04 Governmental Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or notice to or filing (other than SEC public company filings by Parent and UCC filings pursuant to the Finance Documents) with, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, the execution, delivery and performance of the Finance Documents by any Loan Party or the taking of any action by any Loan Party contemplated by any Finance Document, or, if any of the foregoing are required, (a) they have been obtained or made and, as applicable, are in full force and effect or (b) in the case of any notice that may be required to be provided or consent that may need to be obtained by the Parent after the date hereof, the Effective Date and/or the Funding Date, (i) the requirement, or potential requirement, to make such notice or obtain such consent has been notified to the Lender, and (ii) such notice will be made or consent will be obtained if and when required.
Section 5.05 Solvency. Upon giving effect to the Finance Documents by the parties thereto and the consummation of the Finance Documents in accordance with their respective terms, including the making of the Loan and the use of proceeds thereof, the Borrower will be Solvency (Borrower) and the Parent will be Solvent (Parent), in each case as of the Funding Date.
Section 5.06 Taxes. Each of the Borrower and the Parent has timely filed or caused to be filed all Tax returns, declarations, reports, estimates, information returns and statements and other information required to have been filed and have paid or caused to be paid all Taxes required to have been paid by it, except for (i) Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are being maintained in accordance with GAAP, or (ii) to the extent that failure to so file or pay could not reasonably be expected to have a Material Adverse Effect.
Section 5.07 ABL Loan Documents and 2026 Notes Documents. The ABL Loan Documents and 2026 Notes Documents delivered by the Borrower as of the Effective Date and as of the Funding Date shall be true, accurate and complete copies in all respects.
Section 5.08 Separateness. At all times after the date hereof, the Borrower has complied with the requirements set forth in Section 6.08.
ARTICLE VI
COVENANTS
The Borrower covenants and agrees that, and solely with respect to Sections 6.01(b), 6.02(b), 6.03, 6.05(a), and 6.08 (to the extent relevant to it), the Parent covenants and agrees that, in each case until the payment in full of all Obligations (other than Unasserted Obligations):
Section 6.01 Notice of Default or Material Adverse Effect.
(a) The Borrower shall provide to the Lender promptly (and, in any event, within five (5) Business Days) after a Responsible Officer of the Borrower obtains knowledge thereof, notice of: (i) any Default or Event of Default, signed by a Responsible Officer, manager or director of the Borrower, describing such Default or Event of Default and the steps that the Loan Parties propose to take in connection therewith, and (ii) any event involving or affecting the Borrower that could reasonably be expected to have a Material Adverse Effect.
(b) The Parent shall provide to the Lender promptly (and, in any event, within five (5) Business Days) after a Responsible Officer of the Parent obtains knowledge thereof, notice of (i) any event involving or affecting the Parent that could reasonably be expected to have a Material Adverse Effect and (ii) beginning on the Borrowing Request Date, any “default” or “event of default” under the Surviving Covenants.
19
Section 6.02 Compliance with Law.
(a) The Borrower shall comply with the requirements of all Applicable Laws and orders of any Governmental Authority to the extent that the failure to comply therewith could (in the aggregate) reasonably be expected to have a Material Adverse Effect, except where (and for so long as) the necessity of compliance therewith is being contested in good faith by appropriate proceedings.
(b) The Loan Parties shall not use the proceeds of the Loan in any manner that would, or that could reasonably be expected to, cause the Lender to be in violation of any applicable sanctions, anti-corruption or money laundering laws.
Section 6.03 Notices under ABL Loan Documents and 2026 Notes Documents.
(a) Parent shall deliver to the Lender an executed copy of any material amendment, amendment and restatement, waiver or other similar modification or supplement of any ABL Loan Document, 2026 Notes Document or any Material Indebtedness, in each case within five (5) Business Days of the execution thereof.
(b) Parent shall deliver to the Lender a copy of (i) any notice of “Default” or “Event of Default” (or similar term), (ii) any notice regarding the occurrence of a “Material Adverse Effect” (or similar term), and (iii) beginning on the Borrowing Request Date, a copy of each Compliance Certificate in the case of each of the foregoing clauses (i), (ii) and (iii), that is delivered by Parent or any of its Subsidiaries to or by any lender, noteholder, investor, administrative agent, trustee or other debt representative pursuant to the ABL Loan Documents, 2026 Notes Documents or any Material Indebtedness, promptly (and, in any event, within five (5) Business Days) following delivery to such lender, noteholder, investor, administrative agent, trustee or other debt representative, as applicable.
Section 6.04 Indebtedness. The Borrower will not create, incur, assume or suffer to exist any Indebtedness, other than:
(a) Indebtedness created hereunder; and
(b) Indebtedness permitted to be incurred pursuant to Section 6.08(m) hereof.
Section 6.05 Liens.
(a) Parent will not create, incur, assume or suffer to exist any Lien upon its Equity Interests in the Borrower, other than Permitted Liens.
(b) The Borrower will not create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than Permitted Liens.
Section 6.06 Restricted Payments. The Borrower will not declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that the Borrower may declare and pay dividends or distributions of amounts received (a) from the proceeds of the Loan, (b) from the Lender in its capacity as member of the Lender, (c) as a return on Permitted Investments, (d) from Parent as a capital contribution, or (e) from any taxing authority as a refund or otherwise on account of an overpayment of taxes.
Section 6.07 Investments. The Borrower will not make any Investments, other than:
(a) Permitted Investments; and
(b) Investments required to be made in the Lender pursuant to the Joint Venture Agreement.
20
Section 6.08 Separateness. The Borrower acknowledges that the Lender is entering into the transactions contemplated by the Finance Documents in reliance upon the Borrower’s identity as a legal entity that is separate from Parent and its other Affiliates. From and after the Effective Date, the Parent shall cause the Borrower to, and the Borrower shall:
(a) maintain the Borrower’s books and records and bank accounts separate from those of any of its Related Parties;
(b) at all times hold the Borrower out to the public and all other Persons as a legal entity separate from the Borrower’s members and any other Person;
(c) have at least one manager sitting on its board of managers designated by VW SPV; provided that to the extent this clause (c) is not complied with due to an action (or failure to act) on the part of VW SPV or any of its Affiliates, for the purposes hereof the Loan Parties shall be deemed not to have defaulted in the observance or performance of this clause (c);
(d) file tax returns, if any, for the Borrower as may be required under applicable law, to the extent not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law;
(e) except as contemplated herein or in any other Transaction Document, not commingle the Borrower’s assets with assets of any other Person;
(f) have sufficient personnel or duly compensated agents to run its business and operations and compensate its employees (if any) and agents from its own available funds for services provided to it;
(g) conduct the Borrower’s business in the Borrower’s own name and comply with all organizational formalities to maintain the Borrower’s separate existence;
(h) maintain separate financial statements for the Borrower (provided that any member of the Borrower may consolidate its accounts with those of the Borrower to the extent required under the rules and regulations of the SEC or under other applicable law);
(i) pay the Borrower’s own liabilities only out of the Borrower’s own funds except (i) as otherwise expressly required by the Transaction Documents and (ii) that an Affiliate of the Borrower may pay certain organizational expenses of the Borrower;
(j) maintain an arm’s length relationship between the Borrower and each of its Related Parties (it being understood that distributions on the Borrower’s Equity Interests are arm’s length transactions with the holder(s) thereof);
(k) pay the salaries of the Borrower’s own employees, if any, with the Borrower’s own funds;
(l) if the Borrower has any employees, not assume or guarantee or become obligated for the debts of any of its Related Parties and not permit any of its Related Parties to assume, guarantee or become obligated for the debts of the Borrower and not hold out the Borrower’s credit or assets as being available to satisfy the obligations of others;
(m) not incur any indebtedness or liability towards any other party exceeding $1,000,000 except the Loan and to the extent permitted under the Joint Venture Agreement;
21
(n) allocate fairly and reasonably with other Persons any of the Borrower’s overhead for shared office space;
(o) except as contemplated in any Transaction Document, use separate stationery, invoices and checks;
(p) except for liens involuntarily incurred in the ordinary course of business or securing the Obligations, not pledge the Borrower’s assets for the benefit of any other Person;
(q) reasonably attempt to correct any known misunderstanding regarding the Borrower’s separate identity;
(r) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities;
(s) cause the Borrower’s board of managers to keep minutes of any meetings and actions and observe all other company formalities;
(t) not to have the Borrower acquire any securities of its members;
(u) act through its own authorized managers, directors, members, officers and agents in accordance with the authority set forth in the Borrower’s Organizational Document, except as expressly permitted under the Transaction Documents; and
(v) maintain the Borrower’s assets in a manner that facilitates their identification and segregation from those of the Borrower’s Affiliates.
Section 6.09 Further Assurances. The Borrower hereby agrees promptly upon the reasonable request of the Lender:
(a) to correct any material defect or error that may be discovered in any Finance Document or in the execution, acknowledgement, filing or recordation thereof; and
(b) to do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignments, transfers, certificates, assurances and other instruments from time to time to (i) carry out more effectively the purposes of the Finance Documents, (ii) to the fullest extent permitted by applicable law, subject the Collateral to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder, and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Lender for its benefit the rights granted or now or hereafter intended to be granted to the Lender for its benefit under any Finance Document or under any other instruments executed in connection with any Finance Document to which the applicable Loan Party is or is to be a party.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. The following specified events shall be “Events of Default” for the purposes of this Agreement and the other Finance Documents:
(a) (i) any payment of any principal of the Loan shall not be made in accordance herewith or, to the extent in full force and effect, in accordance with the Payment Direction Agreement, in full when due (provided, that except in the case of principal due on the Final Maturity Date, if any such principal payment is not paid when due as a result of a technical or administrative error, it will not result
22
in an Event of Default hereunder so long as such principal payment is made within three (3) Business Days of the date such principal payment was due), or (ii) the Borrower shall default for five (5) Business Days or more in the payment in accordance herewith or, to the extent in full force and effect, in accordance with the Payment Direction Agreement, of any interest or other amount whatsoever payable under this Agreement or any other Finance Document; or
(b) any representation or warranty made by any Loan Party in any Finance Document or that is contained in any certificate, document or other statement furnished at any time pursuant to or in connection with any Finance Document shall prove to have been incorrect in any material respect on or as of the date made (and in the case of any representation or warranty made or deemed made on or after the Funding Date, such representation or warranty shall remain untrue (in any material respect or in any respect, as applicable) or uncorrected for a period of thirty (30) calendar days after the earlier of the date (i) a Responsible Officer of the applicable Loan Party obtains knowledge thereof and (ii) written notice thereof shall have been given to the applicable Loan Party by the Lender); or
(c) (i) any Loan Party shall default in the observance or performance of any covenant contained in Section 6.01, 6.03, 6.04, 6.05(b), 6.06, 6.07 or 6.08, or (ii) on and after the Funding Date, Parent or any of its Subsidiaries shall default under any Surviving Covenant, and in the case of this clause (ii), (x) such default shall continue unremedied for a period of ten (10) Business Days after the earlier of the date (A) a Responsible Officer of the applicable Loan Party obtains knowledge thereof and (B) written notice thereof shall have been given to any Loan Party by the Lender and (y) after such ten (10) Business Day-period has elapsed, such default shall continue unremedied for a further period of sixty (60) days; provided that such further period of sixty (60) days shall be deemed to have lapsed immediately if a Default, Event of Default or Call Event (as defined in the Joint Venture Agreement) (other than such default(s) under the applicable Surviving Covenant(s)) occurs during such further period of sixty (60) days; or
(d) any Loan Party shall default in the observance or performance of any other covenant or agreement contained in the Finance Documents (other than as provided in clauses (a), (b) and (c)), and such default shall continue unremedied for a period of thirty (30) calendar days after the earlier of the date (A) a Responsible Officer of the applicable Loan Party obtains knowledge thereof and (B) written notice thereof shall have been given to any Loan Party by the Lender; or
(e) Parent or any of its Subsidiaries shall (i) fail to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness under the ABL Credit Agreement, the 2026 Notes Indenture or otherwise any Indebtedness (other than Indebtedness under the Finance Documents) having an aggregate principal amount of more than $100,000,000 (any such Indebtedness, “Material Indebtedness”), (ii) fail to (x) deliver certificates as to compliance with a financial covenant to the holder or holders or beneficiary or beneficiaries of the ABL Credit Agreement, the 2026 Notes Indenture or other Material Indebtedness in accordance with the ABL Credit Agreement, the 2026 Notes Indenture or the definitive documentation relating to other Material Indebtedness when due, after giving effect to any applicable grace period, (y) deliver financial statements when due, after giving effect to any applicable grace period, but only if the deadline for delivery of any certificate as to compliance described in the immediately preceding clause (x) is determined by reference to the date such financial statements are required to be delivered, or (z) comply with any financial covenant set forth in the ABL Credit Agreement, the 2026 Notes Indenture or the definitive documentation relating to other Material Indebtedness, in each case beyond the applicable grace period with respect thereto, if any; or (ii) default under any covenant, agreement or other provision of the ABL Credit Agreement, the 2026 Notes Indenture or the definitive documentation relating to other Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, the effect of which default results in the holder or holders or beneficiary or beneficiaries of the ABL Credit Agreement, the 2026 Notes Indenture or other Material Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) declaring such Indebtedness under the ABL Credit Agreement, the 2026 Notes Indenture or other Material Indebtedness to become immediately due and payable; or
23
(f) (i) an involuntary proceeding shall be commenced or an involuntary petition shall be filed, in each case seeking liquidation, reorganization, arrangement, adjustment, an adjudication of bankruptcy, insolvency, judicial management, reorganization, administration or relief of debtors or other similar relief in respect of any Loan Party or any of its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, including the Bankruptcy Code, or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator, or similar official for any Loan Party or for a substantial part of its assets shall have been entered and, in any such case described in clause (i) or (ii) hereof, such proceeding or petition shall continue undismissed or shall be not stayed for a period of 60 or more days; or
(g) any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization, arrangement, adjustment, an adjudication of bankruptcy, insolvency, judicial management, reorganization, administration or relief of debtors or other similar relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, including the Bankruptcy Code, (ii) consent to the institution of any proceeding or petition described in clause (i) above, apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Person, or for a substantial part of its assets, (iii) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (iv) make a general assignment for the benefit of creditors; or
(h) (i) a Call Event (as defined in the Joint Venture Agreement) shall occur and VW SPV exercises its Call Right (as defined in the Joint Venture Agreement) under Section 9.04(a)(ii) of the Joint Venture Agreement, or VW SPV is prevented from delivering a Call Election Notice (as defined in the Joint Venture Agreement) to the Borrower or settling such Call Right under Applicable Law, or (ii) an Event of Default (as defined in the Loan A Agreement) described in (A) Sections 7.01(f) or 7.01(g) of the Loan A Agreement, in each case to the extent caused by the failure of Rivian Automotive, LLC (or any of its Affiliates) to pay any amount when due under the Development and Services Agreement to the Lender, (B) Section 7.01(h)(i) of the Loan A Agreement, if caused by actions of Rivian SPV or Parent and not a Governmental Authority, or (C) Section 7.01(j)(ii) of the Loan A Agreement, in each case has occurred and is continuing; or
(i) a Change of Control shall occur; or
(j) (i) the validity of any Finance Document shall be contested in writing by any Loan Party or any Governmental Authority or (ii) any Finance Document shall for any reason be terminated or become invalid, ineffective or unenforceable (in each case, other than in accordance with its terms), which termination, invalidity or ineffectiveness could reasonably be expected to have a Material Adverse Effect, and such termination, invalidity or ineffectiveness, to the extent capable of being cured, is not cured (whether by entering into a new agreement, an amendment, modification, or otherwise correcting such defect) within thirty (30) days after notice thereof from the Lender; or
(k) any governmental or other authorization, consent, license, permit, concession, approval or authorization which is necessary or appropriate under any Applicable Law for the execution, delivery or performance by any Loan Party of any obligation under any Finance Document or to make any Finance Document legal, valid, enforceable and admissible in evidence shall not be obtained or shall be withdrawn or shall cease to be in full force and effect or shall be modified in a manner, and such failure to obtain, withdrawal, failure to be in full force and effect, or modification, to the extent capable of being cured, is not cured (whether by entering obtaining a new authorization, consent, license, permit, concession, approval or authorization, or otherwise correcting such defect) within thirty (30) days after the earlier of the date (i) a Responsible Officer of the Borrower obtains knowledge thereof and (ii) written notice thereof shall have been given to the Borrower by the Lender); or
24
(l) (i) any Collateral Document or any Lien granted thereunder shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Borrower, (ii) any Loan Party shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability, or (iii) except as permitted under the Collateral Documents, any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien (subject to Permitted Liens).
Section 7.02 Remedies Upon an Event of Default. If an Event of Default occurs (other than an event with respect to the Borrower described in Sections 7.01(f) or 7.01(g)), and at any time thereafter during the continuance of such Event of Default, the Lender may, by notice to the Borrower, take any or all of the following actions, at the same or different times:
(a) prior to the Borrowing Request Date, if an Event of Default described in Sections 7.01(f) (with respect to Parent), 7.01(g) (with respect to Parent), 7.01(h), 7.01(i), 7.01(j)(i) (if caused by actions of a Loan Party and not a Governmental Authority) or 7.01(l)(ii) occurs, terminate the Commitment and thereupon the Commitment shall terminate immediately;
(b) on or after the Borrowing Request Date, if an Event of Default, Other Event of Default or Call Event (as defined in the Joint Venture Agreement) occurs, terminate the Commitment and thereupon the Commitment shall terminate immediately;
(c) declare the Loan then outstanding (including any amount outstanding as a result of a PIK Election) to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loan so declared to be due and payable, together with accrued interest thereon and all other obligations of the Borrower accrued hereunder and under any other Finance Document including any break funding payment, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; or
(d) exercise all rights and remedies available to it under the Finance Documents and Applicable Law.
If an Event of Default described in Sections 7.01(f) or 7.01(g) occurs with respect to the Borrower, the Commitment shall automatically terminate and the principal of the Loan then outstanding, together with accrued interest thereon and other obligations of the Borrower accrued hereunder and under any other Finance Document including any break funding payment, shall automatically become due and payable, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
In addition to any other rights and remedies granted to the Lender in the Finance Documents, the Lender may exercise all rights and remedies of a secured party under the New York Uniform Commercial Code or any other Applicable Law. The Lender shall apply the net proceeds of any action taken by it pursuant to this Article VII, after deducting any costs and expenses payable to the Lender under Section 8.01, in such order as the Lender may elect, and only after such application and after the payment by the Lender of any other amount required by any provision of law, including Section 9-615(a)(3) of the New York Uniform Commercial Code, need the Lender account for the surplus, if any, to the Borrower.
Notwithstanding anything herein or in any other Finance Document to the contrary, it is expressly understood and agreed that, except with respect to payment obligations arising under Section 3.01 and 8.01, (i) the Borrower shall have no personal liability with respect to the Obligations and the Lender agrees to look solely to the Collateral for satisfaction of the Obligations, (ii) Lender’s rights and remedies hereunder and under the other Finance Documents shall be limited to the Collateral and the Lender shall have no right or claim against the Borrower or any of its property or assets other than the Collateral, (iii) if Lender obtains a judgment in respect of the Obligations such judgment may only be enforced against the Collateral and (iv) in the event of a foreclosure against the Collateral, no judgment of any deficiency upon the Obligations shall be sought or obtained by Lender against the Borrower.
25
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. Except as otherwise agreed in writing by the Borrower and the Lender, each of the Loan Parties, on the one hand, and the Lender, on the other hand, shall pay its own out-of-pocket expenses (including reasonable and documented fees and disbursements of external legal counsel) incurred in connection with the preparation, negotiation, execution and delivery of the Finance Documents (including any amendment, restatement, supplement or other modification thereof, or any consent or waiver thereunder), except as provided in the next sentence. Notwithstanding the foregoing, the parties hereto acknowledge and agree that, in the event of any dispute hereunder between the parties hereto resulting in litigation or arbitration proceedings, the legal expenses of the prevailing party shall be reimbursed by the other party thereto.
(b) Indemnification. The Borrower shall indemnify the Lender and each of its directors, officers, employees, agents and advisors (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) (“Losses”), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party (other than VW AG and its Related Parties) arising out of, in connection with, or as a result of (i) the execution or delivery of each Finance Document or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, and the consummation of the transactions contemplated hereby or thereby, in each case, only to the extent relating to the Loan (and not the joint venture or the other transactions contemplated by the Joint Venture Documents), (ii) the Loan or the use or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, and regardless of whether any Indemnitee is a party thereto, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee. This Section 8.01(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim. For avoidance of doubt, the last sentence of Section 8.01(a), and not the indemnity obligations in this Section 8.01(b) shall apply to any dispute hereunder between the parties hereto.
(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, each party hereto agrees that it will not assert, and hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Finance Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Loan or the use of the proceeds thereof; provided that such waiver shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct. No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any
26
information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with any Finance Document or the transactions contemplated hereby or thereby, except to the extent that such damages are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee.
(d) Payments. All amounts due under this Section 8.01 shall be payable in Dollars to the Lender’s bank account specified by the Lender in writing, not later than ten Business Days after demand therefor.
(e) Survival. The agreements in this Section 8.01 shall survive the replacement of the Lender, the termination of the Commitment and the repayment, satisfaction or discharge of all other Obligations.
Section 8.02 Amendments and Waivers, Etc. Except as otherwise expressly set forth in this Agreement, no amendment or waiver of any provision of this Agreement, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Lender and the Borrower, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 8.03 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (NOT INCLUDING SUCH STATE’S CONFLICT OF LAWS PROVISIONS OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 8.04 Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail, sent by fax or e-mail to the address, fax number or e-mail address specified for such Person on Schedule 8.04. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by e-mail and fax shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Each of the Borrower and the Lender may change its address or fax number for notices and other communications hereunder by notice to the other parties hereto.
Section 8.05 Table of Contents; Headings. The table of contents and captions and section headings appearing herein are inserted for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.
Section 8.06 Survival. All representations and warranties made hereunder or in any other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof until indefeasible payment in full of the Obligations. Such representations and warranties have been or will be relied upon by the Lender, regardless of any investigation made by it or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default at the time of the Loan, and shall continue in full force and effect as long as the Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or the Commitment shall remain outstanding. The obligations of the Borrower under Section 3.01 and Section 8.01 shall survive the repayment of the Loan and the termination of the Commitment and, in the case of any assignment of the Loan hereunder, shall survive the making of such assignment with respect to the assigning Lender.
Section 8.07 Successors and Assigns.
(a) Eligible Assignees. The Lender and the Loan Parties may not assign or otherwise transfer any of their respective rights or obligations hereunder without the prior written consent of all
27
parties hereto (and any attempted assignment or transfer by the Lender or Loan Party without such consent shall be null and void), except that the Lender may assign or otherwise transfer all or a portion of the outstanding principal amount of the Loan (in an amount that is an integral multiple of $1,000,000 and not less than $25,000,000) or any of the Lender’s rights and obligations hereunder to an Eligible Assignee; provided, that, subject to Section 8.07(b), so long as Loan A remains outstanding, and except in the case of an assignment after an Event of Default pursuant to Section 7.01(h)(i) hereof has occurred, (i) the consideration received for any assignment of the Loan hereunder to an Eligible Assignee may not be less than the then-outstanding principal amount of the Loan or any portion thereof so assigned and (ii) substantially concurrent with the consummation of such assignment, the Lender must repay Loan A in full. Upon consummation of any such assignment or transfer of the outstanding principal amount of the Loan, the Eligible Assignee thereof shall become a “Lender” hereunder, and if there is more than one “Lender” hereunder as a result thereof, references herein to the “Lender” herein shall be references to one or more “Lenders” as the context may require.
(b) Assignment to VW SPV. Notwithstanding anything to the contrary in this Agreement or any other Transaction Document, VW SPV shall have the right, but not the obligation, to deliver an Assignment and Assumption Notice to the Lender and the Borrower at any time, and on the date on which such Assignment and Assumption Notice has been delivered to the Lender and the Borrower, the Assigned Rights and Obligations shall be deemed assigned to, and assumed by, VW SPV automatically and without any further action of the Parties; provided, however, that so long as Loan A remains outstanding, except in the case of an assignment after an Event of Default pursuant to Section 7.01(h)(i) hereof, such assignment and assumption shall not be effective unless and until (i) the consideration for such assignment is received by the Lender, which consideration may not be less than the then-outstanding principal amount of the Loan or any portion thereof so assigned and (ii) substantially concurrent with the consummation of such assignment, the Lender must repay Loan A in full. From and after the date of delivery of the Assignment and Assumption Notice, the Borrower shall make all payments in respect of the Assigned Interest (including payments of principal, interest, and other amounts) to VW SPV. The parties hereby designate VW SPV as third-party beneficiary of this Section 8.07(b) and VW SPV shall have the right to enforce this Section 8.07(b) as though it were party to this Agreement (and this Section 8.07(b) may not be amended without the prior written consent of VW SPV in addition to each consent otherwise required hereunder).
Section 8.08 Interest Rate Limitation. Notwithstanding anything to the contrary contained herein, the interest paid or agreed to be paid hereunder shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (the “Maximum Rate”). In case the applicable interest rate payable hereunder exceeds the Maximum Rate at any time, the Borrower shall pay interest at the Maximum Rate at such time. If the Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loan or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Lender exceeds the Maximum Rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
Section 8.09 Submission to Jurisdiction; Venue; Waiver of Jury Trial.
(a) EACH OF THE LOAN PARTIES IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE LENDER, OR ANY RELATED PARTY OF THE LENDER IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER FINANCE DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS
28
OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER FINANCE DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCE DOCUMENT AGAINST ANY LOAN PARTY OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY FINANCE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 8.10 Judgment Currency. All payments made under the Finance Documents shall be made in the currency expressly required by the Finance Documents (to the extent required by the terms hereof, the applicable “Agreement Currency”). If for any reason any payment made hereunder is made in a currency (the “Other Currency”) other than the applicable Agreement Currency, then to the extent that the payment actually received by the Lender, when converted into the applicable Agreement Currency at the “Rate of Exchange” (as defined below) on the date of payment (or, if conversion on such date is not practicable, as soon thereafter as it is practicable for the Lender to purchase the applicable Agreement Currency) falls short of the amount due under the terms of this Agreement, the Borrower shall, as a separate and independent obligation of the Borrower, indemnify the Lender and hold the Lender harmless against the amount of such shortfall. All foreign exchange losses incurred in connection with the conversion of any Collateral in accordance with the Finance Documents or any proceeds thereof or any other amounts received by the Lender denominated in a currency other than the Agreement Currency to the applicable Agreement Currency specified therefor shall be borne by the Borrower. As used in this Section 8.10, the term “Rate of Exchange” shall mean the rate at which the Lender is able on the relevant date to purchase the applicable Agreement Currency with the Other Currency and shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into, the applicable Agreement Currency.
29
Section 8.11 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. Any signature to this Agreement may be delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by Applicable Law. For the avoidance of doubt, the foregoing also applies to any amendment, extension or renewal of this Agreement. Each of the parties hereto represents and warrants to the other parties hereto that it has the corporate or other organizational capacity and authority to execute this Agreement through electronic means and there are no restrictions for doing so in that party’s constitutive documents.
Section 8.12 Severability. To the fullest extent permitted by law, any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction, and the remaining portion of such provision and all other remaining provisions hereof will be construed to render them enforceable.
Section 8.13 No Waiver; Remedies. No failure on the part of the Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 8.14 Entire Agreement. As of the date hereof, the Finance Documents constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior or contemporaneous agreements and understandings of such Persons, oral or written, relating to the subject matter hereof.
Section 8.15 Revival and Reinstatement. If the Lender repays, restores or returns, in whole or in part, any payment or property previously paid or transferred to the Lender in full or practical satisfaction of any Obligation, because the payment or transfer (the “Transfer”) was declared to be void, voidable, or otherwise recoverable under any Applicable Law, or because the Lender elects to repay, restore, or return, in whole or in part, in connection with a claim that the Transfer was void, is voidable, or is otherwise recoverable, then as to any amount that the Lender repays, restores, or returns, and as to all reasonable costs, expenses, and attorney’s fees of the Lender related to the Transfer or to the repayment, restoration, return, or voidability of the Transfer, the liability of the Borrower will automatically and immediately be reinstated and restored and will exist as though the Transfer had never been made.
30
Section 8.16 Confidentiality. Notwithstanding anything to the contrary herein or in the Finance Documents, the parties hereto agree that any exchange of information between the parties hereto shall be subject to applicable antitrust laws and the terms of the Information Sharing Agreement.
Section 8.17 No Liability. Notwithstanding anything to the contrary herein or in the other Finance Documents, the parties hereto agree that (a) Parent shall have no liability whatsoever for any of the obligations (including the Obligations) hereunder, and in no event shall Lender have any recourse to Parent therefor, (b) Lender shall have no remedy hereunder for any breach by Parent of its representations, warranties and agreements hereunder unless and until such breach results in an Event of Default, in which case Lender may exercise any of its remedies hereunder in accordance with Section 7.02 (provided that the remedies for a breach by Parent that results in the occurrence and continuation of a Default or Event of Default prior to the Funding of the Loan on the Funding Date shall be as provided in Section 7.02).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.
| RIVIAN JV SPV, LLC,
as Borrower | ||
| By: |
| |
| Name: |
||
| Title: |
||
| RIVIAN AUTOMOTIVE, INC.,
as Parent (executing this Agreement solely for the purposes of Sections 4.02 (the last sentence only), Article V (as to itself only), 6.01(b), 6.02(b), 6.03, 6.05(a), 6.08 and 8.17 hereof) | ||
| By: |
| |
| Name: |
||
| Title: |
||
[Loan B Agreement – Signature Page]
| RIVIAN AND VW GROUP TECHNOLOGY, LLC,
as Lender | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Loan B Agreement – Signature Page]