T1 Energy Inc 8-K, filed Nov 6, 2024
T1 Energy Inc. (TE)
About this 8-K
T1 Energy Inc filed this 8-K on November 6, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 5.02: Director or officer change, or executive pay
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
General
On November 6, 2024, FREYR Battery, Inc., a Delaware corporation (the “Company” or “FREYR”) entered into a transaction agreement (the “Transaction Agreement”) with Trina Solar (Schweiz) AG, an entity organized under the laws of Switzerland (the “Seller”) for the acquisition of all legal and beneficial ownership in the shares of capital stock of Trina Solar US Holding Inc., a Delaware corporation, which owns, directly or indirectly, all legal and beneficial ownership in the shares of capital stock of, or other ownership, membership or equity interest in (a) Trina Solar US Manufacturing Holding Inc., a Delaware corporation (“TUMH”), (b) Trina Solar US Manufacturing Module Associated Entity 1, LLC, a Texas limited liability company (“TUMA”), (c) Trina Solar US Manufacturing Module 1, LLC, a Texas limited liability company (“TUM 1”), and (d) Trina Solar US Manufacturing Cell 1, LLC, an Oklahoma limited liability company (“TUM 2”, and together with TUMH, TUMA and TUM 1, the “Acquired Companies”) (and such acquisition, the “Purchase”).
The Transaction Agreement further contemplates the entry at Closing of the Purchase into certain other agreements, including: (a) certain agreements with respect to the development, operation and services of the solar cell and solar module manufacturing facilities pursuant to the Solar Cell Term Sheet and Solar Module Term Sheets included as Schedules A-7 and A-8 to the Transaction Agreement), to be entered into with Trina Solar Co., Ltd., a company incorporated in China (“Trina Parent”) or certain other subsidiaries and affiliates of Trina Parent (the “Related Agreements”), (b) a Note Instrument, (c) a Convertible Note Instrument, (d) a Cooperation Agreement and (e) a Registration Rights Agreement (the Purchase, together with (a) through (e) collectively, the “Transaction”). Capitalized terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Transaction Agreement.
Transaction Agreement
Consideration
Under the Transaction Agreement, FREYR will acquire the Acquired Companies for (i) $100.0 million cash consideration (subject to an adjustment for any leakage); (ii) 15,437,847 shares of common stock, par value $0.01 per share of FREYR (the “Common Stock”) (the “Share Consideration”); (iii) a $150.0 million one percent (1%) per annum senior unsecured note due in five (5) years (the “Note Instrument”); and (iv) an $80.0 million seven percent (7%) unsecured convertible note due in five (5) years (the “Convertible Note Instrument”), which, subject to CFIUS approval, is convertible in up to two conversions into 30.4 million shares of Common Stock, in aggregate (the “Conversion Shares”). The Second Conversion is also subject to the Requisite Stockholder Approval.
Conditions to Closing
The Transaction is subject to customary Closing conditions including, among other things, (i) the absence of any laws, government orders or injunctions that prohibit, restrict, enjoin or otherwise make illegal the Closing; (ii) the parties’ certification that the representations and warranties are true and correct; (iii) the absence of any material adverse effect on FREYR or the Acquired Companies; (iv) the receipt by the Acquired Companies of certain necessary consents, waivers and approvals; (v) FREYR having isolated, deleted, destroyed, terminated or sold, in each case, all material assets, equipment, and licenses relating to 24M Technologies, Inc.; (vi) the Seller’s completion of a certain internal reorganization (the “Reorganization”); (vii) the first tranche of $50.0 million of the equity financing into FREYR, to be implemented on or prior to Closing pursuant to the Preferred Stock Purchase Agreement (the “Purchase Price”); and (viii) the submission of a supplemental listing application to New York Stock Exchange (the “NYSE”) in connection with the proposed issuance of the Share Consideration and the Conversion Shares, among other conditions.
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Representations and Warranties
The Transaction Agreement contains customary representations and warranties of the Seller, including in respect of the Acquired Companies. The Transaction Agreement also contains customary representations and warranties of FREYR. No representations and warranties will survive Closing except that the Seller’s fundamental representations shall survive until the third (3rd) anniversary of the Closing.
Pre-Closing Covenants
During the period from the date of the Transaction Agreement through the earlier of the Closing and the termination of the Transaction Agreement in accordance with its terms, subject to certain exceptions, each of the parties must comply with certain covenants that include (i) conducting its respective business, in all material respects, in the ordinary course of business consistent with past practice and (ii) complying with all applicable laws in all material respects.
The parties further agreed that for two (2) weeks from the date of the Transaction Agreement they will continue to conduct due diligence in good faith. To the extent either party identifies a potential material liability of $10.0 million or more in any given 12-month period or of $25.0 million or more in the aggregate, the parties shall discuss such potential material liability for ten (10) days. If following such discussion, the identifying party establishes it has identified a material liability, such party shall be entitled to terminate the Transaction Agreement.
From the date of the Transaction Agreement to the Closing, the Seller, its Affiliates and the Acquired Companies, subject to limited exceptions, shall not permit any leakage to occur. If any leakage occurs that is not permitted, it will lead to a reduction to the Purchase Price.
Prior to Closing, the Seller shall prepare and timely file all tax returns of the of the Acquired Company as required by applicable law. All taxes due on or before Closing shall be paid by the Seller or applicable Acquired Company. FREYR shall not, and shall not cause, without the prior written consent of the Seller, which shall not be unreasonably withheld, the Acquired Companies to amend, refile or modify any tax return that would reasonably be expected to increase the tax liability of the Seller during the pre-closing period. Prior to Closing, FREYR, the Seller and the Acquired Companies shall reasonably cooperate in connection with determining tax liability, the preparation and filing of any tax returns and any audit, litigation, or other proceeding with respect to taxes.
Prior to Closing, (a) each of the parties shall use its commercially reasonable efforts to take all necessary actions to consummate the Purchase; and (b) the Seller shall use reasonable best efforts and shall cause the Acquired Companies to (i) use reasonable best efforts to obtain all required third-party consents, waivers and approvals (ii) complete the Reorganization, and (iii) provide all cooperation reasonably requested by FREYR in connection with the satisfaction of any of the settlement conditions under the Preferred Stock Purchase Agreement; (c) the parties shall negotiate and agree the Related Agreements, based on the Solar Module Term Sheets; (d) the parties shall negotiate in good faith the Solar Cell Operational Support Agreement, based on the Solar Cell Term Sheet and (e) the parties shall and shall cause their employees to negotiate and agree certain other employment or consultancy terms for FREYR’s Deputy Chief Financial Officer. Chief Operating Officer and Chief Strategy Officer prior to Closing.
Post-Closing Covenants
Post-Closing, the parties agree to use reasonable best efforts to obtain CFIUS approval. FREYR shall use its reasonable best efforts to obtain the Requisite Stockholder Approval as a condition to the Second Conversion of the Convertible Note Instrument.
In the event that, between Closing and the date of First Conversion of the Convertible Note Instrument or a CFIUS Turndown (as defined below), as applicable, FREYR pays a dividend on its Common Stock, it must pay Seller within five (5) business days of the payment date for the dividend, the amount of such dividend that is paid per share of Common Stock multiplied by the number of Conversion Shares.
If, within twelve (12) months following Closing, any person discovers any right, title or interest in any assets or liability (a “Wrong Pocket Asset” and a “Wrong Pocket Liability,” respectively) that as of Closing related to (i) the business of the Acquired Companies, but was not transferred or assumed by FREYR or any Acquired Company at Closing or (ii) the business of the Seller and its Affiliates other than the business of the Acquired Companies, but was transferred to FREYR or an Acquired Company at Closing, in each case except as a result of a transaction occurring after the Closing consented to by the parties, the parties shall cause (i) such Wrong Pocket Asset to be transferred to the appropriate person and (ii) such Wrong Pocket Liability to be assumed by the right person, as promptly as reasonably practicable for no additional consideration.
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FREYR may elect to obtain a representations and warranties insurance policy with respect to the Seller’s representations.
Within six (6) months post-Closing, FREYR will also use its reasonable efforts to dispose, divest, transfer or otherwise sell the assets and operations that constitute its European business (the “Divestiture”), and in case the consideration received is less than $45.0 million, FREYR shall pay to the Seller an amount equal to nineteen and nine tenths percent (19.9%) of the shortfall between such consideration and $50.0 million. If such Divestiture is not completed within six (6) months from Closing (the “Divestiture Date”), unless waived by the Seller, FREYR shall pay to the Seller a fee of $2.0 million for each calendar month from the Divestiture Date until completion of the Divestiture.
Following Closing, and in the event that any of the Preferred Stock (as defined below) issued under the Preferred Stock Purchase Agreement is converted into FREYR Common Stock, the Seller shall have the right to acquire from FREYR such number of shares of Common Stock so that the Seller’s proportionate ownership of Common Stock following the conversion of the Preferred Stock will be the same as before the conversion at a price equal to $2.50 per share of Common Stock or such other price as is used in the conversion of the Preferred Stock.
After Closing, FREYR shall, or shall cause TUM 1 to repay a certain Production Reserve Fee equal to $220.0 million in five installments to TUS and fully owned by Seller, pursuant to the TUS Offtake Agreement between these TUS and TUM 1, in five installments of $44.0 million, to be paid on each successive anniversary of the Closing Date, subject to certain exceptions and acceleration provisions.
Following Closing, FREYR shall prepare and timely file all tax returns of the Acquired Company as required by applicable law.
CFIUS Turndown
Following Closing, in the event the parties, after reasonable best efforts, fail to receive CFIUS approval with respect to the Conversions (the “CFIUS Turndown”), if CFIUS requires the Seller to divest, dispose, or otherwise sell the shares of Common Stock acquired as Share Consideration pursuant to the Transaction Agreement, within sixty (60) days following the date of the CFIUS Turndown, FREYR shall purchase or redeem from the Seller all such shares of Common Stock and issue to the Seller an unsecured loan note with a term of ten (10) years and an interest rate lower than the Note Instrument, with an aggregate principal amount equal to the 30-day VWAP of the Share Consideration prior to the issue of such unsecure loan note (the “Secondary Note”).
In the event of a CFIUS Turndown or if the Convertible Note Instrument does not become eligible for conversion within twelve (12) months following Closing (as may be extended by the Seller in it is sole discretion), FREYR shall redeem and repay the Convertible Note Instrument with a newly issued unsecured senior note substantially on the same terms as the Secondary Note.
The foregoing description of the Secondary Note is qualified in its entirety by reference to the full text of the form of the Secondary Note, a copy of which is filed as Exhibit 10.4 hereto and incorporated by reference.
Indemnification
FREYR shall have no recourse against the Seller other than in respect of fundamental representations, certain pre-Closing tax representations, the Reorganization, and breach of pre-Closing and post-Closing covenants and the Seller shall have no recourse against FREYR other than in respect of breach of covenants. FREYR is otherwise considering obtaining a representation and warranty insurance policy after the date of the Transaction Agreement. The aggregate liability of the Seller’s indemnification obligation for breach of fundamental representations, the Reorganization, certain pre-Closing tax representations, and leakage shall not exceed the Purchase Price. The aggregate liability of the Seller or FREYR for breach of any covenant under the Transaction Agreement shall not exceed $200.0 million.
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Termination
The Transaction Agreement may be terminated under certain circumstances by mutual agreement of the parties or by either party in the following events: (i) Closing shall not have occurred 120 days after the date of the Transaction Agreement; (ii) a permanent injunction or other government order prohibits or enjoins the Transaction; (iii) the other party’s uncured breach of its representations, warranties or covenants under the Transaction Agreement; or (iv) the identification of a material liability through an ongoing two-week post-signing diligence review entitling the identifying party to terminating the Transaction Agreement.
The foregoing description of the Transaction Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit 2.1, and is incorporated herein in its entirety by reference. The representations, warranties, and covenants contained in such agreement were made only for purposes of such agreement and as of specific date, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties.
Note Instrument and Convertible Note Instrument
At Closing, FREYR and the Seller shall execute the Note Instrument and the Convertible Note Instrument.
Pursuant to the Note Instrument, FREYR will repay the principal amount in cash with quarterly repayments of $7.5 million per quarter starting on the first calendar quarter ending after the one-year anniversary of the date of issuance of the Note Instrument and $30.0 million at maturity. Interest will accrue quarterly in arrears at one percent (1%) per annum and will be paid in cash on a quarterly basis starting at Closing. FREYR, in its discretion, may prepay the Note Instrument, in whole or in part, at any time prior to maturity date without premium or penalty.
Within five (5) days of obtaining CFIUS approval, the Convertible Note Instrument shall partially convert into 12.5 million shares of FREYR’s Common Stock (the “First Conversion”). Within five (5) days of obtaining Requisite Stockholder Approval, the remaining balance of the Convertible Note Instrument shall convert into 18.0 million additional shares of FREYR’s Common Stock. Interest shall accrue quarterly at seven percent (7%) per annum commencing on the issuance date, subject to certain adjustments; however, the Convertible Note Instrument shall never convert to more than 30.4 million shares of Common Stock.
The foregoing descriptions of the Note Instrument and Convertible Note Instrument are qualified in their entirety by reference to the full text of the forms of the Note Instrument and Convertible Note Instrument, copies of which are filed respectively as Exhibits 10.2 and 10.3 hereto and incorporated by reference.
Cooperation Agreement
At Closing, FREYR and the Seller shall enter into a Cooperation Agreement, pursuant to which, among other things, for so long as the Seller holds 15.4 million shares of FREYR’s Common Stock, it shall be entitled to designate for nomination one (1) director to FREYR’s board of directors (the “FREYR Board”) and (ii) for as long as the Seller holds fifteen percent (15%) or more of FREYR’s Common Stock, it shall be entitled to designate for nomination two (2) directors to the FREYR Board. For so long as there is at least one (1) director designated by the Seller on the FREYR Board and at least one (1) such director is an independent director in accordance with the applicable stock exchange listing rules, the FREYR Board shall appoint a director designated by the Seller to each of (i) the nominating and corporate governance committee and (ii) the compensation committee.
Pursuant to the Cooperation Agreement, the Seller shall further agree to customary standstill provisions for so long as the Seller holds the Share Consideration. In addition, subject to limited exceptions, the Seller shall not transfer any shares of Common Stock during the 1-year lock-up period. For as long as the Seller holds securities in the Company, it shall also be entitled to certain anti-dilution rights.
The foregoing description of the Cooperation Agreement is qualified in its entirety by reference to the full text of the form of the Cooperation Agreement, a copy of which is filed as Exhibit 10.5 hereto and incorporated by reference.
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Registration Rights Agreement
At Closing, FREYR and the Seller shall enter into a Registration Rights Agreement, pursuant to which FREYR shall grant the Seller certain registration rights on Form S-3 or other forms of registration statements, including Form S-1, as available, with respect to the shares of Common Stock issued to the Seller pursuant to the Transaction Agreement and the Convertible Note Instrument.
The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of the Registration Rights Agreement, a copy of which is filed as Exhibit 10.6 hereto and incorporated by reference.
Preferred Stock Purchase Agreement
On November 6, 2024, in connection with the Company’s efforts to finance in part the construction, commissioning and ramp-up related to the solar cell manufacturing facility to be developed by TUM 2, including general corporate purposes related to the assets to be acquired by the Company pursuant to the Transaction, FREYR and certain funds and accounts managed by Encompass Capital Advisors LLC entered into a Preferred Stock Purchase Agreement, pursuant to which such funds purchased non-voting preferred stock of FREYR (the “Preferred Stock”) in exchange for $100.0 million, to be funded across two tranches of $50.0 million each, upon Closing and thereafter upon FREYR’s sole discretion upon proceeding to a final investment decision on TUM 2. The Preferred Stock has a term of three (3) years from the Closing Date and a conversion price of $2.50 per share of Common Stock or such other price as is used in the conversion of the Preferred Stock. FREYR will redeem the Preferred Stock at maturity at par value plus any accrued and unpaid interest. The Preferred Stock will rank senior to the Common Stock but junior to all debt obligations of the Company and will have a liquidation preference equal to $10.00 per share of Preferred Stock plus accrued but unpaid dividends. FREYR also agreed to provide certain registration rights with respect to the Preferred Stock and the shares of Common Stock underlying the Preferred Stock. The Preferred Stock carries 6% cash interest, accruing on the funding of the first tranche and payable in arrears (i) on the dividend date 18 months after the first tranche funding and (ii) every six months after such dividend payment date. Other customary representations and warranties, closing conditions and terms were included in the Preferred Stock Purchase Agreement.
The foregoing description of the Preferred Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Preferred Stock Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference.
Voting Agreement
On November 6, 2024, in connection with the Transaction Agreement and the Convertible Note Instrument, FREYR and Encompass Capital Advisors LLC entered into a voting and support agreement pursuant to which such funds agreed to vote the shares of Common Stock it beneficially owns in favor of the Second Conversion at FREYR’s meeting of stockholders to approve such Second Conversion.
The foregoing description of the Voting Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Voting Agreement, a copy of which is filed as Exhibit 10.8 hereto and incorporated by reference.
Securities Purchase Agreement
On November 6, 2024, FREYR and Ms. Chunyan Wu, a co-founder and significant shareholder of Trina Solar, entered into a Securities Purchase Agreement pursuant to which Ms. Wu subscribed for approximately $14.8 million of shares of FREYR’s Common Stock at a price of $1.05 per share (which constitutes a premium to “Minimum Price” as defined under applicable NYSE Rules), representing an aggregate private placement of ten percent (10%) of FREYR’s Common Stock outstanding on the date hereof. FREYR also agreed to provide certain registration rights with respect to the shares issued pursuant to the Securities Purchase Agreement. The obligation of the parties to consummate the purchase and sale of the shares covered by the Securities Purchase Agreement is conditioned upon, amongst other things, CFIUS approval of the transaction. Other customary representations and warranties, closing conditions and terms were included in the Securities Purchase Agreement. The funds will be used for general operational and working capital purposes.
The foregoing description of the Securities Purchase Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Securities Purchase Agreement, a copy of which is filed as Exhibit 10.7 hereto and incorporated by reference.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Tom Einar Jensen’s Departure as Chief Executive Officer and as a Director
On November 6, 2024, FREYR announced that Tom Einar Jensen, the Company’s Chief Executive Officer (“CEO”), would be resigning from his position as CEO and as a director of the Company, effective immediately, and will continue with the Company as a consultant in the role of CEO - Europe. Mr. Jensen’s resignation is not related to any disagreements with the Company on any matter relating to its operations, policies, practices (financial or otherwise) or any issues regarding financial disclosures, accounting, or legal matters. FREYR Battery Norway AS, a wholly-owned subsidiary of the Company, entered into an employment termination and consulting contract with Mr. Jensen, reflecting his transition, effective immediately (the “Jensen Transition Contract”). Under the Jensen Transition Contract, Mr. Jensen will receive (i) a monthly service fee of $30,000 (pro-rated for any partial months) and (ii) in accordance with Mr. Jensen’s previously disclosed employment contract, a severance payment equal to six months of Mr. Jensen’s current base salary at the time of his termination of employment as the Company’s CEO. Furthermore, upon the closing of the Transaction, one-third of Mr. Jensen’s outstanding performance stock options will immediately vest and the remaining unvested portion of the performance stock options will vest 50% on each of the first and second anniversaries of the Closing Date.
The foregoing description of the Jensen Transition Contract does not purport to be complete and is qualified in its entirety by the terms and conditions of the Jensen Transition Contract, a copy of which is filed as Exhibit 10.9 hereto and incorporated by reference.
Appointment of New Chief Executive Officer
In connection with Mr. Jensen’s departure, on November 6, 2024, the FREYR Board appointed Daniel Barcelo as its CEO, effective on November 6, 2024. Mr. Barcelo will continue to serve as a member of the FREYR Board, and as Chair of the FREYR Board, but will no longer serve as a member of the Nominating and Governance Committee or the Audit and Risk Committee.
Mr. Barcelo, 54, has served as a director of FREYR since the consummation of the business combination in 2021. He is also the founder and CEO of Alussa Energy LLC. Prior to founding Alussa Energy in 2019, he was a Director of Research and Portfolio Manager at Moore Capital Management from 2008 to 2011 and an Equity Research Analyst with Lehman Brothers from 1998 to 2004, Bank of America from 2004 to 2008, and Managing Director and Head of Oil & Gas at Renaissance Capital in Moscow, Russia from 2011 to 2012. He has also served as Chief Financial Officer of Ruspetro plc in Russia from 2012 to 2014, Head of Corporate Finance of Lekoil Limited in Nigeria from 2015 to 2016 and co-founder, Director, and Chief Financial Officer of Invicti Terra Argentina Limited in Argentina from 2017 to 2019. Mr. Barcelo is a graduate of Syracuse University with a Bachelor of Science in Finance and is also a Chartered Financial Analyst® charter holder.
The Company and Mr. Barcelo intend to enter into an employment agreement outlining Mr. Barcelo’s compensation for his new role as CEO of the Company, which will be disclosed at such time.
As FREYR’s CEO, Mr. Barcelo will not be considered independent under the NYSE’s listing standards and applicable federal and state securities laws. There are no family relationships between Mr. Barcelo and any director or other executive officer, nor are there any transactions to which the Company was or is a participant and in which Mr. Barcelo has a material interest subject to disclosure under Item 404(a) of Regulation S-K. There are no arrangements or understandings between Mr. Barcelo and any other persons pursuant to which he was selected as an officer.
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Appointment of Chief Operating Executive Officer
In connection with the Transaction, on November 6, 2024, the FREYR Board appointed David Gustafson, currently an employee of TUM 1, as its Chief Operating Officer, effective as of, and subject to, the Closing of the Transactions.
Mr. Gustafson is a Co-General Manager at Trina Solar Co. Ltd, a China-based photovoltaics company. He has over 25 years of experience in industrial manufacturing, engineering, and operations, with a strong background in lean thinking and doing, six sigma problem solving, technical recruiting and team building, automation, and change management. Mr. Gustafson has successfully led multi-factory, multi-national, and multi-business unit operations, delivering customer-focused solutions, driving process improvement, and implementing digital factory technologies. He has also raised capital from venture and board level engagements, negotiated commercial and technical contracts, and launched new products and projects. In 2024, Mr. Gustafson was a registered agent and managing partner at Greywing Advisors, LLC, an operations consulting company. From 2023 to 2024, he was President of CubicPV Inc., an innovative solar company and MIT-affiliated startup. Between 2012 and 2023, Mr. Gustafson served as Vice President of Commercial Manufacturing at Bridgestone Corporation, a multinational manufacturing company. Between 2010 and 2012, he was a Maintenance and Services Manager at Tenaris S.A., a global manufacturing company. Between 2000 and 2009, he was a Manufacturing/Operations Manager at Deere & Company Inc., an agricultural machinery manufacturing company. Mr. Gustafson began his career in 1992 as a Civil Engineer Corps Officer in the US Navy. He holds a BSc in Mechanical Engineering from the Massachusetts Institute of Technology and MS in Materials Science and Engineering from Vanderbilt University and has completed executive education in Technology and Operations Management from Stanford Business School.
The Company and Mr. Gustafson intend to enter into an employment agreement outlining Mr. Gustafson’s compensation for his new role as Chief Operating Officer of the Company, which will be disclosed at such time.
Appointment of New Director
On November 4, 2024, the FREYR Board and all applicable committees thereof voted to appoint W. Richard Anderson as an independent director of the Company with an initial term expiring at the Company’s 2025 annual meeting of stockholders. The FREYR Board appointed Mr. Anderson as a member/chairperson of the Audit and Risk Committee and member of the Nominating and Corporate Governance Committee.
Mr. Anderson will receive the Company’s standard compensation provided for service as a non-employee director and will enter into the Company’s standard form of indemnification agreement for directors and executive officers.
Mr. Anderson has been Chief Executive Officer of Coastline Exploration Limited (formerly SOMA Oil and Gas), with exploration license interests in deep water, offshore Somalia. Mr. Anderson has over 40 years’ experience in the financial aspects of energy related companies, and started his career in audit with PricewaterhouseCoopers, followed by 16 years as a managing and tax partner of Hein & Associates LLP focused on mergers and acquisitions, cross-border transactions and numerous initial and secondary public offerings. From December 1998 to August 2007, he was President and Chief Executive Officer of Prime Natural Resources, Inc. an independent oil and gas exploration and production company, active in the U.S., South America and Kurdistan. From 2008 to 2015 he was Chief Financial Officer of Eurasia Drilling Company Ltd (LSE: EDCL), a large oil and gas drilling company in Russia. Mr. Anderson led the company in various executive and director capacities from its initial public offering in 2007 to a privatization in 2015. For the past 25 years, Mr. Anderson has also been a director of various public companies in the energy, exploration and resource extraction industries, assisting companies with initial public offerings and debt issuances, sourcing of other third party financing, reorganizations, trade sales, pay outs of special dividends, issuing special awards to management teams and conducting internal investigations with the assistance of outside counsel and forensic accountants. His involvement has frequently been on Audit Committees and as Chairman of the Audit Committee. From April 2014 to April 2019 he has served as a Director and Chairman of the Compensation Committee of Gulf Marine Services (LON: GMS); from August 2008 to the present as a Director of Eurasia Drilling Company Limited and member of the Audit Committee (LON: EDCL) and from December 2013 to the present as a Director of Coastline Exploration Limited (formerly SOMA Oil and Gas). Mr. Anderson’s professional qualifications include membership in the AICPA, Texas Society of Certified Public Accountants, Houston Chapter of Texas Society of CPAs and the Society of Exploration Geophysicists. Mr. Anderson graduated from the University of Colorado, magna cum laude, in 1978 and then obtained a masters in taxation from the University of Denver in 1985.
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The FREYR Board believes Mr. Anderson is well qualified to serve as a director due to his extensive operational, public company director and finance experience in the energy, exploration and resource extraction industries.
The FREYR Board has determined that Mr. Anderson is independent under the NYSE’s listing standards and applicable law. There are no arrangements or understandings between Mr. Anderson and any other persons pursuant to which Mr. Anderson was appointed as a director of the Company. In addition, there are no family relationships between Mr. Anderson and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. There are no related party transactions between the Company and Mr. Anderson that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Item 7.01. Regulation FD Disclosure.
On November 6, 2024, the Company issued a press release announcing that the execution of the Transaction Agreement. A copy of the press release is attached hereto as Exhibit 99.1.
Furnished as Exhibit 99.2 is a copy of an investor presentation to be used by the Company in connection with the Transaction.
The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act nor shall it be deemed incorporated by reference in any filling under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
Forward-Looking Statements
This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance and anticipated financial impacts of the Transaction, the satisfaction of the Closing conditions to the Purchase and the timing of the completion of the Transaction. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Transaction Agreement or could otherwise cause the Transaction to fail to close; (2) the outcome of any legal proceedings that may be instituted against the Company following the announcement of the Transaction; (3) the inability to complete the Transaction, including due to failure to satisfy conditions to Closing in the Transaction Agreement; (4) the risk that the Transaction disrupts current plans and operations as a result of the announcement and consummation of the Transaction; (5) the ability to recognize the anticipated benefits of the Transaction; (6) costs related to the Transaction; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and (9) other risks and uncertainties indicated from time to time, including those under “Risk Factors” therein, and in the Company’s other filings with the Securities and Exchange Commission. The Company cautions that the foregoing list of factors is not exclusive. The Company cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| * | Schedules and exhibits omitted pursuant to Item 601(a)(5) of Regulation S-K. FREYR will furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request. FREYR may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules or exhibits so furnished. | |
| ++ | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is not material and is the type of information that the registrant treats as private or confidential. |
8
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| FREYR Battery, Inc. | |||
| By: | /s/ Daniel Barcelo | ||
| Name: | Daniel Barcelo | ||
| Title: | Chairman of the Board of Directors | ||
| Dated: November 6, 2024 | |||
9
Exhibit 2.1
EXECUTION VERSION
[CERTAIN INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT (I) IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.]
TRANSACTION AGREEMENT
by and among
FREYR BATTERY, INC.
AND
TRINA SOLAR (SCHWEIZ) AG
November 6, 2024
TABLE OF CONTENTS
| PAGE | ||
| ARTICLE I | ||
| DEFINITIONS | ||
| Section 1.1 | Capitalized Terms | 1 |
| Section 1.2 | Section References | 16 |
| ARTICLE II | ||
| PURCHASE AND SALE | ||
| Section 2.1 | Purchase and Sale | 21 |
| Section 2.2 | Purchase Price; Cash Consideration Adjustment for Leakage | 21 |
| Section 2.3 | Withholding Taxes | 22 |
| Section 2.4 | Taking of Necessary Action; Further Action | 22 |
| ARTICLE III | ||
| CLOSING AND CLOSING CONSIDERATION | ||
| Section 3.1 | Closing & Parties Closing Deliveries | 22 |
| ARTICLE IV | ||
| REPRESENTATIONS AND WARRANTIES OF THE SELLER | ||
| Section 4.1 | Organizational Existence of the Acquired Companies | 24 |
| Section 4.2 | Power and Authorization; Enforceable Agreement | 25 |
| Section 4.3 | Governmental Approvals | 25 |
| Section 4.4 | Conflicts | 25 |
| Section 4.5 | Capitalization | 26 |
| Section 4.6 | Financial Information | 27 |
| Section 4.7 | Sufficiency of Asset | 28 |
| Section 4.8 | No Undisclosed Liabilities | 28 |
| Section 4.9 | Absence of Changes | 28 |
| Section 4.10 | Intellectual Property | 28 |
| Section 4.11 | Privacy Obligations, Data Protection | 30 |
| Section 4.12 | Material Contracts | 31 |
| Section 4.13 | Employee Benefit Plans | 33 |
| Section 4.14 | Employment Matters | 35 |
| Section 4.15 | Tax Matters | 36 |
| Section 4.16 | Subsidies and Grants | 39 |
| Section 4.17 | Environmental Matters | 39 |
| Section 4.18 | Real Property | 39 |
| Section 4.19 | Property | 40 |
| Section 4.20 | Litigation | 40 |
| Section 4.21 | Insurance | 40 |
| Section 4.22 | Compliance with Laws and Permits | 41 |
| Section 4.23 | Anti-Bribery and Corruption, Customs & Trade Laws, Sanctions and Compliance | 41 |
| Section 4.24 | Directors and Managing Directors | 42 |
| Section 4.25 | Top Suppliers | 43 |
| Section 4.26 | Related Party Claims | 43 |
| Section 4.27 | Complete Copies of Materials | 43 |
| Section 4.28 | Brokers | 43 |
| Section 4.29 | Investment Representation | 43 |
| Section 4.30 | Restricted Securities | 43 |
| Section 4.31 | Resale of Shares | 44 |
| Section 4.32 | Adequate Information | 44 |
| Section 4.33 | No Other Representations or Warranties | 44 |
i
TABLE OF CONTENTS
(continued)
| PAGE | ||
| ARTICLE V | ||
| REPRESENTATIONS AND WARRANTIES OF ACQUIROR | ||
| Section 5.1 | Organization and Good Standing | 45 |
| Section 5.2 | Power and Authorization; Enforceable Agreement | 46 |
| Section 5.3 | Governmental Approvals | 46 |
| Section 5.4 | Conflicts | 46 |
| Section 5.5 | Acquiror Capital Structure | 46 |
| Section 5.6 | Valid Issuance | 46 |
| Section 5.7 | SEC Filings; Financial Statements | 47 |
| Section 5.8 | Absence of changes | 47 |
| Section 5.9 | Sufficiency of Funds | 47 |
| Section 5.10 | Solvency | 47 |
| Section 5.11 | Intellectual Property | 47 |
| Section 5.12 | Material Contracts | 48 |
| Section 5.13 | Tax Matters | 48 |
| Section 5.14 | Environmental Matters | 49 |
| Section 5.15 | Litigation | 49 |
| Section 5.16 | Insurance | 49 |
| Section 5.17 | Compliance with Laws and Permits | 50 |
| Section 5.18 | Anti-Bribery and Corruption, Sanctions and Compliance | 50 |
| Section 5.19 | No Acquiror Vote | 50 |
| Section 5.20 | Brokers | 50 |
| Section 5.21 | Adequate Information | 51 |
| Section 5.22 | No Other Representations or Warranties | 51 |
| ARTICLE VI | ||
| PRE-CLOSING COVENANTS | ||
| Section 6.1 | Commercially Reasonable Efforts; Consents | 51 |
| Section 6.2 | Third-Party Contract Notices, Consents | 52 |
| Section 6.3 | Restrictions on Acquired Companies Activities | 52 |
| Section 6.4 | Restrictions on Acquiror | 55 |
| Section 6.5 | Access to Premises and Information. Due Diligence | 56 |
| Section 6.6 | Seller Reorganization. | 57 |
| Section 6.7 | Preferred Stock Purchase Agreement. | 57 |
| Section 6.8 | 24M Isolation | 57 |
| Section 6.9 | Related Agreements | 57 |
| Section 6.10 | Executives | 58 |
| Section 6.11 | Notification | 58 |
| Section 6.12 | No Leakage | 58 |
| Section 6.13 | NYSE Approval | 58 |
ii
TABLE OF CONTENTS
(continued)
| PAGE | ||
| ARTICLE VII | ||
| Additional POST-CLOSING Covenants | ||
| Section 7.1 | Best Efforts; Governmental Approvals | 58 |
| Section 7.2 | CFIUS Condition | 58 |
| Section 7.3 | Proxy Statement. | 59 |
| Section 7.4 | Acquiror Stockholders Meeting | 61 |
| Section 7.5 | Europe Business Divestiture | 62 |
| Section 7.6 | Wrong Pockets | 62 |
| Section 7.7 | Tax Matters | 63 |
| Section 7.8 | Waivers and Releases of Claims | 66 |
| Section 7.9 | R&W Insurance Policy; Cooperation | 68 |
| Section 7.10 | Partnership; Battery Energy Storage | 69 |
| Section 7.11 | CFIUS Turndown | 69 |
| Section 7.12 | Dividends | 69 |
| Section 7.13 | Production Reserve Fee Repayment | 69 |
| Section 7.14 | Equity Contribution Agreement | 70 |
| Section 7.15 | Solar Cell Agreement | 70 |
| Section 7.16 | Seller’s Option | 70 |
| Section 7.17 | Trina Employee Shares | 70 |
| Section 7.18 | Lock-Up Agreement Waiver Notification | 70 |
| ARTICLE VIII | ||
| Conditions to close | ||
| Section 8.1 | Mutual Conditions | 70 |
| Section 8.2 | Additional Acquiror Conditions | 71 |
| Section 8.3 | Additional Seller Conditions | 71 |
| Section 8.4 | Frustration of Closing Conditions | 72 |
| ARTICLE IX | ||
| PRE-CLOSING TERMINATION OF AGREEMENT | ||
| Section 9.1 | Termination | 72 |
| Section 9.2 | Effect of Termination | 73 |
| ARTICLE X | ||
| POST-CLOSING INDEMNIFICATION | ||
| Section 10.1 | Survival | 73 |
| Section 10.2 | Indemnification | 74 |
| Section 10.3 | Indemnification Limitations and Qualifications | 75 |
| Section 10.4 | Fraud. | 75 |
| Section 10.5 | Claim Procedures | 76 |
| Section 10.6 | Tax Treatment | 77 |
| Section 10.7 | Exclusive Remedy | 77 |
| Section 10.8 | No Rescission | 77 |
| ARTICLE XI | ||
| GENERAL PROVISIONS | ||
| Section 11.1 | Certain Interpretations | 78 |
| Section 11.2 | Notices | 78 |
| Section 11.3 | Confidentiality | 79 |
| Section 11.4 | Public Statements and Disclosure | 80 |
| Section 11.5 | Expenses | 80 |
| Section 11.6 | Amendment | 80 |
| Section 11.7 | Assignment | 80 |
| Section 11.8 | Severability | 80 |
| Section 11.9 | Specific Performance and Other Remedies | 81 |
| Section 11.10 | Governing Law | 81 |
| Section 11.11 | Consent to Jurisdiction | 81 |
| Section 11.12 | WAIVER OF JURY OF TRIAL | 82 |
| Section 11.13 | Entire Agreement | 82 |
| Section 11.14 | Third-Party Beneficiaries | 82 |
| Section 11.15 | Counterparts | 82 |
iii
INDEX OF ANNEXES, EXHIBITS AND SCHEDULES
| Annex | Description |
| Annex A | Acquired Companies |
| Annex B | Excluded Companies |
| Exhibit | Description |
| Exhibit A-1 | Form of Convertible Note Instrument |
| Exhibit A-2 | Form of Cooperation Agreement |
| Exhibit A-3 | Form of Lock-Up Agreement |
| Exhibit A-4 | Form of Note Instrument |
| Exhibit A-5 | Form of Registration Rights Agreement |
| Exhibit A-6 | Form of Secondary Note Instrument |
| Schedule | Description |
| Schedule A-1 | Acquiror Knowledge Persons |
| Schedule A-2 | List of Acquired Companies Resignees |
| Schedule A-3 | List of Acquiror Executive Management Appointments |
| Schedule A-4 | Lock-Up Individuals |
| Schedule A-5 | Seller Account |
| Schedule A-6 | Seller Knowledge Persons |
| Schedule A-7 | Solar Cell Term Sheet |
| Schedule A-8 | Solar Module Term Sheets |
| Schedule 4.15(a) | Employee Census |
| Schedule 6.3(a) | Specific Prohibitions |
| Schedule 7.2(a) | CFIUS Burdensome Condition |
| Schedule 8.2(d) | Consents and Waivers |
iv
TRANSACTION AGREEMENT
This TRANSACTION AGREEMENT (this “Agreement”) is made and entered into as of November 6, 2024 (the “Agreement Date”), by and among FREYR Battery, Inc., a Delaware corporation (“Acquiror”), and Trina Solar (Schweiz) AG, an entity organized under the laws of Switzerland (the “Seller”).
RECITALS
WHEREAS, the Seller owns, directly or indirectly, all legal and beneficial ownership in the shares of capital stock of, or other ownership, membership, partnership, joint venture or equity interest in, the companies set out on Annex A (each, an “Acquired Company” and, collectively, the “Acquired Companies”), and has agreed to sell to Acquiror all of the outstanding Target Shares on the terms set forth herein.
WHEREAS, the Seller or the Acquired Companies own Equity Interests in the companies set out on Annex B (each, an “Excluded Company” and, collectively, the “Excluded Companies”), which are not intended to be sold or transferred to Acquiror in the Contemplated Transactions, and which will be transferred to entities other than the Acquired Companies prior to the Closing.
WHEREAS, Acquiror and the Seller desire to make certain representations, warranties, indemnities, covenants and agreements, as more fully set forth herein, in connection with the Purchase and the other Contemplated Transactions.
NOW, THEREFORE, in consideration of the mutual agreements, covenants and other premises set forth herein, the mutual benefits to be gained by the performance thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted, the Parties hereby agree as follows:
ARTICLE
I
DEFINITIONS
Section 1.1 Capitalized Terms. For all purposes of and pursuant to this Agreement, the following capitalized terms have the following respective meanings:
“24M” means 24M Technologies, Inc., a Delaware corporation.
“24M Assets” means the tangible and intangible assets of Acquiror or any of its Subsidiaries, comprised of proprietary technology, licenses, research and development, equipment and investments relating to the platform technology utilized under the 24M Licenses, including, to (i) the 24M Equipment, (ii) the 24M Licenses, and (iii) 6,975,956 shares of Series G Preferred Stock of 24M issued to Acquiror by 24M on March 24, 2023.
“24M Equipment” means all the equipment relating to the lithium-ion battery production line using the SemiSolidTM technology licensed from 24M to Acquiror, through its Subsidiaries, located at Acquiror’s customer qualification plant in Mo i Rana, Norway.
“24M Licenses” means (i) the license and services agreement dated December 15, 2020, by and among 24M and FREYR Battery Norway AS, a Norwegian limited liability corporation, as amended on January 18, 2021, April 27, 2022, and December 21, 2022; and (ii) the license and services agreement dated October 8, 2021, by and among 24M and FREYR Battery KSP JV, LLC, a Delaware limited liability company.
1
“Acquired Company Employee Plan” means each “employee benefit plan” (as defined in Section 3(3) of ERISA, whether or not subject to ERISA) and all other compensation and benefits plans, programs, policies, agreements or arrangements, whether written or unwritten and whether or not funded, including each employment, individual consulting, cash or equity-based bonus or incentive, change in control, transaction-based, severance, retention, vacation, sick leave, fringe benefit, pension or retirement, profit sharing, deferred compensation, employee loans, life insurance, accident, disability, health, medical, dental or vision plan, program, policy, agreement or arrangement, in each case, in each case, (i) that is or has been maintained, contributed to, or required to be contributed to, by any Acquired Company, or (ii) with respect to which any Acquired Company has or may have any Liability or obligation.
“Acquired Company IP” means any Intellectual Property that is Acquired Company Owned IP or otherwise used or held for use in, or necessary for, the conduct of the Acquired Companies’ business as currently conducted or contemplated to be conducted.
“Acquired Company Owned IP” means any and all Intellectual Property that is (a) owned by, or purported to be owned by, any Acquired Company, or (b) owned (or purported to be owned) by Seller or any of its Affiliates (other than any Acquired Company) and used or held for use in, or necessary for, the conduct of the Acquired Companies’ business as currently conducted or contemplated to be conducted.
“Acquiror Common Stock” means the common stock, par value $0.01 per share, of Acquiror.
“Acquiror Fundamental Representations” means the representations and warranties of Acquiror set forth in Section 5.1 (Organization and Good Standing), Section 5.2 (Power and Authorization; Enforceable Agreement), Section 5.4 (Conflicts) and Section 5.6 (Valid Issuance).
“Acquiror Material Adverse Effect” means any change, event, violation, inaccuracy, circumstance, occurrence, result, state of facts or effect (any such item, an “Effect”), individually or when taken together with all other Effects that have occurred prior to the date of determination of the occurrence of such Effect, that is or would reasonably be expected to (a) materially impede the authority or ability of Acquiror to consummate the Contemplated Transactions and the Conversions in accordance with the terms hereof and applicable Law, or (b) be materially adverse to the business, assets (including intangible assets) and liabilities, financial condition, results of operations of Acquiror, other than, in the case of this clause (b), any Effect resulting from (i) changes in general economic conditions, (ii) changes or developments in any of the industries in which Acquiror operates, (iii) changes in any Laws or legal or regulatory conditions (or the interpretation or enforcement thereof) or changes in GAAP or other applicable accounting standards, or the interpretation or enforcement thereof, (iv) political or social conditions, international diplomatic or trade relations (including US-China relations), or changes in the foregoing, (v) acts of war, sabotage or terrorism (including cyberterrorism), (vi) any natural disaster, hurricane, pandemic, epidemic or act of God, and any actions taken by Governmental Authorities in connection with such events, (vii) the public announcement of this Agreement or the Contemplated Transactions (including by reason of the identity of the Seller or any communication by the Seller regarding its plans or intentions, and including the impact thereof on relationships with customers, suppliers, distributors, partners, employees or others having relationships with any of Acquiror’s Subsidiaries), or (viii) the taking of any action expressly contemplated by this Agreement or (ix) any failure by Acquiror to meet any projections, budgets or estimates of revenue or earnings (it being understood that the facts and circumstances giving rise to such failure may be taken into account in determining whether there has been an Acquiror Material Adverse Effect if otherwise eligible pursuant to this definition); provided that such Effects referenced in clauses (i) through (vi) do not, individually or when taken together with all other such Effects, have a disproportionate or unique effect on Acquiror as compared to its competitors.
2
“Acquiror Material Contracts” means any Contract in effect as of the date of the Closing Date, to which Acquiror or any of its Subsidiaries is a party or by which it is bound, which is required to be furnished or filed with the SEC pursuant to Item 601(b)(10) of Regulation S-K promulgated under the Exchange Act, other than those agreements and arrangements described in Item 601(b)(10)(iii) of Regulation S-K.
“Acquiror Stockholders” means the holders of shares of Acquiror Common Stock.
“Action” means any demand, claim, charge, action, suit, investigation, proceeding (whether at law or in equity), hearing, inquiry, audit, examination petition, complaint, notice of violation, arbitration or other litigation or similar proceeding, whether arbitral, civil, criminal, administrative, investigative or appellate proceeding, commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or arbitration panel.
“Affiliate” of any Person means another Person that directly or indirectly through one of more intermediaries Controls, is Controlled by or is under common Control with, such first Person.
“Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended, the United Kingdom Bribery Act of 2010 and any other applicable Laws concerning anti-corruption, anti-bribery, or anti-money laundering of any other jurisdiction in which any Acquired Company conducts business, including, without limitation, applicable laws passed pursuant to the Organization of Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
“Anti-Money Laundering Laws” means the financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, the money laundering Laws (including any licensing or registration requirements applicable to money services businesses and payment institutions as well as statutes criminalizing money laundering such as 18 U.S.C. §§ 1956 and 1957) of all jurisdictions in which any Acquired Company or Acquiror, conducts business, and any related or similar rules or guidelines issued, administered or enforced by any Governmental Authority.
“Base Cash Consideration” means $100,000,000.
“Burdensome Condition” means any condition or remedy required to obtain CFIUS Approval other than those set out in Schedule 7.2(a).
“Business Day” means each day that is not (a) a Saturday, Sunday, or (b) other day on which banking institutions located in Shanghai, People’s Republic of China, New York, New York, are or obligated by law or executive order to close.
“Cash Consideration” means the Base Cash Consideration less the any Leakage.
“CFIUS” means the Committee on Foreign Investment in the United States and each member agency thereof acting in such capacity.
“CFIUS Approval” means (a) CFIUS has concluded that the Conversions is not a “covered transaction” and not subject to review under the DPA, (b) CFIUS has issued a written notice that it has completed a review or investigation of the notification voluntarily provided pursuant to the DPA with respect to the Conversions, and has concluded all action under the DPA or (c) if CFIUS has sent a report to the President of the United States requesting the President’s decision and (i) the President has announced a decision not to take any action to suspend or prohibit the Conversions or (ii) having received a report from CFIUS requesting the President’s decision, the President has not taken any action after fifteen (15) days from the earlier of the date the President received such report from CFIUS or the end of the investigation period.
3
“CFIUS Notice” means a joint voluntary notice with respect to the Conversions submitted to CFIUS pursuant to 31 C.F.R. § 800.501.
“CFIUS Turndown” shall be deemed to have occurred if (a) CFIUS has informed the Parties in writing, after reasonable best efforts by the Parties to negotiate with CFIUS to receive CFIUS Approval, that it has unresolved national security concerns with respect to the Conversions and that it intends to send or has sent a report to the President of the United States recommending that the President of the United States act to suspend or prohibit the Conversions or (b) if after the Parties use reasonable best efforts to negotiate with CFIUS in good faith, CFIUS has informed the Parties it will impose a Burdensome Condition as a condition of CFIUS Approval.
“Closing Cash Consideration” means the Base Cash Consideration less the Known Leakage Amount.
“Code” means the Internal Revenue Code of 1986, as amended.
“Commercial Agreements” means (i) Solar Cells Supply Agreement; (ii) Polysilicon Supply Agreement; (iii) Module Operational Support Agreement; (iv) IP License Agreement; (v) Trademark License Agreement; (vi) Sales Agency Agreement; (vii) TUS Offtake Agreement; and (viii) Solar Cell Operational Support Agreement.
“Commercially Available Software” means generally available, off-the-shelf Software licensed pursuant to click-through, click-wrap, or other standard terms and conditions.
“Confidential Information” means that information disclosed by each Party to the other Party, including in the case of the Seller, the Seller Parent, in connection with the Contemplated Transactions, including the terms and conditions of this Agreement, the Related Agreements and such Confidentiality Agreement, the existence of discussions between the Parties, trade secrets of each Party, any oral, written, graphic or machine-readable information including, but not limited to, that which relates to patents, patent applications, research, product plans, products, developments, inventions, processes, designs, drawings, engineering, formulae, research, development or know-how, markets, software (including source and object code), hardware configuration, computer programs, algorithms, business or marketing plans, business proposals, costs, prices, purchase or sales volume, agreements with third parties, services, actual or potential customers and suppliers, marketing or finances of the disclosing Party, which information is designated in writing to be confidential or proprietary, or if given orally, is confirmed in writing as having been disclosed as confidential or proprietary within a reasonable time (not to exceed thirty (30) days) after the oral disclosure, or which information would, under the circumstances, appear to a reasonable person to be confidential or proprietary; provided, however, that Confidential Information will not include information that: (i) is as of the date of the Confidentiality Agreement, or which thereafter became, through no act or failure to act on the part of the receiving Party, generally known or readily ascertainable through proper means to persons knowledgeable in the relevant industry; (ii) was acquired or lawfully in the possession of the receiving Party by proper means without restriction as to use or disclosure before receiving such information from the disclosing Party; (iii) becomes available to the receiving Party on a non-confidential basis from a source other than the disclosing Party; provided that such source is not known by the receiving Party to be bound by a confidentiality agreement or otherwise prohibited from disclosing such information to the receiving Party by a contractual, legal or fiduciary obligation; or (iv) was independently developed by the receiving Party without use of the disclosing Party’s Confidential Information.
“Confidentiality Agreement” means the Non–Disclosure Agreement between Seller Parent and Acquiror, dated March 28, 2024, as may be amended from time to time.
4
“Conflict” means with respect to any Contract, Organizational Document, Acquired Company Authorization, instrument, document, interest Lien, Law or Order (each, a “Subject Item”), each and any of the following: (a) any conflict with, breach of, violation of or default under (with or without notice or lapse of time, or both) such Subject Item, (b) any payment or other consideration (including any increase in any payment or consideration) required to be made in connection with such Subject Item, (c) any actual (or right to) terminate, cancel, modify, or accelerate any right or obligation with respect to or under, or loss of any benefit or right under such Subject Item, and (d) any notice, consent, waiver, or approval required under such Subject Item.
“Consent” means any approval, consent, ratification, waiver, clearance or other authorization of, notice to or registration, qualification, designation, declaration or filing with any Person.
“Contemplated Transactions” means the Purchase and the Conversions.
“Contract” means any written or oral, legally binding agreement, contract, mortgage, indenture, lease, license, covenant, plan, insurance policy, instrument, arrangement or commitment, permit, concession, franchise, license or similar arrangement.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled” and “under common Control with” have correlative meanings.
“Controlled Group Liability” means any and all Liabilities (i) under any Multiemployer Plan, (ii) under Title IV of ERISA, (iii) under Section 302 of ERISA or Sections 412 and 4971 of the Code, (iv) as a result of the failure to comply with the continuation of coverage requirements of ERISA Section 601 et seq., or Section 4980B of the Code, or (v) under corresponding or similar provisions of any foreign Law.
“Conversion Conditions” means (i) obtaining CFIUS Approval with respect to the First Conversion and (ii) receiving the Requisite Stockholder Approval at the Acquiror Stockholder Meeting with respect to the Second Conversion.
“Conversions” means the First Conversion and the Second Conversion.
“Conversion Shares” means the First Conversion Shares and the Second Conversion Shares.
“Convertible Note” means $80,000,000 aggregate principal amount of Acquiror’s seven percent (7%) convertible unsecured note due five (5) years of the Closing, issued pursuant to the Convertible Note Instrument.
“Convertible Note Instrument” means the instrument to be executed on or before the Closing Date, by and between Acquiror and Seller, substantially in the form attached hereto as Exhibit A-1.
“Cooperation Agreement” means the cooperation agreement to be executed on or before the Closing Date, between Acquiror and Seller, substantially in the form attached hereto as Exhibit A-2.
“Copyrights” has the meaning given to it in the definition of “Intellectual Property.”
“Customs & Trade Laws” means all applicable export, import, customs and trade, and anti-boycott Laws or programs administered, enacted or enforced by any Governmental Authority, including: (a) the U.S. Export Administration Regulations, the U.S. International Traffic in Arms Regulations, and the import Laws and regulations administered by U.S. Customs and Border Protection, including the Uyghur Forced Labor Prevention Act; (b) the anti-boycott Laws and regulations administered by the U.S. Departments of Commerce and the Treasury; and (c) any other similar export, import, anti-boycott, or other trade Laws or programs in any relevant jurisdiction to the extent they are applicable to any Acquired Company or any of its Subsidiaries.
5
“Disclosed Related Party Agreements” means the (a) the Intercompany Sales Agreement between TUM 1 and TVNW, dated July 16, 2024; (b) Intercompany Sales Agreement between TED and TUM 1, dated July 16, 2024; (c) Agreement for the Provision of Service between TUS and TUM 1, dated July 16, 2024; (d) Agreement for the Provision of Service between Seller Parent and TUM 1, dated July 16, 2024; (e) Intellectual Property License Agreement between Seller Parent and TUM 1, dated July 16, 2024; (f) Trademark License Agreement between Seller Parent and TUM 1, dated July 16, 2024; (g) Marketing and Service Agreement between TUS and TUM 1, dated July 16, 2024; and (h) TUS Offtake Agreement.
“DPA” means Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder.
“Employee” means any employee, worker, consultant, independent contractor, officer, director or other service provider of the Acquired Companies.
“Encompass Capital” means [***].
“Environmental Law” means any Law or Order relating to pollution, the protection of the environment or natural resources, the protection of the public health and safety, or to Hazardous Materials, including the manufacture, processing, distribution, use, treatment, storage, disposal, collection, recycling, labeling, packaging, sale, transport or handling of Hazardous Materials or products containing Hazardous Materials.
“Equity Financing” means the equity financing into Acquiror, to be implemented on or prior to Closing pursuant to the Preferred Stock Purchase Agreement.
“Equity Interests” means, with respect to any Person, (a) any share of capital stock of, or other ownership, membership, partnership, joint venture or equity interest in, such Person, (b) any indebtedness, securities, options, warrants, call, subscription or other rights of, or granted by, such Person or any of its Affiliates that are convertible into, or are exercisable or exchangeable for, or giving any Person any right to acquire any such share of capital stock or other ownership, partnership, joint venture or equity interest, in all cases, whether vested or unvested, (c) any stock appreciation right, phantom stock, interest in the ownership or earnings of such Person or other equity equivalent or equity-based award or right, or (d) any Indebtedness having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which any holder of securities of such Person may vote.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” of any entity means each Person that at any relevant time would be treated as a single employer with such entity for purposes of Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code.
“European Divestiture Target Amount” means $50,000,000.
“Exchange Act” means the Securities Exchange Act of 1934.
“First Conversion” means the conversion of the First Conversion Shares, pursuant to the Convertible Note Instrument.
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“First Tranche Equity Financing” means the first tranche of $50,000,000 of the equity financing into Acquiror, to be implemented on or prior to Closing pursuant to the Preferred Stock Purchase Agreement.
“First Conversion Shares” means 12,521,653 shares of Acquiror Common Stock, as may be adjusted as a result of any share consolidation, stock split, stock dividend or similar event effected between the date hereof and the date of the First Conversion with respect to the Acquiror Common Stock.
“Fraud” means the making by a Party hereto, to the other Party hereto, of an representation or warranty expressly contained in this Agreement that at the time such representation or warranty was made by such Party, (a) such representation or warranty was inaccurate, (b) such Party had actual knowledge (and not imputed or constructive knowledge), without any duty of inquiry or investigation, of the inaccuracy of such representation or warranty, (c) in making such representation or warranty such Party had the intent to deceive such other party and to induce such other party to enter into this Agreement, and (d) such other Party acted in reasonable reliance on such representation or warranty and suffered damages as a result of such reliance. For the avoidance of doubt, “Fraud” does not include equitable fraud, promissory fraud, unfair dealings fraud, or any torts (including fraud) based on negligence or recklessness, and a claim for Fraud may only be made against the Party hereto committing such Fraud.
“GAAP” means generally accepted accounting principles in the United States, as in effect on the date or for the period with respect to which such principles are applied.
“Governmental Authority” means any (a) federal, state, provincial, local or other government (U.S. or non-U.S.), (b) any federal, state, provincial, local, or other governmental or supra-national entity, regulatory or administrative authority, taxing authority, agency, department, board, division, instrumentality or commission, educational agency, political party, body, or judicial or arbitral body, board, tribunal, or court (U.S. or non-U.S.), (c) any public international organization (e.g., the World Bank), (d) any industry self-regulatory authority or (e) any business, entity, or enterprise owned or controlled by any of the foregoing.
“Governmental Official” means (a) an officer, agent or employee of any Governmental Authority, (b) any Person acting for or on behalf of a Governmental Authority, (c) any candidate for any office of or position with any Governmental Authority, or (d) any political party.
“Hazardous Material” means any substance, material, emission or waste that has been listed, defined or designated by any Governmental Authority or by any Environmental Law to be radioactive, toxic, hazardous or otherwise a danger to health or the environment, including polychlorinated biphenyls, asbestos, petroleum, and urea-formaldehyde.
“Incident” means any incident, security breach, or other unauthorized use, access or intrusion to any Systems or any Personal Information processed by or on behalf of the Acquired Companies, including denial of service attacks, infection with malware (including ransomware, spyware, worms, trojans and viruses), hacking, “man in the middle” attacks or similar incidents.
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“Indebtedness” means, with respect to any Person, and without duplication, the following consolidated Liabilities determined in accordance with GAAP: (a) Indebtedness for borrowed money and other indebtedness in the forms of surety bonds or performance bonds; (b) the deferred purchase price of property, assets, goods or services, including “earn-outs” and “seller notes” whether accrued or not, but excluding, for the avoidance of doubt, any trade payables incurred in the ordinary course of business; (c) all reimbursement and other obligations with respect to letters of credit, bank guarantees, bankers’ acceptances or other similar instruments, letters of credit and bankers’ acceptances; (d) any capitalized lease obligations and sale leaseback obligations classified as such under GAAP; (e) all Liabilities arising from the assignment or factoring of receivables or similar arrangements; (f) net intercompany balance payables by the Acquired Companies to the Seller; (g) all Liabilities of the Acquired Companies with respect to (x) any accrued or incurred and unpaid compensation and benefits and (y) any unfunded or underfunded pension, retirement, profit sharing, retiree medical and deferred compensation, in each case, that relate to pre-Closing service but are unpaid as of the Closing and together with the employer portion of any payroll, employment or similar Taxes attributable to such amounts; (h) obligations arising out of interest rate, currency swap, hedging arrangements or any other arrangements designed to provide protection against fluctuations in interest or currency rates; (i) all unpaid declared and approved dividends on any capital stock of such Person and its Subsidiaries; (j) all indebtedness of a third-party secured by a lien on any property or assets of such Person and its Subsidiaries or otherwise assumed or guaranteed by such Person or its Subsidiaries; (k) any payroll Taxes of such Person or its Subsidiaries accrued or payable prior to the Closing Date; (l) guarantees of any of the foregoing; and (m) accrued interest, fees, premiums, penalties, indemnities, costs, expenses or other amounts due in respect of any of the foregoing; provided that, “Indebtedness” shall not include any intercompany indebtedness solely among the Acquired Companies.
“Indemnified Party” mean a Person that may be entitled to be indemnified under this Agreement, including pursuant to Article X.
“Intellectual Property” means any and all intellectual property, industrial property rights and rights in confidential information of every kind and description throughout the world, including all U.S. and foreign (i) patents, patent applications, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions, and extensions thereof (“Patents”), (ii) trademarks, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, design rights, and other similar designations of source or origin, together with the goodwill symbolized by any of the foregoing (including all registrations and applications for registration of the foregoing) (“Trademarks”), (iii) copyrights (including all registrations, applications for registration and renewal rights) and copyrightable subject matter (“Copyrights”), (iv) rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing (“Software”), (v) trade secrets and all other confidential information, ideas, know-how, inventions, proprietary processes, formulae, models, and methodologies (“Trade Secrets”), (vi) rights of publicity, privacy, and rights to Personal Information, (vii) moral rights and rights of attribution and integrity and (viii) all rights in the foregoing and in other similar intangible assets.
“IP License Agreement” means the Amended and Restated Intellectual Property License Agreement, to be executed on or before the Closing Date, between Seller Parent, as licensor, and TUM 1, as licensee, amending and restating the Intellectual Property License Agreement between Seller Parent and TUM 1 dated July 16, 2024.
“Knowledge,” “Known” or “Knowingly” means, with respect to Acquiror or Seller, the actual knowledge of the Persons set forth on Schedule A-1 and Schedule A-6, respectively, after reasonable enquiry.
“Law” means any U.S. or non-U.S. federal, state, provincial, local or other constitution, law, statute, ordinance, rule, directive, regulation, published administrative position, policy or principle of common law issued, enacted, adopted, promulgated, implemented or otherwise put into legal effect by or under the authority of any Governmental Authority and any judgments, decisions, orders and awards made in respect of the foregoing.
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“Leakage” means without duplication: (a) any dividend or distribution declared, paid, or made (whether actual or deemed and in cash or in kind) or any payments in lieu of any dividend declared, made or paid by any Acquired Company, directly or indirectly, to or for the benefit of any Seller or any of its Affiliates or their respective shareholders; (b) any securities being redeemed, purchased or repaid, or any other return of capital (whether by reduction of capital or otherwise and whether in cash or in kind and whether loan or share capital) by any Acquired Company, directly or indirectly, to or for the benefit of the Seller or any of its Affiliates or their respective shareholders; (c) any consultant, advisory, management, monitoring, service, shareholder or other fees, charges or compensation of a similar nature paid to or for the benefit of the Seller or any of its Affiliates or their respective shareholders; (d) any amount owed to any Acquired Company by the Seller or any of its Affiliates or their respective shareholders, which amount is waived or forgiven; (e) any assets or rights transferred to, or liabilities assumed, guaranteed, indemnified, increased or incurred by any Acquired Company, directly or indirectly, for the benefit of the Seller or any of its Affiliates or their respective shareholders; (f) the purchase by any Acquired Company, directly or indirectly, of any assets from or for the benefit of any Seller or any of its Affiliates or their respective shareholders; (g) any Seller Transaction Expenses incurred or paid by any Acquired Company; (i) any agreement or arrangement made or entered into by any Acquired Company to do or give effect to any matter referred to in paragraphs; (a) through (h) (inclusive) above; or (j) without duplication, any Tax payable on or with respect to any of the payments, matters, transactions or circumstances referred to in paragraphs (a) through (i) above, but in each case, excluding any Permitted Leakage.
“Lease Agreement” means any Contract for the leasing, use or occupancy of, or otherwise granting a right in or relating to the Leased Real Property.
“Leased Real Property” means all real property currently leased, subleased or licensed by or from any Acquired Company or otherwise occupied by any Acquired Company.
“Liability” means, with respect to any Person, any and all liabilities, obligations, claims, and deficiencies of any kind (whether known or unknown, contingent, accrued, due or to become due, secured or unsecured, matured or otherwise), including accounts payable, all liabilities, obligations, claims, and deficiencies related to Indebtedness or guarantees, costs, expenses, royalties payable, and other reserves, termination payment obligations, and all other liabilities, obligations, claims, and deficiencies of such Person or any of its Affiliates, in each case, regardless of whether or not such liabilities, obligations, claims, and deficiencies are required to be reflected on a balance sheet in accordance with GAAP.
“Lien” means any lien, pledge, charge, claim, mortgage, security interest or other encumbrance of any kind or character whatsoever.
“Loan Repayment Amount” means $50,000,000 plus interest in accordance with the TUH Credit Facility.
“Lock-Up Agreement” means one or more lock-up agreements to be entered into at Closing, by and among Acquiror and each of the individuals set forth in Schedule A-4 and Encompass Capital, in respect of the preferred stock acquired under the Preferred Stock Purchase Agreement, substantially in the form set out in Exhibit A-3.
“Losses” means all claims, losses, liabilities, damages, deficiencies, Taxes, costs, interest, awards, judgments, settlements, penalties, fees and expenses, including attorneys’, consultants’, experts’ and other professionals’ fees and expenses (including in connection with investigation, defending against, prosecuting, or settling any of the foregoing) and court or arbitration costs but in each case excluding any consequential, indirect, speculative, punitive or exemplary damages.
“Material DD Item” means any Liability identified by either Party in due diligence, solely based on documentation or responses provided by the other Party after 12:01 am (New York time) on October 29, 2024, where the value of such Liability is, or is reasonably estimated to be, $10,000,000 in any given twelve (12) month period or $25,000,000 in the aggregate.
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“Module Operational Support Agreement” means the Operational Support Agreement, to be executed on or before the Closing Date, between TUS, as service provider, and Acquiror, as manufacturer, amending, restating, replacing and renaming the Agreement for the Provision of Service between Seller Parent and TUM 1 dated July 16, 2024.
“Note” means the $150,000,000 aggregate principal amount of Acquiror’s senior unsecured note due five (5) years after the Closing Date, issued pursuant to the Note Instrument.
“Note Instrument” means the instrument to be executed on or before the Closing Date, by and between Acquiror and the Seller, substantially in the form attached hereto as Exhibit A-4.
“NYSE” means the New York Stock Exchange.
"NYSE Approval” means the approval of NYSE for the listing of the Share Consideration and the Conversion Shares.
“NYSE Supplemental Listing Application” means an NYSE supplemental listing application covering the Share Consideration and the Conversion Shares.
“Open Source License” has the meaning given to it in the definition of “Open Source Materials.”
“Open Source Materials” shall mean any Software or other material that is distributed as “free software,” “open source software” or pursuant to any license identified as an open source license by the Open Source Initiative (www.opensource.org) or on similar license terms (“Open Source Licenses”).
“Order” means any order, judgment, injunction, ruling, edict, or other decree, whether non-final, final, temporary, preliminary or permanent, enacted, issued, promulgated, enforced or entered by any Governmental Authority or Governmental Official (in the capacity as a Governmental Official).
“Organizational Documents” means, with respect to any Person (other than an individual), (a) the certificate or articles of incorporation or organization or the limited liability company agreement, operating or partnership agreement adopted or filed in connection with the creation, formation or organization of such Person and (b) all bylaws and equityholders agreements to which such Person is a party relating to the organization or governance of such Person, in each case, as amended or supplemented.
“Party” means each of Acquiror and the Seller.
“Permitted Leakage” means, without duplication, (a) any payments expressly provided for under the terms of this Agreement, as well as the redemption and transfer contemplated by the Reorganization, and any Disclosed Related Agreement; (b) any payment or accrual made in the ordinary course of business in respect of the salary, bonus, pensions, contributions, life insurance payments, medical insurance, expense reimbursements and vacation days accrued and due to any officer, employee, director or consultant of any Acquired Company and, where such Person has a Contract or similar arrangement of employment, directorship, services or other consultancy with such Acquired Company, under and in accordance with such Contract or arrangement, provided that each such Contract was made available, and provided, further, that no such payment is made in connection with the Purchase or any other transaction contemplated hereby, and provided, further, that Permitted Leakage shall include costs and expenses related to any visa workers or any other senior staff engaged by Seller or any of its Affiliates providing services to TUM 1; (c) any payments made purely between the Acquired Companies; and (d) any Leakage in relation to, or arising from, any payment made or agreed to be made or liability incurred in respect of any matter undertaken at the specific written request or with the written consent of Acquiror after the Agreement Date.
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“Permitted Liens” means (a) statutory Liens securing payments not yet due, (b) Liens with respect to the payment of Taxes, in all cases that are not yet due or payable, (c) statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen, service providers or workmen and other similar Liens imposed by applicable Law created in the ordinary course of business for amounts that are not yet due and payable, and (d) licenses of or other grants of rights to use or obligations with respect to Intellectual Property.
“Person” means any individual or entity, including a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority (or any department, agency, or political subdivision thereof).
“Personal Information” means any information or data that (a) identifies (or could be used to identify), relates to, describes, is reasonably capable of being associated with, or could reasonably be linked with a particular individual, device or household, or (b) is defined as “personal data,” “personal information” or “personally identifiable information” or a similar term under applicable Privacy Laws pertaining to privacy or data security.
“Polysilicon Supply Agreement” means the Sales Agreement (Polysilicon Products), to be executed on or before the Closing Date, between TUM 1, as seller, and TVNW, as buyer, terminating and replacing the Intercompany Sales Agreement between TUM 1 and TVNW dated July 16, 2024.
“Pre-Closing Tax Period” means any Tax period or portion thereof that ends on or prior to the Closing Date, including the portion of any Straddle Period ending on the Closing Date.
“Pre-Closing Taxes” means (A) any Taxes of or with respect to the Acquired Companies attributable to any Pre-Closing Tax Period, provided the amounts described in this definition shall be determined (1) as if the Acquired Companies used the accrual method of Tax accounting throughout all Pre-Closing Tax Periods, (2) treating any advance payments, deferred revenues or other prepaid amounts received or arising in any Pre-Closing Tax Period as subject to Tax in such period regardless of when actually recognized for income Tax purposes, (3) by including in the Pre-Closing Tax Period any Taxes, interest and penalties attributable to an adjustment in taxable income or similar amounts required or permitted under any applicable provision of Law arising as a result of transactions, events or accounting methods employed prior to the Closing (including any change of such an accounting method required as a result of the Contemplated Transaction), regardless of when required to be taken into account under applicable Law, (4) by including any Taxes that would have been due or payable on or prior to the Closing Date but for any provision of pandemic response Law, but only to the extent such Taxes are or become due and payable following the Closing Date, and (5) by treating as a Pre-Closing Tax the amount of any payroll Tax credit claimed under any provision of pandemic response Law that is received by any Acquired Company on or before the Closing Date, but only to the extent such payroll Tax credits are subsequently not allowed or are recaptured; (B) any Taxes payable (1) by or with respect to an Acquired Company by reason of such Acquired Company being liable for the Tax of any Person pursuant to Treasury Regulations Section 1.1502-6 or any analogous provision of non-U.S., state or local Tax Law, (2) by or with respect to an Acquired Company under an indemnification agreement (other than this Agreement) or on a transferee or successor liability theory, in respect of any Taxes of any Person, which indemnification agreement was entered into before the Closing Date or which application of transferee or successor liability theory relates to an acquisition, disposition or similar transaction occurring on or prior to the Closing Date, (3) pursuant to Section 7.7(e); and (C) any other Taxes attributable to the Contemplated Transactions, including any Taxes required to be deducted or withheld from any consideration payable or otherwise deliverable pursuant to this Agreement. For purposes of this Agreement, in the case of Taxes based upon income, sales, proceeds, profits, receipts, wages, compensation or similar items, the Taxes attributable to the portion of any Straddle Period that is included in a Pre-Closing Tax Period shall be determined as though the applicable taxable year or period ended at the end of the day on the Closing Date based on an interim closing of the books, except that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions), other than with respect to property placed in service after the Closing, shall be allocated on a per diem basis; and the amount of any other Taxes of the Acquired Companies attributable to the portion of any Straddle Period that is included in a Pre-Closing Tax Period shall equal the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period up to and including the Closing Date, and the denominator of which is the total number of days in the taxable period.
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“Preferred Stock Purchase Agreement” means the preferred stock purchase agreement entered into concurrently with the execution of this Agreement, between Acquiror and Encompass Capital, pursuant to which Encompass Capital will purchase non-voting preferred stock of Acquiror (the “Preferred Stock”) in exchange for $100,000,000, the first tranche of $50,000,000 of which will occur on or prior to the Closing Date.
“Privacy Obligations” means collectively, all (i) Laws pertaining to privacy or data security (“Privacy Laws”); (ii) obligations under Contracts that apply to or regulate privacy rights or Personal Information or the processing of Personal Information; (iii) written privacy policies and other policies relating to the collection, storage, transfer, disclosure, processing, protection and use of Personal Information; and (iv) any rules of self-regulatory bodies, industry groups or other organizations with which Seller or any of its Affiliates are obligated to comply that relate to the collection, storage, transfer, disclosure, processing, protection or use of Personal Information.
“Purchase” means the purchase and sale of Target Shares pursuant to Section 2.1 and all other transactions contemplated by this Agreement to occur at Closing, including entry into the Related Agreements.
“Redemption Price” means the number of shares of Acquiror Common Stock constituting Share Consideration multiplied by the VWAP for the period covering the thirty (30) trading days prior to the issuance of the Secondary Note Instrument pursuant to Section 7.11(a).
“Registration Rights Agreement” means the registration rights agreement to be on or before the Closing Date, between Acquiror and the Seller, substantially in the form attached as Exhibit A-5.
“Related Agreements” means the Convertible Note Instrument, the Cooperation Agreement, the Note Instrument, the Commercial Agreements and all other agreements, instruments and certificates contemplated hereby or thereby to which any Party is a party.
“Related Party Agreement” means any agreement and other arrangements entered into between any Acquired Company, on the one hand, and the Seller Group Company, including any of its Affiliates, on the other hand.
“R&W Insurance Policy” means any Representations and Warranties Insurance Policy with respect to the Seller Representations secured for the benefit of Acquiror as the named insured.
“Reorganization” means that series of transactions whereby TUH will redeem a portion of its shares held by Seller in exchange for the transfer of (i) the issued and outstanding shares of capital stock of, or equivalent ownership interests in, the Excluded Companies and (ii) certain assets, Liabilities, Contracts, Permits and Licenses that are each not primarily related to the businesses of the Acquired Companies (other than as may be explicitly set forth herein), from Acquired Companies to wholly owned Subsidiaries of the Seller, in accordance with Section 6.6.
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“Representatives” means, with respect to a Person, such Person’s Affiliates and the directors, managers, members, shareholders, officers, employees, advisors, counsel, accountants, agents, consultants, intermediaries or other representatives of such Person and its Affiliates.
“Restricted Person” means any Person on the U.S. Department of Commerce’s Entity List, Denied Persons List, Unverified List, or Military End User List or the U.S. Department of State’s Debarred List.
“Sales Agency Agreement” means the Sales Agency and Aftermarket Services Agreement, to be executed on or before the Closing Date, between TUS, as sales agent, and TUM 1, as manufacturer, amending, restating and renaming the Marketing and Service Agreement between TUS and TUM 1 dated July 16, 2024.
“Sanctioned Jurisdiction” means a country or territory that is itself the subject of comprehensive country- or territory-wide Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine), and the non-government controlled areas of Ukraine (in the oblasts of Kherson and Zaporizhzhia).
“Sanctioned Person” means any Person that is a target of Sanctions, including as a result of being: (a) listed on any Sanctions list maintained by (i) the United States (including, without limitation, the Department of the Treasury’s Office of Foreign Assets Control and the Department of State), (ii) the European Union, (iii) any European Union member state, (iv) the United Nations, (v) the United Kingdom, or (vi) any other Governmental Authority of a jurisdiction in which any Acquired Company conducts business; (b) located, organized or resident in a Sanctioned Jurisdiction; or (c) directly or indirectly owned fifty percent or more, individually or in the aggregate, by one or more Persons described in the foregoing clauses (a) or (b).
“Sanctions” means all applicable trade, economic and financial sanctions, embargoes, Laws, and restrictive measures administered, enacted or enforced by (i) the United States (including, without limitation, the Department of the Treasury’s Office of Foreign Assets Control and the Department of State), (ii) the European Union, (iii) any European Union member state, (iv) the United Nations, (v) the United Kingdom, or (vi) any other Governmental Authority of a jurisdiction in which any Acquired Company or Acquiror conducts business.
“SEC” means the Securities and Exchange Commission of the United States of America.
“Second Conversion” means the conversion of the Second Conversion Shares, pursuant to the Convertible Note Instrument.
“Second Conversion Shares” means 17,918,460 shares of Acquiror Common Stock, as may be adjusted as a result of any share consolidation, stock split, stock dividend or similar event effected between the date hereof and the date of the Second Conversion with respect to the Acquiror Common Stock.
“Securities Act” means the Securities Act of 1933, as amended.
“Seller Account” means the Seller’s bank account set out in Schedule A-5.
“Seller Fundamental Representations” means the representations and warranties of the Seller set forth in Section 4.1 (Organizational Existence of the Acquired Companies), Section 4.2 (Power and Authorization; Enforceable Agreement), Section 4.4 (Conflicts), and Section 4.5 (Capitalization).
“Seller Group Company” and “Seller Group Companies” means, collectively, Seller Parent and its Subsidiaries.
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“Seller IP Representations” representations and warranties of the Seller in Section 4.10 (Intellectual Property).
“Seller Material Adverse Effect” means any Effect, individually or when taken together with all other Effects that have occurred prior to the date of determination of the occurrence of such Effect, that is or would reasonably be expected to (a) materially impede the authority or ability of the Seller or any Acquired Company to consummate the Contemplated Transactions in accordance with the terms hereof, or (b) be materially adverse to the business, assets (including intangible assets) and liabilities, financial condition, results of operations of the Acquired Companies taken as a whole, other than, in the case of this clause (b), any Effect resulting from (i) changes in general economic conditions, (ii) changes or developments in any of the industries in which any Acquired Company operates, (iii) changes in any Laws or legal or regulatory conditions (or the interpretation or enforcement thereof) or changes in GAAP or other applicable accounting standards, or the interpretation or enforcement thereof, (iv) political or social conditions, international diplomatic or trade relations (including US-China relations), or changes in the foregoing, (v) acts of war, sabotage or terrorism (including cyberterrorism), (vi) any natural disaster, hurricane, pandemic, epidemic or act of God, and any actions taken by Governmental Authorities in connection with such events, (vii) the public announcement of this Agreement or the Contemplated Transactions (including by reason of the identity of Acquiror or any communication by Acquiror regarding its plans or intentions, and including the impact thereof on relationships with customers, suppliers, distributors, partners, employees or others having relationships with any Acquired Company), (viii) the taking of any action expressly contemplated by this Agreement (including the Worker Transfer) or (ix) any failure by the Acquired Companies to meet any projections, budgets or estimates of revenue or earnings (it being understood that the facts and circumstances giving rise to such failure may be taken into account in determining whether there has been a Seller Material Adverse Effect if otherwise eligible pursuant to this definition); provided that such Effects referenced in clauses (i) through (vi) do not, individually or when taken together with all other such Effects, have a disproportionate or unique effect on any Acquired Company as compared to its competitors.
“Seller Transaction Expenses” means all costs, fees and expenses of the Acquired Companies incurred or agreed to be paid at or prior to the Closing Date that remain unpaid as of the Closing Date in connection with or in anticipation of the negotiation, execution and delivery of this Agreement and the Related Agreements, the consummation of the Contemplated Transactions or the consummation of the Reorganization, including (i) any legal, accounting, investment banking, advisory and other costs, fees and expenses, (ii) any Transfer Taxes and (iii) all retention, transaction, change in control or similar bonuses or any other compensatory payment or benefit to be paid or provided by any Acquired Company as a result of, or in connection with, the consummation of the Contemplated Transactions (together with the employer portion of any payroll, employment or similar Taxes attributable to such amounts), but excluding (a) any Liabilities arising as a result of affirmative action taken by (x) the Acquired Companies after the Closing Date or (y) Acquiror prior to, at or after the Closing Date, (b) any Taxes that are not described in clause (ii) of this definition, and (c) any costs and expenses incurred in obtaining the consents required under this Agreement.
“Seller Parent” means Trina Solar Co., Ltd., a company incorporated in the People’s Republic of China.
“Seller Tax Representations” means the representations and warranties of the Seller in Section 4.15 (Tax Matters).
“Senior Employee” means any Employee with a basic annual salary or fee in excess of $200,000.
“Share Consideration” means 15,437,847 shares of Acquiror Common Stock, as may be adjusted as a result of any share consolidation, stock split, stock dividend or similar event effected between the date hereof and the Closing Date with respect to the Acquiror Common Stock.
“Solar Cell Operational Support Agreement” means the solar cell operational support agreement between TUS, as service provider and TUM 2 as manufacturer.
“Solar Cell Manufacturing Facility” means the solar cell manufacturing facility to be developed substantially in accordance with the Solar Cell Term Sheets, and constructed by TUM 2, or any other Affiliate of the Acquired Companies or of Acquiror, after Closing, to be located in the United States.
“Solar Cells Supply Agreement” means the Amended and Restated Sales Agreement (Solar Cells), to be executed on or before the Closing Date, between TED, as seller, and TUM 1, as buyer, amending and restating the Intercompany Sales Agreement between TED and TUM 1 dated July 16, 2024.
“Solar Module Manufacturing Facility” means the solar module manufacturing facility currently under construction by TUM 1 and located at 1200 North Sunrise Road in Wilmer, Texas.
“Solar Cell Term Sheets” means each of the term sheets attached hereto as Schedule A-7 setting out the detailed terms and conditions in relation with the development, operation and services of the Solar Cell Manufacturing Facility after the Closing Date, which will be included in the Solar Cell Operational Support Agreement, as applicable.
“Solar Module Term Sheets” means each of the term sheets attached hereto as Schedule A-8 setting out the detailed terms and conditions in relation with the development, operation and services of the Solar Module Manufacturing Facility after the Closing Date, which will be included in the Solar Cells Supply Agreement, Polysilicon Supply Agreement, Module Operational Support Agreement, IP License Agreement, Trademark License Agreement, Sales Agency Agreement and the TUS Offtake Agreement, as applicable.
“Straddle Period” means any taxable period beginning on or before the Closing Date and ending after the Closing Date.
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“Subsidiary” or “subsidiary” means, with respect to any Person, any corporation or other organization or Person, whether incorporated or unincorporated, of which (a) such Person or any other subsidiary of such Person is a general partner (excluding such partnerships where such Person or any subsidiary of such Person does not have a majority of the voting interest in such partnership) or (b) such Person controls directly or indirectly.
“Systems” means all networks, systems, equipment, databases, websites and other information technology or data processing assets, facilities, infrastructure or services (including related Software and hardware) owned or controlled by or on behalf of any Acquired Company, and the data, including Personal Information, processed thereby or thereon.
“Target Shares” means, collectively, all of the shares of common stock or other securities of Trina Solar (U.S.) Holding Inc., a Delaware corporation (“TUH”). For the avoidance of doubt, Target Shares do not include any shares of TUH that are redeemed as part of the Reorganization.
“Tax” means (a) any income, alternative or add-on minimum tax, gross income, estimated, gross receipts, sales, use, ad valorem, value added, transfer, franchise, capital stock, profits, license, registration, withholding, payroll, social security (or equivalent, including employer and employees’ contributions), employment, unemployment, disability, excise, severance, stamp, occupation, premium, property (real, tangible or intangible), environmental or windfall profit tax, escheat or unclaimed property, custom duty, tariff, or other tax, governmental fee or other like assessment or charge in the nature of a tax, together with any interest or any penalty or addition to tax or additional amount (whether disputed or not) imposed by any Governmental Authority responsible for the imposition of any such tax (domestic or foreign), (b) any liability for the payment of any amounts of the type described in clause (a) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary, aggregate or similar group for any taxable period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) of this sentence as a result of being a transferee of or successor to any Person or as a result of any express or implied obligation to assume such Taxes or to indemnify any other Person, including by operation of Law.
“Tax Proceeding” means any action, audit, grievance, examination, investigation, lawsuit, administrative proceeding, litigation or arbitration regarding Tax, in each case, by or before a Governmental Authority (whether civil, criminal or administrative).
“Tax Return” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Law relating to any Tax, including any schedule or amendment thereof or attachment thereto.
“Taxing Authority” means any Governmental Authority having or purporting to exercise jurisdiction with respect to any Tax.
“TED” means Trina Solar Energy Development Pte. Ltd., a company organized under the laws of the Republic of Singapore.
“Trademark License Agreement” means the Amended and Restated Trademark License Agreement, to be executed on or before the Closing Date, between TUS, as licensor, and TUM 1, as licensee, amending, restating, replacing and renaming the Trademark License Agreement between Seller Parent and TUM 1 dated July 16, 2024.
“Treasury Regulations” means the United States Treasury regulations issued pursuant to the Code.
“TUH Credit Facility” mean the credit facility with a principal amount of $50,000,000 between Seller and TUH dated October 18, 2024.
“TUM 1” means Trina Solar US Manufacturing Module 1 LLC, a limited liability company organized under the laws of Texas.
“TUM 2” means Trina Solar US Manufacturing Cell 1, LLC, a limited liability company organized under the laws of Oklahoma.
“TUS” means Trina Solar (U.S.), Inc., a corporation organized under the laws of Delaware.
“TUS Offtake Agreement” means the Supply Contract, , to be executed on or before the Closing Date, between TUM 1, as supplier, and TUS, as purchaser, amending and restating the Supply Agreement between TUM 1 and TUS dated July 16, 2024.
“TVNW” means Trina Solar (Viet Nam) Wafer Company Limited, a company organized under the laws of Vietnam.
“United States” and “U.S.” means the United States of America.
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“Uyghur Forced Labor Prevention Act” means The Uyghur Forced Labor Prevention Act enacted in the United States (Public Law 117 - 78).
“VWAP” means the dollar volume-weighted average price for the shares of Acquiror Common Stock on the NYSE during the period beginning at 9:30:01 a.m., New York time (or such other time as the NYSE 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 NYSE publicly announces is the official close of trading), as reported by Bloomberg, L.P. through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time (or such other time as the NYSE publicly announces is the official open of trading), and ending at 4:00:00 p.m., New York City Time (or such other time as the NYSE publicly announces is the official close of trading), as reported by Bloomberg, L.P. If the VWAP cannot be calculated for the shares of Acquiror Common Stock on a particular date on any of the foregoing bases, the VWAP of the shares of Acquiror Common Stock shall be the fair market value of the shares of Acquiror Common Stock on such date as determined by Acquiror’s Board of Directors in good faith.
“Worker Transfer” means the pre-Closing transfer from TUM 1 to Seller or its Affiliates of certain employees and service providers who presently provide services to TUM 1, as may be agreed by Acquiror and Seller from time to time.
Section 1.2 Section References. The following capitalized terms, as used in this Agreement, have the respective meanings given to them in the Section as set forth below adjacent to such terms:
| Term | Section Reference | |
| 24M | 1.1 | |
| 24M Assets | 1.1 | |
| 24M Equipment | 1.1 | |
| 24M Isolation | 6.8 | |
| 24M Licenses | 1.1 | |
| Acquired Companies | Recitals | |
| Acquired Companies Financials | 4.6(a) | |
| Acquired Companies Year-End Financials | 4.6(a) | |
| Acquired Company | Recitals | |
| Acquired Company Authorizations | 4.22(b) | |
| Acquired Company Employee Plan | 1.1 | |
| Acquired Company IP | 1.1 | |
| Acquired Company Owned IP | 1.1 | |
| Acquired Company Registered IP | 4.10(a) | |
| Acquiror | Preamble | |
| Acquiror Authorizations | 5.17(b) | |
| Acquiror Claims | 7.8(a)(iii) | |
| Acquiror Common Stock | 1.1 | |
| Acquiror Disclosure Statement | V | |
| Acquiror Fundamental Representations | 1.1 | |
| Acquiror Material Adverse Effect | 1.1 | |
| Acquiror Material Contracts | 1.1 | |
| Acquiror Related Party | 7.9 | |
| Acquiror Released Parties | 7.9 | |
| Acquiror Releasing Parties | 7.9(b) | |
| Acquiror Representations | 5.22(a) | |
| Acquiror SEC Documents | 1.1(c) | |
| Acquiror Stockholders | 1.1 | |
| Acquiror Stockholders Meeting | 7.4(b) | |
| Action | 1.1 | |
| Affiliate | 1.1 | |
| Agreement | Preamble | |
| Agreement Date | Preamble | |
| Anti-Corruption Laws | 1.1 | |
| Anti-Money Laundering Laws | 1.1 | |
| Balance Sheet Date | 4.6(a) | |
| Base Cash Consideration | 1.1 | |
| Books and Records | 4.6(e) | |
| Burdensome Condition | 1.1 | |
| Business Day | 1.1 |
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| Cash Consideration | 1.1 | |
| CFIUS | 1.1 | |
| CFIUS Approval | 1.1 | |
| CFIUS Notice | 1.1 | |
| CFIUS Turndown | 1.1 | |
| Chosen Courts | 11.12 | |
| Claim Notice | 10.5(b) | |
| Claim Objection Notice | 10.5(c) | |
| Closing | 3.1(a) | |
| Closing Cash Consideration | 1.1 | |
| Closing Date | 3.1(a) | |
| Code | 1.1 | |
| Commercial Agreements | 1.1 | |
| Commercially Available Software | 1.1 | |
| Confidential Information | 1.1 | |
| Confidentiality Agreement | 1.1 | |
| Conflict | 1.1 | |
| Consent | 1.1 | |
| Contemplated Transactions | 1.1 | |
| Contract | 1.1 | |
| Control | 1.1 | |
| Controlled | 1.1 | |
| Controlled Group Liability | 1.1 | |
| Conversion Conditions | 1.1 | |
| Conversion Shares | 1.1 | |
| Conversions | 1.1 | |
| Convertible Note | 1.1 | |
| Convertible Note Instrument | 1.1 | |
| Cooperation Agreement | 1.1 | |
| Copyrights | 1.1 | |
| Current Balance Sheets. | 4.6(c) | |
| Customs & Trade Laws | 1.1 | |
| DD Discussion Period | 6.5(b) | |
| Definitive Proxy Statement | 7.3(c) | |
| Designated Accounting Firm | 7.7(a)(iii) | |
| Disclosed Related Party Agreements | 1.1 | |
| Dispute Notice | 7.7(a)(iii) | |
| DPA | 1.1 | |
| Effect | 1.1 | |
| Employee | 1.1 | |
| Encompass Capital | 1.1 | |
| End Date | 9.1(b) | |
| Environmental Law | 1.1 | |
| Equity Financing | 1.1 | |
| Equity Interests | 1.1 | |
| ERISA | 1.1 | |
| ERISA Affiliate | 1.1 | |
| Europe Divestiture | 7.5 | |
| European Divestiture Consideration | 7.5 | |
| European Divestiture Target Amount | 1.1 | |
| Exchange Act | 1.1 |
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| Excluded Companies | Recitals | |
| Excluded Company | Recitals | |
| Expert Determination | 7.7(a)(iii) | |
| First Conversion | 1.1 | |
| First Conversion Shares | 1.1 | |
| First Tranche Equity Financing | 1.1 | |
| Fraud | 1.1 | |
| GAAP | 1.1 | |
| Governmental Authority | 1.1 | |
| Governmental Official | 1.1 | |
| Hazardous Material | 1.1 | |
| Incident | 1.1 | |
| Indebtedness | 1.1 | |
| Indemnification Claim | 10.5(b) | |
| Indemnified Party | 1.1 | |
| Intellectual Property | 1.1 | |
| IP License Agreement | 1.1 | |
| Knowingly | 1.1 | |
| Knowledge | 1.1 | |
| Known | 1.1 | |
| Labor Agreement | 4.14(c) | |
| Labor Entity | 4.14(c) | |
| Law | 1.1 | |
| Leakage | 1.1 | |
| Lease Agreement | 1.1 | |
| Leased Real Property | 1.1 | |
| Liability | 1.1 | |
| Lien | 1.1 | |
| Loan Repayment Amount | 1.1 | |
| Lock-Up Agreement | 1.1 | |
| Losses | 1.1 | |
| Material Contract | 4.12(b) | |
| Material DD Item | 1.1 | |
| matter | 4.20(a) | |
| Module Operational Support Agreement | 1.1 | |
| Multiemployer Plan | 4.13(b) | |
| Note | 1.1 | |
| Note Instrument | 1.1 | |
| NYSE | 1.1 | |
| NYSE Approval | 1.1 | |
| NYSE Supplemental Listing Application | 1.1 | |
| Objection Deadline | 10.5(c) | |
| Open Source License | 1.1 | |
| Open Source Materials | 1.1 | |
| Order | 1.1 | |
| Organizational Documents | 1.1 | |
| Other Required Filing | 7.3(d) | |
| Party | 1.1 | |
| Patents | 1.1 | |
| PCAOB Audited Financials | 7.3(d)(ii) | |
| Permitted Leakage | 1.1 |
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| Permitted Liens | 1.1 | |
| Person | 1.1 | |
| personal data | 1.1 | |
| personal information | 1.1 | |
| Personal Information | 1.1 | |
| personally identifiable information | 1.1 | |
| Polysilicon Supply Agreement | 1.1 | |
| Pre-Closing Period | 6.1 | |
| Pre-Closing Tax Period | 1.1 | |
| Pre-Closing Taxes | 1.1 | |
| Preferred Stock | 1.1 | |
| Preferred Stock Purchase Agreement | 1.1 | |
| Preliminary Proxy Statement | 7.3(b) | |
| Privacy Laws | 1.1 | |
| Privacy Obligations | 1.1 | |
| Pro Forma Financials | 7.3(d)(ii) | |
| Production Reserve Fee | 7.13, 7.13 | |
| Purchase | 1.1 | |
| Purchase Price | 2.2(a) | |
| R&W Insurance Policy | 1.1 | |
| Redemption Price | 1.1 | |
| Registration Rights Agreement | 1.1 | |
| Related Agreements | 1.1 | |
| Related Party Agreement | 1.1 | |
| Reorganization | 1.1 | |
| Representatives | 1.1 | |
| Required Financials | 7.3(d)(ii) | |
| Requisite Stockholder Approval | 7.4(b) | |
| Restricted Person | 1.1 | |
| Right Pocket | 7.6(a)(ii) | |
| Sales Agency Agreement | 1.1 | |
| Sanctioned Jurisdiction | 1.1 | |
| Sanctioned Person | 1.1 | |
| Sanctions | 1.1 | |
| SEC | 1.1 | |
| Second Conversation | 1.1 | |
| Second Conversion Shares | 1.1 | |
| Secondary Note Instrument | 7.12(a) | |
| Securities Act | 1.1 | |
| Seller | Preamble | |
| Seller Account | 1.1 | |
| Seller Claims | 7.8(a)(iii) | |
| Seller Disclosure Statement | IV | |
| Seller Fundamental Representations | 1.1 | |
| Seller Group Companies | 1.1 | |
| Seller Group Company | 1.1 | |
| Seller IP Representations | 1.1 | |
| Seller Material Adverse Effect | 1.1 | |
| Seller Parent | 1.1 | |
| Seller Related Party | 7.9 | |
| Seller Released Parties | 7.9 |
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| Seller Releasing Parties | 7.8(a)(i) | |
| Seller Representations | 4.33(a) | |
| Seller Tax Representations | 1.1 | |
| Seller Transaction Expenses | 1.1 | |
| Senior Employee | 1.1 | |
| Settlement Memorandum | 10.5(c)(ii) | |
| Share Consideration | 1.1 | |
| Software | 1.1 | |
| Solar Cell Manufacturing Facility | 1.1 | |
| Solar Cell Operational Support Agreement | 1.1 | |
| Solar Cell Term Sheets | 1.1 | |
| Solar Cells Supply Agreement | 1.1 | |
| Solar Module Manufacturing Facility | 1.1 | |
| Solar Module Term Sheets | 1.1 | |
| Straddle Period | 1.1 | |
| Subject Item | 1.1 | |
| Subject Provision | 10.5(b) | |
| Subsidiary | 1.1 | |
| Systems | 1.1 | |
| Target Shares | 1.1 | |
| Tax | 1.1 | |
| Tax Claim | 7.8 | |
| Tax Proceeding | 1.1 | |
| Tax Return | 1.1 | |
| Taxing Authority | 1.1 | |
| TED | 1.1 | |
| Third-Party Claim | 10.5(e)(ii) | |
| Top Supplier | 4.25 | |
| Trade Secrets | 1.1 | |
| Trademark License Agreement | 1.1 | |
| Trademarks | 1.1 | |
| Transfer Taxes | 7.8 | |
| Treasury Regulations | 1.1 | |
| TUH | 1.1 | |
| TUH Credit Facility | 1.1 | |
| TUM 1 | 1.1 | |
| TUM 2 | 1.1 | |
| TUMH | 4.6(a) | |
| TUS | 1.1 | |
| TUS Offtake Agreement | 1.1 | |
| TVNW | 1.1 | |
| U.S. | 1.1 | |
| under common Control with | 1.1 | |
| United States | 1.1 | |
| Unobjected Claim | 10.5(c) | |
| Uyghur Forced Labor Prevention Act | 1.1 | |
| VWAP | 1.1 | |
| Worker Transfer | 1.1 | |
| Wrong Pocket | 7.6(a)(ii) | |
| Wrong Pocket Asset | 7.6(a)(i) | |
| Wrong Pocket Liability | 7.6(a)(i) |
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ARTICLE
II
PURCHASE AND SALE
Section 2.1 Purchase and Sale.
(a) Purchase. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Seller shall sell, convey, assign, transfer and deliver, or cause to be sold, conveyed, assigned, transferred and delivered, to Acquiror or Acquiror’s wholly-owned designee, and Acquiror or Acquiror’s designee shall purchase from the Seller, all legal and beneficial right, title and interest in and to all the Target Shares held by the Seller or any of its Affiliates free and clear of all Liens and as a result of such acquisitions Acquiror or Acquiror’s designee will own all of the Target Shares previously held by the Seller or any of its Affiliates. No Party shall be obliged to complete the purchase and sale of any Target Shares unless the purchase and sale of all of the Target Shares is completed simultaneously (subject to the terms and conditions of this Agreement).
(b) Transfer of Title. At the Closing, the ownership of the Target Shares held by the Seller or any of its Affiliates shall pass from the Seller to Acquiror or Acquiror’s designee, in exchange for the payment of the Purchase Price to the Seller.
Section 2.2 Purchase Price; Cash Consideration Adjustment for Leakage.
(a) Purchase Price. The purchase price for the Target Shares shall be composed of (i) the Cash Consideration, (ii) the Share Consideration, (iii) the Note and (iv) the Convertible Note ((i) to (iv), the “Purchase Price”).
(b) Notification and Adjustment of Leakage. Not less than five (5) Business Days prior to Closing, the Seller shall notify Acquiror in writing (such notification, the “Leakage Statement”) of the amount of any Leakage having taken place from the date hereof until the Closing Date (the “Known Leakage Amount”).
(c) Payment of Purchase Price; Exchange Procedures. At Closing, Acquiror shall:
(i) deposit (or cause to be deposited) the Closing Cash Consideration by bank wire transfer of immediately available funds to the Seller’s Account;
(ii) issue and deliver to the Seller the Share Consideration (subject to the transfer restrictions contemplated in this Agreement and the Cooperation Agreement);
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(iii) issue and deliver to the Seller the Note (subject to the transfer restrictions contemplated in the Note Instrument) by executing the Note Instrument; and
(iv) issue and deliver to the Seller the Convertible Note (subject to the transfer restrictions contemplated in the Convertible Note Instrument) by executing the Convertible Note Instrument.
(d) Acquiror Shares. Notwithstanding anything herein to the contrary, the shares of Acquiror Common Stock and issued in connection with the Contemplated Transactions will be subject to (i) the terms and conditions of, including any restrictions and encumbrances provided for under, this Agreement, Acquiror’s articles of association and other organizational documents, as may be amended, or amended and restated, from time to time, and the Cooperation Agreement or any other Contract entered into by the Party to whom all such shares were issued, and (ii) applicable securities and corporate Laws.
Section 2.3 Withholding Taxes. Acquiror and its Affiliates (including the Acquired Companies following the Closing) shall be entitled to deduct and withhold (or cause to be deducted and withheld) from any amount payable pursuant to this Agreement such amounts as are required to be deducted or withheld therefrom under any applicable Law; provided, however, that if Acquiror or its Affiliates intend to deduct or withhold from any amount payable pursuant to this Agreement (other than in respect of compensation), such Person shall notify the Seller of such intent at least fifteen (15) Business Days prior to the applicable payment date or, if later, as soon as reasonably practicable prior to the payment date, and shall cooperate with Seller in good faith to reduce or eliminate any such deduction or withholding to the extent permitted under applicable Laws. Any amounts deducted, withheld and paid over to the appropriate tax Governmental Authority shall be treated as having been paid to the Person in respect of whom such withholding was made for all purposes of this Agreement or any other Related Agreement.
Section 2.4 Taking of Necessary Action; Further Action. At and following the Closing, the Seller, at the request of Acquiror, and Acquiror, at the request of the Seller, shall execute and deliver such other instruments and do and perform such other acts and things as may be reasonably requested by the requesting Party in writing and reasonably necessary or desirable for effecting completely the consummation of the Purchase, the Conversions and the other Contemplated Transactions.
ARTICLE
III
CLOSING AND CLOSING CONSIDERATION
Section 3.1 Closing & Parties Closing Deliveries.
(a) Closing. Unless this Agreement is validly terminated pursuant to Section 9.1, Acquiror and the Seller shall consummate the Purchase at a closing (the “Closing”), which shall occur at the close of business five (5) Business Days following satisfaction or waiver (if permissible hereunder) of the conditions set forth in Section 8.1, Section 8.2, and Section 8.3 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to satisfaction or waiver (if permissible hereunder) of those conditions at the Closing), by remote exchange of documents, unless another time and place is mutually agreed upon in writing by Acquiror and the Seller. The date upon which the Closing occurs hereunder shall be referred to herein as the “Closing Date.” With respect to the remote exchange of signatures or other actions required to complete the Closing, and notwithstanding anything to the contrary in this Agreement, all closing deliveries, registrations and actions shall be deemed to have occurred simultaneously, and no delivery, registration or action by any Party shall have any legal effect (and shall be null and void) unless all deliveries, registrations and actions by all parties required to complete the Closing have been completed and released.
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(b) Seller Closing Deliveries. At or prior to the Closing, the Seller shall deliver to Acquiror the following:
(i) in respect of the Target Shares, duly executed and delivered share or unit certificates, as applicable, and share or unit power;
(ii) a copy of the updated shareholder or member register of TUH reflecting the Target Shares transferred and delivered to Acquiror or Acquiror’s designee pursuant to this Agreement;
(iii) copy of the resolutions (or action taken by unanimous written consent in lieu thereof) of the board of directors of the Seller approving the execution, delivery and performance of this Agreement and the Related Agreements and the consummation of the Purchase, and a copy of the resolutions (or action taken by written consent in lieu thereof) of the stockholders of the Seller approving the execution, delivery and performance of this Agreement and the Related Agreements and the consummation of the Purchase;
(iv) resignations duly executed by each director, officer or employee of the Acquired Companies included in Schedule A-2, as well as the revocation of powers of attorney, if any, granted to such resignees;
(v) a duly executed IRS Form W-8 from the Seller;
(vi) the Convertible Note Instrument duly executed by the Seller;
(vii) the Cooperation Agreement duly executed by the Seller;
(viii) the IP License Agreement duly executed by Seller Parent and TUM 1;
(ix) the Module Operational Support Agreement duly executed by TUS;
(x) the Trademark License Agreement duly executed by TUS and TUM 1;
(xi) the Note Instrument duly executed by the Seller;
(xii) the Polysilicon Supply Agreement duly executed by TUM 1 and TVNW;
(xiii) the Registration Rights Agreement duly executed by the Seller;
(xiv) Sales Agency Agreement duly executed by TUM 1 and TUS;
(xv) the Solar Cells Supply Agreement duly executed by TUM 1 and TED; and
(xvi) TUS Offtake Agreement duly executed by TUM 1 and TUS.
(c) Acquiror Closing Deliveries. At the Closing, Acquiror shall deliver to the Seller the following:
(i) the Purchase Price in accordance with Section 2.2(a);
(ii) pay the Loan Repayment Amount to the Seller Acount;
(iii) copy of Acquiror’s resolutions (or action taken by written consent in lieu thereof) of the board of directors of Acquiror appointing the executive management set forth in Schedule A-3 on the terms agreed pursuant to Section 6.10;
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(iv) the Convertible Note Instrument duly executed by Acquiror;
(v) the Cooperation Agreement duly executed by Acquiror;
(vi) proof of payment by Encompass Capital of the First Tranche Equity Financing under the Preferred Stock Purchase Agreement;
(vii) the Note Instrument duly executed by Acquiror;
(viii) the Module Operational Support Agreement duly executed by Acquiror; and
(ix) the Registration Rights Agreement duly executed by Acquiror.
ARTICLE
IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Subject to such exceptions, qualifications and other matters as are specifically set forth in the disclosure statement delivered by the Seller to Acquiror on the Agreement Date (the “Seller Disclosure Statement”) (it being understood and hereby agreed that (a) the information set forth in the Seller Disclosure Statement shall be disclosed under separate section, subsection, and subclause references that correspond to the sections, subsections, and subclauses of this Article IV to which such information relates, and (b) the information set forth in each section, subsection, and subclause of the Seller Disclosure Statement shall qualify (i) the representations and warranties set forth in the corresponding section, subsection, and subclause of this Article IV and (ii) any other representations and warranties set forth in this Article IV if, and solely to the extent that, it is reasonably apparent on the face of such disclosure, without reference to the underlying documents referenced therein and without independent knowledge of the matters described therein, that it applies to such other section, subsection or subclause of this Article IV), the Seller hereby represents and warrants as of the Agreement Date and as of the Closing Date as follows:
Section 4.1 Organizational Existence of the Acquired Companies.
(a) Each Acquired Company is a legal entity duly organized, validly existing and, where relevant, in good standing, under the laws of the relevant jurisdiction in which it was incorporated.
(b) Each Acquired Company has full corporate power to own, lease and operate its properties and assets and to carry on its business in the manner and to the extent conducted or contemplated to be conducted on the Agreement Date. Each Acquired Company is qualified to do business in any jurisdiction in which it does business (to the extent the concept is applicable in such jurisdiction).
(c) No order has been made and no resolution has been passed for or regarding the initiation of any insolvency proceedings or the winding-up of the Acquired Companies, and no meeting has been convened and no petition has been presented for such purpose in respect to the Acquired Companies. No administration order has been made in respect of the Acquired Companies, and no petition for such an order has been presented in respect of the Acquired Companies. No trustee, liquidator, receiver, administrator, or other similar person has been appointed in respect of the Acquired Companies or any of their respective assets. No Acquired Company is or has in the past been insolvent or unable to pay its debts as they fall due. No creditor of the Acquired Companies has enforced any security over any assets of the Acquired Companies, or is currently entitled to do so as a result of any breach by the Acquired Companies of any financing agreement.
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(d) The Organizational Documents of each Acquired Company have been made available to Acquiror and are true, complete and current on the Agreement Date, and are kept by each Acquired Company in all material respects in accordance with applicable Laws. No registration filings regarding the Organizational Documents of any Acquired Company are pending, and no resolutions have been passed which should, but have not been, filed for registration with any authority. The minutes of each Acquired Company (i) are complete and up-to-date and have been maintained in accordance with sound and prudent business practice, (ii) contain true, correct and complete records of all actions taken, and summaries of all meetings held, by the respective shareholders and board of directors of each Acquired Company (and any committees thereof) since the time of incorporation of each Acquired Company and (iii) have been made available to Acquiror. At the Closing, the minute books and other Books and Records will be in the possession of the Acquired Companies.
(e) No Acquired Company has any Subsidiary, branch, representative office or place of business (whether or not amounting to a permanent establishment under any relevant Laws) outside its jurisdiction of incorporation.
Section 4.2 Power and Authorization; Enforceable Agreement.
(a) The Seller has, and any of its Affiliates who are party to a Related Agreement, have, all requisite power and authority to enter into this Agreement and any Related Agreements and each certificate and other instrument required to be executed and delivered by the Seller or its Affiliates and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement, any Related Agreements, and each certificate and other instrument required to be executed and delivered by the Seller or its Affiliates or to which the Seller, or any of its Affiliates, is a party and the performance of its obligations hereunder and thereby have been duly authorized by all necessary action on the part of the Seller, or its Affiliates, and no further action is required on the part of the Seller or its Affiliates to authorize its execution, delivery and performance of this Agreement and any Related Agreements to which the Seller, or its Affiliates, is a Party and the Contemplated Transactions.
(b) This Agreement and each of the Related Agreements to which the Seller, or any of its Affiliates, is a Party have been (or in the case of Related Agreements to be entered into at or prior to the Agreement Date, will be) duly executed and delivered by the Seller or its Affiliates and, assuming the due authorization, execution and delivery by Acquiror (as applicable), constitute (or in the case of Related Agreements to be entered into at or prior to the Agreement Date, will be) the valid and binding obligations of the Seller or its Affiliates enforceable against it in accordance with their respective terms, subject to Laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
Section 4.3 Governmental Approvals. Except as set forth in Section 4.3 of the Seller Disclosure Statement, no consent, notice, waiver, approval, Order or authorization of, or registration, declaration or filing with, any Governmental Authority, is required to be obtained by any member of the Seller Group Company, in connection with the execution and delivery of this Agreement and any Related Agreement or the consummation of the Contemplated Transactions, except for the Conversion Conditions or the Reorganization.
Section 4.4 Conflicts. Except as set forth on Section 4.4 of the Sellers Disclosure Statement, the execution and delivery by the Seller of this Agreement and any Related Agreement to which the Seller is (or will be) a Party, and the consummation of the Purchase and the other Contemplated Transactions, will not (a) result in the creation or imposition of any Lien (other than Permitted Liens) upon the assets of any Acquired Company and (b) result in or give rise to any Conflict in (i) any provision of the Organizational Documents of any Acquired Company or Seller, as amended, (ii) any Material Contract, Acquired Company Authorization, or Lien to which any Acquired Company is a party or by which any Acquired Company or any of their respective properties or tangible assets are bound or subject or (iii) any Law or Order applicable to any Acquired Company or any of their respective properties or assets (whether tangible or intangible), except, in each of clauses (a) and (b), as would not be material to the Acquired Companies taken as a whole.
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Section 4.5 Capitalization.
(a) The Seller is the sole legal and beneficial owner of the Target Shares designated, and the Seller has good and valid title with respect to, and holds all right title and interest in and to, such Target Shares held by it.
(b) The Target Shares represent all of the issued and outstanding equity securities (and rights to acquire equity securities) of TUH.
(c) All Target Shares are duly authorized, validly issued, fully paid and non-assessable. The Target Shares are not subject to any Liens or to any rights of first refusal of any kind, and no rights to purchase such Target Shares have been granted to any other Person. The Seller has the sole right to transfer the Target Shares to Acquiror. The Target Shares owned by the Seller constitute the Seller’s entire interest in TUH and the Seller does not have the right to acquire, directly or indirectly, any other Equity Interest in TUH. The Seller is not a Party to any option, warrant, purchase right, or other Contract or commitment that could require it to sell, transfer, or otherwise dispose of any Target Shares. The Seller has not previously granted or agreed to grant any ongoing power of attorney in respect of any Target Shares or entered into any voting trust, vote pooling or other agreement with respect to the right to vote, call meetings of the board of directors of TUH or give consents or approvals of any kind as to such Target Shares. At the Closing, upon payment of the Purchase Price, Acquiror will receive good and valid title to such Target Shares, free and clear of all Liens.
(d) The capital stock of each Acquired Company as of the Agreement Date is set forth in Annex A. All of the issued and outstanding shares of each of the Acquired Companies have been duly authorized and validly issued, are fully paid and nonassessable and are owned of record (both legally and beneficially) by the Seller or one of the Acquired Companies as indicated in Annex A. There are no other outstanding (i) securities of any of the Acquired Companies, including any instrument convertible into or exchangeable for shares of capital stock or voting securities of any of the Acquired Companies; or (ii) options, rights of first offer or refusal, redemption or repurchase rights, or other rights in favor of third parties to acquire any securities from any of the Acquired Companies, and there is no obligation of any of the Acquired Companies to issue any capital stock, voting securities, or securities or other instruments convertible into or exchangeable for capital stock or voting securities of any of the Acquired Companies. Except as indicated on Section 4.5(d) of the Seller Disclosure Statement, none of the Acquired Subsidiaries has any Subsidiaries or holds, directly or indirectly, an equity interest in any other Person.
(e) No Acquired Company holds any treasury shares or any other Equity Interest in any other Acquired Company.
(f) Other than the Target Shares, there are no, and neither the Seller nor the Acquired Companies have unfilled promises or commitments (whether or not binding) or Contract to issue or grant any securities or enter into any commitments or agreements of any character, written or oral, for the issuance or grant of any securities of any Acquired Company or obligating any Acquired Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, sold, repurchased or redeemed, any securities or obligating any Acquired Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any security. There are no outstanding or authorized, and neither the Seller nor the Acquired Companies have unfulfilled promises or commitments (whether or not binding) or Contract to issue, grant, or enter into any, stock appreciation, option, phantom stock, restricted stock, restricted stock unit, profit participation or other similar rights with respect to any Acquired Company (whether payable in securities, cash or otherwise).
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(g) Prior to the Agreement Date no dividends have been declared, made or paid or agreed to be declared, made or paid, by any Acquired Company.
(h) There are no issued or outstanding bonds, debentures, notes or other indebtedness of any Acquired Company (A) having the right to vote on any matters on which the shareholders or unitholders, as applicable, of any Acquired Company may vote (or which is convertible into, or exchangeable for, securities having such right), or (B) the value of which is in any way based upon or derived from capital or voting stock of any Acquired Company.
Section 4.6 Financial Information.
(a) Section 4.6(a) of the Seller Disclosure Statement sets forth (i) the unaudited balance sheets of each TUH, Trina Solar US Manufacturing Holding, Inc. (“TUMH”) and TUM 1 as of December 31, 2023, and the related unaudited income statement for the twelve (12) month periods then ended (the “Acquired Companies Year-End Financials”), and (ii) the unaudited balance sheet of each of TUH, TUMH and TUM 1 as of September 30, 2024 (the “Balance Sheet Date”), and the related unaudited income statements for the nine (9) month period ended on the Balance Sheet Date (together with the Acquired Companies Year-End Financials, the “Acquired Companies Financials”). The Acquired Companies Financials have been prepared in accordance with GAAP consistently applied throughout the periods indicated and consistent with each other.
(b) No material change has been made to the accounting policies or to any other accounting treatment (including, for the avoidance of doubt, any estimation techniques or approaches to the exercise of accounting discretion of judgment) of the Acquired Companies for at least two (2) years prior to September 30, 2024. The Acquired Companies Financials give a true and fair view of the Acquired Companies’ assets, liabilities, financial condition, operating results and cash flows as of the dates and during the periods indicated therein.
(c) TUH’s, TUMH’s and TUM 1’s unaudited balance sheet as of the Balance Sheet Date is referred to hereinafter as the “Current Balance Sheets.” The books and records of TUH, TUMH and TUM 1 have been, and are being, maintained in all material respects in accordance with applicable legal and accounting requirements (including, without limitation, GAAP) and the Acquired Companies Financials are consistent with such books and records. All reserves that are set forth in or reflected in the Current Balance Sheets have been established in accordance with GAAP consistently applied with the Acquired Companies Financials.
(d) No Acquired Company is a Party to, or has a commitment to effect, enter into or create, any joint venture, or “off-balance sheet arrangement,” where the result, purpose or effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, any Acquired Company in the Acquired Companies Financials.
(e) Each of the Acquired Companies maintains accurate business records, financial books and records, personnel records, legers, sales accounting records, Tax records and related work papers and other books and records (collectively the “Books and Records”) reflecting its assets and liabilities and maintains internal accounting controls that provide reasonable assurance that (i) transactions are executed with management’s authorization, (ii) transactions are recorded as necessary to permit preparation of the Acquired Companies’ financial statements in conformity with GAAP and to maintain accountability of its assets, (iii) access to its assets is permitted only in accordance with management’s authorization, and (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. No Acquired Company has engaged in any material transaction or maintained any bank account except as reflected in the Books and Records. The Books and Records (A) are in all material respects true, correct and complete, (B) have been maintained in accordance with the Acquired Companies’ business practices on a basis consistent with prior years, and (C) fairly reflect in all material respects the basis for the Acquired Companies Financials. Each Acquired Company has filed their respective statutory financial statements with the relevant authorities in compliance with applicable Laws.
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(f) No Acquired Company (including any Employee) has identified or been made aware of (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by any Acquired Company, (ii) any Fraud, whether or not material, that involves any Acquired Company’s management or other Employees who have a role in the preparation of financial statements or the internal accounting controls utilized by any Acquired Company or (iii) any claim or allegation regarding any of the foregoing.
Section 4.7 Sufficiency of Assets. (a) Upon the Closing, the assets and properties of the Acquired Companies constitute all of the material assets and properties used or held for use in the businesses of the Acquired Companies as currently conducted and all the Seller and all the assets of the Seller connected to the business of the Acquired Companies, (b) at the Closing, Acquiror (through its direct or indirect ownership of the Acquired Companies) will have sufficient rights, property and assets to conduct the operations of the businesses of the Acquired Companies as currently conducted and (c) without prejudice to the provisions set forth in Section 7.6, from and after the Closing, the Seller or their Representatives will not own any assets or properties used in or held for use in the businesses of the Acquired Companies as currently conducted.
Section 4.8 No Undisclosed Liabilities. No Acquired Company has any Liability, except for those that (a) have been specifically reflected and adequately reserved for in the Current Balance Sheets, or (b) have arisen in the ordinary course of business since the Balance Sheet Date that are not material relative to the ordinary course of business consistent with past practices in amount or significance, either individually or in the aggregate, and do not result from a breach of Contract (including any representation or warranty therein), breach of warranty, violation of Law, infringement, misappropriation, or other tort or (c) that would not be required to be set forth on a consolidated balance sheet of the Acquired Companies or any Acquired Company prepared in accordance with GAAP.
Section 4.9 Absence of Changes. Since September 30, 2024 (a) the operations of the Acquired Companies have been conducted in the ordinary course of business, (b) no Seller Material Adverse Effect has occurred and (c) no Acquired Company has taken any action that would be prohibited by Section 6.3 if proposed to be taken or actually taken after the Agreement Date.
Section 4.10 Intellectual Property.
(a) Section 4.10(a) of the Seller Disclosure Statement contains a true, complete and accurate list, as of the Agreement Date, of each registration (including issued Patents) and application constituting Acquired Company Owned IP, including domain names (“Acquired Company Registered IP”), setting forth, for each the jurisdiction where such Acquired Company Registered IP has been registered or filed; the application, registration or serial number; the application, filing or registration date; the status; and the record and beneficial owners. There are no actions that must be taken within four (4) months from the Agreement Date, including the payment of fees or the filing of documents, for the purposes of obtaining, maintaining, perfecting, or renewing any rights in such registered or applied for Intellectual Property.
(b) The Acquired Company Registered IP is subsisting, valid and enforceable and there is no reasonable basis for a claim that any Acquired Company Registered IP is invalid or unenforceable. Since January 1, 2021, no interference, opposition, reissue, reexamination, or other similar Action has been pending or threatened in writing in which the ownership, validity, scope or enforceability of any Acquired Company Registered IP has been contested or challenged.
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(c) The Acquired Companies are the sole and exclusive beneficial, and with respect to applications and registrations (including Patents), owner of all Acquired Company Owned IP, and no other Person has any rights to such Intellectual Property. The Acquired Companies own or have a valid right to use the Acquired Company IP, in each case free and clear of all Liens (other than Permitted Liens), in business of the Acquired Companies as currently conducted and contemplated to be conducted. The Seller and its Affiliates have entered into valid and enforceable written agreements with all Persons (including all past and present founders, employees, consultants and independent contractors) who have contributed to the creation, generation, conception, discovery, development or reduction to practice of any Intellectual Property related to the Acquired Companies’ business or, for or on behalf of any Acquired Company, (including Acquired Company Owned IP), pursuant to which such Persons presently assign to an Acquired Company all of such Person’s rights, title and interest in and to all Intellectual Property created, generated, conceived, discovered, developed or reduced to practice for the Acquired Company in the course of their employment or retention thereby, without any exclusions or reservations, and no party thereto is in default or breach of such agreement.
(d) No funding, facilities or resources of any Governmental Authority, university, college, or other educational institution, or research center were used in the creation, generation, conception, discovery, development or reduction to practice of any Acquired Company Owned IP. Neither the Seller or its Affiliates (in connection with the operation of the Acquired Companies’ business) nor any of the Acquired Companies is a member or promoter of, or a contributor to, any industry standards body or similar organization that obligates any Acquired Company to grant or offer to any third party any license or similar immunity with respect to such Intellectual Property. No Person who contributed to the creation, generation, conception, discovery, development or reduction to practice of any Acquired Company Owned IP was performing services for any Governmental Authority, or for a university, college or other educational institution or research center, during the period of time such Person was creating, generating, conceiving, discovering, developing or reducing to practice any Acquired Company Owned IP.
(e) The consummation of the Contemplated Transactions will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, the Acquired Companies’ right to own, use, or hold for use any Intellectual Property as owned, used, or held for use (including for defensive purposes) in the conduct of the business of the Acquired Companies as currently conducted and contemplated to be conducted. All Acquired Company Owned IP is (and immediately following the Closing will be) fully transferable, alienable and licensable by any Acquired Company without restriction (other than Permitted Liens) and without payment of any kind to any third party. Other than with respect to the applicable rights granted under the IP License Agreement and the Trademark License Agreement, neither Seller or any of its Affiliates (other than the Acquired Companies), nor any current or former owner, partner, director, stockholder, officer, or employee of Seller or any of its Affiliates will, after giving effect to the Contemplated Transactions, own, license, or retain any proprietary rights in any of the Intellectual Property owned, used, or held for use (including for defensive purposes) by the Acquired Companies in the conduct of their business as currently conducted and contemplated to be conducted.
(f) Since January 1, 2021, no Person has infringed, misappropriated, or otherwise violated any Acquired Company Owned IP, and no such Actions have been asserted or threatened against any Person (including in the form of offers or invitations to obtain a license).
(g) The conduct of the business of the Acquired Companies as currently conducted has not since January 1, 2021, and as contemplated to be conducted, and the use of the products and technology of the Acquired Companies will not infringe, misappropriate, or otherwise violate any Intellectual Property of any other Person, and no such Actions have been pending or threatened in writing since January 1, 2021, against the Seller or any of its Affiliates or any other Person who is entitled to be indemnified, defended, held harmless or reimbursed by the Seller or any of its Affiliates.
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(h) The Acquired Company IP constitutes all of the Intellectual Property reasonably necessary for the operation of the business of the Acquired Companies as such business are currently conducted and as contemplated to be conducted.
(i) Neither the Seller or any of its Affiliates nor any Acquired Company has used, modified, or distributed any Open Source Materials in a manner that requires any Acquired Company Source Code to be publicly disclosed, publicly distributed, dedicated to the public or licensed to any Person pursuant to a copyleft license or otherwise imposes any other material limitation, restriction or condition on the right or ability of any Acquired Company to use, license or distribute any Acquired Company Owned IP. Seller and its Affiliates have complied with the terms and conditions of all applicable Open Source Licenses in all material respects in connection with the conduct of the Acquired Companies’ business.
(j) The Seller and its Affiliates have taken reasonable steps to protect material Trade Secrets that are Acquired Company Owned IP, and there has been no loss of, or unauthorized access to or disclosure of, any such Trade Secrets.
(k) Neither the Seller or its Affiliates, nor any Person acting on its or their behalf, has disclosed, licensed or delivered to any third party, agreed to disclose or deliver to any third party, or deposited or agreed to deposit with any escrow agent or other third party, any Acquired Company Source Code. No third party has accessed or obtained any Acquired Company Source Code without authorization. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) would reasonably be expected to require the disclosure or delivery by the Seller or its Affiliates, any Acquired Company or, any other Person, of any Acquired Company Source Code to any third party (including escrow agents).
Section 4.11 Privacy Obligations, Data Protection.
(a) The Seller and its Affiliates (solely in connection with the business of the Acquired Companies) and the Acquired Companies are in compliance and since January 1, 2021, have complied in all material respects with Privacy Obligations. The Acquired Companies have implemented and maintain appropriate technical and organizational policies, procedures and other measures to protect Personal Information owned, controlled or processed by the Acquired Companies against personal data breaches.
(b) Neither Seller or its Affiliates in connection with the business of the Acquired Companies, nor any Acquired Company has since January 1, 2021 (i) suffered any material breach of Personal Information; (ii) been subject to investigation or received any written notice or other communication from any supervisory authority or Governmental Authority in relation to any alleged non-compliance with Privacy Laws; or (iii) received any written claim, complaint or other communication from any Person claiming a right to compensation under Privacy Laws or alleging non-compliance with Privacy Obligations; and (iv) no event has occurred and no circumstances exist which could reasonably be expected to give rise to any of the consequences described in (i) through (iii) in this Section 4.11(b) (inclusive).
(c) Since January 1, 2021, there has been no material Incident, and to the Seller’s Knowledge, there are no circumstances that may give rise to an Incident affecting any System owned or controlled by any of the Acquired Companies.
(d) The Seller and its Affiliates carry out regular tests and vulnerability assessments of the Systems and promptly remediate all critical and high-risk issues and vulnerabilities identified therein, in each case, in accordance with customary industry standards and practices for entities operating businesses similar to the business of the Acquired Companies. The Seller and its Affiliates have used commercially reasonable efforts to implement and maintain policies and practices to monitor, prevent and detect any Incident and protect the availability, security and integrity of all Systems and data (including Personal Information processed thereby or thereon) used or held for use in connection with the business of the Acquired Companies, and implement, maintain and regularly test appropriate disaster recovery and business continuity plans, procedures and facilities, in each case, in accordance customary industry standards and practices for entities operating businesses similar to the business of the Acquired Companies. The Systems are in good working condition in all material respects and perform all functions necessary for the current operation of the Acquired Companies.
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Section 4.12 Material Contracts.
(a) Section 4.12(a) of the Seller Disclosure Statement identifies, in each subpart that corresponds to the subsection listed below in this Section 4.12(a), each of the following Contracts to which any Acquired Company is a party or by which any of its respective assets or properties are bound as of the Agreement Date:
(i) Contracts with a Top Supplier;
(ii) any Contract relating to or involving (A) Liabilities or payment obligations of any party thereto other than the Acquired Companies, in excess of $10,000,000 in any given twelve (12) month period after the Agreement Date or $25,000,000 in the aggregate over the term of the Contract, including any Liability or payment obligation that may arise in the future upon the satisfaction or occurrence of any terms, conditions, termination, event, covenants or otherwise or (B) the performance of services after the Agreement Date by any party thereto other than the Acquired Companies for an amount, or having a value, in excess of $10,000,000 in the aggregate (or the equivalent amount in local currency at the applicable exchange rate as of the Agreement Date), other than the Disclosed Related Party Agreements;
(iii) all Contracts relating to the acquisition, sale, transfer, development, use, exploitation or license (including coexistence agreements and covenants not to sue) of any material Intellectual Property, excluding (A) contracts for generally commercially available Software having license fees of less than $1,000,000 annually or in the aggregate, (B) employee and contractor confidentiality and invention assignment agreements, and (C) non-disclosure agreements entered into in the ordinary course of business;
(iv) imposing or purporting to impose any restriction on or limit on the right or ability or freedom of the Seller or Acquired Company (or that would expressly impose or purport to impose any restriction on or limit the right or ability or freedom of Acquiror or any of its Affiliates after the Purchase): (A) to engage in any business practices or other activities, (B) to compete with any other Person or to engage in any line of business, market or geographic area, or to sell, license, manufacture or otherwise distribute any of its technology or products, or from providing services, to customers or potential customers or any class of customers, in any geographic area, during any period of time, or in any segment of the market, (C) to acquire any product, property or other asset (including Intellectual Property), or any services, from any other Person, (D) to sell any product or other asset (including Intellectual Property) to or perform any services for any other Person or to transact business or deal in any other manner with any other Person, or (E) to license or distribute any product, Software or technology;
(v) relating to the provision of lending, consulting, development, sales or any other services to any Acquired Company, in each case, by any other Person, involving payment obligations in excess of $10,000,000 in the prior twelve (12) month period;
(vi) relates to the purchase, lease, license or rental of equipment in excess of $10,000,000 on a one-time basis or $25,000,000 on an annual basis;
(vii) that is an Acquired Company Employee Plan, including any employment or services agreement, offer letter, or similar Contract that sets forth the terms and conditions of employment or service with any Employee, that cannot be terminated within sixty (60) days after the delivery of a termination notice by any Acquired Company without payment or other liability;
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(viii) that grants any retention, change of control, severance or termination pay or benefits (in cash, securities, or otherwise) to any Employee;
(ix) that is an agreement with any current Senior Employee;
(x) any Contract with a professional employer organization or similar party;
(xi) any Labor Agreement;
(xii) that is a lease, lease guaranty, sublease, Contract for the leasing, use or occupancy of, or otherwise granting a right in or relating to Leased Real Property;
(xiii) relating to capital expenditures and involving future payments in excess of $10,000,000 individually or $25,000,000 in the aggregate;
(xiv) relating to any mortgages, indentures, guarantees, loans or credit agreements, security agreements or other Contracts or instruments relating to Indebtedness having a value in excess of $25,000,000 or the creation of any Lien (other than Permitted Liens) with respect to any asset of any Acquired Company;
(xv) involving or incorporating any guaranty, pledge, performance or completion bond, indemnity or surety arrangement;
(xvi) creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities;
(xvii) that is with a Governmental Authority, or constitutes or relates to any quotation, bid or proposal submitted to any Governmental Authority or higher-tier subcontractor of any Governmental Authority;
(xviii) relating to any acquisition or agreement to acquire or dispose of (i) assets of any Person, other than acquisitions in the ordinary course of business or the disposal of non-material assets of any Acquired Company in the ordinary course of business, or (ii) any Equity Interest in any Person (including any Acquired Company) or any business or operations of any Person;
(xix) that is a hedging, futures, exchange, options or other derivative Contract;
(xx) that is with any investment banker, broker, financial advisor or similar party, retained by the Seller or any Acquired Company in connection with this Agreement and the Contemplated Transactions; and
(xxi) that otherwise involves payment by any Acquired Company of $10,000,000 individually or $25,000,000 in the aggregate or more and is not cancellable without penalty within thirty (30) days.
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(b) Each Contract (x) set forth in the Seller Disclosure Statement, or (y) required to be set forth on the Seller Disclosure Statement in order to make the corresponding section of this Article IV true, correct and complete, is referred to herein as a “Material Contract.” The Seller has made available to Acquiror true, correct and complete copies of all Material Contracts, including all material amendments, exhibits, schedules and other attachments thereto, in each case as of the Agreement Date. Each Material Contract is valid and in full force and effect and is enforceable by the Seller or the Acquired Companies, as applicable, in accordance with its terms, subject to Laws of general application relating to bankruptcy, insolvency and the relief of debtors; and rules of law governing specific performance, injunctive relief and other equitable remedies. No Acquired Company has materially violated or breached, or committed any material default under, any Material Contract and, to the Seller’s Knowledge, no other Person that is party to a Material Contract has materially violated or breached, or committed any material default under, such Material Contract. Since the latter of the respective date of incorporation and January 1, 2021, no Acquired Company has received any written notice alleging a material breach of, or material default under, any Material Contract. To the Seller’s Knowledge, no event has occurred, and no circumstance or condition exists, with respect to a Material Contract that (with or without notice or lapse of time) would reasonably be expected to: (i) result in a material violation or material breach of any of the provisions of such Material Contract by any Acquired Company or the counterparty to such Material Contract; (ii) give any party to such Material Contract the right to declare a default or exercise any material remedy under such Material Contract; (iii) give any party to such Material Contract the right to accelerate the maturity or performance of such Material Contract; or (iv) give any Person the right to cancel prior to the specified expiration date thereof, terminate prior to the specified expiration date thereof or materially modify such Material Contract. Since the latter of the respective date of incorporation of the Acquired Companies and January 1, 2021, no Acquired Company has received any written notice of termination of any Material Contract (regardless of whether such Person has the right to do so under such Contract) prior to the specified expiration date thereof.
Section 4.13 Employee Benefit Plans.
(a) Section 4.13(a) of the Seller Disclosure Statement sets forth a true, correct and complete list of each Acquired Company Employee Plan. No Acquired Company has made any plan or commitment to establish or enter into any new material Acquired Company Employee Plan or to modify any material Acquired Company Employee Plan. No material promises or representations have been made to any Employees to increase their compensation or to continue their employment for any specific duration and no Acquired Company is under any legal obligation to make any change in the compensation or benefits of any Employee, except as required by law or the terms of the Acquired Company Employee Plan. The Seller has made available to Acquiror true and complete copies of, to the extent applicable: (i) the plan document (including all amendments thereto) governing each Acquired Company Employee Plan or, if such plan is not in writing, a written description of such Acquired Company Employee Plan, (ii) if the Acquired Company Employee Plan is funded through a trust or any other funding arrangement, a copy of such trust or other funding arrangement, (iii) each ERISA summary plan description and summary of material modifications, (iv) the most recent annual report on Form 5500 including, if applicable, all schedules and attachments thereto prepared in connection with any such Acquired Company Employee Plan, (v) the most recently received Internal Revenue Service determination letter (or opinion or advisory letter, if applicable) and (vi) all non-routine correspondence to and from any Governmental Authority within the last three (3) years.
(b) Absence of Certain Plans. Neither any Acquired Company nor any of its ERISA Affiliates maintains, sponsors or participates in, or contributes to or is required to contribute to, (i) a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA) (a “Multiemployer Plan”), (ii) a “multiple employer plan” that is subject to Section 4063 or Section 4064 of ERISA or Section 413(c) of the Code, (iii) a plan subject to Section 412 of the Code or Section 302 or Title IV of ERISA or (iv) a “multiple employer welfare arrangement” (as defined in Section 3(4) of ERISA). No liability under Title IV or Section 302 of ERISA has been incurred by the any Acquired Company or any of its Subsidiaries (including on account of any ERISA Affiliate) that has not been satisfied in full and, to the Knowledge of the Seller, no condition exists that would reasonably be expected to result in any Acquired Company or any of its Subsidiaries (including on account of any ERISA Affiliate) incurring any such liability, other than any liability for premiums due to the Pension Benefit Guaranty Corporation (which premiums have been paid when due).
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(c) Employee Plan Compliance.
(i) Each Acquired Company Employee Plan has been maintained, in all material respects, in compliance with its terms and all applicable Laws, including the applicable provisions of ERISA, the Code and any applicable regulatory guidance issued by any Governmental Authority. There are no Actions pending or threatened or reasonably anticipated (other than routine claims for benefits) against the Seller or any Acquired Company relating to an Acquired Company Employee Plan. Each Acquired Company Employee Plan can be amended, terminated or otherwise discontinued after the Closing in accordance with its terms, without liability as a result of such amendment termination or discontinuance to Acquiror, or any Acquired Company.
(ii) Each Acquired Company Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service or is the subject of a favorable opinion letter from the Internal Revenue Service on the form of such Acquired Company Employee Plan and, to the Knowledge of the Seller, there are no facts or circumstances that would be reasonably likely to adversely affect the determination of the qualified status of any such Acquired Company Employee Plan as set forth in such determination letter.
(iii) Neither any Acquired Company nor any of its Subsidiaries have incurred any liability for any Tax or civil penalty imposed under Chapter 43 of the Code or Sections 409 or 502 of ERISA with respect to any Acquired Company Employee Plan that has not been satisfied in full. There does not now exist, nor do any circumstances exist that could result in, any Controlled Group Liability of any Acquired Company or any of its Subsidiaries (including on account of any ERISA Affiliate) that could be a liability of Acquiror and its Affiliates (including the Acquired Companies and their Subsidiaries) following the Closing.
(d) No Prohibited Transactions. With respect to each Acquired Company Employee Plan, (i) none of the Acquired Companies, any of their Subsidiaries, or, to the Knowledge of the Seller, any of their respective directors, officers, employees or agents has engaged in or been a party to any non-exempt “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA), and (ii) none of the Acquired Companies or any of their Subsidiaries or, to the Knowledge of the Seller, any other “fiduciary” (as defined in Section 3(21) of ERISA) has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of such plan.
(e) No Post-Employment Obligations. No Acquired Company Employee Plan provides, or has any obligation or liability to provide, post-termination or retiree or post-employment life insurance, health or other employee welfare benefits to any person for any reason other than required under Section 601 et seq. of ERISA or Section 4980B of the Code or similar applicable state Law.
(f) Section 409A. Each Acquired Company Employee Plan that is a “nonqualified deferred compensation plan” (within the meaning of Section 409A of the Code) has (i) been maintained and operated in compliance with Section 409A of the Code and all applicable Treasury Regulations promulgated thereunder so as to avoid any Tax, penalty or interest under Section 409A of the Code, and (ii) been in documentary and operational compliance with Section 409A of the Code and all applicable Internal Revenue Service guidance promulgated thereunder.
(g) Change of Control. Neither the execution and delivery of this Agreement nor the consummation of the Contemplated Transactions (either alone or upon the occurrence of any additional or subsequent events) will (i) result in any payment or benefit (including severance or bonus) becoming due under any Acquired Company Employee Plan or otherwise to any Employee, (ii) result in any forgiveness of indebtedness with respect to any Employee, (iii) increase any benefits otherwise payable by the Acquired Companies under any Acquired Company Employee Plan, (iv) result in the obligation to fund benefits under any Acquired Company Employee Plan, (v) result in the acceleration of the time of payment or vesting of any benefits provided under any Acquired Company Employee Plan or (vi) result in excess parachute payments within the meaning of Section 280G(b) of the Code or a loss of deduction under Section 280G of the Code. Neither the Seller nor the Acquired Companies have any obligation to gross-up, indemnify or otherwise reimburse any Employee or any other Person for any Taxes, including under Section 409A or 4999 of the Code.
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Section 4.14 Employment Matters.
(a) Employee Census. Schedule 4.15(a) contains an accurate and complete table of the following information for each current Employee as of the Agreement Date: (i) anonymized ID, (ii) employing or engaging entity and employing entity following the Reorganization, (iii) date of commencement of continuous employment or engagement, (iv) job title, (v) status (full-time or part-time), (vi) work location (city, state), (vii) type of employer sponsored visa, if applicable, (viii) annual base compensation, (ix) any commission and bonus opportunities (target, maximum and any amounts paid in respect of the current and immediately preceding calendar years), (x) exempt or non-exempt status, (xi) employment status (whether such person is party to an employment agreement or is employed “at will”) or independent contractor status, (xii) leave status, including type of leave and expected return date, (xiii) union status, (xiv) notice period or term of employment or engagement (if applicable), and (xv) accrued but unpaid vacation or other applicable paid time off balances. Notwithstanding the foregoing, following the Reorganization, certain employees of TUS will (at least partially) be assigned to, or provide services with respect to, the Solar Module Manufacturing Facility at Closing.
(b) Notice of Termination. None of the current Senior Employees have given notice or been given notice of termination regarding their employment or service relationship with any Acquired Company.
(c) Labor. No Employees are represented by any labor union, works council, trade union, employee representatives, personnel delegates or similar labor relations entity, labor organization or group of employees (each, a “Labor Entity”) and the Acquired Companies are not party to or bound by any labor agreement, collective bargaining agreement or any other labor-related agreements or arrangements with any Labor Entity (each a “Labor Agreement”). Since the latter of the respective date of incorporation and eighteen (18) months preceding the Agreement Date, no Labor Entity has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority. Since the latter of the respective date of incorporation of each Acquired Company and eighteen (18) months preceding the Agreement Date, there has been no actual, or to the Knowledge of the Seller, threatened, unfair labor practice charge, material grievance, material arbitration, strike, lockout, slowdown, collective action (of whatever kind) concerted refusal to work overtime, work stoppage, picketing, handbilling, or other labor dispute against or affecting any Acquired Company. To the Knowledge of the Seller, there have been no activities or proceedings of any Labor Entity to organize any Employees.
(d) Compliance with Employment Laws. Each of the Acquired Companies is in compliance in all material respects and since the latter of their respective date of incorporation, has been in compliance in all material respects, with all Laws respecting employment and employment practices, including, without limitation, all laws respecting terms and conditions of employment, health and safety, wages and hours, child labor, immigration, employment discrimination, disability rights or benefits, equal opportunity, plant closures and layoffs, affirmative action, workers’ compensation, labor relations, employee leave issues and unemployment insurance and any applicable Labor Agreement. All individuals who are performing, and for the six-year period preceding the Agreement Date have performed, services for the Acquired Companies, while classified as independent contractors have been properly so classified for all purposes. All Employees classified as “exempt” under the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq., and applicable state wage and hour Laws are, and for the six (6) year period preceding the Agreement Date have been, properly classified as “exempt.” The Acquired Companies do not use automated employment decision tools (AEDTs) or other artificial intelligence in connection with hiring or promotion decisions. The Acquired Companies are not delinquent in payments to any Employees for any services or amounts required to be reimbursed or otherwise paid. No Acquired Company has a single employer, joint employer, alter ego or similar relationship with any other company.
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(e) Employment-Related Actions. There are no Actions by or against any of the Acquired Companies pending, or to the Seller’s Knowledge, threatened to be brought or filed, by or with any Governmental Authority or arbitral tribunal in connection with the employment or termination of employment of any Employee or applicant to become an Employee, including, without limitation, any claim relating to unfair labor practices, employment discrimination, harassment, retaliation, equal pay or any other employment related matter arising under applicable Laws.
(f) Violation of Restrictive Covenants. No Employee is in any respect in violation of any term of any employment agreement, non-disclosure agreement, common law non-disclosure obligation, fiduciary duty, non-competition agreement, restrictive covenant or other obligation: (i) to the Acquired Companies or (ii) to a former employer of any such Employee relating (A) to the right of any such Employee to be employed by the Acquired Companies or (B) to the knowledge or use of trade secrets or proprietary information.
(g) No Harassment. None of the Acquired Companies is a party to a settlement agreement with a current or former Employee, director or officer that involves allegations relating to sexual harassment, sexual misconduct or discrimination by either an officer or Employee. In the last five years, no allegations of sexual harassment, sexual misconduct or discrimination have been made against any officer or Employee, and to the Knowledge of the Seller, no such harassment, misconduct or discrimination has occurred.
(h) Government Contractor. The Acquired Companies are not and have not been: (i) a “contractor” or “subcontractor” (as defined by Executive Order 11246), (ii) required to comply with Executive Order 11246 or any other applicable Law requiring affirmative action or other employment related actions for government contractors or subcontractors, or (iii) otherwise required to maintain an affirmative action plan.
Section 4.15 Tax Matters.
(a) Tax Returns and Payments. All income and other material Tax Returns required to be filed by or with respect to any Acquired Company have been duly and timely filed with the appropriate Taxing Authority (taking into account any valid extensions of time within which to make such filings). All such Tax Returns are true, correct and complete in all material respects, were prepared in substantial compliance with all applicable Law and disclose all Taxes required to be paid for the periods covered thereby. Each Acquired Company has duly and timely paid, or has caused to be duly and timely paid, all Taxes due and owing by it to the appropriate Governmental Authority (whether or not shown on any Tax Return).
(b) Reserves for Payment of Taxes. The Acquired Companies Financials reflect, in accordance with GAAP, adequate reserves for all Taxes payable by or with respect to each Acquired Company for all taxable periods through the date of such financial statements, and since such date, no Acquired Company has incurred any Liability for Taxes outside the ordinary course of business consistent with past practice.
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(c) Statute of Limitations. There are no outstanding agreements waiving or extending the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, Taxes of or with respect to any Acquired Company for any taxable period (except for such agreements for which the applicable statutory period of limitations (after giving effect to any waiver or extension) has already expired), and no request for any such waiver or extension made by any Governmental Authority is currently pending.
(d) Power of Attorney. No power of attorney given by, or binding upon, any Acquired Company with respect to any matter relating to Taxes is currently in force.
(e) Tax Liens. There are no Liens for Taxes against any of the Acquired Companies’ assets, other than Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings.
(f) No Beneficiary of Tax Return Extension. No Acquired Company is the beneficiary of any outstanding extension of time within which to file any Tax Return and no request for such extension is currently pending.
(g) Tax Incentives. No Acquired Company is the beneficiary of any Tax grant, abatement or incentive granted or made available by any Governmental Authority that will terminate as a result of the consummation of the Contemplated Transactions. No Acquired Company is a party or subject to any Tax exemption, Tax holiday or other Tax reduction agreement or order that will terminate as a result of the consummation of the Contemplated Transactions.
(h) Audits. No audit, examination, dispute, claim, investigation, proposed adjustment or judicial or administrative proceeding with respect to any Tax Liability or Tax Return of, or with respect to, any Acquired Company is currently pending, contemplated, threatened or ongoing. All deficiencies for Taxes asserted or assessed against or in respect of Acquired Company have been fully and timely paid or settled.
(i) No Tax Ruling. No Person has received any Tax ruling, technical advice memoranda or similar agreements or rulings or entered into any closing agreement (as described in Section 7121 of the Code or any corresponding, analogous or similar provision of state, local or non-U.S. Law), settlement agreement or pending ruling request, in each case with respect to Taxes of or with respect to any Acquired Company, and no request for any such ruling, settlement, or agreement is currently pending.
(j) Withholding. Each Acquired Company has withheld from any payment to its respective employees, independent contractors, creditors, equityholders and other applicable third parties, and timely remitted to the appropriate Governmental Authority, all amounts with respect to Taxes that were required to be so withheld and remitted under applicable Tax Laws in all respects in substantial compliance with all Tax withholding and remitting provisions of applicable Tax Laws.
(k) Tax Residence. Each Acquired Company has been a resident for Tax purposes solely in the jurisdiction where its registered seat or office is located. Without limiting the generality of the immediately preceding sentence, no written claim has been made by a Governmental Authority in a jurisdiction where an Acquired Company does not file a Tax Return that such Acquired Company is or may be subject to taxation by that jurisdiction. No Acquired Company has a “permanent establishment” (within the meaning of a relevant income Tax treaty) or otherwise has an office or fixed place of business in a country other than its country of organization.
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(l) Classification of Entities. Each Acquired Company has, at all times since its formation, been properly classified either as a corporation or as an entity disregarded from its owner for U.S. federal and applicable state and local income Tax purposes.
(m) Tax Sharing Agreements. No Acquired Company is a party to or bound by or has any obligation under any Tax sharing, Tax indemnity, Tax allocation or similar agreement or arrangement with any other Person (other than any customary Tax sharing, indemnity or allocation provisions contained in a commercial agreement that is entered into in the ordinary course of business consistent with past practice, the primary purpose of which does not relate to Taxes). No Acquired Company (i) is or has ever been a member of an affiliated group of corporations (as defined in Section 1504(a) of the Code or any similar provision of state, local or non-U.S. Law) filing or included in a consolidated, combined, joint, unitary or similar Tax Return or (ii) has Liability for the Taxes of any Person under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or non-U.S. Law), as transferee or successor, by Contract (other than any customary commercial agreement entered into in the ordinary course of business consistent with past practice, the primary purpose of which does not relate to Taxes) or otherwise, in each case except for the consolidated group, for U.S. federal income tax purposes, of which TUH is the common parent.
(n) Change in Accounting Methods; Closing Agreements. No Person will be required to include or take into account any material item of income in, or exclude any material item of deduction or loss from, taxable income in respect of any Acquired Company for any taxable period (or portion thereof) for which Tax Returns have not yet been filed as a result of (i) any change in method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date, (ii) any use of an improper method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date, (iii) any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Law) executed prior to the Closing, (iv) any deferred intercompany gain or excess loss account, in each case described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision or administrative rule of federal, state, local or non-U.S. Law) and existing at or prior to the Closing, (v) any installment sale or open transaction disposition made prior to the Closing, (vi) any prepaid amount or deferred revenue accrued prior to the Closing or (vii) an election under Section 108(i) of the Code (or any corresponding or similar provision of any state, local or non-U.S. Tax Law).
(o) Transfer Pricing. All related-party transactions involving any Acquired Company are at arm’s-length in compliance with Section 482 of the Code, the Treasury Regulations promulgated thereunder and any comparable, analogous or similar provision of state, local or non-U.S. Law.
(p) Tax Disclosure. No Acquired Company has participated in, or is currently participating in, or has ever been a party to, or promoter of, any “listed transaction” as defined in Section 6707A(c)(2) of the Code and Treasury Regulations Section 1.6011-4 (or any comparable, analogous or similar provision of state, local or non-U.S. Tax Law).
(q) Seller Tax Returns. Seller has delivered or made available to Acquiror copies of (i) the federal and state income Tax Returns and all non-U.S. income Tax Returns relating to any Acquired Company (and amended Tax Returns, revenue agents’ reports and other notices from the IRS or other Taxing Authorities) for each of the preceding three (3) taxable years and (ii) all other Tax Returns and other reports and statements made or received by or on behalf of any Acquired Company that relate to Taxes arising during such periods, including income tax audit reports, statements of income or gross receipts tax, franchise tax, sales tax and transfer tax received by or on behalf of any Acquired Company.
(r) Sales, Use and Payroll Taxes. Each Acquired Company has properly collected all sales, use and payroll Taxes required to be collected by or with respect to such Acquired Company and remitted all such Taxes to the applicable Taxing Authority, in each case in the time and in the manner required by applicable Law.
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(s) Equity Interests. No Acquired Company owns an equity interest in another Person (other than another Acquired Company) for Tax purposes.
(t) Target Shares. The Target Shares represent the only equity interests in the Acquired Companies for Tax purposes.
(u) Distributions of Stock. No Acquired Company has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Sections 355 or 361 of the Code.
(v) Section 6417. Neither the Acquired Companies, Seller nor any Affiliate of Seller has made an elective pay election under Section 6417 of the Code with respect to any advanced manufacturing production credits under Section 45X of the Code eligible to be claimed with respect to the Solar Module Manufacturing Facility or the Solar Cell Manufacturing Facility.
(w) Section 6418. Neither the Acquired Companies, nor Seller nor any Affiliate of Seller has made an election or agreed to make an election under Section 6418(a) of the Code to transfer any advanced manufacturing production credits under Section 45X of the Code eligible to be claimed with respect to the Solar Module Manufacturing Facility or the Solar Cell Manufacturing Facility.
Section 4.16 Subsidies and Grants. The terms and conditions of the public subsidies, grants, or other similar public benefits received by any Acquired Company have been made available to Acquiror and the terms and conditions thereof have been complied with by the Acquired Companies, except were such non-compliance would not have a Seller Material Adverse Effect.
Section 4.17 Environmental Matters. As of the Agreement Date, each Acquired Company has been in material compliance with all applicable Environmental Laws. No Acquired Company has received any written notices of actual or alleged violation or liability with respect to any applicable Environmental Law that has not been resolved, including any written notices alleging that an Acquired Company is responsible for the investigation or cleanup of any third-party site to which such Acquired Company has transported or arranged for the transportation of Hazardous Materials for treatment or disposal.
Section 4.18 Real Property.
(a) No Acquired Company (i) owns, or has ever owned, any real property and (ii) has entered into (and is not bound by or required to enter into) any Contracts to purchase any real property.
(b) Except as set forth in Section 4.18(b) of the Seller Disclosure Statement, no construction, alteration or other leaseholder improvement work with respect to the Leased Real Property remains to be paid for, or performed by, any Acquired Company, and no Acquired Company has entered into any commitments or agreements with respect to the design or construction of any leasehold improvements at any Leased Real Property or is obligated to reimburse any landlord or other third party for the cost of any such leasehold improvements.
(c) No Acquired Company has assigned, subleased, licensed or otherwise transferred all or any portion of its interests in any Lease Agreements or any Leased Real Property. The Acquired Company expect to be able to continue to have the right to occupy the Leased Real Property through the remainder of the term of the applicable Lease Agreement. The Leased Real Property is in good condition and repair in all material respects, reasonable wear and tear excepted.
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Section 4.19 Property. Each Acquired Company has good and valid title to, or, in the case of leased or licensed properties and assets, valid leasehold interests or license rights in, all properties and assets, real, personal and mixed, held by, used by or held for use by any Acquired Company in their respective businesses, free and clear of any Liens, except (a) as reflected in the Current Balance Sheets, and (b) Permitted Liens. All such items of property owned, leased, or licensed by any Acquired Company (i) are adequate for the conduct of the business of the Acquired Companies as currently conducted and as currently contemplated to be conducted, and (ii) in good operating condition, subject to normal wear and tear, and regularly and properly maintained. Such properties and assets (including any assets owned by the Acquired Companies at, and as of immediately following the Closing), together with such properties and assets to which the Acquired Companies have valid leasehold interests or license rights in, constitute all of the assets that are (and for the prior eighteen (18) months have been) used in or held for use in, the conduct of the business of the Acquired Companies as such business is currently conducted (and has been conducted for the prior eighteen (18) month period).
Section 4.20 Litigation.
(a) Since the latter of the respective date of incorporation and January 1, 2021, there have been no Actions, audits, actions, suits, demand letters, claims, cause of actions, arbitration proceedings or mediation proceedings, or, to the Knowledge of Seller, governmental or regulatory inquiries or investigations, or administrative proceedings or other similar proceedings against any Acquired Company, any of its respective properties or tangible assets or any of its officers or directors (in their capacity as such) as a party; provided that no Action, governmental or regulatory inquiry or investigation, audit, action, suit, demand letter, claim, cause of action, arbitration proceeding, mediation proceeding, administrative proceeding or similar proceeding (a “matter”) that occurs for the first time after the Agreement Date shall constitute an “Action” for purposes of this Section 4.20 unless the damages sought or awarded in respect of such matter exceed $25,000,000.
(b) There is no current, pending, or to the Knowledge of the Seller, threatened, Action of any nature against the Seller, arising out of or relating to (i) the Seller’s beneficial ownership of the Target Shares, (ii) the Seller’s capacity as a Seller hereunder, (iii) the Contemplated Transactions or (iv) any contribution of assets (tangible or intangible) by the Seller to any Acquired Company. There is no current or pending or, to the Knowledge of the Seller, threatened investigation or proceeding, against the Seller arising out of or relating to the matters noted in clauses (i) through (iv) of the preceding sentence by or before any Governmental Authority. There is no current or pending or, to the Knowledge of the Seller, threatened Action against the Seller with respect to which the Seller has a contractual right or a right to indemnification from any Acquired Company related to facts and circumstances existing prior to the Closing.
(c) No Governmental Authority has at any time challenged or overtly questioned (in each case in writing) the legal right of any Acquired Company to conduct their respective operations as presently or previously conducted or as currently contemplated to be conducted. There is no Action of any nature pending or, to the Seller’s Knowledge, threatened against any Person who has a contractual right or a right pursuant to Law to indemnification from the Acquired Companies related to facts and circumstances existing prior to the Closing.
(d) There is no Action by any Acquired Company pending or threatened against any other Person.
Section 4.21 Insurance. Section 4.21 of the Seller Disclosure Statement lists all insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors of any Acquired Company, including the type of coverage, the carrier, the amount of coverage, the term and the annual premiums of such policies. There is no claim by any Acquired Company pending under any of such policies or bonds as to which coverage has been denied or disputed. In addition, there is no pending claim of which its total value (inclusive of defense expenses) would reasonably be expected to exceed the policy limits. All premiums due and payable under all such policies and bonds have been timely paid (or if installment payments are due, will be timely paid if incurred prior to the Agreement Date), and the Acquired Companies are otherwise in compliance with respect to its obligations under the terms of such policies and bonds. Such policies and bonds are in full force and effect. To the Knowledge of the Seller, there has been no threatened, termination of, or material premium increase with respect to, any of such policies. None of the Acquired Companies has ever maintained, established, sponsored, participated in or contributed to any self-insurance plan.
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Section 4.22 Compliance with Laws and Permits.
(a) Compliance with Laws. Since the latter of the respective date of incorporation and January 1, 2021, each Acquired Company has been, in all material respects, in compliance with all applicable Laws to which any Acquired Company, or any of the properties, assets or business activities of any Acquired Company are subject to or bound. Since the latter of the respective date of incorporation and January 1, 2021, no Acquired Company has received any written (or, to the Knowledge of the Seller, other) notice from a Governmental Authority of any actual or alleged material non-compliance with any Law (other than with respect to any matter that is the subject of Section 4.20(c)).
(b) Permits. Each Acquired Company holds all permits, franchises, authorizations, registrations, approvals and licenses of any Governmental Authority required under applicable Laws for the conducting of its business, or the ownership or operation of assets, by such Acquired Company as currently conducted (collectively, the “Acquired Company Authorizations”), the absence of which would have a material impact on any Acquired Company, and no Acquired Company is in default under any of the same. The Acquired Company Authorizations are in full force and effect. Since the latter of the respective date of incorporation and January 1, 2021, each Acquired Company has been and is in compliance in all material respects with the terms and conditions of the Acquired Company Authorizations. Since the latter of the respective date of incorporation and January 1, 2021, no Acquired Company has received any written (or, to the Knowledge of the Seller, other) notice of any breach, violation, or default under or with respect to any Acquired Company Authorization. The Seller has made available to Acquiror true, correct and complete copies of all the material Acquired Company Authorizations.
Section 4.23 Anti-Bribery and Corruption, Customs & Trade Laws, Sanctions and Compliance.
(a) Sanctions and Customs & Trade Laws. Since the latter of the respective date of incorporation and April 24, 2019: (i) no Acquired Company, Seller Group Company, and none of their respective directors, officers, nor, to the Knowledge of the Seller, its employees or agents, has violated any applicable Customs & Trade Laws or Sanctions; and (ii) no Acquired Company or Seller Group Company has conducted, directly or indirectly, any business with, in, or involving any Sanctioned Jurisdiction, Sanctioned Person or Restricted Person. No Acquired Company, Seller Group Company, nor any of their respective shareholders (direct or indirect), directors, officers, employees or agents is a Sanctioned Person or a Restricted Person. Each Acquired Company and Seller Group Company has in place written policies, controls, and systems reasonably designed to ensure compliance with all applicable Customs & Trade Laws and Sanctions. No Acquired Company or Seller Group Company has (i) made any voluntary, directed or involuntary disclosure to any Governmental Authority with respect to any actual, alleged or reasonably suspected violation of any Customs & Trade Laws or Sanctions, (ii) been the target of a past, current, pending or threatened investigation, or enforcement proceeding by a Governmental Authority for any actual or alleged violation of Customs & Trade Laws or Sanctions, or (iii) received any written or other notice concerning any actual or alleged violation of any Customs & Trade Laws or Sanctions.
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(b) Import and Export Licenses. Since the latter of the respective date of incorporation and April 24, 2019, each Acquired Company and Seller Group Company has obtained all required import and export licenses and all other necessary consents, notices, waivers, approvals, orders, authorizations, and declarations, and completed all necessary registrations and filings, required under applicable Customs & Trade Laws and Sanctions.
(c) Anti-Corruption Laws. Since the latter of the respective date of incorporation and January 1, 2019, no Acquired Company, no Seller Group Company, and none of their respective officers or directors, (or to the Knowledge of the Seller, the Acquired Companies’ or Seller Group Company’ respective employees or agents) is in violation of any applicable Anti-Corruption Law or has directly or knowingly indirectly, made, offered, promised, authorized, accepted or agreed to receive, any unlawful payment, gift, bribe or kickback: (i) to or for the benefit of any person for the purposes of influencing any official act or decision; (ii) to secure any improper advantage; or (iii) to induce any person to do or omit to do any act in violation of the lawful duty of such person. Each Acquired Company and Seller Group Company has established and maintains a compliance program and adequate internal controls and procedures reasonably designed to ensure that each Acquired Company, Seller Group Company and their respective Affiliates and Representatives (to the extent acting on their behalf) do not violate any Anti-Corruption Laws. No Acquired Company, no Seller Group Company, and none of their officers or directors or employees has (i) made any voluntary, directed or involuntary disclosure to any Governmental Authority with respect to any actual, alleged or reasonably suspected violation of any Anti-Corruption Laws, (ii) been the target of a past, current, pending or threatened whistleblower report, or investigation, or enforcement proceeding by a Governmental Authority for any actual or alleged violation of Anti-Corruption Laws, or (iii) received any written or, to the Knowledge of the Seller, other notice concerning any actual or alleged violation of any Anti-Corruption Laws. No Employee of, or holder of a financial interest in, any Acquired Company, their respective Affiliates, is currently a Governmental Official.
(d) Anti-Money Laundering Laws. Since the latter of the respective date of incorporation and January 1, 2019, no Acquired Company, no Seller Group Company, and none of their respective directors, officers, employees or agents, has violated any applicable Anti-Money Laundering Laws. Each Acquired Company and Seller Group Company has in place written policies, controls, and systems designed to ensure compliance with all applicable Anti-Money Laundering Laws. No Acquired Company nor Seller Group Company has (i) made any voluntary, directed or involuntary disclosure to any Governmental Authority with respect to any actual, alleged or reasonably suspected violation of any Anti-Money Laundering Laws, (ii) been the target of a past, current, pending or threatened investigation or enforcement proceeding by a Governmental Authority for any actual or alleged violation of Anti-Money Laundering Laws, or (iii) received any written or, to the Knowledge of the Seller, other notice concerning any actual or alleged violation of any Anti-Money Laundering Laws.
Section 4.24 Directors and Managing Directors.
(a) Section 4.24(a) lists the members of the boards of directors of the Acquired Companies, none of which are employees of an Acquired Company.
(b) No Acquired Company is a party to any agreement, obligation or commitment with respect to the election or appointment of any individual or individuals as a managing director or a member of the board of directors of any Acquired Company and there is no voting agreement or other arrangement among the shareholders of any Acquired Company.
(c) There are no agreements, commitments and undertakings with respect to any compensation to be provided by any Acquired Company to any of the Acquired Companies’ directors.
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Section 4.25 Top Suppliers. Section 4.25 of the Seller Disclosure Statement contains a true, correct and complete list, as of the Agreement Date, of the suppliers or vendors of the Acquired Companies, whether of products, services or information technology or otherwise, for the calendar year 2023 and the nine (9) month period ended September 30, 2024, with a spend in excess of $50,000,000 during each such period (or the equivalent amount in local currency at the applicable exchange rate as of the Agreement Date), or such supplier is otherwise strategically important to any Acquired Company (each such Person, a “Top Supplier”). No Acquired Company has received written notice, nor do the Seller has Knowledge or reason to believe, that any Top Supplier (i) intends to or in fact did cancel, terminate or otherwise materially and adversely modify its relationship with any Acquired Company (whether related to payment, price or otherwise) for any reason, or (ii) is threatened with bankruptcy or insolvency or is, or is reasonably likely to become unable to supply or support products or services to or for any Acquired Company in quantities and manner consistent with past practice.
Section 4.26 Related Party Claims. There are no Acquiror Claims that any Acquired Company has, or may now or hereafter have, including Acquiror Claims arising under applicable Law, other than arising under this Agreement, any Related Agreement, when entered or any Disclosed Related Party Agreement or in connection with the Contemplated Transaction (and such matters shall not constitute Acquired Claims).
Section 4.27 Complete Copies of Materials. The Seller has made available to Acquiror true, correct and complete copies of each Contract, document, or other information expressly required by a representation in this Article IV to be set forth or referenced in the Seller Disclosure Statement.
Section 4.28 Brokers. Except pursuant to the Contracts set forth on Section 4.28 of the Seller Disclosure Statement, no agent, broker, investment banker, person or firm acting in a similar capacity on behalf of or under the authority of any Acquired Company is or will be entitled to any broker’s, finder’s fee or any other commission or similar fee, directly or indirectly payable by any Acquired Company, directly or indirectly, in connection with any of the Contemplated Transactions.
Section 4.29 Investment Representation. The Seller is an “accredited investor” as defined in Regulation D promulgated under the Securities Act. The Seller acknowledges that it is informed as to the risks of the ownership of the shares of Acquiror Common Stock and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of such ownership, and is able to bear the economic risk of such ownership for an indefinite period of time. The Seller has been furnished access to such information and documents as it has requested and has been afforded an opportunity to ask questions of and receive answers from representatives of Acquiror concerning the issuance of the shares of Acquiror Common Stock constituting the Share Consideration and when issued, the Conversion Shares.
Section 4.30 Restricted Securities. The Seller understands that neither the issuance of the shares of Acquiror Common Stock in connection with the Purchase or Conversions nor the transfer of such shares to the Seller has been registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Seller’s representations as expressed herein. The Seller understands that the shares of Acquiror Common Stock are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Seller must hold the Acquiror Common Stock indefinitely unless and until they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Seller acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including the time and manner of sale, the holding period for the Acquiror Common Stock, and on requirements relating to Acquiror which are outside of the Seller’s control, which Acquiror is under no obligation, and may not be able, to satisfy.
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Section 4.31 Resale of Shares.
(a) The Seller understands and agrees that it may not sell or otherwise transfer any shares of Acquiror Common Stock, except pursuant to an effective registration under the Securities Act, or in a transaction which qualifies as an exempt transaction under the Securities Act and the rules and regulations promulgated thereunder and in accordance with the restrictions set forth in this Agreement and the Cooperation Agreement.
(b) The Seller acknowledges that each certificate or instrument evidencing the shares of Acquiror Common Stock constituting the Share Consideration or Conversion Shares shall initially bear substantially the following restrictive legend, either as an endorsement, on the face thereof or a comparable notation or other arrangement with respect to any uncertificated shares:
“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A TRANSACTION AGREEMENT, DATED AS OF NOVEMBER 6, 2024, BY AND AMONG FREYR BATTERY, INC. AND CERTAIN OTHER PARTIES THERETO (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF FREYR BATTERY, INC.) AND THE COOPERATION AGREEMENT BY AND AMONG FREYR BATTERY, INC. AND CERTAIN OTHER PARTIES THERETO, DATED AS OF THE CLOSING DATE (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF FREYR BATTERY, INC.).”
Section 4.32 Adequate Information. The Seller has received, has had an opportunity to review and has reviewed, a copy of this Agreement and the documents contemplated hereby and such other documents and information as it has deemed appropriate to make its own analysis and decision to enter into this Agreement and to sell the Target Shares owned by the Seller to Acquiror on the basis of such analysis. The Seller has such knowledge and experience in business and financial matters to enable the Seller to understand and evaluate this Agreement and form an investment decision with respect thereto. The Seller understands and acknowledges that Acquiror is entering into this Agreement in reliance upon the Seller’s execution and delivery of this Agreement and agreement to be bound hereby, including with respect to the Seller’s indemnification obligations hereunder.
Section 4.33 No Other Representations or Warranties.
(a) Except for the representations and warranties made by the Seller in this Article IV (as qualified by the applicable items disclosed in the Seller Disclosure Statement) (together, the “Seller Representations”), neither the Seller nor any other Person makes or has made to Acquiror or any of its Affiliates any representation or warranty, expressed or implied, at law or in equity, with respect to or on behalf of any Acquired Company, or their respective businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding any Acquired Company or any other matter furnished or provided to Acquiror or any of its Affiliates or Representatives or otherwise made available to Acquiror in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement, the Purchase or any other Contemplated Transactions. The Seller disclaims any other representations or warranties, whether made by any of them or any of its Affiliates (including any Acquired Company) or their respective Representatives.
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(b) The Seller acknowledges and agrees that, except for the representations and warranties made by Acquiror in Article V, neither Acquiror nor any other Person is making or has made any representations or warranty, expressed or implied, at law or in equity, with respect to or on behalf of Acquiror or any of its Subsidiaries or Affiliates, or their respective businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding Acquiror or its Subsidiaries or Affiliates or any other matter furnished or provided or otherwise made available to the Seller, or any of their respective Affiliates or Representatives, in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement, or the Contemplated Transactions. The Seller specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made by any Person and acknowledges and agrees that Acquiror and its Affiliates have specifically disclaimed and do hereby specifically disclaim any such other representations and warranties.
ARTICLE
V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Subject to such exceptions (a) as are specifically set forth in the appropriate section, subsection or subclause of the disclosure schedule delivered by Acquiror to the Seller on the Agreement Date (the “Acquiror Disclosure Statement”) (it being understood and hereby agreed that (i) the information set forth in the Acquiror Disclosure Statement shall be disclosed under separate section, subsection, and subclause references that correspond to the sections, subsections, and subclauses of this Article V to which such information relates, and (ii) the information set forth in each section, subsection, and subclause of the Acquiror Disclosure Statement shall qualify (A) the representations and warranties set forth in the corresponding section, subsection, and subclause of this Article V, and (B) any other representations and warranties set forth in this Article V if, and solely to the extent that, it is reasonably apparent on the face of such disclosure, without reference to the underlying documents referenced therein and without independent knowledge of the matters described therein, that it applies to such other section, subsection or subclause of this Article V), and (b) as disclosed in the reports, statements and other documents, including any publicly filed schedules or exhibits thereto, filed by Acquiror with the SEC or furnished by Acquiror to the SEC, in each case pursuant to the Exchange Act on or after January 1, 2022, and at least two (2) Business Days prior to the Agreement Date (to the extent that the relevance of any such disclosure with respect to any section of this Agreement is reasonably apparent on its face) (other than any disclosures contained or referenced therein under the captions “Risk Factors” and “Quantitative and Qualitative Disclosures About Market Risk”, disclosure set forth in any “forward-looking statements” disclaimer or any similar precautionary sections and any other disclosures contained or referenced therein that are predictive, cautionary or forward-looking in nature or any non-public material), Acquiror hereby represents and warrants to the Seller, as of the Agreement Date and as of the Closing Date as follows:
Section 5.1 Organization and Good Standing. Acquiror and each Subsidiary of Acquiror is a corporation or other legal entity duly organized, validly existing and, where relevant, in good standing under the Laws of the jurisdiction of its organization and Acquiror and each Subsidiary of Acquiror has all requisite corporate or other organizational power and authority to carry on its businesses as now being conducted and is qualified to do business and is, where relevant, in good standing as a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification, in each case except as would not reasonably be expected to have, individually or in the aggregate, an Acquiror Material Adverse Effect.
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Section 5.2 Power and Authorization; Enforceable Agreement.
(a) Acquiror has all requisite corporate power and authority to enter into this Agreement and any Related Agreements to which it is a party and to consummate the Purchase or any other Contemplated Transactions and Acquiror’s obligations hereunder (including the payment of the Share Consideration) and thereunder, except, with respect to the Second Conversion, which is subject to Acquiror receiving the Requisite Stockholder Approval at the Acquiror Stockholder Meeting. The execution and delivery by Acquiror of this Agreement and any Related Agreements to which it is a party and the consummation of the Purchase and Acquiror’s obligations hereunder and thereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of Acquiror.
(b) This Agreement and any Related Agreements to which Acquiror is a party have been (or in the case of Related Agreements to be entered into at or prior to the Closing Date, will be) duly executed and delivered by Acquiror and constitute the valid and binding obligations of Acquiror, enforceable against Acquiror in accordance with their terms, subject to Laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
Section 5.3 Governmental Approvals. No consent, notice, waiver, approval, Order or authorization of, or registration, declaration or filing with, any Governmental Authority, is required by, or with respect to, Acquiror in connection with the execution and delivery of this Agreement and any Related Agreement or the consummation of the Contemplated Transactions (including the payment of the Share Consideration) and thereby, except for the Conversion Conditions.
Section 5.4 Conflicts. The execution and delivery by Acquiror of this Agreement and any Related Agreement to which Acquiror is a party (or will be), and the consummation of the Contemplated Transactions, will not (a) result in the creation or imposition of any Lien (other than Permitted Liens) upon the assets of Acquiror and (b) result in or give rise to any Conflict in (i) any provision of the Organizational Documents of Acquiror, as amended, (ii) any Material Contract (as defined for purposes of this representation in Regulation S-K under the Securities Act), or (iii) any Law or Order applicable to Acquiror or any of its properties or assets (whether tangible or intangible), except, in each of clauses (a) and (b), as would not be expected to have an Acquiror Material Adverse Effect.
Section 5.5 Acquiror Capital Structure.
(a) The only authorized shares of capital stock of Acquiror as of June 30, 2024, are (a) 355,000,000 shares of Acquiror Common Stock, (b) 140,500,000 shares of which are issued and outstanding as of August 2, 2024, and (c) 10,000,000 shares of preferred stock, of which none are issued and outstanding.
(b) Schedule 5.5(b) of Acquiror Disclosure Statement sets forth a true and complete list, as of the date hereof, of all of the issued and outstanding warrants of Acquiror entitling the corresponding holders to purchase certain amount of shares of Common Stock of Acquiror as detailed on Schedule 5.5(b) of Acquiror Disclosure Statement.
Section 5.6 Valid Issuance. The Acquiror Common Stock issued as Share Consideration or Conversion Shares, are or will be duly authorized, validly issued, fully paid and non-assessable, and are free of all Liens and restrictions on transfer, other than restrictions on transfer under (a) this Agreement, the Related Agreements, Acquiror’s certificate of incorporation, as may be amended, or amended and restated, from time to time in accordance with this Agreement, and any applicable Contract entered into by Acquiror and (b) applicable securities Laws.
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Section 5.7 SEC Filings; Financial Statements.
(c) Since January 21, 2022, Acquiror has filed or otherwise furnished on a timely basis all registration statements, prospectuses, forms, reports, proxy statements, schedules, statements and documents required to be filed or furnished by it under the Exchange Act, as the case may be, together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002 (the “Acquiror SEC Documents”). As of their respective filing dates, the Acquiror SEC Documents did not contain any untrue statement of a material fact or omit 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, and complied as to form with the applicable requirements of the Exchange Act or the Securities Act, as the case may be, and the applicable regulations of the SEC thereunder and the listing and corporate governance rules and regulations of the NYSE.
(d) The audited financial statements of Acquiror included in the Acquiror SEC Documents fairly present in all material respects the financial position and results of operations of Acquiror as of the dates and for the periods referred to therein in accordance with GAAP applied on a consistent basis during the periods involved.
Section 5.8 Absence of changes. Since September 30, 2024, and prior to the Agreement Date, (a) the operations of Acquiror have been conducted in the ordinary course of business, and (b) no Acquiror Material Adverse Effect has occurred.
Section 5.9 Sufficiency of Funds. Acquiror has access to (directly or through one or more Affiliates) funds immediately available, as and when needed, that are necessary to (a) consummate the Purchase, (b) consummate the Conversions, (c) otherwise perform its obligations under this Agreement and (d) pay any fees, expenses or other amounts payable by Acquiror in connection with the consummation of such transactions and the other Contemplated Transactions.
Section 5.10 Solvency. That Acquiror’s economic situation is solvent and that the execution of this Agreement and Related Agreement and the payment of the Purchase Price obligations included herein or in any of the other Related Agreements is not likely to and will not result in Acquiror becoming insolvent.
Section 5.11 Intellectual Property. Except as would not have an Acquiror Material Adverse Effect:
(a) Acquiror owns or have a valid right to use the material Intellectual Property used in its business as currently conducted free and clear of all Liens other than Permitted Liens; provided that the foregoing is not a representation or warranty with respect to infringement, misappropriation or other violations of Intellectual Property.
(b) (i) Since June 14, 2022, to Acquiror’s Knowledge, no Person has infringed, misappropriated, or otherwise violated any Intellectual Property used by Acquiror in the conduct of its business, and no such Actions have been asserted or threatened against any Person (including in the form of offers or invitations to obtain a license) by Acquiror and its Affiliates and (ii) to Acquiror’s Knowledge, the conduct of Acquiror’s business as currently conducted has not since June 14, 2022, infringed, misappropriated, or otherwise violated any Intellectual Property of any other Person and no such Actions have been pending or threatened in writing since June 14, 2022, against Acquiror or any of its Affiliates.
(c) Acquiror and its Affiliates have taken reasonable steps to protect material trade secrets that are owned by Acquiror and its Affiliates.
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Section 5.12 Material Contracts.
(a) List of Material Contracts. Section 5.12(a) of the Acquiror Disclosure Statement contains a true, correct and complete list of all the Acquiror Material Contracts. Acquiror has made available to Seller, or publicly filed with the SEC, a true, correct and complete copy of each Acquiror Material Contract as in effect as of the Agreement Date required to be scheduled in Section 5.12(a) of the Acquiror Disclosure Statement.
(b) Validity. Each Acquiror Material Contract (other than any Acquiror Material Contract that has expired in accordance with its terms) is binding on Acquiror or each Subsidiary of Acquiror that is a party thereto and is in full force and effect, and none of Acquiror, any of its Subsidiaries party thereto or, to the Knowledge of Acquiror, any other party thereto is in breach of or default pursuant to any such Acquiror Material Contract, except for such failures to be in full force and effect as have not had, and would not reasonably be expected to have, an Acquiror Material Adverse Effect. Acquiror and each of its Subsidiaries, and, to the Knowledge of Acquiror, any other party thereto, has performed all obligations required to be performed by it under each Acquiror Material Contract, except where the failure to fully perform has not had, and would not reasonably be expected to have, an Acquiror Material Adverse Effect. No event has occurred that, with notice or lapse of time or both, would constitute such a breach or default pursuant to any Acquiror Material Contract by Acquiror or any of its Subsidiaries, or, to the Knowledge of Acquiror, any other party thereto, and neither Acquiror nor any of its Subsidiaries has received written notice of the foregoing in each case that has not been cured or from the counterparty to any Acquiror Material Contract (or, to the Knowledge of Acquiror, any of such counterparty’s Affiliates) regarding an intent to terminate any Acquiror Material Contract (whether as a result of a change of control or otherwise), in each case, except for such breaches, defaults or terminations that have not had, and would not reasonably be expected to have, an Acquiror Material Adverse Effect.
Section 5.13 Tax Matters. Except as would not reasonably be expected to have an Acquiror Material Adverse Effect:
(a) Tax Returns and Payments. All income and other material Tax Returns required to be filed by Acquiror have been duly and timely filed with the appropriate Taxing Authority (taking into account any valid extensions of time within which to make such filings). All such Tax Returns are true, correct and complete in all material respects, were prepared in substantial compliance with all applicable Law and disclose all Taxes required to be paid for the periods covered thereby. Acquiror has duly and timely paid, or has caused to be duly and timely paid, all Taxes due and owing by it to the appropriate Governmental Authority (whether or not shown on any Tax Return).
(b) Reserves for Payment of Taxes. Acquiror’s most recent financial statements included in the Acquiror SEC Documents reflect, in accordance with GAAP, an adequate reserve for all Taxes payable by Acquiror for all taxable periods through the date of such financial statements, and since such date, Acquiror has not incurred any Liability for Taxes outside the ordinary course of business consistent with past practice.
(c) Audits; Claims. Except as disclosed in Section 5.13 of the Acquiror Disclosure Statement, no audit, examination, dispute, claim, investigation, proposed adjustment or judicial or administrative proceeding with respect to any Tax Liability or Tax Return of Acquiror is currently pending, and to Acquiror’s knowledge, is contemplated, threatened or ongoing. All deficiencies for Taxes asserted or assessed against Acquiror have been fully and timely paid or settled.
(d) Withholding. Acquiror has withheld from any payment to its respective employees, independent contractors, creditors, equityholders and other applicable third parties, and timely remitted to the appropriate Governmental Authority, all amounts with respect to Taxes that were required to be so withheld and remitted under applicable Tax Laws in all respects in substantial compliance with all Tax withholding and remitting provisions of applicable Tax Laws.
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Section 5.14 Environmental Matters. As of the Agreement Date, Acquiror has been in material compliance with all applicable Environmental Laws. Acquiror has not received any written notices of actual or alleged violation or liability with respect to any applicable Environmental Law that has not been resolved, including any written notices alleging that Acquiror is responsible for the investigation or cleanup of any third-party site to which Acquiror has transported or arranged for the transportation of Hazardous Materials for treatment or disposal.
Section 5.15 Litigation.
(a) Since January 1, 2021, to the Knowledge of Acquiror, there have been no material Actions against Acquiror, any of its respective properties or tangible assets or any of its officers or directors (in their capacity as such) as a party. There is no material outstanding Order, judgment, ruling, arbitral award, or other decision (including provisional remedies and injunctions) that specifically relates to and binds Acquiror, any of its respective properties or tangible assets or any of its officers or directors (in their capacity as such).
(b) There is no current, pending, or to the Knowledge of Acquiror, threatened, Action of any nature against Acquiror, arising out of or relating to (i) Acquiror’s capacity as an Acquiror hereunder, or (ii) the Contemplated Transactions. There is no current or pending or, to the Knowledge of Acquiror, threatened investigation or proceeding, against Acquiror arising out of or relating to the matters noted in clauses (i) through (ii) of the preceding sentence by or before any Governmental Authority.
(c) No Governmental Authority has at any time challenged or overtly questioned (in each case in writing) the legal right of Acquiror to conduct its respective operations as presently or previously conducted or as currently contemplated to be conducted. There is no Action of any nature pending or, to Acquiror’ Knowledge, threatened against any Person who has a contractual right or a right pursuant to Law to indemnification from Acquiror related to facts and circumstances existing prior to the Closing.
Section 5.16 Insurance. Section 5.16 of the Acquiror Disclosure Statement lists all insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors of Acquiror and its Subsidiaries, including the type of coverage, the carrier, the amount of coverage, the term and the annual premiums of such policies. There is no claim by Acquiror or any of its Subsidiaries pending under any of such policies or bonds as to which coverage has been denied or disputed. In addition, there is no pending claim of which its total value (inclusive of defense expenses) would reasonably be expected to exceed the policy limits. All premiums due and payable under all such policies and bonds have been timely paid (or if installment payments are due, will be timely paid if incurred prior to the Agreement Date), and Acquiror and its Subsidiaries are otherwise in compliance with respect to its obligations under the terms of such policies and bonds. Such policies and bonds are in full force and effect. To the Knowledge of Acquiror, there has been no threatened, termination of, or material premium increase with respect to, any of such policies. Acquiror has not ever maintained, established, sponsored, participated in or contributed to any self-insurance plan.
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Section 5.17 Compliance with Laws and Permits.
(a) Compliance with Laws. Since January 1, 2021, Acquiror has been, in all material respects, in compliance with all applicable Laws to which Acquiror, or any of its properties, assets or business activities are subject to or bound. Since January 1, 2021, Acquiror has not received any written notice from a Governmental Authority of any actual or alleged material non-compliance with any Law (other than with respect to any matter that is the subject of Section 5.15(c)).
(b) Permits. Acquiror holds all permits, franchises, authorizations, registrations, approvals and licenses of any Governmental Authority required under applicable Laws for the conducting of its business, or the ownership or operation of assets, by Acquiror as currently conducted (collectively, the “Acquiror Authorizations”), the absence of which would have a material impact on Acquiror, and it is not in default under any of the same. The Acquiror Authorizations are in full force and effect. Since January 1, 2021, Acquiror has been and is in compliance in all material respects with the terms and conditions of the Acquiror Authorizations. Since January 1, 2021, Acquiror has not received any written notice of any breach, violation, or default under or with respect to any Acquiror Authorization. Acquiror has made available to the Seller true, correct and complete copies of all the material Acquiror Authorizations.
Section 5.18 Anti-Bribery and Corruption, Sanctions and Compliance.
(a) Sanctions and Trade Laws. Neither Acquiror, nor any of its directors, officers, employees or agents is a Sanctioned Person or a Restricted Person.
(b) Anti-Corruption Laws. Since the latter of the date of incorporation and January 1, 2019, Acquiror, its respective officers or directors, (or to the Knowledge of Acquiror, Acquiror’s employees or agents) are not in violation of any applicable Anti-Corruption Law or has directly or knowingly indirectly, made, offered, promised, authorized, accepted or agreed to receive, any unlawful payment, gift, bribe or kickback: (i) to or for the benefit of any person for the purposes of influencing any official act or decision; (ii) to secure any improper advantage; or (iii) to induce any person to do or omit to do any act in violation of the lawful duty of such person; and (iv) in relation to clauses (ii) through (iii) above, with the intention of winning or retaining business or a business advantage for any person, including Acquiror or any of their Affiliates. Acquiror has established and maintains a compliance program and adequate internal controls and procedures reasonably designed to ensure that Acquiror and its respective Affiliates and Representatives (to the extent acting on their behalf) do not violate any Anti-Corruption Laws. Acquiror, its officers or directors or employees have (i) made any voluntary, directed or involuntary disclosure to any Governmental Authority with respect to any actual, alleged or reasonably suspected violation of any Anti-Corruption Laws, (ii) been the target of a past, current, pending or threatened whistleblower report, or investigation, or enforcement proceeding by a Governmental Authority for any actual or alleged violation of Anti-Corruption Laws, or (iii) received any written or, to the Knowledge of Acquiror, other notice concerning any actual or alleged violation of any Anti-Corruption Laws. No Employee of, or holder of a financial interest in, Acquiror, or any of their respective Affiliates, is currently a Governmental Official.
(c) TID Status. Acquiror represents that it has conducted an assessment and has determined that it is not a “TID U.S. business”, as defined pursuant to 31 CFR § 800.248.
Section 5.19 No Acquiror Vote. No vote or consent of the holders of any capital stock of, or other equity or voting interest in, Acquiror is necessary to approve this Agreement or the Purchase.
Section 5.20 Brokers. Except pursuant to the Contracts set forth on Section 5.20 of the Acquiror Disclosure Statement, no agent, broker, investment banker, person or firm acting in a similar capacity on behalf of or under the authority of Acquiror is or will be entitled to any broker’s, finder’s fee or any other commission or similar fee, directly or indirectly payable by Acquiror, directly or indirectly, in connection with any of the Contemplated Transactions.
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Section 5.21 Adequate Information. Acquiror has received, has had an opportunity to review and has reviewed, a copy of this Agreement and the documents contemplated hereby and such other documents and information as it has deemed appropriate to make its own analysis and decision to enter into this Agreement and to acquire the Target Shares on the basis of such analysis. Acquiror has such knowledge and experience in business and financial matters to enable Acquiror to understand and evaluate this Agreement and form an investment decision with respect thereto. Acquiror understands and acknowledges that the Seller is entering into this Agreement in reliance upon Acquiror’s execution and delivery of this Agreement and agreement to be bound hereby.
Section 5.22 No Other Representations or Warranties.
(a) Except for the representations and warranties made by Acquiror in this Article V (as qualified by the applicable items disclosed in the Acquiror Disclosure Statement) (together, the “Acquiror Representations”), neither Acquiror nor any other Person makes or has made to the Seller or any of its Affiliates any representation or warranty, expressed or implied, at law or in equity, with respect to or on behalf of Acquiror or any of its Affiliates, or their respective businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding Acquiror or any of its Affiliates or any other matter furnished or provided to the Seller or any of its Affiliates or Representatives or otherwise made available in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement, the Contemplated Transactions. Acquiror disclaims any other representations or warranties, whether made by it or any of its Affiliates or their respective Representatives.
(b) Acquiror acknowledges and agrees that, except for the representations and warranties made by the Seller in Article IV, neither the Seller nor any other Person is making or has made any representations or warranty, expressed or implied, at law or in equity, with respect to or on behalf of any Acquired Company, or their respective businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding any Acquired Company or any other matter furnished or provided or otherwise made available to Acquiror or any of its Affiliates or their respective Representatives, in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement, the Contemplated Transactions. Acquiror specifically disclaims that it is relying upon or has relied upon any such other representations or warranties that may have been made by any Person and acknowledges and agrees that the Seller has specifically disclaimed and do hereby specifically disclaim any such other representations and warranties.
ARTICLE
VI
PRE-CLOSING COVENANTS
Section 6.1 Commercially Reasonable Efforts; Consents. Subject to the terms and conditions of this Agreement, from the date of this Agreement until the earlier to occur of the Closing and the earlier termination of this Agreement pursuant to Section 9.1 (the “Pre-Closing Period”), each of the Parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws to consummate and make effective the Purchase as promptly as practicable, including by using commercially reasonable efforts to (i) take all action necessary to satisfy all of the conditions to the obligations of the other Party to effect the Purchase, and (ii) subject to the below provisions of this Section 6.1, effect all necessary registrations and filings and remove any injunctions or other impediments or delays, legal or otherwise, in each case in order to consummate and make effective the Purchase for the purpose of securing to the Parties the benefits contemplated by this Agreement.
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Section 6.2 Third-Party Contract Notices, Consents. The Seller shall, and shall cause each Acquired Company to, send all notices and use reasonable best efforts to obtain all consents, waivers and approvals of any third party as may be required pursuant to the terms of any Contract set forth on Section 4.4 of the Sellers Disclosure Statement, and the Seller shall, and shall cause each Acquired Company to, use reasonable best efforts to obtain any other consents, waivers and approvals of any third-party that may be required in connection with the Purchase or the Related Agreements. No party shall be required to compensate any third party, commence or participate in any Action or offer or grant any accommodations (financial or otherwise) to any third party to obtain any consent, waiver or approval with respect to the Contracts set forth on Section 4.4 of the Seller Disclosure Statement pursuant to the first sentence of this Section 6.2, except as required pursuant to the terms of the applicable Contract under which such consent, waiver or approval is sought. Such notices, consents, modifications, waivers and approvals shall be in form and substance acceptable to Acquiror (acting reasonably). In the event the Purchase or any other Contemplated Transaction hereby is not consummated for any reason, none of Acquiror, or any of its Affiliates shall have any liability to the Seller, any Acquired Company or any other Person for any Liabilities resulting from the Seller or any Acquired Company sending any such notice or seeking to obtain any such consents, modifications, waivers and approvals. The Parties shall use reasonable best efforts to minimize any costs and expenses borne by any Party or the Acquired Companies in connection with obtaining such consents.
Section 6.3 Restrictions on Acquired Companies Activities.
(a) Conduct of the Acquired Companies’ Businesses Generally. During the Pre-Closing Period, without the prior written consent of Acquiror, which shall not be unreasonably withheld, conditioned or delayed, the Seller shall use its reasonable best efforts to conduct (and shall cause its Subsidiaries to conduct) the business of the Acquired Companies in the ordinary course of business consistent with past practice and use commercially reasonable efforts to (w) preserve intact the present business organizations of the Acquired Companies, (x) keep available the services of the present Employees, other than with respect to the Worker Transfer, (y) preserve the assets (including intangible assets) and properties of the Acquired Companies (other than with respect to the Excluded Companies) and (z) preserve the relationships of the Acquired Companies with customers, suppliers, licensors, licensees, and others having business dealings with them, all with the goal of preserving unimpaired the goodwill and ongoing businesses of the Acquired Companies at the Closing.
(b) Specific Prohibitions. Without limiting the generality or effect of, during the Pre-Closing Period, except (i) to the extent described on Schedule 6.3, (ii) as necessary to consummate the Reorganization, (iii) as otherwise contemplated by this Agreement, (iv) in connection with the Worker Transfer; (v) as expressly required by any applicable Law or applicable Order or (vi) as consented to or approved by Acquiror in writing, which consent or approval shall not be unreasonably withheld, conditioned or delayed, the Seller shall not (and shall cause its Subsidiaries not to) take any of the following actions:
(i) amend its organizational documents, effect any split, combination, reclassification or similar action with respect to its capital stock or other Equity Interests or adopt or carry out any recapitalization, merger, plan of complete or partial liquidation or dissolution;
(ii) propose or adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of any Acquired Company;
(iii) declare, set aside, make or pay any dividends or other distributions (whether in cash, stock or property) in respect of any shares of any Acquired Company;
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(iv) split, combine or reclassify any Target Shares or any other Equity Interest of any Acquired Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for the Target Shares or any other Equity Interest of any Acquired Company, or directly or indirectly repurchase, redeem or otherwise acquire any Target Shares or any other Equity Interest of any Acquired Company (or options, warrants or other rights convertible into, exercisable or exchangeable for Target Shares or any other Equity Interest of any Acquired Company);
(v) issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any Target Shares or equity-based awards (whether payable in cash, securities or otherwise) or any other Equity Interest of any Acquired Company or any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other Contracts or commitments of any character obligating any of them to issue or purchase any such shares or other convertible securities, or amend, accelerate the vesting of, adjust or modify any Target Shares;
(vi) with respect to any Acquired Company, form, or enter into any commitment to form, a subsidiary, or acquire, or enter into any commitment to acquire, an interest in any corporation, association, joint venture, partnership or other business entity or division thereof or any portion of the assets of the foregoing;
(vii) make or agree to make any capital expenditure or commitment (i) from any Acquired Company exceeding $10,000,000 individually or $25,000,000 in the aggregate or (ii) that relates to the development of the solar cell facilities by any Acquired Company exceeding $1,000,000;
(viii) with respect to any Acquired Company, acquire or agree to acquire or dispose or agree to dispose of (i) assets of any person, other than acquisitions of assets in the ordinary course of business or the disposal of non-material assets of any Acquired Company in the ordinary course of business, or (ii) any Equity Interest in any Person (including any Acquired Company) or any business or operations of any Person;
(ix) sell, divest, exclusively license or assign to any Person or enter into any Contract to sell, divest, exclusively license or assign to any Person any rights in, to or under any Acquired Company IP;
(x) abandon or allow to lapse or expire any Acquired Company IP, or fail to renew or make any filing or payment necessary in connection with the prosecution or maintenance of any material Acquired Company Registered IP;
(xi) with respect to any Acquired Company, (1) incur any Indebtedness in excess of $10,000,000 (or the equivalent amount in local currency at the applicable exchange rate as of the Agreement Date), including by the issuance or sale of any debt securities, (2) create or permit any Lien (other than Permitted Liens) over any material intangible or other asset of any Acquired Company or (3) amend the terms of any outstanding loan agreement or other Contract evidencing Indebtedness;
(xii) with respect to any Acquired Company, make any loan to any Person other than in the ordinary course of business, purchase debt securities of any Person or guarantee any Indebtedness of any Person;
(xiii) commence or settle any Action or threat of any Action by or against any Acquired Company or relating to any of their businesses, properties or assets;
(xiv) with respect to any Acquired Company, pay, discharge, release, waive or satisfy any claims, rights or liabilities, other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice of liabilities reflected on the Current Balance Sheets or incurred in the ordinary course of business after the Balance Sheet Date;
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(xv) with respect to any Acquired Company, adopt or change accounting methods or practices (including any change in depreciation or amortization policies or rates or any change to practices that would impact the methodology for recognizing revenue) other than as required by GAAP;
(xvi) with respect to any Acquired Company, make, revoke or change any material election in respect of Taxes, adopt or change any taxable period or method of accounting in respect of Taxes, enter into any Contract in respect of Taxes, file any Tax Return in a manner that is inconsistent with past custom and practice, surrender any right to a tax refund or credit, settle or compromise any claim, audit, litigation or assessment in respect of Taxes, consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, make or request any Tax ruling, enter into any Tax sharing or similar Contract or arrangement (other than customary commercial Contracts entered into in the ordinary course of business the primary purpose of which is unrelated to Tax), enter into any transactions giving rise to deferred gain or loss, or amend any Tax Return;
(xvii) with respect to any Acquired Company, fail to maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice;
(xviii) except as expressly required pursuant to the terms of any Labor Agreement, Acquired Company Employee Plan or employment Contract in effect as of the date hereof and disclosed in the Seller Disclosure Statement, (1) adopt, enter into or amend any Labor Agreement, Acquired Company Employee Plan or employment Contract, (2) increase or agree to increase the salaries, bonuses, wage rates, or other compensation or benefits of their respective Employees or consultants (other than in the ordinary course of business consistent with past practice with respect to any active employee who is not a Senior Employee), (3) grant, pay or promise any bonus or other incentive compensation, severance, retention, change in control or other similar arrangement or (4) accelerate any rights, funding or benefits under any Acquired Company Employee Plan or employment Contract or accelerate the time of vesting or payment of any award under any Acquired Company Employee Plan or employment Contract;
(xix) with respect to any Acquired Company, violate any Customs & Trade Laws, Sanctions, or Anti-Money Laundering Laws, Anti-Corruption Laws or conduct., directly or indirectly, any business with, in, or involving any Sanctioned Jurisdiction, Sanctioned Person or Restricted Person;
(xx) (1) hire or engage any Senior Employee or (2) demote or terminate (other than for cause) or otherwise materially modify the terms and conditions of employment of any current Senior Employee;
(xxi) (1) modify, renew, extend, or enter into any Labor Agreement, or (2) recognize or certify any Labor Entity as the bargaining representative for any Employee;
(xxii) waive, release, amend or fail to enforce the restrictive covenant obligations of any current or former Employee, independent contractor, officer or director of the Acquired Companies;
(xxiii) materially amend or modify, or remove, any privacy policies applicable to the Acquired Companies’ business, and other applicable policies relating to the collection, storage, transfer, disclosure, processing, protection and use of Personal Information, publish any new policies relating to such matters or announce any such amendment, or modification, removal, or publication, except to the extent reasonably required to comply with Privacy Laws or other applicable Laws;
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(xxiv) (1) terminate, or materially amend, extend, waive, violate or modify, any Material Contract, or (2) enter into any Contract which would have constituted a Material Contract had such Contract been entered into prior to the Agreement Date (other than Contracts that are entered into with customers in the ordinary course of business consistent with past practice);
(xxv) enter into any new line of business or change any of the Acquired Companies’ operating policies in any material respect (including, without limitation, any of the Acquired Companies’ provisioning policies), except as required by applicable Law or by policies imposed by any Governmental Authority;
(xxvi) make any material change or otherwise cancel, revoke or replace any of the Acquired Companies’ risk management policies and operational strategy;
(xxvii) enter into any Contract to purchase or sell any interest in real property, or grant any security interest in any real property or enter into any Leased Real Property agreement;
(xxviii) (1) other than in the ordinary course of business, intentionally defer payment of any accounts payable, commissions, or other liabilities of any Acquired Company, (2) provide for a material reduction in fees or other amounts due to any Acquired Company after the Closing, or (3) give any material discount, credits, accommodation or other concession (other than in the Ordinary Course of Business), or otherwise purposefully take action that would reasonably be expected to accelerate or induce the collection of any receivable or otherwise increase the cash or cash equivalents or other current assets of any Acquired Company; or
(xxix) take, commit, or agree in writing or otherwise take or make any of the actions described in subclauses (i) through (xxviii) of this Section 6.3(b).
Section 6.4 Restrictions on Acquiror. During the Pre-Closing Period, except (i) to the extent described on Schedule 6.4, (ii) as otherwise contemplated by this Agreement, (iii) as expressly required by any applicable Law or applicable Order or (iv) as consented to or approved by the Seller in writing, which consent or approval shall not be unreasonably withheld, conditioned or delayed, Acquiror shall not (and shall cause its Subsidiaries not to) take any of the following actions:
(a) amend Acquiror’s Organizational Documents, effect any split, combination, reclassification or similar action with respect to its capital stock or other Equity Interests or adopt or carry out any recapitalization, merger, plan of complete or partial liquidation or dissolution;
(b) form, or enter into any commitment to acquire, or enter into any commitment to acquire, an interest in any corporation, association, joint venture, partnership or other business entity or division thereof or any portion of the assets of the foregoing, other than transaction solely between Acquiror and its wholly owned Subsidiaries or between the Acquiror’s wholly owned Subsidiaries;
(c) change Acquiror’s authorized or issued Acquiror Common Stock, or issue (A) any Equity Interests of Acquiror or (B) any options, warrants, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of Common Stock, agreements, arrangements or commitments obligating Acquiror to issue, deliver or sell any Equity Interests of Acquiror or authorize the issuance of any shares of Acquiror Common Stock or any other Equity Interest of Acquiror, in each case, other than (1) with respect to equity or equity-based awards that are granted to service providers of Acquiror in the ordinary course of business consistent with past practice or (2) in connection with the settlement, withholding or forfeiture of any equity or equity-based awards granted by Acquiror;
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(d) (1) incur any Indebtedness in excess of $10,000,000 (or the equivalent amount in local currency at the applicable exchange rate as of the Agreement Date), including by the issuance or sale of any debt securities, (2) create or permit any Lien (other than Permitted Liens) over any material intangible or other asset of any Acquired Company or (3) amend the terms of any outstanding loan agreement or other Contract evidencing Indebtedness;
(e) propose or adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization or other reorganization of Acquiror;
(f) declare, set aside, make or pay any dividends or other distributions (whether in cash, stock or property) in respect of any shares of Acquiror Common Stock or any other Equity Interest of Acquiror;
(g) split, combine or reclassify any shares of Acquiror Common Stock or any other Equity Interest of Acquiror or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any shares of Acquiror Common Stock or any other Equity Interest of Acquiror, or directly or indirectly repurchase, redeem or otherwise acquire any such shares or any other Equity Interest of Acquiror (or options, warrants or other rights convertible into, exercisable or exchangeable for any shares of Acquiror Common Stock or any other Equity Interest of Acquiror); and
(h) acquire or agree to acquire or dispose or agree to dispose of (i) assets of any person, other than the acquisitions in the ordinary course of business or disposal of non-material assets of Acquiror in the ordinary course of business, or (ii) any Equity Interest in any Person or any business or operations of any Person; and
(i) agree to take, commit, or agree in writing or otherwise take or make any of the actions described in paragraphs (a) through (h) of this Section 6.4.
Section 6.5 Access to Premises and Information. Due Diligence.
(a) During the Pre-Closing Period, each Party and its Affiliates shall permit the other Party and its Affiliates and their respective Representatives, at such other Party’s expense, to have reasonable access (at reasonable times and upon reasonable notice) to Representatives of the first Party and its Affiliates and to premises, properties, books, records (including Tax records) and any Contracts of such first Party and its Subsidiaries and, during such period, shall furnish promptly such information concerning the businesses, properties and personnel of such first Party and its Subsidiaries as the other Party shall reasonably request; provided that, no Party shall be required to provide access to or to disclose information where such access or disclosure (a) would reasonably be expected to jeopardize any attorney-client communications or attorney work product, or (b) relates to information or materials required to be kept confidential by applicable Law; provided, however, that the first Party will notify the second Party in reasonable detail of the circumstances giving rise to any non-disclosure pursuant to the foregoing and to permit disclosure of such information, to the extent possible, in a manner consistent with privilege or applicable Law. The information provided pursuant to this Section 6.5 shall be used solely for the purpose of the Contemplated Transactions (including any financing to be implemented in connection with or prior to Closing), and such information shall be kept confidential by each party and its Affiliates in accordance with the terms and conditions of the Confidentiality Agreement.
(b) The Parties agree that for two (2) weeks following the Agreement Date, the Parties shall continue to conduct due diligence, in good faith. Each Party shall promptly provide all due diligence material reasonably requested by the other Party or its Representatives. To the extent either Party identifies a potential Material DD Item, it shall promptly (and within two (2) Business Days of identifying such potential Material DD Item), notify the other Party in writing of such item, including providing as much supporting documentation as is available to such Party. The Parties shall discuss any Material DD Item in good faith for ten (10) days (the “DD Discussion Period”). If following the DD Discussion Period, the Party that identified the potential Material DD Item establishes with supporting documentation, it has identified a Material DD Item, the Party that identifies the Material DD Item shall be entitled to terminate this Agreement in accordance with Section 9.1(f),
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Section 6.6 Seller Reorganization.
(a) The Seller shall (i) use reasonable best efforts to consummate the Reorganization as soon as possible after the date hereof and in any event prior to the Closing and (ii) keep Acquiror reasonably updated on any steps in connection with the Reorganization. With respect to any step in the Reorganization that requires any third-party approval or consents, including approvals or consents from employees or Orders, the Seller shall cause its Affiliates and Representatives to use reasonable best efforts to obtain such approval or consent or to otherwise comply with such Order. Acquiror shall, upon the request of the Seller, use reasonable best efforts to assist in the Reorganization, provided that Acquirer shall not be required to pay any costs or expenses with respect to the Reorganization.
(b) The Seller shall give Acquiror a reasonable opportunity to review and comment on the drafts of the definitive documentation governing the Reorganization and shall consider in good faith Acquiror’s comments. Acquiror and the Seller shall discuss in good faith any of Acquiror’s comments, which the Seller determines not to include in such documentation.
(c) All costs and expenses, including Taxes, related to the Reorganization shall be borne by the Seller. The Seller shall draft the documentation for the Reorganization in good faith to avoid any adverse consequences to either Party or the Acquired Companies.
Section 6.7 Preferred Stock Purchase Agreement.
(a) Seller Cooperation. The Seller shall, and shall cause its Subsidiaries to, use its and their reasonable best efforts to provide, at the expense of Acquiror, all cooperation reasonably requested by Acquiror in connection with the satisfaction of any of the settlement conditions under the Preferred Stock Purchase Agreement; provided that such requested cooperation does not unreasonably interfere with the ongoing operations of any Acquired Company.
(b) Acquiror Efforts. Acquiror shall, and shall cause its Subsidiaries to, use its and their reasonable best efforts to cause the satisfaction of all of the settlement conditions under the Preferred Stock Purchase Agreement in order to issue and deliver the preferred stock thereunder and obtain the payment and disbursement for such securities on or before the Closing Date.
Section 6.8 24M Isolation. Before the Closing Date, Acquiror shall take such actions to ensure that it has (i) isolated and segregated from of any of the Seller, its Affiliates or its Representatives, including any directors nominated by Seller under the Cooperation Agreement, (ii) deleted or destroyed, to the extent it is able to, or (iii) terminated, disposed, divested, transferred or otherwise sold, in each case (i), (ii) and (iii), all 24M Assets ((i) to (iii) collectively, the “24M Isolation”).
Section 6.9 Related Agreements. As soon as possible after the Agreement Date and prior to Closing, the Parties shall negotiate in good faith each of the following agreements, in each case substantially on the terms set out in the Solar Module Term Sheets, as applicable:
(a) Solar Cells Supply Agreement;
(b) Polysilicon Supply Agreement;
(c) Module Operational Support Agreement;
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(d) IP License Agreement;
(e) Trademark License Agreement;
(f) Sales Agency Agreement; and
(g) TUS Offtake Agreement.
Section 6.10 Executives. As soon as possible after the Agreement Date and prior to Closing, the Parties shall, and shall cause their respective employees to, negotiate in good faith and agree reasonable employment or consultancy terms for the Deputy Chief Financial Officer, Chief Operating Officer and Chief Strategy Officer, each of Acquiror. The employment terms for each such position shall be generally consistent with the terms offered to Acquiror executives prior to the date hereof, provided that the Chief Strategy Officer shall be an independent contractor of Acquiror.
Section 6.11 Notification. Between the date of this Agreement and the Closing Date, (i) the Seller shall notify Acquiror in writing promptly after the Seller obtains actual Knowledge of any action or omission that would reasonably be expected to make the satisfaction of one or more of the conditions set forth in Section 8.1 impossible and (ii) Acquiror shall notify the Seller in writing promptly after Acquiror obtains actual Knowledge of any action or omission that would reasonably be expected to make the satisfaction of one or more of the conditions set forth in Section 8.1 impossible; provided, however, that the delivery of any notice pursuant to this Section 6.11 shall be informational only and will not limit or otherwise affect the remedies available hereunder to the Party receiving such notice, or the representations or warranties of, or the conditions to the obligations of, the Parties.
Section 6.12 No Leakage. From the Agreement Date to the Closing Date, neither the Seller shall not and shall cause its Affiliates, including the Acquired Companies, not permit any Leakage to occur.
Section 6.13 NYSE Approval. Acquiror shall use its commercially reasonable best efforts to obtain the NYSE Approval for the listing of the Share Consideration and the Conversion Shares.
ARTICLE
VII
Additional POST-CLOSING Covenants
Section 7.1 Best Efforts; Governmental Approvals. Following Closing, each of the Parties shall use their respective reasonable best efforts (and shall cause their respective Affiliates to, if applicable) (a) to take (or cause to be taken) all actions; (b) do (or cause to be done) all things; and (c) assist and cooperate with the other Parties in doing (or causing to be done) all things, in each case as are necessary, proper or advisable pursuant to applicable Law or otherwise to consummate and make effective, as promptly as practicable, the Conversions, including by causing the Conversion Conditions to be satisfied in accordance with Section 7.2, Section 7.3 and Section 7.4 of this Agreement.
Section 7.2 CFIUS Condition.
(a) Filing. Each of the Parties hereto (and their respective Affiliates, if applicable) shall promptly file the draft CFIUS Notice. Each of the Parties hereto shall (i) cooperate and coordinate (and shall cause their respective Affiliates to cooperate and coordinate) with the other in the making of such filings or submissions; (ii) supply the other (or cause the other to be supplied) with any information that may be required in order to make such filings or submissions; (iii) supply (or cause to be supplied) any additional information that may be required or requested in connection with making such filings or submissions and obtaining the CFIUS Approval; and (iv) use (and cause their respective Affiliates to use) reasonable best efforts to take all actions required, proper or advisable to obtain the CFIUS Approval; provided that nothing in this Section 7.2 shall require the Parties hereto to accept any Burdensome Condition to obtain the CFIUS Approval. Without limiting the foregoing, each of Acquiror (and its respective Affiliates, if applicable), on the one hand, and the Seller (and their Affiliates, if applicable), on the other hand, shall promptly inform the other of any communication from CFIUS regarding the Conversions in connection with the CFIUS Notice. Without limitation to Section 7.2(b), if any Party or Affiliate thereof receives any comments or a request for additional information or documentary material from CFIUS with respect to the Conversions, then such Party shall make (or cause to be made), as promptly as practicable and after consultation with the other Parties, an appropriate response to such request. If CFIUS suggests or requests that, or Acquiror and the Seller mutually determine it to be appropriate that, the Parties withdraw and resubmit the CFIUS Notice, the Parties may, as many times as they agree to be necessary to obtain the CFIUS Approval, request to withdraw the CFIUS Notice and, if such withdrawal is effected, re-file an application with CFIUS, and each Party shall cooperate in such request and refiling.
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(b) Cooperation. In furtherance and not in limitation of the foregoing, the Seller and Acquiror shall (and shall cause their respective Subsidiaries to), subject to any restrictions under applicable Laws, (i) promptly notify the other Parties of, and, if in writing, furnish the others with copies of (or, in the case of oral communications, advise the others of the contents of) any material communication received by such Person from CFIUS in connection with the Conversions and permit the other Parties to review and discuss in advance (and to consider in good faith any comments made by the other Parties in relation to) any proposed draft notifications, formal notifications, filing, submission or other written communication (and any analyses, memoranda, white papers, presentations, correspondence or other documents submitted therewith) made in connection with the Conversions to CFIUS; (ii) keep the other Parties reasonably informed with respect to the status of any such submissions and filings to CFIUS in connection with the Conversions and any developments, meetings or discussions with CFIUS in respect thereof, including with respect to (A) the receipt of any non-action, action, clearance, consent, approval or waiver, and (B) the nature and status of any objections raised or proposed or threatened to be raised by CFIUS with respect to the Conversions; and (iii) not participate in any meeting, hearing, proceeding or substantive discussions (whether in person, by telephone or otherwise) with or before CFIUS in respect of the Conversions without giving the other Parties reasonable prior notice of such meeting, hearing, proceeding or discussion and, unless prohibited by CFIUS, the opportunity to attend or participate. However, the Seller and Acquiror may designate any non-public or competitively sensitive information (including trade secrets) provided to CFIUS as restricted to “outside counsel only” and any such information shall not be shared with employees, officers or directors or their equivalents of Acquiror without approval of the Seller if the Seller is providing the non-public or competitively sensitive information, or of the Seller if Acquiror is providing such information; provided that each of the Seller and Acquiror may redact any valuation and related information before sharing any information provided to CFIUS with another Party on an “outside counsel only” basis, and that the Seller and Acquiror shall not in any event be required to share information that is entitled to legal privilege with the other Parties, even on an “outside counsel” only basis, where this would reasonably be expected to cause such information to cease to be entitled to legal privilege.
Section 7.3 Proxy Statement.
(a) Filing of Preliminary Proxy Statement. As promptly as practicable following Closing, Acquiror shall, with the assistance of the Seller, pursuant to Rule 14a-6 of the Securities Act, prepare and cause to be filed with the SEC a preliminary proxy statement (such preliminary proxy statement and any amendments or supplement thereto, the “Preliminary Proxy Statement”) relating to the approval by Acquiror Stockholders of the Second Conversion.
(b) Proxy Statement. As promptly as practical following confirmation by the SEC of having cleared and concluded their assessment of the Preliminary Proxy Statement, Acquiror (with the assistance and cooperation of the Seller as reasonably requested by Acquiror) shall prepare, mail to the Acquiror Stockholders and file with the SEC a definitive proxy statement (as amended or supplemented, the “Definitive Proxy Statement”) relating to the approval by Acquiror Stockholders of the Second Conversion.
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(c) Efforts. The Parties shall use their reasonable best efforts to cause the Preliminary Proxy Statement and the Definitive Proxy Statement for which they are responsible to comply as to form in all material respects with the applicable requirements of the Securities Act, Exchange Act, the applicable rules of the SEC and NYSE. The Parties may not file or furnish the Preliminary Proxy Statement or the Definitive Proxy Statement or any other required filing with the SEC (“Other Required Filing”) without providing the other Parties and their counsel a reasonable opportunity to review and comment on such document and will give due consideration to all reasonable additions, deletions or changes suggested thereto by such other Parties and their counsel.
(d) Furnishing Information.
(i) The Seller agrees to use reasonable best efforts to, assist Acquiror, with the preparation of, true, correct and complete copies of (A) (x) audited financial statements (audited to Public Company Accounting Oversight Board (PCAOB) standards), including consolidated balance sheets, statements of operations, statements of income and cash flows, and statements of stockholders equity of each of the Acquired Companies as of and for the years ended December 31, 2022 and December 31, 2023 (the latter period if and when required in accordance with Rule 14a-6 of the Securities Act, which is applicable to the Preliminary Proxy Statement and the Definitive Proxy Statement, or as required pursuant to Form 8-K as approved by the SEC) together with an unqualified audit report thereon from each Acquired Company’s independent public accountants, in each case, prepared in accordance with GAAP (collectively, the “PCAOB Audited Financials”) and (y) any unaudited pro forma financial statements required by Regulation S-X under the Securities Act (as interpreted by the staff of the SEC) to be included in the Preliminary Proxy Statement and the Definitive Proxy Statement (the “Pro Forma Financials” and, together with the PCAOB Audited Financials, the “Required Financials”) and (B) make any necessary amendments, restatements or revisions to the Required Financials such that they remain compliant with the applicable rules and regulations of the SEC governing the Preliminary Proxy Statement and the Definitive Proxy Statement, as required in order to consummate the Second Conversion; or the requirements under Form 8-K in relation to the SEC disclosure requirement under Item 2.01 thereunder (such item titled “Completion of Acquisition or Disposition of Assets”).
(ii) Each of the Seller, on the one hand, and Acquiror, on the other hand, shall furnish all information concerning it, each Acquired Company and its Affiliates, if applicable, as the other Party or Parties (as applicable) may reasonably request in connection with the preparation and filing with the SEC of the Preliminary Proxy Statement and the Definitive Proxy Statement. If at any time prior to the date of the Acquiror Stockholder Meeting any information relating to the Acquired Companies, Acquiror, the Seller or any of their respective Affiliates should be discovered by the Seller, on the one hand, or Acquiror, on the other hand, that should be set forth in an amendment or supplement to the Preliminary Proxy Statement, the Definitive Proxy Statement or any Other Required Filing, as the case may be, so that such filing would not include any misstatement of a material fact or omit to state any 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, then the Party that discovers such information shall promptly notify the other, and an appropriate amendment or supplement to such filing describing such information shall be promptly prepared and filed with the SEC by the appropriate Party and, to the extent required by applicable law or the SEC or its staff, disseminated to Acquiror Stockholders.
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(iii) Each of the Seller and Acquiror shall use reasonable best efforts to ensure that the information supplied (or to be supplied) by, or on behalf of, such Person to be included in the Preliminary Proxy Statement, Definitive Proxy Statement or any Other Required Filing will not, at the time the Preliminary Proxy Statement, Definitive Proxy Statement or such Other Required Filing and any amendment thereof or supplement thereto are filed with the SEC, at the time the Definitive Proxy Statement is first disseminated to the Acquiror Stockholders and at the time of the Acquiror Stockholder Meeting, contain any untrue statement of a material fact or omit to state any 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, except that no representation or warranty is made by the Seller, the Acquired Companies, or Acquiror with respect to statements made therein based on information supplied by the other of the Seller, the Acquired Companies or Acquiror for inclusion or incorporation by reference therein. Notwithstanding anything in this Agreement to the contrary, Acquiror shall with the assistance of the Seller, be responsible for the preparation of pro forma financial statements required to be included in the Preliminary Proxy Statement and Definitive Proxy Statement, if any. The Seller and Acquiror shall cooperate with each other and use their respective reasonable best efforts (x) to have the Preliminary Proxy Statement cleared by the SEC as promptly as practicable after its filing; and (y) keep the Definitive Proxy Statement updated for so long as necessary prior to the Acquiror Stockholder Meeting.
(e) Consultation Prior to Certain Communications. The Seller and its respective Representatives, on the one hand, and Acquiror, and its respective Representatives, on the other hand, shall not communicate in writing with the SEC or its staff with respect to the Preliminary Proxy Statement or any Other Required Filing without first providing the other Parties a reasonable opportunity to review and comment on such written communication, and each Party shall give due consideration to all reasonable additions, deletions or changes suggested thereto by the other Parties or their respective counsel. None of the Seller, Acquiror or any of their respective Representatives shall agree to participate in any material or substantive meeting or conference (including by telephone) with the SEC, or any member of the staff thereof, in respect of the Preliminary Proxy Statement, Definitive Proxy Statement or any Other Required Filing unless it consults with the other Parties in advance and, to the extent permitted by the SEC, allows the other Parties to participate.
(f) Notices. The Seller, on the one hand, and Acquiror, on the other hand, shall advise the other, promptly after it receives notice thereof, of any receipt of a request by the SEC or its staff for (i) any amendment or revisions to the Preliminary Proxy Statement or any Other Required Filing with the SEC, as the case may be; (ii) any receipt of comments from the SEC or its staff on the Preliminary Proxy Statement or any Other Required Filing, as the case may be; or (iii) any receipt of a request by the SEC or its staff for additional information in connection therewith. Acquiror and the Seller shall respond as to any comments received from the SEC or its staff on the Preliminary Proxy Statement or any Other Required Filing as promptly as practicable after its receipt thereof. Acquiror shall advise the Seller, promptly after receipt of notice thereof, of the time of the Preliminary Proxy Statement being cleared by the SEC.
(g) Other actions. The Seller and Acquiror shall use its reasonable best efforts to take any other action required to be taken by it under the Securities Act, the Exchange Act, the rules and policies of the NYSE and the General Corporation Law of the State of Delaware, as applicable.
Section 7.4 Acquiror Stockholders Meeting.
(a) Call of Acquiror Stockholder Meeting. Acquiror shall establish a record date for, duly call, give notice of, convene and hold a meeting of its stockholders as promptly as practicable following the Closing Date for the purpose of obtaining the adoption of the Second Conversion by the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of Acquiror Common Stock (the “Requisite Stockholder Approval”) present at the meeting of stockholders of Acquiror (the “Acquiror Stockholders Meeting”). In furtherance of the foregoing, Acquiror shall conduct in a timely manner a “broker search” in accordance with Rule 14a-13 of the Exchange Act. Acquiror shall use its reasonable best efforts to solicit proxies to obtain the Requisite Stockholder Approval pursuant to Section 7.3. Acquiror shall permit the Seller and its Representatives to attend the Acquiror Stockholder Meeting.
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(b) Adjournment of Acquiror Stockholder Meeting. Notwithstanding anything to the contrary in this Agreement, nothing will prevent Acquiror from postponing or adjourning the Acquiror Stockholder Meeting (i) to allow additional solicitation of votes in order to obtain the Requisite Stockholder Approval; (ii) if there are holders of an insufficient number of shares of the Acquiror Common Stock present or represented by proxy at the Acquiror Stockholder Meeting to constitute a quorum at the Acquiror Stockholder Meeting; or (iii) if the board of directors of Acquiror (or a committee thereof) has determined in good faith (after consultation with outside legal counsel) that Acquiror is (A) required to postpone or adjourn the Acquiror Stockholder Meeting by applicable Law or a request from the SEC or its staff or (B) reasonably likely to be required under applicable Law to postpone or adjourn the Acquiror Stockholder Meeting in order to give the Acquiror Stockholders sufficient time to evaluate any information or disclosure that Acquiror has sent to the Acquiror Stockholders or otherwise made available to Acquiror Stockholders; provided, however, that, subject to the fiduciary duties of the board of directors of Acquiror, in no event shall the Acquiror Stockholder Meeting be postponed or adjourned more than twice or for more than twenty (20) Business Days in the aggregate without the prior written consent of the Seller (not to be unreasonably withheld, conditioned or delayed).
Section 7.5 Europe Business Divestiture. Following Closing, Acquiror shall use its reasonable efforts (and shall cause its respective Affiliates to use their reasonable efforts, if applicable), to dispose, divest, transfer or otherwise sell all of the assets and operations constituting Acquiror’s European business (the “Europe Divestiture”), within six (6) months following the Closing Date, as may be extended by the Seller (the “Divestment Date”), provided that, unless waived by the Seller in writing, if the European Divestiture is not completed by the Divestment Date the Acquire shall pay a fee of $2,000,000 to the Seller for each calendar month between the Divestment Date and the date of completion of the European Divestment. If the total consideration received by Acquiror in connection with the Europe Divestiture, including as a result of any adjustments to the purchase price or payment of any deferred consideration in connection with the Europe Divestiture (such total amount, the “European Divestiture Consideration”) is less than 90% of the European Divestiture Target Amount, then Acquiror shall, no later than twenty (20) Business Days the after receiving European Divestiture Consideration, cause to be paid to Acquiror or its designee an amount equal to nineteen and nine tenth percent (19.9%) of the difference between the European Divestiture Target Amount minus the European Divestment Consideration and by bank wire transfer to the Seller’s Account.
Section 7.6 Wrong Pockets.
(a) If, within twelve (12) months following the Closing, any person discovers any right, title or interest in any asset or any Liability (a “Wrong Pocket Asset” and a “Wrong Pocket Liability,” respectively) that as of the Closing Date related to (i) the business of the Acquired Companies, but was not transferred or assumed by Acquiror or any Acquired Company at Closing or (ii) the business of the Seller and its Affiliates other than the business of the Acquired Companies, but was transferred to Acquiror or an Acquired Company at Closing, in each case except as a result of a transaction occurring after the Closing consented to by the Parties, then:
(i) the Parties shall cause any of their respective Affiliates holding such right, title or interest in a Wrong Pocket Asset (the “Wrong Pocket”) to transfer such Wrong Pocket Asset to the appropriate Person (the “Right Pocket”) as promptly as reasonably practicable for no additional consideration;
(ii) the Parties shall cause such Wrong Pocket to hold its right, title and interest in and to the Wrong Pocket Asset for the benefit of the Right Pocket until such time as the transfer is completed; and
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(iii) the Parties shall cause the Right Pocket to assume any Wrong Pocket Liability from the relevant Wrong Pocket as promptly as reasonably practicable for no additional consideration.
(b) All costs and expenses arising out of compliance with such transfers shall be allocated to the Parties as though such transfers had been completed as of the Closing in accordance with this Agreement.
(c) The Parties shall cause the Right Pocket to cooperate with the Wrong Pocket in connection with the transfers contemplated by this Section 7.6.
Section 7.7 Tax Matters.
(a) Tax Returns.
(i) The Seller has prepared, or has caused to be prepared, and timely filed, or shall prepare, or cause to be prepared, and timely file, all Tax Returns of the Acquired Companies required to be filed under Law on or prior to the Closing Date. The Tax Returns described in this Section 7.7(a)(i) were or will be prepared on a basis consistent with those prepared for prior taxable periods unless otherwise required by Law. The Seller shall provide Acquiror with a copy of each such Tax Return for its review and comment no less than thirty (30) days prior to the due date (taking into account valid extensions thereto) for such Tax Return, the Seller shall incorporate Acquiror’s reasonable written comments on such income Tax Returns, and the Seller shall timely file or cause to be filed the foregoing. In the event that the Parties are unable to resolve any dispute with respect to any Tax Return the preparation of which is governed by this Section 7.7(a)(i), such dispute shall be resolved by a Designated Accounting Firm in accordance with Section 7.7(a)(iii).
(ii) Acquiror will prepare, or cause to be prepared, all Tax Returns of the Acquired Companies required to be filed under Law following the Closing Date. All such Tax Returns that are attributable or include a portion of a Pre-Closing Tax Period shall be prepared on a basis consistent with those prepared for prior taxable periods unless otherwise required by Law. Acquiror shall provide Seller with a copy of each such income Tax Return for its review and comment no less than thirty (30) days prior to the due date (taking into account valid extensions thereto) for such income Tax Return, Acquiror shall incorporate Acquiror’s reasonable written comments on such Tax Returns, and Acquiror shall timely file or cause to be timely filed the foregoing. In the event that the Parties are unable to resolve any dispute with respect to any Tax Return the preparation of which is governed by this Section 7.7(a)(ii), such dispute shall be resolved by a Designated Accounting Firm in accordance with Section 7.7(a)(iii). To the extent that any Tax consequences attributable to the Reorganization are required to be reported on any United States federal, and applicable state and local, income tax returns for a Pre-Closing Tax Period, such tax returns shall (x) report the Reorganization as a redemption qualifying under Section 302(a) of the Code, and (y) include any elections under Section 338(h)(10) of the Code solely with respect to the redemption of shares of TUH for shares of the Excluded Companies that are corporations for United States federal income tax purposes, except, in either case, if (a) (y) Acquiror determines in good faith, after consultation with its tax advisers, that there is not at least “a more likely than not” comfort level with respect to such reporting position or elections and (x) Acquiror notifies Seller in writing of such determination not less than ten (10) Business Days prior to Closing; and (b) after Acquiror notifies Seller of such determination, Seller does not deliver a written opinion from a nationally recognized law firm or accounting firm, upon which TUH can rely, that there is at least a “more likely than not” comfort level with respect such reporting position or elections.
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(iii) Either Party shall have the right to refer such dispute to the dispute resolution group of an independent internationally recognized accounting firm that is mutually agreed upon by Acquiror and the Seller or, if Acquiror and the Seller are unable to agree on such accounting firm at least twenty-five (25) days prior to the due date for the relevant Tax Return, either Party may request the President of the American Arbitration Association to appoint a senior partner in an internationally recognized accounting firm to resolve the dispute, which firm shall be engaged by Acquiror and the Seller (such firm, or any successor thereto, being referred to herein as the “Designated Accounting Firm”). In connection with the resolution of any such dispute by the Designated Accounting Firm: (A) each of the Seller and Acquiror shall have a reasonable opportunity to meet with the Designated Accounting Firm to provide its views as to any disputed issues with respect to the relevant Tax Return; provided that none of Seller, Acquiror, or any of their respective Affiliates or Representatives shall have any ex parte communications or meetings with the Designated Accounting Firm regarding the subject matter hereof without the other Party’s prior written consent; (B) each of the Seller and Acquiror shall promptly provide, or cause to be provided, to the Designated Accounting Firm all information as is reasonably necessary to permit the Designated Accounting Firm to resolve such disputes; (C) the Designated Accounting Firm, acting as an expert and not an arbitrator, shall determine only those particular disputed items referred to in the corresponding dispute notice (the “Dispute Notice”) and not agreed by the Parties during the period prior to the filing of the relevant Tax Return, and upon reaching a determination shall deliver a copy of its determination (the “Expert Determination”) to the Seller and Acquiror; and (D) the determination made by the Designated Accounting Firm of any items that are in dispute shall, absent manifest error or fraud, be conclusive, binding upon the Parties, non-appealable, and not be subject to further review, and shall be considered a final arbitration award that is enforceable pursuant to the terms of the Federal Arbitration Act. In calculating the Expert Determination, the Designated Accounting Firm shall (1) be limited to addressing only those particular disputed items referred to in the Dispute Notice and not agreed by the Parties during the period prior to the filing of the relevant Tax Return and (2) calculate an amount, with respect to each disputed item, no greater than the higher amount calculated by Acquiror or the Seller, as the case may be, and no lower than the lower amount calculated by Acquiror or the Seller, as the case may be, with respect to such disputed item. The Designated Accounting Firm shall resolve all disputes at least ten (10) days prior to the due date for the relevant Tax Return. The fees and expenses of the Designated Accounting Firm shall be allocated between Acquiror, on the one hand, and the Seller, on the other hand, based upon the percentage which the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party.
(iv) All Taxes due on or before the Closing Date (whether or not shown on such Tax Returns) shall be paid or will be paid by the Seller or applicable Acquired Company when due.
(v) Any Tax refunds or Tax credits actually received in cash by an Acquired Company after the Closing but attributable to a Pre-Closing Tax Period (as determined pursuant to the principles of clause (vi), below) shall be for the benefit of the Seller, and Acquiror, any of the Acquired Companies or any of their respective Affiliates, as applicable, shall promptly pay to the Seller in cash the amount of any such Tax refund or the dollar value of any such Tax credit within five (5) Business Days following receipt thereof; provided, however, that Seller is not entitled to payment hereunder in respect of (a) refunds or credits of Taxes that were not paid prior to the Closing, (b) refunds or credits attributable to the carryback of any Tax attribute generated in a taxable period (or portion thereof) beginning after the Closing Date, (c) refunds or credits subject to a pending audit or other Tax proceeding, or (d) refunds or credits the value of which is required to be paid to a third party pursuant to a Contract entered into prior to the Closing by Seller or any of its Affiliates (including the Acquired Companies). Any and all payments pursuant to this clause (v) shall be made net of all costs and expenses (including Taxes) incurred by Acquiror or any of its Affiliates (including the Acquired Companies).
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(vi) In the case of Taxes that are payable with respect to a Straddle Period, the portion of any such Taxes that are attributable to a Pre-Closing Tax Period for purposes of this Agreement shall be: in the case of Taxes (i) based upon, or related to, income, receipts, profits, wages, capital or net worth, (ii) imposed in connection with the sale, transfer or assignment of property, or (iii) required to be withheld, deemed equal to the amount which would be payable if the taxable year ended on (and included) the Closing Date; and, in the case of other Taxes, deemed to be the amount of such Taxes for the entire period multiplied by a fraction the numerator of which is the number of days in the period ending on (and including) the Closing Date and the denominator of which is the number of days in the entire period. The remainder of the Taxes for the Straddle Period shall be allocated to the period or portion thereof commencing on or after the Closing Date.
(vii) Without the prior written consent of the Seller, which consent shall not be unreasonably withheld, conditioned, or delayed, Acquiror shall not, and shall cause the Acquired Companies not to, amend, re-file, or otherwise modify any Tax Return for, or take any position or action attributable to, any Pre-Closing Tax Period that would reasonably be expected to increase the Tax liability of the Seller or its Affiliates or that would otherwise adversely affect the Seller’s liability for Taxes related to any Pre-Closing Tax Period or indemnification obligations with respect to Taxes pursuant to this Agreement.
(b) Indemnification for Taxes. All Taxes that are due and payable with respect to Tax Returns described in this Section 7.7 shall be the responsibility of the Seller to the extent they constitute Pre-Closing Taxes, and shall, for the avoidance of doubt, together with any related costs and other Losses, be subject to indemnification pursuant to Article X.
(c) Cooperation on Tax Matters. Acquiror, Seller, and the Acquired Companies and their respective Affiliates shall reasonably cooperate, as and to the extent reasonably requested by another Party, in connection with determining any liability for Taxes, the preparation and filing of any Tax Return and any audit, litigation or other proceeding with respect to Taxes, in each case, relating to the Acquired Companies for a taxable period beginning on or before the Closing Date. Such cooperation shall include the retention and (upon any other Party’s written request) the provision of records and information that are reasonably relevant to any such Tax matter and making employees reasonably available on a mutually convenient basis to provide additional information and explanation of any material provided under this Section 7.7(c), and furnishing the other Parties reasonable assistance in connection therewith (at such other Party’s expense). Any records and information obtained pursuant to the provisions of this Section 7.7(c) providing for the sharing of information or review of any Tax Return or other schedule related to Taxes with respect to the Acquired Companies shall in each case be kept, unless otherwise required by applicable Law, confidential by the Parties and their respective Affiliates, and such provisions shall in any event be subject to applicable Law relating to the exchange of information and appropriate legal privilege and work-product protections. The Parties will cooperate and negotiate in good faith from time to time and as needed with respect to any changes required or appropriate with respect to the Acquiror’s or its Affiliates operations or ownership structure to maximize the Acquired Companies’ (or Acquiror’s or its Affiliates’) eligibility to benefit from advanced manufacturing production credits under Section 45X of the Code or other similar benefits in light of any changes to applicable laws or otherwise.
(d) Termination of Tax Sharing Agreements. On the Closing Date, any existing agreements relating to the allocation or sharing of Taxes or other similar arrangements (other than this Agreement and any other Contract entered into in the ordinary course of business consistent with past practice and for which Taxes are not the principal subject matter) to which any Acquired Company is a party shall in each case be terminated and have no further effect for any taxable year or period (whether a past, present or future year or period), and no additional payments shall be made thereunder on or after the Closing Date in respect of redetermination of Tax Liabilities or otherwise.
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(e) Transfer Taxes. Any transfer, documentary, sales, use, stamp, registration, value added, real property, and other such Taxes (including any penalties and interest) incurred in connection with the purchase and sale of Target Shares pursuant to Section 2.1 shall be borne fifty percent (50%) by Acquiror and fifty percent (50%) by the Seller (the “Transfer Taxes”). Any Tax Returns with respect to such Transfer Taxes shall be prepared and filed by the Party primarily or customarily responsible under applicable Law for filing such Tax Returns, and such Party will provide such Tax Returns to the other Parties at least ten (10) days prior to the date such Tax Returns are due to be filed (or, if such Tax Returns are due within ten (10) days following the Closing, as soon as reasonably practicable).
(f) Tax Contests. Acquiror agrees to give written notice to Seller of the receipt of any written notice by Acquiror or any of the Acquired Companies which involves the assertion of any claim, or the commencement of any action, in either case with respect to Taxes of any of the Acquired Companies in respect of any Pre-Closing Tax Period (a “Tax Claim”). Acquiror shall control the contest or resolution of any Tax Claim; provided, however, that Acquiror shall obtain the prior written consent of Seller (which consent shall not be unreasonably withheld, conditioned or delayed) before entering into any settlement of a Tax Claim or ceasing to defend such Tax Claim; and, provided further, that Seller shall be entitled to participate in the defense of such Tax Claim and to employ counsel of its choice for such purpose, the fees and expenses of which separate counsel shall be borne solely by Seller.
Section 7.8 Waivers and Releases of Claims.
(a) Effective as of the Closing, the Seller by execution of this Agreement, on behalf of itself and each of its current or former Affiliates, officers, directors, employees, managers, partners, principals, advisors, agents, stockholders, members, investors, equity holders or other representatives (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors), family members, heirs, beneficiaries, estates, executors, administrators, trustees, successors or assigns (collectively, but in each case, excluding each Acquired Company, the “Seller Releasing Parties”), hereby:
(i) acknowledges and agrees that the Seller Releasing Parties (A) have no Seller Claims, (B) have not transferred or assigned, or purported to transfer or assign, any Seller Claims and (C) shall not transfer or assign, or purport to transfer or assign, any Seller Claims, in each case, relating to any of the Acquired Companies against the Acquiror Released Parties;
(ii) hereby unconditionally, irrevocably and forever releases, acquits and discharges the Acquiror Released Parties from, and covenants not to sue any Acquiror Released Parties for, any and all claims, demands, allegations, assertions, complaints, controversies, charges, duties, grievances, rights, causes of action, Actions, suits, Liabilities, debts, obligations, promises, commitments, agreements, guarantees, endorsements, duties, breaches of duties, damages, costs, losses, debts and expenses (including out-of-pocket attorneys’ fees and costs incurred) of any nature whatsoever (whether direct or indirect, known or unknown, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, asserted or unasserted, absolute or contingent, determined or conditional, express or implied, fixed or variable and whether vicarious, derivative, joint, several or secondary) in each case, in any way relating to, arising out of or in connection with (A) any Acquired Company, including in any way relating to, arising out of or in connection with any actions or inactions with respect to any Acquired Company or its respective businesses, operations or affairs, (B) without limiting clause (A), any Acquiror Related Party (other than, following the Closing, any Acquired Company) to the extent relating to the Acquired Companies and their respective business, operations or affairs, or (C) arising from or relating to the Seller Releasing Party’s capacity, or rights, as a holder of capital stock or other securities of any Acquired Company (collectively, “Seller Claims”) that the Seller Releasing Party has or had or can, shall or may now or hereafter have, including any Seller Claims arising under any applicable Law: provided however that the Seller Releasing Parties are not releasing any claims (x) for ordinary course compensation and benefits due to them through the Closing Date to the extent that such compensation or benefits are disclosed to Acquiror prior to the Closing Date or are entered into thereafter in accordance with the terms of this Agreement and (y) arising under this Agreement (or any Related Agreement) or in connection with the Contemplated Transactions (and such matters shall not constitute Seller Claims);
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(iii) acknowledges and agrees that it (A) has read and understands this release and has been advised to seek legal counsel prior to signing this Agreement and has had ample opportunity to do so, (B) has signed this Agreement, including the provisions of this Section 7.8, freely and voluntarily, (C) does not rely, and has not relied, on any representation or statement not set forth in this release made by Acquiror or any other Person with regard to the subject matter, basis or effect of this release or otherwise and (D) does not rely, and has not relied, on any representations or warranties made by Acquiror in this Agreement, which such representations and warranties may have been made for the purpose of allocating contractual risk between the Parties rather than establishing such matters as facts; and
(iv) specifies that the release reflected in this Section 7.8 shall become effective only upon the consummation of the Closing pursuant to the terms and conditions of this Agreement.
(b) Effective as of the Closing, Acquiror by execution of this Agreement, on behalf of itself and each of its current or former Affiliates, officers, directors, employees, managers, partners, principals, advisors, agents, stockholders, members, investors, equity holders or other representatives (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors), family members, heirs, beneficiaries, estates, executors, administrators, trustees, successors or assigns (collectively, but in each case, including each Acquired Company, the “Acquiror Releasing Parties”), hereby:
(i) acknowledges and agrees that the Acquiror Releasing Parties (A) have no Acquiror Claims, (B) have not transferred or assigned, or purported to transfer or assign, any Acquiror Claims and (C) shall not transfer or assign, or purport to transfer or assign, any Acquiror Claims, in each case, relating to any of the Acquired Companies against the Seller Released Parties;
(ii) hereby unconditionally, irrevocably and forever releases, acquits and discharges the Seller Released Parties from, and covenants not to sue any Seller Released Parties for, any and all claims, demands, allegations, assertions, complaints, controversies, charges, duties, grievances, rights, causes of action, Actions, suits, Liabilities, debts, obligations, promises, commitments, agreements, guarantees, endorsements, duties, breaches of duties, damages, costs, losses, debts and expenses (including out-of-pocket attorneys’ fees and costs incurred) of any nature whatsoever (whether direct or indirect, known or unknown, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, asserted or unasserted, absolute or contingent, determined or conditional, express or implied, fixed or variable and whether vicarious, derivative, joint, several or secondary) in each case, in any way relating to, arising out of or in connection with (A) any Acquired Company, including in any way relating to, arising out of or in connection with any actions or inactions with respect to any Acquired Company or its respective businesses, operations or affairs, or (B) without limiting clause (A), any Seller Related Party to the extent relating to the Acquired Companies and their respective business, operations or affairs (collectively, “Acquiror Claims”) that the Acquiror Releasing Party has or had or can, shall or may now or hereafter have, including any Acquiror Claims arising under any applicable Law: provided however that the Acquiror Releasing Parties are not releasing any claims arising under this Agreement, any Related Agreement when entered or any Disclosed a Related Party Agreement or in connection with the Contemplated Transactions (and such matters shall not constitute Acquiror Claims);
(iii) acknowledges and agrees that it (A) has read and understands this release and has been advised to seek legal counsel prior to signing this Agreement and has had ample opportunity to do so, (B) has signed this Agreement, including the provisions of this Section 7.8, freely and voluntarily, (C) does not rely, and has not relied, on any representation or statement not set forth in this release made by Seller or any other Person with regard to the subject matter, basis or effect of this release or otherwise and (D) does not rely, and has not relied, on any representations or warranties made by Seller in this Agreement, which such representations and warranties may have been made for the purpose of allocating contractual risk between the Parties rather than establishing such matters as facts; and
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(iv) specifies that the release reflected in this Section 7.8 shall become effective only upon the consummation of the Closing pursuant to the terms and conditions of this Agreement.
(c) For purposes of this Agreement, the following terms shall have the following meanings: (A) “Acquiror Released Parties” means Acquiror and each of its respective Affiliates (including, following the Closing, any Acquired Company), Subsidiaries, subdivisions, officers, directors, employees, managers, partners, principals, advisors, agents, stockholders, members, investors, equity holders or other representatives (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors), successors, predecessors or assigns, (B) “Acquiror Related Party” means each Acquiror Released Parties, other than Acquiror, (C) “Seller Released Parties” means the Seller and each of its respective Affiliates (excluding, following the Closing, any Acquired Company), Subsidiaries, subdivisions, officers, directors, employees, managers, partners, principals, advisors, agents, stockholders, members, investors, equity holders or other representatives (including, without limitation, attorneys, accountants, consultants, bankers and financial advisors), successors, predecessors or assigns, and (D) “Seller Related Party” means each Seller Released Parties, other than Seller.
Section 7.9 R&W Insurance Policy; Cooperation.
(a) R&W Insurance Policy. Acquiror may elect, in its sole discretion and at its sole cost, to obtain a conditional binder to a representation and warranty and pre-Closing Tax indemnity (including coverage for Pre-Closing Taxes) R&W Insurance Policy after the Agreement Date. If obtained, the R&W Insurance Policy shall include a provision whereby the insurer expressly waives, and irrevocably agrees, except in the case of Fraud, not to pursue, directly or indirectly, any subrogation rights against Seller or any of its Affiliates, or any former stockholders, managers, members, directors, officers, employees, agents or Representatives of any of the foregoing with respect to any claim made by any insured thereunder and such Persons shall be express third-party beneficiaries of such provision.
(b) Cooperation. Prior to the Closing, the Seller shall, and shall cause its Subsidiaries to, use reasonable best efforts to (A) provide to Acquiror, the insurers under the R&W Insurance Policy and their respective Representatives, and (B) cause their respective Representatives to provide to Acquiror, the insurers under the R&W Insurance Policy and their respective Representatives, at Acquiror’s sole expense, such cooperation as is reasonably requested by them in connection with arranging, discussing the terms of, and underwriting the R&W Insurance Policy, including by responding promptly and satisfactorily to any due diligence requests the insurers may reasonably have with respect to the Acquired Companies and their businesses; provided that (i) such cooperation does not materially interfere with the business or operations of the Acquired Companies and (ii) all such information provided by the Acquired Companies pursuant to this Section 7.9(b) shall be treated as “Confidential Information” pursuant to the terms of the Confidentiality Agreement, the provisions of which are by this reference hereby incorporated herein.
Section 7.10 Partnership; Battery Energy Storage. Following Closing, each of the Parties shall use their respective reasonable best efforts (and shall cause their respective Affiliates to, if applicable) (a) to take (or cause to be taken) actions; and (b) do (or cause to be done) all things reasonably necessary, proper or advisable, to discuss and explore a strategic partnership in the United States in respect of a battery energy storage business.
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Section 7.11 CFIUS Turndown.
(a) Redemption of Seller Acquiror Common Stock. Following Closing, and in the event of a CFIUS Turndown, where CFIUS specifically requires the Seller to divest, dispose, or otherwise sell the shares of Acquiror Common Stock acquired as Share Consideration pursuant to this Agreement, within sixty (60) days following the date of the CFIUS Turndown, Acquiror shall purchase or redeem from the Seller, all such shares of Acquiror Common Stock in exchange for Acquiror issuing to Seller an unsecured loan note, substantially in the form attached hereto as Exhibit A-6 (the “Secondary Note Instrument”), with an aggregate principal amount equal to the Redemption Price.
(b) Convertible Note. In the event of a (i) CFIUS Turndown, or (ii) if the Convertible Note does not become eligible for any of the Conversions pursuant to the Convertible Note; provided that such failure to become eligible for the Conversions is not caused by any deliberate action of the Seller or any of their respective Affiliates, in either case under (i) or (ii), within twelve (12) months following the Closing Date (as may be extended by Seller in its sole discretion), the Convertible Note shall be redeemed and repaid by Acquiror with a newly issued unsecured loan note substantially in the form of the Secondary Note Instrument, with an aggregate principal amount equal to the amount of principal and accrued but unpaid interest under the Convertible Note at the time the Convertible Note is redeemed.
Section 7.12 Dividends.
In the event that between Closing and the date of the First Conversion or a CFIUS Turndown, as applicable, Acquiror pays a dividend or distribution on the Acquiror Common Stock, Acquiror shall pay to the Seller in cash within five (5) Business Days of the payment date for the dividend or distribution, the amount of such dividend or distribution that is paid per share of Acquiror Common Stock multiplied by the number of Conversion Shares.
Section 7.13 Production Reserve Fee Repayment.
(a) The Parties acknowledge and agree that as of the Closing, TUM 1 owes TUS an amount equal to $220,000,000 (the “Production Reserve Fee”). Beginning on the first anniversary of the Closing Date, Acquiror shall repay, or cause TUM 1 to repay, the Production Reserve Fee to TUS, in five installments of $44,000,000, to be paid on each successive anniversary of the Closing Date (each, an “Installment Payment”), provided that in the event that Acquiror, acting reasonably, determines that it does not have sufficient free cash flow to pay any Installment Payment, such Installment Payment shall be reduced accordingly and Seller and Acquiror shall negotiate a revised payment schedule in good faith, provided further, that any such unpaid Installment Payment shall accrue interest at six percent (6%) per annum.
(b) If TUM 1 enters into product offtake agreements with customers with respect to at least three gigawatt (3GW) of TUM 1’s capacity in addition to the currently committed one and a half gigawatt (1.5GW) capacity, then, after the last of such offtake agreements is entered into, any customer deposits received by TUM 1 shall be paid to the Seller in reduction of the Production Reserve Fee until the Production Reserve Fee is fully paid.
(c) If Acquiror or any of its Subsidiaries enter into a financing agreement providing the Acquiror or its Subsidiaries with at least $275,000,000 of financing, then Acquiror shall, within 30 days, make a payment to TUS of all unpaid amounts of the Production Reserve Fee, unless such payment is prohibited by the terms of any financing arrangements for the Solar Cell Manufacturing Facility or Solar Module Manufacturing Facility.
(d) Acquiror may offset any amounts due under this Section 7.13 against any payments TVNW would owe to TUM 1 under the Polysilicon Supply Agreement.
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Section 7.14 Equity Contribution Agreement. Following the Closing, Acquiror will cooperate with TED to terminate that certain Equity Contribution Agreement, dated July 16, 2024, between TED and TUM 1, and the Seller will cause TED to cooperate with Acquiror to support any replacement conditions to the extent necessary.
Section 7.15 Solar Cell Agreement. As soon as possible after the Agreement Date and prior to Closing, the Parties shall negotiate in good faith the Solar Cell Operational Support Agreement, substantially on the terms set out in the Solar Cell Term Sheets.
Section 7.16 Seller’s Option. Following Closing, and in the event that any of the Preferred Stock issued under the Preferred Stock Purchase Agreement is converted into Acquiror Common Stock, Seller shall have the right, but not the obligation, by written notice to Acquiror, to acquire from Acquiror such number of shares of Acquiror Common Stock so that the Seller’s proportionate ownership of Acquiror Common Stock following the conversion of the Preferred Stock will be the same as before the conversion at a price equal to $2.50 per share of Acquiror Common Stock or such other price as is the Conversion Price pursuant to the Preferred Stock Purchase Agreement upon conversion of the Preferred Stock. Notwithstanding Section 2(e) of the Cooperation Agreement, the Parties agree this Section 7.16 shall be Seller’s only anti-dilution protection upon the conversion of any of the Preferred Stock.
Section 7.17 Trina Employee Shares. As soon as reasonably practicable after the Second Conversion, the Seller shall distribute 3,000,000 shares of Acquiror Common Stock out of the Share Consideration received by the Seller to employees of the Seller or its Affiliates in one or more transactions, each of which qualifies as exempt transactions under the Securities Act and the rules and regulations promulgated thereunder and in accordance with the restrictions set forth in this Agreement, provided that in all cases such transfer shall be in compliance with all Laws applicable to any Party. Prior to any transfer contemplated by the preceding sentence, the Seller shall provide written evidence, reasonably satisfactory to the Acquiror, that all such transfers comply with all applicable Laws, including the Securities Act. The Parties agree that the transfer restrictions set out in Section 2(c) of the Cooperation Agreement shall not apply to the transfer of shares to employees permitted by this Section 7.17, provided that such employees agree not to transfer such shares to any person for a period of twelve (12) months after the date they receive the shares from the Seller.
Section 7.18 Lock-Up Agreement Waiver Notification. Acquiror shall use its commercially reasonable best efforts to promptly notify Seller if Acquiror receives notice from Encompass Capital that Encompass Capital is seeking a waiver of the Lock-Up Agreement pursuant to Section 1(a) of the Lock-Up Agreement.
ARTICLE
VIII
Conditions to close
Section 8.1 Mutual Conditions. The respective obligations of Acquiror and the Seller to effect the Purchase shall be subject to the satisfaction at or prior to the Closing, of the condition that no Law or Order (whether temporary, preliminary or permanent) promulgated by a Governmental Authority of competent jurisdiction shall be in effect which has the effect of making the consummation of the Purchase illegal, or otherwise prohibiting the consummation of the Purchase in accordance with the terms of this Agreement.
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Section 8.2 Additional Acquiror Conditions. The obligations of Acquiror to effect the Purchase shall be subject to the satisfaction, at or prior to the Closing, of each of the following additional conditions, any of which may be waived in writing exclusively by Acquiror in its sole discretion:
(a) Seller Representations and Warranties.
(i) The representations and warranties of the Seller (other than the Seller Fundamental Representations) shall have been true and correct (without giving effect to any qualification as to materiality or similar qualification) on and as of the Agreement Date and shall be true and correct on and as of the Closing Date as though such representations and warranties were made on and as of the Closing (other than such representations and warranties of the Seller made only as of a specified earlier date, which shall be true and correct on and as of such specified earlier date), except in each case for any failure to be so true and correct that has not had, and would not be reasonably expected to have, a Seller Material Adverse Effect.
(ii) The Seller Fundamental Representations shall have been true and correct in all but de minimis respects on and as of the Agreement Date and shall be true and correct in all but de minimis respects on and as of the Closing Date as though such representations and warranties were made on and as of the Closing (other than such representations and warranties of such Seller made only as of a specified earlier date, which shall be true and correct in all but de minimis respects as of such specified earlier date).
(b) Seller Covenants. The Seller shall have performed and complied in all material respects with its respective covenants and obligations under this Agreement required to be performed and complied with by the Seller at or prior to the Closing.
(c) Seller Material Adverse Effect. Since the Agreement Date, no Seller Material Adverse Effect shall have occurred.
(d) Consents; Waivers. The Acquired Companies shall have received all necessary consents, waivers and approvals set forth on Schedule 8.2(d).
(e) Seller Closing Certificates. Acquiror shall have received a certificate from the Seller, validly executed by an officer of the Seller for and on Seller’s behalf, to the effect that, as of the Closing, the conditions set forth in Sections 8.2(a), Section 8.2(b), Section 8.2(c) and Section 8.3(c) have been satisfied.
(f) Reorganization. Seller shall have completed the Reorganization in accordance with Section 6.6 and provided evidence acceptable to Acquiror.
Section 8.3 Additional Seller Conditions. The obligations of the Seller to effect the Purchase shall be subject to the satisfaction, at or prior to the Closing, of each of the following additional conditions, any of which may be waived in writing exclusively by the Seller in its sole discretion:
(a) Acquiror Representations and Warranties.
(i) The representations and warranties of Acquiror (other than the Acquiror Fundamental Representations) shall have been true and correct (without giving effect to any qualification as to materiality or similar qualification) on and as of the Agreement Date and shall be true and correct on and as of the Closing Date as though such representations and warranties were made on and as of the Closing (other than such representations and warranties of Acquiror made only as of a specified earlier date, which shall be true and correct on and as of such specified earlier date), except in each case for any failure to be so true and correct that has not had, and would not be reasonably expected to have, a Acquiror Material Adverse Effect.
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(ii) The Acquiror Fundamental Representations shall have been true and correct in all but de minimis respects on and as of the Agreement Date and shall be true and correct in all but de minimis respects on and as of the Closing Date as though such representations and warranties were made on and as of the Closing (other than such representations and warranties of Acquiror made only as of a specified earlier date, which shall be true and correct in all but de minimis respects as of such specified earlier date).
(b) Acquiror Covenants. Acquiror shall have performed and complied in all material respects with each of its covenants and obligations under this Agreement required to be performed and complied with by it at or prior to the Closing.
(c) Acquiror Material Adverse Effect. Since the Agreement Date, no Acquiror Material Adverse Effect shall have occurred.
(d) Acquiror Closing Certificate. The Seller shall have received a certificate from Acquiror, validly executed by an officer of Acquiror for and on Acquiror’s behalf, to the effect that, as of the Closing, the conditions set forth in Section 8.3(a), Section 8.3(a)(ii), Section 8.3(b), Section 8.3(c) and Section 8.3(f) have been satisfied.
(e) 24M Isolation. Acquiror shall have completed the 24M Isolation.
(f) Equity Financing. The First Tranche Equity Financing has been completed pursuant to the terms of the Preferred Stock Purchase Agreement.
(g) NYSE Supplemental Listing Application. Acquiror shall have filed the NYSE Supplemental Listing Application with NYSE.
Section 8.4 Frustration of Closing Conditions. Neither the Seller nor Acquiror may rely on the failure of any condition set forth in this Article III to be satisfied if such failure was caused by such Party’s failure to act in good faith or to use reasonable best efforts or such other efforts standard as may be expressly set forth herein to cause the conditions to the Closing of the other Party set forth in this Article III to be satisfied.
ARTICLE
IX
PRE-CLOSING TERMINATION OF AGREEMENT
Section 9.1 Termination. This Agreement may be terminated and the Contemplated Transactions may be abandoned, at any time prior to the Closing only as follows:
(a) by mutual written agreement of the Seller and Acquiror;
(b) by Acquiror or the Seller if the Closing Date shall not have occurred by the date falling one hundred twenty (120) days after the Agreement Date (the “End Date”); provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available (i) to the Seller, if any action or failure to act by the Seller has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes a breach of this Agreement or (ii) to Acquiror if any action or failure to act by Acquiror has been a principal cause of or resulted in the failure of the Closing to occur on or before such date and such action or failure to act constitutes a breach of this Agreement;
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(c) by Acquiror or the Seller if a Governmental Authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered any applicable Law or any final non-appealable Order permanently enjoining or otherwise prohibiting the Purchase has been issued by a Governmental Authority of competent jurisdiction; provided, however, that the right to terminate this Agreement under this Section 9.1(c) will not be available to any Party whose actions resulted in any applicable Law or Order that had the effect of restraining, enjoining or otherwise prohibiting the Purchase;
(d) by Acquiror, if it is not in material breach of its obligations under this Agreement and there has been a breach of, or inaccuracy in, any representation, warranty, covenant or agreement of the Seller such that the conditions set forth in Section 8.2(a), Section 8.2(b) or Section 8.2(c) would not be satisfied as of the time of such breach or inaccuracy and such breach or inaccuracy has not been cured within five (5) Business Days after written notice thereof to the Seller; provided, however, that no cure period shall be required (i) for a breach or inaccuracy which by its nature cannot be cured or (ii) if any of the conditions to Closing in Section 8.2(a) and Section 8.2(b) for the benefit of Acquiror are incapable of being satisfied on or before the End Date;
(e) by the Seller, if it is not in material breach of its obligations under this Agreement and there has been a breach of, or inaccuracy in, any representation, warranty, covenant or agreement of Acquiror such that the conditions set forth in Section 8.3(a) or Section 8.3(a) would not be satisfied as of the time of such breach or inaccuracy and such breach or inaccuracy has not been cured within five (5) Business Days after written notice thereof to Acquiror; provided, however, that no cure period shall be required (i) for a breach or inaccuracy which by its nature cannot be cured or (ii) if any of the conditions to Closing in Section 8.3(a) and Section 8.3(a) for the benefit of the Seller are incapable of being satisfied on or before the End Date; or
(f) by either Party, in accordance with Section 6.5(b), provided such terminating Party is not in breach, other than de minimis breach, of its obligations under this Agreement.
Section 9.2 Effect of Termination. Any valid termination of this Agreement under Section 9.1 will be effective (subject to the cure periods provided above) immediately upon the delivery of a valid written notice of the terminating Party to the other Party. In the event of termination of this Agreement as provided in Section 9.1, this Agreement and all rights and obligations hereunder shall forthwith become void and there shall be no liability or obligation on the part of Acquiror, the Seller, or their respective Representatives; provided, however, that each of the Seller and Acquiror hereto shall remain liable for any Fraud occurring prior to such termination, in which case the aggrieved Party shall be entitled to all remedies available at law or in equity. Notwithstanding the foregoing, the provisions of Section 11.5 (Expenses), Section 11.3 (Confidentiality), Section 11.4 (Public Disclosure), ARTICLE XI (General Provisions) and this Section 9.2, (in each case including the respective meanings ascribed to the capitalized terms used in such Sections as defined in this Agreement), shall remain in full force and effect and survive any termination of this Agreement pursuant to the terms of this Article IX.
ARTICLE
X
POST-CLOSING INDEMNIFICATION
Section 10.1 Survival.
(a) Representations and Warranties of the Seller. The representations and warranties of the Seller contained in this Agreement shall not survive the Closing; provided, however, that the Seller Fundamental Representations shall survive from and after the Closing Date until the third anniversary of the Closing Date.
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(b) Representations and Warranties of Acquiror. The representations and warranties of Acquiror shall not survive the Closing.
(c) Pre-Closing Tax and Transfer Tax. All indemnification obligations relating to any Pre-Closing Tax obligation or any Transfer Tax shall survive the Closing until, and all claims with respect thereto shall terminate on, the date that is ninety (90) days after the expiration of the statute of limitations (including all extensions or waivers thereof) applicable to the applicable subject matter thereof.
(d) Covenants. The covenants of the Seller and Acquiror shall survive until their performance in accordance with the terms of this Agreement, and any claim for breach of any such covenant may be made within twelve (12) months after the expiration date for such performance, provided that Section 6.12 shall survive until the final settlement of any claim for Leakage pursuant to Section 10.2(a)(v).
(e) Extension of Survival Period. Notwithstanding the foregoing, if a Claim Notice with respect to a claim for indemnification under Section 10.2 has been delivered pursuant to Section 10.5 prior to the expiration of the applicable survival period set forth in this Section 10.1, the covenants or agreements that are the subject of such claim Notice shall survive with respect to the matters set forth in such Claim Notice until such claim is finally and fully resolved; provided, however, that the delivery of such Claim Notice will extend only the survival period for that particular alleged breach and not any other breaches of that covenant not asserted prior to the expiration of the survival period. This Section 10.1 shall operate as a contractual statute of limitations; provided, however, that nothing in this Section 10.1 shall limit any liability for, or any Party’s rights to bring a claim for, fraud.
(f) Agreement Controls. For the avoidance of doubt and notwithstanding anything to the contrary set forth herein, it is the intention of the Parties that, except in the case of Fraud, the respective survival periods and termination dates set forth in this Section 10.1 supersede any applicable statutes of limitations that would otherwise apply to such covenants and agreements.
Section 10.2 Indemnification.
(a) Seller Indemnification. Subject to the applicable limitations set forth in this Article X (including Section 10.1), from and after the Closing, the Seller shall indemnify and hold harmless Acquiror and its Affiliates (including, after the Closing Date, any Acquired Company) and its and their respective Representatives from and against all Losses, paid, incurred, suffered or sustained by such Indemnified Parties, or any of them (regardless of whether or not such Losses relate to any Third-Party Claims), directly or indirectly resulting from, arising out of, relating to, or in connection with:
(i) any breach of, default in, or failure by the Seller or any of its Affiliates, to perform or comply with any covenant or agreement of the Seller contained in this Agreement;
(ii) any breach of, failure to be true of, or inaccuracy in, as of the Closing Date, any Seller Fundamental Representation, or any breach of, failure to be true of, or inaccuracy in, any certificate or instrument delivered by, or on behalf of, the Seller pursuant to this Agreement with respect to any Seller Fundamental Representation;
(iii) the Reorganization;
(iv) any Pre-Closing Taxes; and
(v) any Leakage that occurred between the Agreement Date and the Closing Date.
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(b) Acquiror Indemnification. Subject to the applicable limitations set forth in this Article X (including Section 10.1), from and after the Closing, Acquiror shall indemnify and hold harmless the Seller and its Affiliates (excluding, after the Closing Date, any Acquired Company) and its and their respective Representatives from and against all Losses, paid, incurred, suffered or sustained by such Indemnified Parties, or any of them (regardless of whether or not such Losses relate to any Third-Party Claims), directly or indirectly resulting from, arising out of, relating to, or in connection with any breach of, default in, or failure by Acquiror or any of its Affiliates, to perform or comply with, any covenant or agreement of Acquiror contained in this Agreement.
Section 10.3 Indemnification Limitations and Qualifications. In each case, except for Seller’s indemnification obligation pursuant to Section 10.2(a)(iii), Section 10.2(a)(iv), or Section 10.2(a)(v):
(a) Indemnification Deductibles. No Party shall be liable for indemnification pursuant to Section 10.2 unless and until the aggregate amount of Losses subject to indemnification by such Party exceeds $5,000,000, in which event such Party shall be entitled to indemnification for all such Losses in excess of such amount.
(b) Indemnification Caps.
(i) the aggregate liability of the Seller’s indemnification obligation pursuant to Section 10.2(a)(ii) shall not exceed the Purchase Price; and
(ii) the aggregate liability of the Seller pursuant to Section 10.2(a)(i) or the Acquirer pursuant to Section 10.2(b) shall not exceed $200,000,000;
(c) Insurance Recoveries; Tax Benefits. The amount of any Losses payable to an Indemnified Party pursuant to the indemnification obligations in Section 10.2 shall be calculated after giving effect (A) to any amounts actually recovered by the Indemnified Party from insurance policies, which recovery shall be calculated net of the following: (1) reasonable costs and expenses (including Taxes) incurred by such Indemnified Party or its Affiliates and its and their respective Representatives in procuring such recovery; (2) any increases in premiums or premium adjustments to the extent attributable to such recovery (applicable to any past, present or future premiums); and (3) deductibles and other amounts incurred in connection with such recovery; provided, however, that the Indemnified Parties shall have no obligation to seek recovery under any insurance policies or to maintain any insurance policies for any period of time and (B) any net Tax benefit that is realized by the Indemnified Party as a reduction in cash Taxes otherwise payable in the year such Losses are incurred or the following taxable year as a result of such Losses.
Section 10.4 Fraud. Notwithstanding anything herein to the contrary, nothing in this Agreement shall limit (i) the liability of a Party in connection with any claim based on Fraud, or (ii) the right of any Indemnified Party to pursue remedies under or related to any Related Agreement (other than certificates delivered pursuant to this Agreement) against the parties thereto.
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Section 10.5 Claim Procedures.
(a) Indemnification Claims. To the extent applicable, subject to the limitations set forth in Section 10.3 or Section 10.4, if any Indemnified Party wishes to assert a claim under Section 10.2(a) or Section 10.2(b), as applicable (each, an “Indemnification Claim”), it shall notify in writing the Seller (if the Seller is the party from which indemnification is sought pursuant to Section 10.2(a)) or Acquiror (if Acquiror is the party from which indemnification is sought pursuant to Section 10.2(b)) of the facts and circumstances that give rise to such Indemnification Claim. As soon as reasonably practicable after such notice, the Indemnified Party shall deliver to the other Party a written claim notice (a “Claim Notice”) stating (i) that an Indemnified Party has paid, incurred, suffered or sustained, or anticipates that it may pay, incur, suffer or sustain Losses, and (ii) to the extent reasonably available, specifying such Losses or anticipated Losses in reasonable detail, the facts and circumstances (to the extent known by or available to the corresponding Representative) giving rise to such Losses and, if applicable, the nature of the misrepresentation, breach of warranty or covenant or other indemnifiable matter. Without extending the time limitations set forth in Section 10.1, a Claim Notice may be updated from time to time by the Indemnified Party delivering such Claim Notice to reflect any change in circumstances following the date thereof, and with respect to Leakage, Acquiror may deliver more than one (1) claim for Leakage, if there are separate events constituting Leakage. A failure to give complete, accurate or, without extending the time limitations set forth in Section 10.1, timely notice of a Claim Notice will not affect the rights or obligations of any Indemnified Party hereunder. If an Indemnification Claim may be brought under different or multiple sections, clauses or subclauses of Section 10.2 (or with respect to different or multiple representations, warrants or covenants), then the applicable Indemnified Parties shall have the right to bring such Indemnification Claim under any or each such section, clause, subclauses, representation, warranty or covenant (each a “Subject Provision”) that it chooses and the Indemnified Parties will not be precluded from seeking indemnification under any Subject Provision by virtue of the Indemnified Parties not being entitled to seek indemnification under any other Subject Provision.
(b) Response to Claim. If the Seller or Acquiror, as applicable, does not object in writing within thirty (30) days of delivery of a Claim Notice (the “Objection Deadline”) by delivery of a written notice of objection to the Indemnified Party containing a reasonably detailed description of the facts and circumstances (to the extent known or available) supporting an objection to the applicable claim (a “Claim Objection Notice”), such failure to so object shall be an irrevocable acknowledgment by the relevant Party with respect to an Indemnification Claim, that the Indemnified Party is entitled to the full amount of the claim for Losses set forth in such Claim Notice (an “Unobjected Claim”). In such event, the Losses for which the Indemnified Party is entitled payment under the Unobjected Claim shall be satisfied in accordance with Section 10.5(d).
(c) Resolution of Objections to Claims.
(i) With respect to each Indemnification Claim, if the Seller or Acquiror, as applicable, delivers a Claim Objection Notice pursuant to Section 10.5(b) prior to the Objection Deadline with respect to such Indemnification Claim, Acquiror and the Seller shall attempt in good faith for thirty (30) days after the delivery of such Claim Objection Notice to resolve such objection. If Acquiror and the Seller resolve and come to an agreement regarding the claim(s) made in the Claim Objection Notice, a memorandum setting forth such agreement (the “Settlement Memorandum”) shall be prepared and signed by Acquiror and the Seller, which Settlement Memorandum shall be final and conclusive and binding on Acquiror and the Seller. In such event, the Losses for which the Indemnified Parties are entitled payment under the Settlement Memorandum shall be satisfied in accordance with Section 10.5(d).
(ii) With respect to each claim pursuant to Section 10.5(a) as to which a Claim Objection Notice was delivered pursuant to Section 10.5(b), and to which no such agreement can be reached after good faith negotiation and prior to thirty (30) days after the Indemnified Party’s receipt of such Claim Objection Notice (or such later date as may be agreed in writing by Acquiror and the Seller), either Acquiror or the Seller may commence an Action in in accordance with Section 11.11.
(d) Satisfaction of Claims. In the event of an Unobjected Claim or a Settlement Memorandum, or in the event Seller or Acquiror liability has been established pursuant to a final binding decision in accordance with Section 11.11, Acquiror and the Seller shall, subject to the limitations set forth in this Article X, as promptly as practicable thereafter but no later than ten (10) Business Days after the Objection Deadline or the date of the Settlement Memorandum or decision, as the case may be, pay in cash to the Indemnified Party the full amount of the corresponding Losses, provided that Seller shall have no obligation under Section 10.2(a)(v) for any Known Leakage Amount deducted from the Closing Cash Consideration.
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(e) Third-Party Claims.
(i) In the event that a Party becomes aware of third-party claim against an Indemnified Party that such Party in good faith believes constitutes a matter for which such Indemnified Party is entitled to indemnification, compensation, or reimbursement under Section 10.2, as applicable (each, a “Third-Party Claim”), such Party shall give prompt written notice thereof to the other Party. Except with respect to Taxes, such Party shall have the right in its sole and absolute discretion to conduct (and, if necessary assume), the defense and prosecution of and to settle or resolve any such Third-Party Claim, and if such Party does not promptly assume the defense of such Third-Party Claim the costs and expenses incurred by the Indemnified Parties in connection with the investigation, defense, prosecution, and settlement of such Third-Party Claim (including attorneys’, consultants’, experts’ and other professionals’ fees and expenses and court or arbitration costs) shall be Losses for which the Indemnified Parties are entitled to indemnification, compensation and reimbursement pursuant to Section 10.2, subject to the limitations of this Article X, regardless of the outcome of such Third-Party Claim. Acquiror (in the case of Third-Party Claims defended by the Seller) and the Seller (in the case of Third-Party Claims defended by Acquiror) shall have the right to receive copies of all pleadings, material written notices, and material written communications with respect to any Third-Party Claim.
(ii) Except with respect to Taxes, without which shall not be unreasonably withheld, conditioned, or delayed, no Indemnified Party shall consent to any settlement or resolution of any Third-Party Claim (or admit any liability with respect thereto).
(iii) If applicable, the insurers under the R&W Insurance Policy and their agents and advisors shall be permitted to associate effectively with any Party in the defense of any matter which might reasonably constitute a Loss (as defined in the R&W Insurance Policy).
Section 10.6 Tax Treatment.
(a) Any payments made to an Indemnified Party pursuant to any indemnification obligations under this Article X will be treated as adjustments to the Cash Consideration for Tax purposes and such agreed treatment will govern for purposes of this Agreement, unless otherwise required by applicable Law.
Section 10.7 Exclusive Remedy.
(a) From and after the Closing, this Article X shall be the sole and exclusive remedy of the Indemnified Parties against Acquiror or Seller, as applicable, for any monetary damages in connection with this Agreement or the transactions contemplated hereby; provided, however, that (i) this Section 10.7 shall not apply to, or be deemed a waiver by any Party of, (1) any right or claim under this Article X, (2) any claim for specific performance or injunctive relief (including pursuant to Section 11.9), or (3) any right or claim under or related to any Related Agreement, and (ii) nothing in this Agreement shall limit the liability of any Person in connection with Fraud committed by such Person.
(b) Notwithstanding anything to the contrary herein, Acquiror acknowledges and agrees that it is relying exclusively on, and its sole recourse for any actual or alleged breach of any representation or warranty (other than the Fundamental Representations) set forth in this Agreement (or any certificate or other document delivered hereunder) will be, the R&W Insurance Policy.
Section 10.8 No Rescission. Notwithstanding anything in this Agreement to the contrary, no breach of any representation, warranty, covenant or agreement contained in this Agreement shall give rise to any right on the part of any Party, after the consummation of the Contemplated Transactions, to rescind this Agreement or any of the Contemplated Transactions.
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ARTICLE
XI
GENERAL PROVISIONS
Section 11.1 Certain Interpretations. When a reference is made in this Agreement to an Appendix, Exhibit or Schedule, such reference shall be to an Appendix, Exhibit or Schedule to this Agreement unless otherwise indicated. When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. The words “hereof,” “herein,” “hereby” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” is used in the inclusive sense of “and/or.” The terms “or,” “any” and “either” are not exclusive. When used herein, the phrase “to the extent” shall be deemed to be followed by the words “but only to the extent.” The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any statute, rule or regulation shall be deemed to refer to such statute, rule or regulation as amended or supplemented from time to time, including through the promulgation of applicable rules or regulations. References to any Person include the successors and permitted assignees of that Person. References from or through any date mean, unless otherwise specified, from but not including or to but not including, respectively. References to one gender include all genders. When used herein, and references to “$” or “dollar” shall be deemed to be references to dollars of the United States of America. 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, if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day. The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All capitalized terms that are used but not defined herein shall have the respective meanings ascribed to such terms in Section 1.1.
Section 11.2 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, or mailed by registered or certified mail (return receipt requested) or sent via email to the Parties at the following addresses or to such other address as the Party to whom notice is given may have previously furnished to the others in writing in the manner set forth above (provided that notice of any change of address shall be effective only upon receipt thereof):
(a) if to Acquiror (or following the Closing, to the Acquired Companies), to:
FREYR Battery, Inc.
6&8 East Court Square, Suite 300
Newnan, Georgia 30263
Attention: Compliance Officer
Email: compliance-officer@freyrbattery.com
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with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London, EC2N 4BQ, United Kingdom
Attention: Denis Klimentchenko and Sarah Knapp
Email: Denis.Klimentchenko@skadden.com
Sarah.Knapp@skadden.com;
(b) if to the Seller, to:
Trina Solar (Schweiz) AG
No.2 Tianhe Road, Trina PV Industrial Park, Xinbei District, Changzhou, Jiangsu, China.
Attention: Hua Liu
Email: hua.liu@trinasolar.com
with a copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019-6119
United States
Attention: Catherine X. Pan-Giordano
Email: pan.catherine@dorsey.com
All such notices and other communications shall be deemed to have been duly given or sent (i) one Business Day following the date mailed if sent by overnight commercial messenger or courier service or five (5) Business Days following the date mailed if sent by other mail service, (ii) on the date on which delivered personally or (iii) the date on which sent by email transmission, as the case may be, and addressed as aforesaid.
Section 11.3 Confidentiality. Each of the Parties agrees that the information obtained in any investigation prior to the Agreement Date, or otherwise pursuant to the negotiation and execution of this Agreement or the effectuation of the Contemplated Transactions, including, for the avoidance of doubt, in connection with the Conversions and the Conversion Conditions, shall be governed by the terms of the Confidentiality Agreement. Without limiting the foregoing, the Seller and Acquiror shall maintain the confidentiality of, and shall not disclose or use, any Confidential Information or documents provided to, or learned by, Seller or Acquiror, as the case may be, in connection with the Contemplated Transactions except as expressly contemplated by this Agreement; provided, however, each Party may disclose such information, to the extent, (a) required by applicable Law or any applicable rule or regulation having the effect of Law, (b) reasonably required in order to obtain the consents and approvals required under or expressly contemplated by this Agreement, (c) to enforce the terms of this Agreement; provided, further, however, that the Parties may disclose information to their respective Representatives, in each case, to the extent such Representatives have a bona fide need to know such information in connection with the Seller’s or Acquiror’s fulfillment of its duties under this Agreement, and who are subject to confidentiality obligations (whether fiduciary, contractual or otherwise) at least as protective as the restrictions contained herein and the Confidentiality Agreement (provided that the Parties shall be responsible for any action taken or omissions made by their respective Representatives to whom it disclosed information that would have resulted in a violation or breach of the terms of this Agreement by their Representatives if such Representatives were a party hereto, and subject to the terms of, this Agreement as if such Person were the Seller or Acquiror, as applicable).
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Section 11.4 Public Statements and Disclosure. Each of the initial press releases prepared by the Seller and Acquiror, with respect to the execution of this Agreement and Closing shall be in the form agreed to by the Parties, and following such initial press releases, the Seller and Acquiror shall consult with each other before issuing, and give each other the reasonable opportunity to review and comment upon (and consider in good faith any comments made by the other Parties in relation to), any press release or other public statements (or any statements that are reasonably likely to become public) with respect to the Contemplated Transactions and shall not issue any such press release or make any such public statement prior to such consultation and without the prior written consent of (x) the Seller in the case of any such press release or public statement by Acquiror, or (y) Acquiror in the case of any such press release or public statement by the Seller (which consent in the case of (x) or (y) shall not be unreasonably withheld or delayed), except that no such consent shall be required for any such press release or public statement required by applicable Law, court process or by obligations pursuant to any rules of, or listing agreement with, any national securities exchange or national securities quotation system (and then only after as much advance notice to the other Party and consultation as is feasible) if the applicable Party has provided a right to review such press release or public statement (to the extent permissible); provided that neither the Seller nor Acquiror shall be obligated to engage in such consultation with respect to communications (including communications directed to employees, suppliers, customers, partners, vendors or stockholders) that are consistent with public statements previously made in accordance with this Section 11.4 or any communications plan previously agreed to by Acquiror and the Seller. Notwithstanding the foregoing, the restrictions set forth in this Section 11.4 shall not apply to the portion of any release or public statement in connection with any dispute or Action between the Parties regarding this Agreement, the Purchase or the Conversions.
Section 11.5 Expenses. Except as otherwise provided in this Agreement, all Expenses incurred in connection with this Agreement, the Contemplated Transactions shall be paid by the Party incurring such Expenses.
Section 11.6 Amendment. This Agreement may be amended at any time from and after the Closing, by execution and delivery of an instrument in writing signed by each of the Seller and Acquiror.
Section 11.7 Assignment. This Agreement shall not be assigned by operation of law or otherwise without the mutual prior written consent of Acquiror and the Seller, except that Acquiror may assign its rights and delegate its obligations hereunder to its Affiliates as long as Acquiror remains ultimately liable for all of Acquiror’s obligations hereunder and in the case of an assignment by Acquiror, such Affiliate executes and delivers a counterpart signature to this Agreement, in each case, so long as Acquiror is not relieved of any liability or obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective permitted successors and assigns. Any purported assignment in violation of this Section 11.7 shall be void and of no effect.
Section 11.8 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties hereto. The Parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
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Section 11.9 Specific Performance and Other Remedies.
(a) The Parties hereby expressly recognize and acknowledge that immediate, extensive and irreparable damage would result, no adequate remedy at law would exist, and damages would be difficult to determine in the event that any provision of this Agreement is not performed in accordance with its specific terms or otherwise breached. The Parties to this Agreement agree that, in the event of any breach or threatened breach by the other Party of any covenant, obligation or other agreement set forth in this Agreement or any Related Agreement, (i) each Party shall be entitled, without any proof of actual damages (and in addition to any other remedy that may be available to it), to seek a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other agreement and an injunction preventing or restraining such breach or threatened breach, and (ii) no Party shall be required to provide or post any bond or other security or collateral in connection with any such decree, order or injunction or in connection with any related action or Action.
(b) The liability of a Party under Article X will be in addition to any other liability that a Party may have at law or in equity based on such Party’s Fraud. Notwithstanding anything to the contrary contained in this Agreement, none of the provisions set forth in this Agreement, including the provisions set forth in Article X, shall be deemed a waiver by a Party of any right or remedy which such Party may have at law or in equity based on the other Party’s Fraud, nor will any such provisions limit, or be deemed to limit (i) the amounts of recovery sought or awarded in any such claim for Fraud, (ii) the time period during which a claim for Fraud may be brought or (iii) the recourse which a Party may seek against another Person with respect to a claim for Fraud.
Section 11.10 Governing Law. This Agreement, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Agreement, any Related Agreement (in each case, other than Related Agreements that expressly select a different governing law), or the negotiation, administration, performance, or enforcement of this Agreement or any Related Agreement (in each case, other than Related Agreements that expressly select a different governing law), including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Agreement or any Related Agreement (in each case, other than Related Agreements that expressly select a different governing law), shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
Section 11.11 Consent to Jurisdiction. Each of the Parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts) in any Action based on, arising out of or relating to this Agreement or the Contemplated Transaction, for and on behalf of itself or any of its properties or assets, in accordance with Section 11.2 or in such other manner as may be permitted by applicable Law, and nothing in this Section 11.11 shall affect the right of any Party to serve legal process in any other manner permitted by applicable Law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Agreement or the Contemplated Transactions; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Agreement or the Contemplated Transactions shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Agreement or the Contemplated Transactions in any court other than the Chosen Courts. Each of Acquiror and Seller agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable Law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 11.11, each Party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 11.2. Nothing in this Section 11.11 shall affect t right of any Party to serve process in any other manner permitted by Law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Agreement or the Contemplated Transactions or (y) be deemed to confer rights on any Person other than the Parties.
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Section 11.12 WAIVER OF JURY OF TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS AGREEMENT OR THE CONTEMPLATED TRANSACTIONS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTION. EACH PARTY ACKNOWLEDGES AND AGREES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 11.12.
Section 11.13 Entire Agreement. This Agreement, the Annexes, Exhibits and Schedules hereto, the Seller Disclosure Statement, the Acquiror Disclosure Statement, the Related Agreements, and the documents and instruments and other agreements among the Parties referenced herein constitute the entire agreement among the Parties with respect to the subject matter of this Agreement and the Related Agreements and supersede all prior agreements and understandings both written and oral, among the Parties with respect to the subject matter of this Agreement and the Related Agreements.
Section 11.14 Third-Party Beneficiaries. The Parties agree that their respective representations, warranties, covenants, and agreements set forth in this Agreement are solely for the benefit of the other Party in accordance with and subject to the terms of this Agreement and, except in the case of Fraud, this Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against, the Parties. This Agreement is not intended to and shall not confer upon any other Person any rights or remedies under this Agreement.
Section 11.15 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in.PDF format or by facsimile shall be sufficient to bind the Parties to the terms and conditions of this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Acquiror and the Seller have caused this Agreement to be executed as of the date first written above.
| FREYR BATTERY, INC. | |||
| By: | /s/ Daniel Barcelo | ||
| Name: | Daniel Barcelo | ||
| Title: | Authorized Signatory | ||
[Signature Pages to Transaction Agreement]
IN WITNESS WHEREOF, Acquiror and the Seller have caused this Agreement to be executed as of the date first written above.
| TRINA SOLAR (SCHWEIZ) AG. | |||
| By: | /s/ Mingxing Lin | ||
| Name: | Mingxing Lin | ||
| Title: | Authorized Signatory | ||
[Signature Pages to Transaction Agreement]
ANNEX A
ACQUIRED COMPANIES
Jurisdiction |
Acquired Company | Equity Owner | Seller’s Direct and Indirect Equity Interest (%) |
| Delaware | Trina Solar (U.S.) Holding Inc. | Seller | 100% |
| Delaware | Trina Solar US Manufacturing Holding, Inc. | Trina Solar (U.S.) Holding Inc. | 100% |
| Texas | Trina Solar US Manufacturing Module Associated Entity 1, LLC | Trina Solar US Manufacturing Holding, Inc. | 100% |
| Texas | Trina Solar US Manufacturing Module 1, LLC |
Trina Solar US Manufacturing Holding, Inc. and Trina Solar US Manufacturing Module Associated Entity 1, LLC |
100% |
| Oklahoma | Trina Solar US Manufacturing Cell 1, LLC | Trina Solar US Manufacturing Holding, Inc. | 100% |
ANNEX B
EXCLUDED COMPANIES
| ● | Trina Solar US Development LLC |
| ● | Pennsville Landfill Solar, LLC |
| ● | Trina Solar US SBU LLC (US) |
| ● | Woods Road, LLC |
| ● | Trina Solar Latam Services (US) |
| ● | Trina Solar (Tracker Solutions Inc.) |
| ● | Trina Solar (U.S.), Inc. |
| ● | Trina Solar (U.S.) Equity Holding Inc. |
| ● | Lonestar (US) |
Exhibit 10.1
[CERTAIN INFORMATION IN THIS EXHIBIT IDENTIFIED BY [***] IS CONFIDENTIAL AND HAS BEEN EXCLUDED BECAUSE IT (I) IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.]
CONVERTIBLE SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This CONVERTIBLE SERIES A PREFERRED STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of November 6, 2024, is entered into by and between FREYR Battery, Inc., a Delaware corporation (“FREYR” or the “Company”), and each of the entities listed in Schedule I to this Agreement (each a “Purchaser” and collectively, the “Purchasers”). FREYR and the Purchasers are referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS:
WHEREAS, the Company has commenced a non-voting convertible preferred equity offering (the “Preferred Equity Offering”), pursuant to which the Company has offered the Purchasers an opportunity to purchase shares of Series A Preferred Stock (as defined herein), substantially on the terms and conditions set forth in the Certificate of Designation of Series A Convertible Preferred Stock of FREYR Battery, Inc. attached to this Agreement as Exhibit C (the “Certificate of Designation”); and
WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase from the Company, Series A Preferred Stock, as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following terms shall have the following meanings:
“Action” means any demand, claim, charge, action, suit, investigation, proceeding (whether at law or in equity), hearing, inquiry, audit, examination petition, complaint, notice of violation, arbitration or other litigation or similar proceeding, whether arbitral, civil, criminal, administrative, investigative or appellate proceeding, commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or arbitration panel.
“Addendum” has the meaning assigned to it in Section 9.9.
“Affiliate” of any Person means another Person that directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with, such first Person.
“Agreement” has the meaning assigned to it in the preamble hereto; it includes the Exhibits and Schedules hereto.
“Anti-Corruption Laws” has the meaning assigned to it in Section 3.10(b).
“Assumption Agreement” has the meaning assigned to it in Section 9.9.
“Business Day” means any day other than Saturday, Sunday or other day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed.
“Certificate of Designation” has the meaning assigned to it in the Recitals hereto.
“Chosen Courts” has the meaning assigned to it in Section 9.13.
“Common Stock” means shares of common stock of the Company, par value $0.01 per share.
“Company” has the meaning assigned to it in the preamble hereto.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled” and “under common Control with” have correlative meanings.
“Encumbrance” means any security interest, pledge, mortgage, lien, claim, option, charge, restriction or encumbrance.
“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.
“Environmental Laws” means any and all current foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, applicable to the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by the Company.
“First Tranche” has the meaning assigned to it in Section 2.1(a).
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“First Tranche Closing” has the meaning assigned to it in Section 2.3(a).
“First Tranche Closing Actions” has the meaning assigned to it in Section 2.4.
“First Tranche Closing Date” means the date upon which the closing of the TUMH Transaction occurs.
“First Tranche Purchase Price” has the meaning assigned to it in Section 2.2.
“FREYR” has the meaning assigned to it in the preamble hereto.
“Governmental Authority” means any (a) federal, state, provincial, local or other government (U.S. or non-U.S.), (b) any federal, state, provincial, local, or other governmental or supra-national entity, regulatory or administrative authority, taxing authority, agency, department, board, division, instrumentality or commission, educational agency, political party, body, or judicial or arbitral body, board, tribunal, or court (U.S. or non-U.S.), (c) any public international organization (e.g., the World Bank), (d) any industry self-regulatory authority or (e) any business, entity, or enterprise owned or controlled by any of the foregoing.
“Hazardous Materials” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.
“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.
“Law” means any U.S. or non-U.S. federal, state, provincial, local or other constitution, law, statute, ordinance, rule, directive, regulation, published administrative position, policy or principle of common law issued, enacted, adopted, promulgated, implemented or otherwise put into legal effect by or under the authority of any Governmental Authority and any judgments, decisions, orders and awards made in respect of the foregoing.
“Lien” has the meaning assigned to it in Section 3.3.
“Lock-Up Agreement” means that certain lock-up agreement entered into by and among the Company and the Purchasers on the First Tranche Closing Date.
“Losses” has the meaning assigned to it in Section 5.6(c)(i).
“Lower Conversion Price” has the meaning assigned to it in Section 5.7.
“Material Adverse Effect” has the meaning assigned to it in Section 3.1.
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“Material Contracts” means all “material contracts” of the Company within the meaning of Item 601 of Regulation S-K of the SEC.
“NYSE” means the New York Stock Exchange.
“Offering Documents” means, collectively, all agreements, documents, or instruments related to or in connection with the Preferred Equity Offering, including this Agreement and any other documents or exhibits related to or contemplated in the foregoing.
“Order” means any order, judgment, injunction, ruling, edict, or other decree, whether non-final, final, temporary, preliminary or permanent, enacted, issued, promulgated, enforced or entered by any Governmental Authority.
“Party” or “Parties” has the meaning assigned to it in the preamble hereto.
“Permitted Lien” has the meaning assigned to it in Section 3.3.
“Person” means any individual or entity, including a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority (or any department, agency, or political subdivision thereof).
“Preferred Equity Offering” has the meaning assigned to it in the Recitals hereto.
“Preferred Stock” means the non-voting Convertible Series A Preferred Stock of the Company.
“Prospectus” has the meaning assigned to it in Section 5.6(c)(i).
“Purchasers” has the meaning assigned to it in the preamble hereto.
“Registrable Securities” has the meaning assigned to it in Section 5.6(a).
“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.
“Restricted Person” has the meaning assigned to it in Section 3.10(a).
“Resulting Common Stock” means any shares of Series A Preferred Stock converted to shares of Common Stock of the Company.
“Sanctioned Jurisdiction” has the meaning assigned to it in Section 3.10(a).
“Sanctioned Person” has the meaning assigned to it in Section 3.10(a).
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“Sanctions” has the meaning assigned to it in Section 3.10(a).
“Second Tranche” has the meaning assigned to it in Section 2.1(b).
“Second Tranche Closing” has the meaning assigned to it in Section 2.3(b).
“Second Tranche Closing Actions” has the meaning assigned to it in Section 2.5(c).
“Second Tranche Closing Date” means the date of issuance of the Second Tranche, being a date falling within 30 days following the date that the Company proceeds with its final investment decision with respect to the TUM 2 facility.
“Second Tranche Option” has the meaning assigned to it in Section 2.1(b).
“Second Tranche Purchase Price” has the meaning assigned to it in Section 2.2.
“SEC” means the U.S. Securities and Exchange Commission.
“SEC Documents” has the meaning assigned to it in Section 3.7(a).
“Securities Act” means the Securities Act of 1933, as amended.
“Subsidiary” has the meaning assigned to it in Section 3.1.
“Survival Period” has the meaning assigned to it in Section 9.3.
“Total Purchase Price” has the meaning assigned to it in Section 2.2.
“Treasury” means the U.S. Department of the Treasury.
“TUMH Transaction” means the proposed acquisition by the Company of certain solar cell manufacturing assets from Trina Solar (Schweiz) AG and related transactions.
“TUMH Transaction Agreement” has the meaning assigned to it in Section 3.11(a).
“TUM 2” means Trina Solar US Manufacturing Cell 1, LLC, a limited liability company organized under the laws of Oklahoma.
“Underlying Shares” has the meaning assigned to it in Section 5.6(a).
Section 2. AGREEMENT TO SELL AND PURCHASE.
2.1 Sale and Purchase of Shares.
(a) First Tranche. Subject to the terms of this Agreement, at the First Tranche Closing, the Company hereby agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees to purchase from the Company, the number of shares of Series A Preferred Stock set out against their name in Schedule I, free and clear of all Encumbrances (the “First Tranche”).
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(b) Second Tranche. Following the completion of the First Tranche and subject to the terms of this Agreement, upon the Company’s notice to the Purchasers of its decision (in its sole discretion) to exercise its option to issue and sell to the Purchasers an additional 5 million shares of Series A Preferred Stock (the “Second Tranche Option”), the Company agrees to issue and sell to each Purchaser, and each Purchaser agrees to purchase from the Company, the additional number of shares of Series A Preferred Stock set out against their name in Schedule I, free and clear of all Encumbrances at the Second Tranche Closing (the “Second Tranche”). The Purchasers shall have the right, upon providing at least five (5) Business Days’ notice to the Company, to reallocate amongst themselves the Series A Preferred Stock to be issued pursuant to the exercise of the Second Tranche Option.
2.2 Purchase Price. The purchase price for the Series A Preferred Stock to be purchased by the Purchasers hereby shall be $10.00 per share such that the aggregate purchase price to be paid by the Purchasers shall be (i) $50 million with respect to the First Tranche (the “First Tranche Purchase Price”) and (ii) $50 million with respect to the Second Tranche (the “Second Tranche Purchase Price”). The aggregate purchase price of the First Tranche and the Second Tranche shall be $100 million and shall be referred to herein as the “Total Purchase Price”.
2.3 Closing.
(a) First Tranche Closing. Subject to the terms of this Agreement, the closing of the First Tranche (the “First Tranche Closing”), will occur on the First Tranche Closing Date, unless otherwise agreed by the mutual consent of the Parties. The First Tranche Closing shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom (UK) LLP, 22 Bishopsgate, London, United Kingdom, EC2N 4BQ or such other place as the Parties mutually agree. The Parties agree that the First Tranche Closing may occur via delivery of facsimiles or photocopies of the applicable Offering Documents. Unless otherwise provided herein, all proceedings to be taken and all documents to be executed and delivered by all Parties at the First Tranche Closing will be deemed to have been taken and executed simultaneously, and no proceedings will be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered.
(b) Second Tranche Closing. Subject to the terms of this Agreement, the closing of the Second Tranche (the “Second Tranche Closing”), will occur on the Second Tranche Closing Date, unless otherwise agreed by the mutual consent of the Parties. The Second Tranche Closing shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom (UK) LLP, 22 Bishopsgate, London, United Kingdom, EC2N 4BQ or such other place as the Parties mutually agree. The Parties agree that the Second Tranche Closing may occur via delivery of facsimiles or photocopies of the applicable Offering Documents. Unless otherwise provided herein, all proceedings to be taken and all documents to be executed and delivered by all Parties at the Second Tranche Closing will be deemed to have been taken and executed simultaneously, and no proceedings will be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered.
2.4 Actions at the First Tranche Closing. At the First Tranche Closing, the Purchasers and the Company (as applicable) shall take or cause to be taken the following actions (“First Tranche Closing Actions”):
(a) Form W-9. The Purchasers (and, as applicable, each of their respective transferees as designated in accordance with Section 2.7 and Section 9.9, the Addendum and the Assumption Agreement) shall deliver to the Company a completed and executed U.S. Internal Revenue Service Form W-9.
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(b) Payment of the First Tranche Purchase Price. The Purchasers shall pay the First Tranche Purchase Price in respect of the shares purchased by the Purchasers pursuant to Section 2.1(a) to the Company by wire transfer of immediately available funds to the account specified by the Company to the Purchasers in writing not less than five (5) Business Days prior to the First Tranche Closing.
(c) Issuance of Series A Preferred Stock. The Company shall deliver to the Purchasers a true, correct and complete certificate, or other applicable evidence of ownership acceptable to the Purchasers, representing the shares of Series A Preferred Stock in the First Tranche purchased by the Purchasers pursuant to Section 2.1(a), duly authorized by all requisite corporate action on the part of the Company, together with all instruments of transfer in respect of the Purchasers’ interests in such shares, and in the form required by the Certificate of Designation.
2.5 Actions at the Second Tranche Closing. Subject to the Company’s exercise of the Second Tranche Option, at the Second Tranche Closing, the Purchasers and the Company (as applicable) shall take or cause to be taken the following actions (“Second Tranche Closing Actions”):
(a) Form W-9. The Purchasers (and, as applicable, each of their respective transferees as designated in accordance with Section 2.7 and Section 9.9) shall deliver to the Company a completed and executed U.S. Internal Revenue Service Form W-9.
(b) Payment of the Second Tranche Purchase Price. The Purchasers shall pay the Second Tranche Purchase Price in respect of the shares purchased by the Purchasers pursuant to Section 2.1(b) to the Company by wire transfer of immediately available funds to the account specified by the Company to the Purchasers in writing not less than five (5) Business Days prior to the Second Tranche Closing.
(c) Issuance of Series A Preferred Stock. The Company shall deliver to the Purchasers a true, correct and complete certificate, or other applicable evidence of ownership acceptable to the Purchasers, representing the shares of Series A Preferred Stock in the Second Tranche purchased by the Purchasers pursuant to Section 2.1(b), duly authorized by all requisite corporate action on the part of the Company, together with all instruments of transfer in respect of the Purchasers’ interests in such shares, and in the form required by the Certificate of Designation.
2.6 Transfer Taxes. All of the Series A Preferred Stock issued to the Purchasers pursuant to this Agreement will be delivered with any and all issue, stamp, transfer or similar taxes or duties payable in connection with such delivery duly paid by the Company.
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2.7 Restrictions on Transferability. Section 1 of the Lock-Up Agreement (Lock-Up) is hereby incorporated by reference herein, mutatis mutandis.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to each Purchaser as of the date hereof and as of each of the First Tranche Closing Date and, if the Second Tranche Closing occurs, the Second Tranche Closing Date (except for representations and warranties that are made as of a specific date, which are made only as of such date), on behalf of itself and not any other Party, as follows:
3.1 Organization and Good Standing. The Company and each Subsidiary (as defined below) of the Company is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and the Company and each Subsidiary of the Company has all requisite corporate or other organizational power and authority to carry on its businesses as now being conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the condition (financial or otherwise), prospects, earnings, business or properties of the Company and the Subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business or (ii) the ability of the Company to perform its obligations under this Agreement. For purposes of this Agreement, “Subsidiary” means any entity in which the Company, directly or indirectly, owns any of the outstanding capital stock, equity or similar interests or voting power of such entity at the time of this Agreement or at any time hereafter, whether directly or through any other Subsidiary.
3.2 Authorization; Enforcement; Validity.
(a) The Company has all requisite corporate power and authority to enter into this Agreement in connection with the transactions contemplated hereby, and to issue and deliver the Series A Preferred Stock in accordance with the terms hereof. The execution and delivery by the Company of this Agreement and the consummation of the issuance and delivery of the Series A Preferred Stock and the Company’s obligations hereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of the Company.
(b) This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
3.3 No Conflicts. The execution and delivery by the Company of this Agreement, and the consummation of the contemplated transactions herein (including, without limitation, the issuance of the Series A Preferred Stock and Resulting Common Stock), will not (a) result in the creation or imposition of any Lien (other than Permitted Liens) upon the assets of the Company and (b) result in or give rise to any conflict in (i) any provision of the organizational documents of the Company, as amended, (ii) any Material Contract, or (iii) any Law or Order applicable to the Company or any of its properties or assets (whether tangible or intangible) (including the listing rules set forth by the NYSE), except, in each of clauses (a) and (b), as would not be expected to have a Material Adverse Effect. For the purposes of this Agreement, “Lien” means any lien, pledge, charge, claim, mortgage, security interest or other encumbrance of any kind or character whatsoever and “Permitted Lien” means (a) statutory Liens securing payments not yet due, (b) Liens with respect to the payment of taxes, in all cases that are not yet due or payable, (c) statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen, service providers or workmen and other similar Liens imposed by applicable law created in the ordinary course of business for amounts that are not yet due and payable, and (d) licenses of or other grants of rights to use or obligations with respect to intellectual property.
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3.4 Consents and Approvals. The execution, delivery and performance by the Company of this Agreement (including, without limitation, the issuance of the Series A Preferred Stock and Resulting Common Stock) do not require any (a) consent, approval, authorization or other Order of, action by, filing with or notification to, any Governmental Authority or any other Person under any of the terms, conditions or provisions of any Law or Order applicable to the Company or by which any of its or their assets or properties may be bound, any contract or agreement to which the Company is a party or by which the Company may be bound, except for any consent, approval, authorization or other Order of, action by, filing with or notification to, any Governmental Authority or any other Person under any of the terms, conditions or provisions of any Law or Order applicable to the Company that, if not made or obtained, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or (b) shareholder approvals or consents required by the listing rules set forth by the NYSE.
3.5 Company Capital Structure. The only authorized shares of capital stock of the Company as of the date of this Agreement, are (a) 355,000,000 shares of Common Stock, of which 140,500,000 shares of Common Stock that are issued and outstanding, and (b) 10,000,000 shares of preferred stock, of which no shares are outstanding as of the date of this Agreement, and assuming filing of the Certificate of Designation with the Secretary of State of the State of Delaware 5,000,000 of which will be outstanding as of the First Tranche Closing Date and 10,000,000 of which will be outstanding as of the Second Tranche Closing Date.
3.6 Valid Issuance. The Series A Preferred Stock will be duly authorized, validly issued, fully paid and non-assessable, and free of all Liens and restrictions on transfer, other than restrictions on transfer under (a) this Agreement, the Company’s certificate of incorporation, as may be amended, or amended and restated, from time to time in accordance with this Agreement, or the Certificate of Designation and (b) applicable securities laws, assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 4, and will not have been issued in violation of or subject to any preemptive or similar rights created under the Company’s organization documents or under the laws of the state of Delaware.
3.7 SEC Reports; Financial Statements.
(a) Since June 14, 2021, the Company has filed or otherwise furnished on a timely basis, as applicable, all registration statements, prospectuses, forms, reports, proxy statements, schedules, statements and documents required to be filed or furnished by it under the Exchange Act, as the case may be, together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder (collectively, “Sarbanes-Oxley”) (the “SEC Documents”). As of their respective filing dates, the SEC Documents did not contain any untrue statement of a material fact or omit 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, and complied as to form with the applicable requirements of the Exchange Act or the Securities Act, as the case may be, and the applicable regulations of the SEC thereunder and the listing and corporate governance rules and regulations of the NYSE.
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(b) The audited financial statements of the Company included in the SEC Documents fairly present in all material respects the financial position and results of operations of the Company as of the dates and for the periods referred to therein in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved.
3.8 Absence of Certain Changes. Since September 30, 2024, and prior to the date hereof, (a) the operations of the Company have been conducted in the ordinary course of business, and (b) no Material Adverse Effect has occurred.
3.9 Absence of Litigation.
(a) Other than as disclosed in the SEC Documents, since January 1, 2021, to the knowledge of the Company, there have been no material Actions against the Company, any of its respective properties or tangible assets or any of its officers or directors (in their capacity as such) as a party. There is no material outstanding Order, judgment, ruling, arbitral award, or other decision (including provisional remedies and injunctions) that specifically relates to and binds the Company, any of its respective properties or tangible assets or any of its officers or directors (in their capacity as such).
(b) There is no current, pending, or to the knowledge of the Company, threatened, Action of any nature against the Company, arising out of or relating to the Company’s capacity hereunder. There is no current or pending or, to the knowledge of the Company, threatened investigation or proceeding, against the Company arising out of or relating to the matters noted in the preceding sentence by or before any Governmental Agency.
3.10 Anti-Bribery and Corruption; Sanctions and Compliance.
(a) Sanctions and Trade Laws. Neither the Company, nor any of its directors, officers, employees or agents is a Sanctioned Person or a Restricted Person.
For the purposes of this Agreement, “Sanctioned Person” means any Person that is a target of Sanctions, including as a result of being: (a) listed on any Sanctions list maintained by the United States (including, without limitation, the Treasury’s Office of Foreign Assets Control and the Department of State), (ii) the European Union, (iii) any European Union member state, (iv) the United Nations, (v) the United Kingdom or (vi) any other governmental agency of a jurisdiction in which the Company conducts its business; (b) located, organized or resident in a Sanctioned Jurisdiction; or (c) directly or indirectly owned fifty percent or more or controlled, individually or in the aggregate, by one or more Persons described in the foregoing clauses (a) or (b); “Sanctions” means all applicable trade, economic and financial sanctions, embargoes, laws, and restrictive measures administered, enacted or enforced by (i) the United States (including, without limitation, the Treasury’s Office of Foreign Assets Control and the Department of State), (ii) the European Union, (iii) any European Union member state, (iv) the United Nations, (v) the United Kingdom, or (vi) any other governmental agency of a jurisdiction in which the Company or the Purchasers conduct business; “Restricted Person” means any Person on the U.S. Department of Commerce’s Entity List, Denied Persons List, Unverified List, or Military End User List or the U.S. Department of State’s Debarred List; and “Sanctioned Jurisdiction” means a country or territory that is itself the subject of comprehensive country- or territory-wide Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine), and the non-government controlled areas of Ukraine in the oblasts of Kherson and Zaporizhzhia).
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(b) Anti-Corruption Laws. Since January 1, 2021, the Company, its respective officers or directors, (or to the knowledge of the Company, the Company’s employees or agents) are not in violation of any applicable Anti-Corruption Law or has directly or knowingly indirectly, made, offered, promised, authorized, accepted or agreed to receive, any unlawful payment, gift, bribe or kickback: (a) to or for the benefit of any person for the purposes of influencing any official act or decision; (b) to secure any improper advantage; or (c) to induce any person to do or omit to do any act in violation of the lawful duty of such person; and (d) in relation to clauses (b) through (c) above, with the intention of winning or retaining business or a business advantage for any person, including the Company or any of its Affiliates. The Company has established and maintains a compliance program and adequate internal controls and procedures reasonably designed to ensure that the Company and its respective Affiliates and representatives (to the extent acting on their behalf) do not violate any Anti-Corruption Laws. The Company, its officers or directors or employees have (i) made any voluntary, directed or involuntary disclosure to any governmental agency with respect to any actual, alleged or reasonably suspected violation of any Anti-Corruption Laws, (ii) been the target of a past, current, pending or threatened whistleblower report, or investigation, or enforcement proceeding by a governmental agency for any actual or alleged violation of Anti-Corruption Laws, or (iii) received any written or, to the knowledge of the Company, other notice concerning any actual or alleged violation of any Anti-Corruption Laws. No employee of, or holder of a financial interest in, the Company, their respective Affiliates, is currently a governmental official.
For the purposes of this Agreement, “Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended, the United Kingdom Bribery Act of 2010 and any other applicable laws concerning anti-corruption, anti-bribery, or anti-money laundering of any other jurisdiction in which the Company conducts business, including, without limitation, applicable laws passed pursuant to the Organization of Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
3.11 TUMH Transaction Agreement.
(a) As of the date hereof, that certain transaction agreement, in the form furnished by the Company with the SEC on a Current Report on Form 8-K dated as of the date hereof (the “TUMH Transaction Agreement”) is in final or substantially final form.
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(b) If the Second Tranche Closing occurs, as of the date of the Second Tranche Closing, the TUMH Transaction Agreement shall have been duly executed and delivered by the parties thereto.
3.12 Ownership of Property. The Company has good title to each of the properties and assets material to its business, and all such properties and assets are free and clear of liens and except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
3.13 Securities Exemption. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 4 of this Agreement, no registration under the Securities Act is required for the offer and sale of any of the Series A Preferred Stock by the Company to the Purchasers. Neither the Company nor any person acting on its behalf has taken any action, directly or indirectly, including making any offer or sale of any Company security or solicited any offers to buy any security in violation of the Securities Act or under circumstances that would cause the offer and sale of the Series A Preferred Stock by the Company to the Purchasers contemplated hereby to fail to be entitled to the exemption from the registration requirements of the Securities Act (other than offers or sales of securities under an employee benefit plan as defined in Rule 405 under the Securities Act).
3.14 No General Solicitation. Neither the Company nor any person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Series A Preferred Stock in violation of the Securities Act.
3.15 No Broker. Neither the Company nor any person acting on its behalf is under any obligation to pay any broker’s fee or finder’s fee or commission in connection with the sale of the Series A Preferred Stock.
3.16 Investment Company. The Company is not, and immediately after receipt of payment for the Series A Preferred Stock the Company will not be, subject to registration as an “investment company” under the Investment Company Act of 1940, as amended.
3.17 Compliance with Laws. The Company is in compliance with all applicable Laws, except where such non-compliance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date hereof, the Company has not received any written communication from a Governmental Authority that alleges that the Company is not in compliance with or is in default or violation of any applicable Law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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3.18 Environmental Laws. Neither the Company nor any of their respective Facilities (including any facilities of any of their predecessors) or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Except as could not reasonably be expected to have a Material Adverse Effect, the Company has not received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law. There are and, to the Company’s knowledge, have been, no conditions, occurrences, or Hazardous Materials Activities which could reasonably be expected to form the basis of an Environmental Claim against the Company that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither the Company nor, to the Company’s knowledge, any predecessor of the Company has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Facility (including any facilities of any of their predecessors), and none of the Company’s operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. No event or condition has occurred or is occurring with respect to the Company relating to any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity which individually or in the aggregate has had, or could reasonably be expected to have, a Material Adverse Effect. For the avoidance of doubt, this Section 3.18 shall not apply to any facilities acquired by the Company as contemplated in connection with the TUMH Transaction.
3.19 Labor Matters. The Company is not engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect. There is (a) no unfair labor practice complaint pending or, to the knowledge of the Company, threatened against the Company before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement to which the Company is a party is pending or, to the knowledge of the Company, threatened against the Company, (b) no strike or work stoppage in existence or, to the knowledge of the Company, threatened involving the Company, and (c) to the knowledge of the Company, no union representation question existing with respect to the employees of the Company and, to the knowledge of the Company, no union organization activity that is taking place, except (with respect to any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate) as is not reasonably likely to have a Material Adverse Effect.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser represents and warrants to the Company as of the date hereof and as of the First Tranche Closing Date and, if the Second Tranche Closing occurs, the Second Tranche Closing Date (except for representations and warranties that are made as of a specific date, which are made only as of such date), as follows:
4.1 Organization and Qualification. Such Purchaser has been duly organized and is validly existing and, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, is in good standing under the laws of its jurisdiction of organization, with the requisite power and authority to own its properties and conduct its business as currently conducted.
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4.2 Authorization; Enforcement; Validity. Such Purchaser has all necessary corporate, limited liability company or equivalent power and authority to enter into this Agreement and to carry out, or cause to be carried out, its obligations hereunder in accordance with the terms hereof. The execution and delivery by such Purchaser of this Agreement and the performance by such Purchaser of its obligations hereunder have been duly authorized by all requisite action on the part of such Purchaser, and no other action on the part of such Purchaser is necessary to authorize the execution and delivery by such Purchaser of this Agreement or the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by such Purchaser, and assuming due authorization, execution and delivery by the Company, this Agreement constitutes the legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.
4.3 No Conflicts. The execution, delivery, and performance by such Purchaser of this Agreement do not and will not (a) violate any provision of the organizational documents of such Purchaser; (b) conflict with or violate any Law or Order applicable to such Purchaser or any of its respective assets or properties; or (c) violate, conflict with, result in any breach of, constitute a default (or 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, amendment, acceleration, suspension, revocation or cancellation of, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which such Purchaser is a party or to which any of its assets or properties are subject, or result in the creation of any Encumbrance on any of its assets or properties, except, in the case of clauses (b) and (c), for any such conflict, violation, breach or default that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
4.4 Consents and Approvals. The execution, delivery and performance by such Purchaser of this Agreement do not require such Purchaser to obtain any consent, approval, authorization or other Order of, action by, filing with or notification to, any Governmental Authority or any other Person under any of the terms, conditions or provisions of any Law or Order applicable to such Purchaser or by which any of its assets or properties may be bound, any contract to which such Purchaser is a party or by which such Purchaser may be bound, except for any consent, approval, authorization or other Order of, action by, filing with or notification to, any Governmental Authority or any other Person under any of the terms, conditions or provisions of any Law or Order applicable to such Purchaser that, if not made or obtained, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to such Purchaser.
4.5 Purchaser Representation. (i) Such Purchaser is either (A) a qualified institutional buyer as defined in Rule 144A of the Securities Act, (B) an accredited investor as defined in Rule 501(a)(1), (2), (3), (7) or (8) under the Securities Act, (C) a non-U.S. person under Regulation S under the Securities Act, or (D) the foreign equivalent of (A) or (B) above, and (ii) any securities of the Company acquired by such Purchaser under this Agreement will have been acquired for investment and not with a view to distribution or resale in violation of the Securities Act.
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4.6 Sufficient Funds. Such Purchaser has sufficient assets (or the ability to call sufficient capital from its equityholders) and the financial capacity to perform all of its obligations under this Agreement, including the ability to fully fund the Total Purchase Price by the First Tranche Closing.
4.7 Anti-Bribery and Corruption; Sanctions and Compliance.
(a) Sanctions and Trade Laws. Neither such Purchaser, nor any of its directors, officers, employees or agents is a Sanctioned Person or a Restricted Person.
(b) Anti-Corruption Laws. Since January 1, 2021, such Purchaser, its respective officers or directors, (or to the knowledge of such Purchaser, its employees or agents) are not in violation of any applicable Anti-Corruption Law or has directly or knowingly indirectly, made, offered, promised, authorized, accepted or agreed to receive, any unlawful payment, gift, bribe or kickback: (a) to or for the benefit of any person for the purposes of influencing any official act or decision; (b) to secure any improper advantage; or (c) to induce any person to do or omit to do any act in violation of the lawful duty of such person; and (d) in relation to clauses (b) through (c) above, with the intention of winning or retaining business or a business advantage for any person, including such Purchaser or any of its Affiliates. Such Purchaser has established and maintains a compliance program and adequate internal controls and procedures reasonably designed to ensure that such Purchaser and its respective Affiliates and representatives (to the extent acting on their behalf) do not violate any Anti-Corruption Laws. Such Purchaser, its officers or directors or employees have (i) made any voluntary, directed or involuntary disclosure to any governmental agency with respect to any actual, alleged or reasonably suspected violation of any Anti-Corruption Laws, (ii) been the target of a past, current, pending or threatened whistleblower report, or investigation, or enforcement proceeding by a governmental agency for any actual or alleged violation of Anti-Corruption Laws, or (iii) received any written or, to the knowledge of such Purchaser, other notice concerning any actual or alleged violation of any Anti-Corruption Laws. No employee of, or holder of a financial interest in, the Purchaser or its Affiliates is currently a governmental official.
4.8 Securities Exemption. Neither such Purchaser nor any person acting on its behalf has taken any action, directly or indirectly, in violation of the Securities Act or under circumstances that would cause the offer and sale of the Series A Preferred Stock by the Company to such Purchaser contemplated hereby to fail to be entitled to the exemption from the registration requirements of the Securities Act.
Section 5. ADDITIONAL COVENANTS.
5.1 Commercially Reasonable Efforts. Each of the Company and the Purchasers hereby agrees to use their commercially reasonable efforts to timely satisfy (if applicable) each of the conditions applicable to such Party under Sections 6 and 7, respectively, of this Agreement.
5.2 Further Assurances. Each Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other Party may reasonably request to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
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5.3 Use of Proceeds. The Company shall use the proceeds from the Preferred Equity Offering primarily for working capital and for general corporate purposes.
5.4 Expenses. The Company shall bear all of its own expenses in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including without limitation all fees and expenses of its agents, representatives, counsel and accountants.
5.5 Public Announcements. No press release or other public announcement related to this Agreement or the transactions contemplated herein shall be issued or made without the joint approval of the Company and the Purchasers, unless such release or announcement is required by law or the rules of any securities exchange on which securities of the Company are traded (including, for the avoidance of doubt, any Current Report on Form 8-K required to be filed by the Company with the SEC describing this Agreement or the transactions contemplated herein), in which case the Purchasers shall be afforded a reasonable opportunity to review such public announcement prior to publication.
5.6 Registration; Indemnification.
(a) The Company agrees that as soon as practicable following the First Tranche Closing and in any event within 90 calendar days following the First Tranche Closing Date, the Company will submit or file with the SEC a registration statement for a shelf registration on Form S-3 (or Form S-1 if Form S-3 is not available to the Company at such time), covering the resale of (i) the shares of Series A Preferred Stock (x) issued and sold under the First Tranche and (y) that may be issued and sold under the Second Tranche and (ii) the shares of Common Stock underlying the Series A Preferred Stock (the “Underlying Shares”) (x) issued and sold under the First Tranche and (y) that may be issued and sold under the Second Tranche (collectively, the “Registrable Securities”) and the Company shall use its commercially reasonable efforts to have the registration statement declared effective as soon as practicable after the filing thereof.
(b) The Company’s obligations to include either tranche of Registrable Securities in a registration statement are contingent upon the Purchasers furnishing in writing to the Company such information regarding the Purchasers, the securities of the Company held by the Purchasers and the intended method of disposition of the Registrable Securities (which shall be limited to non-underwritten public offerings) as shall be reasonably necessary and requested by the Company to effect the registration of the Registrable Securities, and the Purchasers shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Company shall be entitled to postpone and suspend the effectiveness or use of the registration statement, if applicable, during any customary blackout or similar period or as permitted hereunder.
(c) Indemnification.
(i) The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless, to the extent permitted by law, the Purchasers, their respective directors, officers, members, stockholders, partners and agents, and each person who controls such the Purchasers (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the directors, officers, members, stockholders, partners and agents of each such controlling person, to the fullest extent permitted by law, from and against all losses, claims, damages, liabilities, costs and expenses (including, without limitation, reasonable and documented outside attorneys’ fees) (collectively, “Losses”) that arise out of, are based upon, or caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, prospectus included in any registration statement (“Prospectus”) or preliminary Prospectus or any amendment 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 the light of the circumstances under which they were made not misleading, except insofar as the same are based upon, or caused by, or contained in any information or affidavit so furnished in writing to the Company by or on behalf of the Purchasers expressly for use therein.
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(ii) In connection with any registration statement in which the Purchasers are participating, the Purchasers shall furnish (or cause to be furnished) to the Company in writing such necessary information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors, officers, members, stockholders, partners and agents and each person or entity who controls the Company (within the meaning of the Securities Act) and the directors, officers, members, stockholders, partners and agents of each such controlling person, against any losses, claims, damages, liabilities and expenses (including, without limitation, reasonable and documented outside attorneys’ fees) resulting from any untrue statement of material fact contained or incorporated by reference in any registration statement, Prospectus or preliminary Prospectus or any amendment 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 the light of the circumstances under which they were made not misleading, but only to the extent that such untrue statement or omission is contained (or not contained in, in the case of an omission) in any information or affidavit so furnished in writing by on behalf of the Purchasers expressly for use therein.
(iii) Any person or entity entitled to indemnification herein shall (A) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s or entity’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (B) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement includes a statement or admission of fault and culpability on the part of such indemnified party or which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
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(iv) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, member, stockholder or agent, or controlling person of such indemnified party and shall survive the transfer of securities.
(v) If the indemnification provided under this Section 5.6(c) from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Losses, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by (or not made by, in the case of an omission), or relates to information supplied by (or not supplied by, in the case of an omission), such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above shall be deemed to include, subject to the limitations set forth in Sections 5.6(c)(i), (ii) and (iii) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 5.6(c)(v) from any person or entity who was not guilty of such fraudulent misrepresentation.
5.7 Most Favored Nation. In the event that (a) the Company exercises the Second Tranche Option, and (b) between the date of this Agreement and one year following the Second Tranche Closing Date, the Company has issued any shares of preferred stock with a conversion price for converting into shares of Common Stock that is lower than the conversion price set out in the Certificate of Designation and that would otherwise be applicable to the Second Tranche (such lower conversion price being referred to as the “Lower Conversion Price”), the Company shall make such amendment as is necessary to the terms of the Second Tranche so that the conversion price applicable to the Second Tranche is no higher than the Lower Conversion Price. In no event shall the Lower Conversion Price be below $1.05.
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5.8 Stock Exchange Listing. The Company shall cause the Series A Preferred Stock and the Underlying Shares to be issued pursuant to this Agreement to be approved for listing on the NYSE.
Section 6. CONDITIONS TO THE PURCHASERS’ OBLIGATIONS.
6.1 The obligations of the Purchasers to consummate the First Tranche and the transactions related thereto pursuant to this Agreement on the First Tranche Closing Date shall be subject to the satisfaction at or prior to the First Tranche Closing Date of each of the following conditions, any one or more of which may be waived in writing by the Purchasers:
(a) Representations and Warranties. All of the Representations made by the Company in this Agreement shall be true and correct in all respects as of the First Tranche Closing Date as though made on and as of the First Tranche Closing Date (except to the extent such representations and warranties expressly speak as of an earlier date, in which case such representations and warranties shall be true and correct as of such date).
(b) Performance of First Tranche Closing Actions. The Company shall have performed each of the First Tranche Closing Actions required to be performed by it at the First Tranche Closing.
(c) No Legal Impediment to Issuance; No Material Adverse Effect. No Law or Order shall have become effective or been enacted, adopted or issued by any Governmental Authority that prohibits the implementation of this Agreement or the transactions contemplated herein, and no Material Adverse Effect shall have occurred.
(d) TUMH Transaction Closing. Subject to the terms of the TUMH Transaction Agreement, the closing of the TUMH Transaction and the transactions contemplated thereby shall have occurred on or prior to the First Tranche Closing Date substantially in accordance with the terms of the TUMH Transaction Agreement substantially in the form furnished by the Company with the SEC on a Current Report on Form 8-K dated as of the date hereof (without any material amendments or alterations).
(e) Certificate of Designation. The Certificate of Designation substantially in the form of Exhibit C shall have been filed with the Secretary of State of the State of Delaware.
6.2 If the Second Tranche Closing Option is exercised, the obligations of the Purchasers to consummate the Second Tranche and the related transactions thereto pursuant to this Agreement on the Second Tranche Closing Date shall be subject to the satisfaction at or prior to the Second Tranche Closing Date of each of the following conditions, any one or more of which may be waived in writing by the Purchasers:
(a) Representations and Warranties. All of the Representations made by the Company in this Agreement shall be true and correct in all respects as of the Second Tranche Closing Date as though made on and as of the Second Tranche Closing Date (except to the extent such representations and warranties expressly speak as of an earlier date, in which case such representations and warranties shall be true and correct as of such date).
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(b) Performance of Second Tranche Closing Actions. The Company shall have performed each of the Second Tranche Closing Actions required to be performed by it at the Second Tranche Closing.
(c) No Legal Impediment to Issuance; No Material Adverse Effect. No Law or Order shall have become effective or been enacted, adopted or issued by any Governmental Authority that prohibits the implementation of this Agreement or the transactions contemplated herein, and no Material Adverse Effect shall have occurred.
(d) TUM 2 Final Investment Decision. The Company shall have proceeded with its final investment decision with regard to the TUM 2 facility.
(e) Registration Statement. In accordance with Section 5.6(a) the Company shall have submitted or filed with the SEC a registration statement for a shelf registration on Form S-3 (or Form S-1 if Form S-3 is not available to the Company at such time), covering the resale of the Registrable Securities and such registration statement shall have become effective under the Securities Act, and no stop order suspending the effectiveness of the registration statement shall have been issued.
(f) Maintenance of Listing. The Underlying Shares and Series A Preferred Stock (i) shall be listed on the NYSE and (ii) shall not have been suspended by the SEC or the NYSE from trading on the NYSE.
Section 7. CONDITIONS TO THE COMPANY’S OBLIGATIONS.
7.1 The obligations of the Company to issue and sell to the Purchasers the Series A Preferred Stock with respect to the First Tranche and the related transactions pursuant to this Agreement shall be subject to the satisfaction at or prior to the First Tranche Closing Date of each of the following conditions, any one or more of which may be waived in writing by the Company:
(a) Representations and Warranties. All of the Representations made by the Purchasers in this Agreement shall be true and correct in all respects as of the First Tranche Closing Date as though made on and as of the First Tranche Closing Date (except to the extent such representations and warranties expressly speak as of an earlier date, in which case such representations and warranties shall be true and correct as of such date).
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(b) Performance of First Tranche Closing Actions. The Purchasers shall have performed each of the First Tranche Closing Actions required to be performed by it at the First Tranche Closing.
(c) No Legal Impediment to Issuance. No Law or Order shall have become effective or been enacted, adopted or issued by any Governmental Authority that prohibits the implementation of this Agreement or the transactions contemplated by this Agreement.
7.2 If the Second Tranche Closing occurs, the obligations of the Company to issue and sell to the Purchasers the Series A Preferred Stock with respect to the Second Tranche and the related transactions thereto pursuant to this Agreement shall be subject to the satisfaction at or prior to the Second Tranche Closing Date of each of the following conditions, any one or more of which may be waived in writing by the Company:
(a) Representations and Warranties. All of the Representations made by the Purchasers in this Agreement shall be true and correct in all respects as of the Second Tranche Closing Date as though made on and as of the Second Tranche Closing Date (except to the extent such representations and warranties expressly speak as of an earlier date, in which case such representations and warranties shall be true and correct as of such date).
(b) Performance of Second Tranche Closing Actions. The Purchasers shall have performed each of the Second Tranche Closing Actions required to be performed by it at the Second Tranche Closing.
(c) No Legal Impediment to Issuance. No Law or Order shall have become effective or been enacted, adopted or issued by any Governmental Authority that prohibits the implementation of this Agreement or the transactions contemplated by this Agreement.
Section 8. TERMINATION.
8.1 Termination. This Agreement may be terminated and the transactions contemplated herein may be abandoned, (x) with respect to the First Tranche Closing, at any time prior to the First Tranche Closing or (y) with respect to the Second Tranche Closing, at any time prior to the Second Tranche Closing, only as follows:
(a) with respect to both the First Tranche and the Second Tranche, by mutual written agreement of the Company and the Purchasers;
(b) by the Company or the Purchasers if a Governmental Authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered any applicable Law or any final non appealable Order permanently enjoining or otherwise prohibiting the Preferred Equity Offering has been issued by a Governmental Authority of competent jurisdiction; provided, however, that the right to terminate this Agreement under this Section 8.1(b) will not be available to any Party whose actions resulted in any applicable Law or Order that had the effect of restraining, enjoining or otherwise prohibiting the Preferred Equity Offering;
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(c) by the Company, if it is not in material breach of its obligations under this Agreement and there has been a breach of, or inaccuracy in, any representation, warranty, covenant or agreement of the Purchasers such that (i) with respect to the First Tranche Closing, the conditions set forth in Section 7.1(a) or Section 7.1(b), or (ii) if the Second Tranche Closing occurs, with respect to the Second Tranche Closing, the conditions set forth in Section 7.2(a) or Section 7.2(b) would not be satisfied as of the time of such breach or inaccuracy and such breach or inaccuracy has not been cured within five (5) Business Days after written notice thereof to the Purchasers; provided, however, that no cure period shall be required (x) for a breach or inaccuracy which by its nature cannot be cured or (y) if any of the conditions to (xx) the First Tranche Closing in Section 7.1(a) and Section 7.1(b) or, as applicable, (yy) the Second Tranche Closing in Section 7.2(a) and Section 7.2(b) for the benefit of the Company are incapable of being satisfied on or before with respect to the First Tranche Closing, the First Tranche Closing, or with respect to the Second Tranche Closing, the Second Tranche Closing; or
(d) by the Purchasers, if it is not in material breach of their obligations under this Agreement and there has been a breach of, or inaccuracy in, any representation, warranty, covenant or agreement of the Company such that (i) with respect to the First Tranche Closing, the conditions set forth in Section 6.1(a), Section 6.1(a) or Section 6.1(c) (with respect to the reference to Material Adverse Effect only), or (ii) if the Second Tranche Closing occurs, with respect to the Second Tranche Closing, the conditions set forth in Section 6.2(a), Section 6.2(b) or Section 6.2(c) (with respect to the reference to Material Adverse Effect only) would not be satisfied as of the time of such breach or inaccuracy and such breach or inaccuracy has not been cured within five (5) Business Days after written notice thereof to the Company; provided, however, that no cure period shall be required (x) for a breach or inaccuracy which by its nature cannot be cured or (y) if any of the conditions to (xx) the First Tranche Closing in Section 6.1(a) or Section 6.1(a) or, as applicable (yy) the Second Tranche Closing in Section 6.2(a) or Section 6.2(b) for the benefit of the Seller are incapable of being satisfied on or before with respect to the First Tranche Closing, the First Tranche Closing, or with respect to the Second Tranche Closing, the Second Tranche Closing.
8.2 Effect of Termination. Any valid termination of this Agreement under Section 8.1 will be effective (subject to the cure periods provided above) immediately upon the delivery of a valid written notice of the terminating Party to the other Party. In the event of termination of this Agreement as provided in Section 8.1, this Agreement and all rights and obligations hereunder shall forthwith become void and there shall be no liability or obligation on the part of the Company, the Purchasers, or their respective representatives; provided, however, that each of the Purchasers and Company hereto shall remain liable for any fraud or any willful and material breach of this Agreement occurring prior to such termination, in which case the aggrieved Party shall be entitled to all remedies available at law or in equity. Notwithstanding the foregoing, the provisions of Sections 8 and 9, (in each case including the respective meanings ascribed to the capitalized terms used in such Sections as defined in this Agreement), shall remain in full force and effect and survive any termination of this Agreement pursuant to the terms of this Section 8.
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Section 9. MISCELLANEOUS.
9.1 Payments. All payments made by or on behalf of the Company or any of their Affiliates to the Purchasers or their respective assigns, successors or designees pursuant to this Agreement shall be without withholding, set-off, counterclaim or deduction of any kind, except as required under applicable Law.
9.2 Arm’s Length Transaction. The Company acknowledges and agrees that (i) the Preferred Equity Offering and any other transactions described in this Agreement are an arm’s-length commercial transaction between the Parties and (ii) the Purchasers have not assumed nor will it assume an advisory or fiduciary responsibility in the Company’s favor with respect to any of the transactions contemplated by this Agreement or the process leading thereto, and the Purchasers have no obligation to the Company with respect to the transactions contemplated by this Agreement except those obligations expressly set forth in this Agreement or the Offering Documents to which it is a party.
9.3 Survival. The representations, warranties, covenants, agreements and obligations of the Parties shall survive the First and Second Tranche Closings as follows (each such survival period, a “Survival Period”): (i) (x) with respect to the First Tranche, the representations and warranties made by each Party in this Agreement in connection with the First Tranche shall survive the First Tranche Closing until the first anniversary of the First Tranche Closing and, (y) if the Second Tranche Closing occurs, with respect to the Second Tranche, the representations and warranties made by each Party in this Agreement in connection with the Second Tranche shall survive the Second Tranche Closing until the first anniversary of the Second Tranche Closing and (ii) the covenants, agreements, obligations and other undertakings of the Parties shall survive, the First Tranche Closing, and, as applicable, the Second Tranche Closing until fully performed in accordance with their terms.
9.4 No Waiver of Rights. All waivers hereunder must be made in writing, and the failure of any Party at any time to require another Party’s performance of any obligation under this Agreement shall not affect the right subsequently to require performance of that obligation. Any waiver of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision or a waiver or modification of any other provision.
9.5 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by email or registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for any Party as shall be specified by such Party in a notice given in accordance with this Section 9.5).
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| (a) | If to the Company, to: |
FREYR Battery, Inc.
6&8 East Court Square, Suite 300
Newnan, Georgia 30263
Attention: Compliance Officer
Email: compliance-officer@freyrbattery.com
With a copy (which shall not constitute notice to the Company) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London, EC2N 4BQ, United Kingdom
Attention: Denis Klimentchenko and Danny Tricot
Email: denis.klimentchenko@skadden.com; danny.tricot@skadden.com
| (b) | If to the Purchasers, to: |
Encompass Capital Advisors LLC
200 Park Avenue, 16th Floor Suite 1604,
New York, NY 10166
Attention: Syed Kazmi, CFO
Email: finance@encompasscap.com
With a copy (which shall not constitute notice to the Company) to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 10019
Attention: Mitchell Raab
Email: mraab@olshanlaw.com
Any of the foregoing addresses may be changed by giving notice of such change in the foregoing manner, except that notices for changes of address shall be effective only upon receipt.
9.6 Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
9.7 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, 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 hereby 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 an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
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9.8 Entire Agreement. This Agreement and the agreements and documents referenced herein constitute the entire agreement of the Parties with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, between the Parties with respect to the subject matter hereof.
9.9 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns in accordance with Section 2.7; provided, however, that any such permitted transferee, as a condition precedent to such transfer, becomes a Party to this Agreement and assumes the obligations of the Purchasers with respect to the transferred shares under this Agreement by an addendum substantially in the form set forth in Exhibit A (the “Addendum”) and an assumption agreement in substantially the form set forth in Exhibit B hereto (the “Assumption Agreement”) and deliver the same to the Company in accordance with Section 9.5, and provided, further, that with respect to a transfer to an Affiliate of the Purchasers, the Purchasers either (i) shall have provided an adequate equity support letter or a guarantee of such Affiliate-transferee’s obligations, in form and substance reasonably acceptable to the Company or (ii) shall remain fully obligated to fund the Purchase Price. Any transfer that is made in violation of the immediately preceding sentence shall be null and void ab initio, and the Company shall have the right to enforce the voiding of such transfer.
9.10 No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the Parties and their respective successors and permitted assigns and, except as expressly set forth in Sections 2.7 and 9.9, nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
9.11 Amendment. This Agreement may not be altered, amended, or modified except by a written instrument executed by or on behalf of the Company and the Purchasers.
9.12 Governing Law. This Agreement, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Agreement, or the negotiation, administration, performance, or enforcement of this Agreement, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Agreement, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
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9.13 Consent to Jurisdiction. Each of the Parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby, for and on behalf of itself or any of its properties or assets, in accordance with Section 9.13 or in such other manner as may be permitted by applicable law, and nothing in this Section 9.13 shall affect the right of any party to serve legal process in any other manner permitted by applicable law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Agreement or the transactions contemplated hereby; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby in any court other than the Chosen Courts. Each of the Company and the Purchasers agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 9.13, each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 9.5. Nothing in this Section 9.13 shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby or (y) be deemed to confer rights on any Person other than the parties.
9.14 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTION. EACH PARTY ACKNOWLEDGES AND AGREES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.14.
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9.15 Currency. Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in United States dollars.
9.16 Counterparts; Execution.
(a) This Agreement shall become effective upon the execution and delivery of a duly executed counterpart hereof by each of the parties hereto. Each of the Parties may execute this Agreement by electronic means and recognizes and accepts the use of electronic signatures and records by any other party hereto in connection with the execution and storage hereof. The words “execution,” “signed,” and “signature,” shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state laws based on the Uniform Electronic Transactions Act.
(b) This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Agreement by electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.
9.17 Specific Performance. Each Party acknowledges that, in view of the uniqueness of the securities referenced herein and the transactions contemplated by this Agreement, the other Party would not have an adequate remedy at law for money damages in the event that this Agreement has not been performed in accordance with its terms, and therefore agrees that the other Party shall be entitled to specific performance and injunctive or other equitable relief, without the necessity of proving the inadequacy of monetary damages as a remedy.
9.18 Waiver of Consequential Damages. Notwithstanding any provision in this Agreement to the contrary, in no event shall any Party or its Affiliates, or their respective managers, members, shareholders or representatives, be liable hereunder at any time for punitive, incidental, consequential special or indirect damages, including loss of future profits, revenue or income, or loss of business reputation of any other Party or any of its Affiliates, whether in contract, tort (including negligence), strict liability or otherwise, and each Party hereby expressly releases each other Party, its Affiliates, and their respective managers, members, shareholders, partners, consultants, representatives, successors and assigns therefrom.
9.19 Rules of Construction. The Parties and their respective legal counsel participated in the preparation of this Agreement, and therefore, this Agreement shall be construed neither against nor in favor of any of the Parties, but rather in accordance with the fair meaning thereof. All definitions set forth in this Agreement are deemed applicable whether the words defined are used in this Agreement in the singular or in the plural, and correlative forms of defined terms have corresponding meanings. The term “including” is not limiting and means “including without limitation.” The term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, clause, schedule, annex and exhibit references are to this Agreement unless otherwise specified. Any reference to this Agreement shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, and supplements thereto and thereof, as applicable. Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms.
[No further text appears; signature pages follow]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
| FREYR BATTERY, INC. | |||
| By: | /s/ Daniel Barcelo | ||
| Name: | Daniel Barcelo | ||
| Title: | Authorized Signatory | ||
[Signature Page – Preferred Stock Purchase Agreement]
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| PURCHASERS | |||
| [***] | |||
| By: | [***] | ||
| By: | /s/ Syed Kazmi | ||
| Name: | Syed Kazmi | ||
| Title: | Chief Financial Officer | ||
| [***] | |||
| By: | [***] | ||
| By: | /s/ Syed Kazmi | ||
| Name: | Syed Kazmi | ||
| Title: | Chief Financial Officer | ||
| [***] | |||
| By: | [***] | ||
| By: | /s/ Syed Kazmi | ||
| Name: | Syed Kazmi | ||
| Title: | Chief Financial Officer | ||
[Signature Page – Preferred Stock Purchase Agreement]
29
| PURCHASERS (CONTINUED) | |||
| [***] | |||
| By: | [***] | ||
| By: | /s/ Syed Kazmi | ||
| Name: | Syed Kazmi | ||
| Title: | Chief Financial Officer | ||
| [***] | |||
| By: | [***] | ||
| By: | /s/ Syed Kazmi | ||
| Name: | Syed Kazmi | ||
| Title: | Chief Financial Officer | ||
[Signature Page – Preferred Stock Purchase Agreement]
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Exhibit A
ADDENDUM
Reference is made to that certain Convertible Series A Preferred Stock Purchase Agreement (as amended, modified or supplemented from time to time, the “Agreement”) by and between FREYR Battery, Inc., a Delaware corporation (“FREYR”), and the Purchaser parties thereto, or any successor(s) thereof. Each capitalized term used but not defined herein shall have the meaning given to it in the Agreement.
Upon execution and delivery of this Addendum by the undersigned, as provided in Section 9.9 of the Agreement, the undersigned hereby becomes the Purchaser with respect to [●] shares of Series A Preferred Stock, as applicable thereunder and bound thereby effective as of the date of the Agreement.
By executing and delivering this Addendum, the undersigned represents and warrants, for itself and for the benefit of the Company, that:
| (a) | as of the date of this Addendum, the undersigned has executed and delivered an Assumption and Joinder Agreement therefor (a copy of which is attached to this Addendum); |
| (b) | as of the date of this Addendum, with respect to each transferee that (i) is an individual, such transferee has all requisite authority to enter into this Addendum and to carry out the transactions contemplated by, and perform its respective obligation under, the Agreement and (ii) is not an individual, such transferee is duly organized, validly existing, and in good standing under the laws of the state of its organization, and has all requisite corporate, partnership, or limited liability company power and authority to enter into this Addendum and to carry out the transactions contemplated by, and perform its respective obligations under, the Agreement; |
| (c) | assuming the due execution and delivery of the Agreement by FREYR, the Addendum and the Agreement are legally valid and binding obligations of it, enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors’ rights generally; and |
| (d) | as of the date of this Addendum, it is not aware of any event that, due to any fiduciary or other duty to any other person, would prevent it from taking any action required of it under the Agreement and this Addendum. |
By executing and delivering this Addendum to FREYR, the undersigned agrees to be bound by all the terms of the Agreement with respect to [●] shares of Series A Preferred Stock.
The undersigned acknowledges and agrees that once delivered to FREYR, it may not revoke, withdraw, amend, change or modify this Addendum unless the Agreement has been terminated.
THIS ADDENDUM SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
This Addendum may be executed in one or more counterparts, each of which, when so executed, shall constitute the same instrument and the counterparts may be delivered by facsimile transmission or by electronic mail in portable document format (.pdf).
[Signature on Following Page]
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IN WITNESS WHEREOF, the Parties have caused this Addendum to be duly executed and delivered by their proper and duly authorized officers as of this [●] day of [●].
| TRANSFEREE WHO BECOMES THE PURCHASER | |
| [NAME] | |
| as a Purchaser | |
| Name: |
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Exhibit B
ASSUMPTION AND JOINDER AGREEMENT
Reference is made to (i) that certain Convertible Series A Preferred Stock Purchase Agreement (as amended, modified or supplemented from time to time, the “Agreement”), dated as of [●], 2024, by and between FREYR Battery, Inc., a Delaware corporation (“FREYR”), and the Purchaser parties thereto, or any successor(s) thereof, and (ii) that certain Addendum, dated as of [●], [●] (the “Transferor Addendum”) submitted by [●], as transferor (the “Transferor”). Each capitalized term used but not defined herein shall have the meaning given to it in the Agreement.
As a condition precedent to becoming the Purchaser with respect to [●] shares of Series A Preferred Stock, the undersigned (the “Transferee”) hereby agrees to become bound by all the terms, conditions and obligations set forth in the Agreement and the Transferor Addendum, copies of which are attached hereto as Annex I. This Assumption and Joinder Agreement shall take effect and shall become an integral part of the Agreement and the Transferor Addendum immediately upon its execution, and the Transferee shall be deemed to be bound by all of the terms, conditions and obligations of the Agreement and the Transferor Addendum as of the date thereof. The Transferee shall hereafter be deemed to be the “Purchaser” with respect to [●] shares of Series A Preferred Stock and a “Party” for all purposes under the Agreement.
[Signatures on Following Page]
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IN WITNESS WHEREOF, this Assumption and Joinder Agreement has been duly executed by each of the undersigned as of the date specified below.
Date: [●]
| Name of Transferor | Name of Transferee | |
| Authorized Signatory of Transferor | Authorized Signatory of Transferee | |
| (Type or Print Name and Title of Authorized Signatory) | (Type or Print Name and Title of Authorized Signatory) |
| Address of Transferee: | |
| Attn: | |
| Tel: | |
| Fax: | |
| E-mail: |
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Exhibit C
FORM OF CERTIFICATE OF DESIGNATION
OF
SERIES A CONVERTIBLE PREFERRED STOCK
[see attached]
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FORM OF CERTIFICATE OF DESIGNATION
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
FREYR BATTERY, INC.
FREYR BATTERY, INC., a Delaware corporation (the “Corporation”), certifies that, pursuant to the authority contained in Article Fourth of its Amended and Restated Certificate of Incorporation, as amended prior to the date hereof (the “Certificate of Incorporation”), and in accordance with the provisions of Section 151 of the Delaware General Corporation Law (the “DGCL”), the board of directors of the Corporation (the “Board of Directors”) duly approved and adopted on November ____, 2024 the following resolution, which resolution remains in full force and effect on the date hereof:
WHEREAS, the Certificate of Incorporation authorizes the issuance of up to 355,000,000 shares of Common Stock and up to 10,000,000 shares of preferred stock, par value $0.01 per share, of the Corporation (the “Preferred Stock”) in one or more series, and expressly authorizes the Board of Directors, subject to limitations prescribed by law, to establish and fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations and restrictions of the shares of such series; and
WHEREAS, the Board of Directors desires to establish and fix such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations and restrictions of the Series A Preferred Stock defined below.
NOW, THEREFORE, BE IT RESOLVED, that the Series A Preferred Stock be, and hereby is, created, and that the number of shares thereof, the voting powers thereof and the designations, preferences and relative, participating, optional and other special rights thereof and the qualifications, limitations and restrictions thereof be, and hereby are, as follows:
| 1. | Designation and Amount. |
The shares of such series shall be designated as “Non-Voting Convertible Preferred Stock,” par value $0.01 per share, and the number of shares constituting such series shall be ten million (10,000,000) (the “Series A Preferred Stock”). Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than that of the shares then outstanding.
| 2. | Ranking. |
(a) The Series A Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank: (i) on a parity with each class or series of equity securities of the Corporation the terms of which expressly provide that such class or series will rank on parity with the Series A Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Parity Securities”), (ii) senior to the Common Stock and each other class or series of capital stock outstanding or established after the date hereof by the Corporation the terms of which do not expressly provide that it ranks senior to or on parity with to the Series A Preferred Stock as to dividend rights and/or as to rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Junior Securities”), and (iii) junior to each other class or series of capital stock outstanding or established after the date hereof by the Corporation the terms of which expressly provide that it ranks senior to the Series A Preferred Stock as to dividend rights and/or as to rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Senior Securities”). The Series A Preferred Stock shall also rank junior to the Corporation’s existing and future indebtedness.
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(b) Each share of Series A Preferred Stock will be identical in all respects to the other shares of Series A Preferred Stock.
(c) Shares of Series A Preferred Stock converted into Common Stock (as defined below) will be cancelled and will revert to authorized but unissued Preferred Stock, undesignated as to series.
(d) In any case where any Dividend Payment Date is not a Business Day, then (notwithstanding any other provision of this Certificate of Designation) payment of dividends need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Dividend Payment Date; provided, however, that no interest will accrue on such amount of dividends for the period from and after such Dividend Payment Date, as the case may be.
| 3. | Certain Defined Terms. |
As used in this Certificate of Designation, the following terms have the respective meanings set forth below:
(a) “Affiliate” of any Person means another Person that directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with, such first Person.
(b) “Beneficial Ownership Limitation” shall be 19.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Series A Preferred Stock held by the applicable Holder.
(c) “Board of Directors” has the meaning specified in the first paragraph of this Certificate of Designation.
(d) “Business Day” means any day other than Saturday, Sunday or other day on which banking institutions in the City of New York are authorized or required by law or executive order to remain closed.
(e) “Certificate of Designation” means this Certificate of Designation of the Convertible Series A Preferred Stock of the Corporation.
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(f) “Certificate of Incorporation” has the meaning specified in the first paragraph of this Certificate of Designation.
(g) “Change of Control” means the occurrence of any of the following: (i) any sale, lease or transfer or series of sales, leases or transfers of all or substantially all of the assets of the Corporation and its Subsidiaries; (ii) any direct or indirect transfer of the Corporation’s securities (including pursuant to any merger, consolidation, share exchange, recapitalization or reorganization of the Corporation in which the Corporation is the surviving corporation) such that after such transfer a Person or group of Persons (other than the holders of the Corporation’s capital stock immediately prior to such transfer and their respective Affiliates) would own, directly or indirectly, 50% or more of the outstanding voting stock of the Corporation; or (iii) any merger, consolidation, share exchange, recapitalization or reorganization of the Corporation with or into another Person where the Corporation is not the surviving corporation. For the avoidance of doubt the TUH Transaction is not an event that constitutes a Change of Control.
(h) “Common Stock” means common stock of the Corporation, par value $0.01 per share.
(i) “Conversion Date” has the meaning specified in Section 8(b).
(j) “Conversion Price” means $2.50 per share of Common Stock, provided, however, that, if the Corporation elects not to issue the Second Tranche on the date that the Corporation proceeds with its final investment decision with respect to the TUM 2 facility, the Conversion Price shall be reduced to $1.79 per share of Common Stock.
(k) “Conversion Ratio” means, with respect to any share of Series A Preferred Stock, an amount (subject to adjustment in accordance with the provisions of Section 8(f)) equal to the quotient of (i) the sum of (A) the Issue Price, plus (B) any accrued but unpaid dividends on such share of Series A Preferred Stock as of immediately prior to the conversion thereof in accordance with Section 4, divided by (ii) the Conversion Price.
(l) “Corporation” has the meaning specified in the first paragraph of this Certificate of Designation.
(m) “DGCL” has the meaning specified in the first paragraph of this Certificate of Designation.
(n) “Dividend Payment Date” has the meaning specified in Section 4(a).
(o) “Dividend Rate” means a rate per annum equal to 6.0%.
(p) “Dividend Shortfall” has the meaning specified in Section 4(d).
(q) “DTC” means the Deposit Trust Company.
(r) “DWAC Delivery” has the meaning specified in Section 8(b).
(s) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
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(t) “First Dividend Payment Date” has the meaning specified in Section 4(a).
(u) “First Preferred Dividend Period” has the meaning specified in Section 4(a).
(v) “First Tranche” means [5 million] shares of Series A Preferred Stock issued and sold by the Corporation to the Purchasers at the Issue Price on the First Tranche Closing Date pursuant to the Series A Preferred Stock Purchase Agreement.
(w) “First Tranche Closing Date” means the date upon which the closing of the TUMH Transaction occurs.
(x) “Governmental Authority” means any (a) federal, state, provincial, local or other government (U.S. or non-U.S.), (b) any federal, state, provincial, local, or other governmental or supra-national entity, regulatory or administrative authority, taxing authority, agency, department, board, division, instrumentality or commission, educational agency, political party, body, or judicial or arbitral body, board, tribunal, or court (U.S. or non-U.S.), (c) any public international organization (e.g., the World Bank), (d) any industry self-regulatory authority or (e) any business, entity, or enterprise owned or controlled by any of the foregoing.
(y) “Holders” means, with respect to shares of Series A Preferred Stock, the stockholders in whose name such Series A Preferred Stock is registered in the stock books of the Corporation.
(z) “Issue Price” means an amount per share of Series A Preferred Stock equal to $10.00.
(aa) “Junior Securities” has the meaning specified in Section 2.
(bb) “Liquidation” means any voluntary or involuntary liquidation, dissolution or winding up of the Corporation.
(cc) “Liquidation Preference” means $10.00 per share of Series A Preferred Stock plus an amount equal to any accrued but unpaid dividends on such share of Series A Preferred Stock as of immediately prior to a Liquidation event in accordance with Section 5.
(dd) “Maturity Date” has the meaning specified in Section 6.
(ee) “Maturity Redemption Price” has the meaning specified in Section 7(a).
(ff) “Notice of Conversion” has the meaning specified in Section 8(b).
(gg) “NYSE” means the New York Stock Exchange.
(hh) “Parity Securities” has the meaning specified in Section 2.
(ii) “Person” means any individual or entity, including a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority (or any department, agency, or political subdivision thereof).
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(jj) “Preferred Dividend Period” has the meaning specified in Section 4(a).
(kk) “Preferred Holders” has the meaning specified in Section 5(a)(i).
(ll) “Preferred Stock” has the meaning specified in the recitals of this Certificate of Designation.
(mm) “Purchasers” means the purchasers of Series A Preferred Stock pursuant to the Preferred Stock Purchase Agreement and their respective successors and permitted assigns.
(nn) “Second Tranche” means, if the Corporation elects to issue such shares, [5 million] shares of Series A Preferred Stock issued and sold by the Corporation to the Purchasers at the Issue Price on the Second Tranche Closing Date pursuant to the Series A Preferred Stock Purchase Agreement.
(oo) “Second Tranche Closing Date” means the date of issuance of the Second Tranche, being a date falling within 30 days following the date that the Corporation proceeds with its final investment decision with respect to the TUM 2 facility.
(pp) “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(qq) “Senior Securities” has the meaning specified in Section 2.
(rr) “Series A Preferred Stock” has the meaning specified in Section 1.
(ss) “Series A Preferred Stock Purchase Agreement” means that certain Convertible Series A Preferred Stock Purchase Agreement by and among the Corporation and the Purchasers for the purchase of Series A Preferred Stock governed by this Certificate of Designation dated [●], 2024.
(tt) “Share Delivery Date” has the meaning specified in Section 8(c)(i).
(uu) “Subsidiary” means any entity in which the Corporation, directly or indirectly, owns any of the outstanding capital stock, equity or similar interests or voting power of such entity at the time of this Certificate of Designation or at any time hereafter, whether directly or through any other Subsidiary.
(vv) “Trading Day” means a day during which trading in securities generally occurs on the NYSE.
(ww) “Transfer Agent” means Continental Stock Transfer & Trust Company, acting as the Corporation’s duly appointed transfer agent, registrar, conversion agent, dividend disbursing agent and paying agent for any securities of the Corporation, and its successors and assigns, or any other Person appointed to serve as transfer agent, registrar, conversion agent, dividend disbursing agent or paying agent by the Corporation.
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(xx) “TUMH Transaction” means the proposed acquisition by the Corporation of certain solar cell manufacturing assets from Trina Solar (Schweiz) AG and related transactions.
(yy) “TUM 2” means Trina Solar US Manufacturing Cell 1, LLC, a limited liability company organized under the laws of Oklahoma.
| 4. | Dividends. |
(a) Commencing from and including the First Tranche Closing Date, cash dividends shall accrue on the First Tranche at the Dividend Rate and accumulate and be payable in arrears (i) on the dividend payment date falling 18 months following the First Tranche Closing Date (the “First Dividend Payment Date”) in respect of the period from and including the issuance date of the First Tranche to but excluding the First Dividend Payment Date (the “First Preferred Dividend Period”), and (ii) thereafter on the dates falling every six months following the First Dividend Payment Date (together with the First Dividend Payment Date, each a “Dividend Payment Date”) in respect of the period from and including the previous Dividend Payment Date to but excluding the subsequent Dividend Payment Date (or the Maturity Date) (together with the First Preferred Dividend Period, each a “Preferred Dividend Period”).
(b) If the Second Tranche is issued, commencing from and including the Second Tranche Closing Date, cash dividends shall accrue on the Second Tranche at the Dividend Rate and accumulate and be payable in arrears on each Dividend Payment Date in respect of the related Preferred Dividend Period.
(c) The amount of dividends payable on Series A Preferred Stock on any date prior to the end of a Preferred Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month. Dividends shall accumulate whether or not in any Preferred Dividend Period there have been funds of the Corporation legally available for the payment of such Preferred Dividends. Dividends are payable on a cumulative basis once declared, whether or not there shall be funds legally available for the payment thereon. Dividends shall accrue and remain payable until the earlier of (i) the Conversion Date and (ii) the Maturity Date. The Corporation shall pay any and all withholding taxes that may be payable in respect of the dividend payments, and all dividend payments shall be made net of any required withholding taxes.
(d) Subject to the foregoing, dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors may be declared and paid on any other securities of the Corporation, including Common Stock and other Junior Securities, from time to time, and Holders of Series A Preferred Stock shall not be entitled to participate in any such dividends, provided, however, that, subject to the rights of holders of any Senior Securities, in the event that (i) the dividend payable with respect to a share of Preferred Stock in a Preferred Dividend Period pursuant to Section 4(a) is less than (ii) the aggregate amount of any distributions made with regard to the equivalent number of shares of Common Stock underlying such share of Preferred Stock during such Preferred Dividend Period (such shortfall being referred to as the “Dividend Shortfall”), Holders will be entitled to receive in respect of each share of Preferred Stock, in addition to the dividend payable pursuant to Section 4(a), an amount equal to the Dividend Shortfall.
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| 5. | Liquidation; Change of Control. |
(a) Liquidation.
(i) In the event of any Liquidation, subject to the rights of holders of any Senior Securities and after satisfaction of all liabilities and obligations to creditors of the Corporation, before any distribution is made to holders of shares of Junior Securities, the Holders of the Series A Preferred Stock and Parity Securities (the “Preferred Holders”) will be entitled to receive liquidating distributions in the amount that is the greater of (i) the aggregate Liquidation Preference per share of Series A Preferred Stock and (ii) the amount of cash to which a holder would be entitled to receive in a Liquidation with respect to such shares if they had been converted to Common Stock immediately prior to such Liquidation, after giving effect to this Section 5(a)(i) with respect to all shares of Series A Preferred Stock, before any distribution of assets is made to the holders of any Junior Securities.
(ii) Notice of any Liquidation will be given by mail, postage prepaid, not less than thirty (30) days prior to the distribution or payment date stated therein, to each Preferred Holder appearing on the stock books of the Corporation as of the date of such notice at the address of said Preferred Holder shown therein. Such notice will state a distribution or payment date, the aggregate Liquidation Preference distributable in respect of all shares of Series A Preferred Stock and Parity Securities then held by such Preferred Holder and the place where such amount will be distributable or payable.
(iii) After the payment to the Preferred Holders of all amounts distributable pursuant to Section 5(a)(i), the Holders of outstanding shares of Series A Preferred Stock will have no right or claim, based on their ownership of shares of Series A Preferred Stock, to any of the remaining assets of the Corporation.
(b) Change of Control. In the event of a Change of Control event, the Holders will be entitled to receive the greater of: (i) the aggregate Liquidation Preference of the outstanding shares of Series A Preferred Stock, including any accrued and unpaid dividends thereon to the closing date of the Change of Control event and (ii) the amount of consideration that would be payable or issuable in such Change of Control transaction to a holder of the number of shares of Common Stock into which the shares of Series A Preferred Stock are convertible by their terms as of the closing date of the Change of Control event; provided, that, the Holders will receive the same form consideration to be received by holders of Common Stock in such a Change of Control event.
| 6. | Maturity. |
The maturity date for any tranches of Series A Preferred Stock issued and sold shall be three years from the First Tranche Closing Date (the “Maturity Date”).
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| 7. | Redemption. |
(a) Redemption at Maturity. On the Maturity Date, the Corporation shall redeem the then outstanding shares of Series A Preferred Stock at the aggregate Issue Price plus any accrued and unpaid dividends (the “Maturity Redemption Price”) in accordance with the Method for Redemption set forth under Section 7(b).
(b) Method of Redemption.
(i) In any case of redemption of shares of Series A Preferred Stock, the Corporation shall, not less than thirty (30) nor more than sixty (60) days before the Maturity Date, send to each Holder notice of the intention of the Corporation to redeem such shares of Series A Preferred Stock. Such notice shall set out the number of shares of Series A Preferred Stock held by the Holders which are to be redeemed, the Maturity Redemption Price, the Maturity Date and the place at which Holders may present and surrender such shares of Series A Preferred Stock for redemption, if such shares are certificated.
(ii) On the Maturity Date, the Corporation shall pay or cause to be paid to or to the order of the Holders of the shares of Series A Preferred Stock to be redeemed the Maturity Redemption Price for each share of Series A Preferred Stock to be redeemed on presentation and surrender, at the registered office of the Corporation or any other place specified in the notice of redemption, of the certificate or certificates representing the shares of Series A Preferred Stock called for redemption, if any. The Corporation shall have the right at any time after the giving of notice of redemption to deposit the aggregate Maturity Redemption Price of the shares of Series A Preferred Stock or of such of the shares of Series A Preferred Stock which are represented by certificates which have not at the date of such deposit been surrendered by the Holders thereof in connection with such redemption, to a special account in any chartered bank or any trust company named in such notice or in a subsequent notice to the Holders of the shares of Series A Preferred Stock in respect of which the deposit is made, to be paid without interest to or to the order of the respective Holders upon presentation and surrender to such bank or trust company of the certificates representing such shares of Series A Preferred Stock.
(iii) Upon such deposit being made or upon the Maturity Date, whichever is the later, the shares of Series A Preferred Stock in respect of which such deposit shall have been made shall be and be deemed to be redeemed and the rights of the Holders thereof shall be limited to receiving, without interest, their proportionate part of the amount so deposited upon presentation and surrender of the certificate or certificates representing their shares of Series A Preferred Stock being redeemed, if any. Any interest on any such deposit shall belong to the Corporation. From and after the Maturity Date, the shares of Series A Preferred Stock shall cease to be entitled to dividends and to participate in the assets of the Corporation and the holders thereof shall not be entitled to exercise any of their other rights as Holders in respect thereof unless payment of the Maturity Redemption Price shall not be made upon presentation and surrender of the certificates in accordance with this Section 7(b)(iii), in which case the rights of the Holders thereof shall remain unaffected.
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| 8. | Conversion. |
(a) Optional Conversion by the Holders. On or after the first anniversary of the First Tranche Closing Date, each share of Series A Preferred Stock shall be convertible, at the option of the Holders thereof, into a number of shares of Common Stock, in whole and not in part (subject only to Section 8(c)(iii) in which case the Holders can convert in part solely in order to comply with the Beneficial Ownership Limitation), equal to the Conversion Ratio in effect on the Conversion Date.
(b) Conversion Notice. The Holders shall effect conversions by providing the Corporation with a conversion notice (via overnight courier, facsimile or email) in the form attached hereto as Exhibit B (a “Notice of Conversion”), duly completed and executed for the total number of shares of Preferred Stock issued to the Holders. [For purposes of clarification, the Corporation or the Transfer Agent shall not require Holders to obtain a medallion guaranty, notary attestation or any similar deliverable in order to effectuate the conversion of all or a portion of such Holders’ shares of Series A Preferred Stock.] Provided the Transfer Agent is participating in the DTC Fast Automated Securities Transfer program, the Notice of Conversion may specify, at the Holders’ election, whether the applicable converted shares shall be credited to the account of the Holders’ prime broker with DTC through its Deposit Withdrawal Agent Commission system (a “DWAC Delivery”). The date on which a conversion of Series A Preferred Stock shall be deemed effective (the “Conversion Date”) shall be defined as the Business Day that the Notice of Conversion, completed and executed, is sent (via overnight courier, facsimile or email) to, and received during regular business hours by, the Corporation.
(c) Mechanics of Conversion.
(i) Electronic Issuance Upon Conversion. Not later than three (3) Business Days after the applicable Conversion Date (the “Share Delivery Date”), the Corporation shall cause to be electronically transferred the applicable number of shares of Common Stock issued on the Share Delivery Date pursuant to Section 8(a) by crediting the account of the Holders’ prime broker with DTC through its DWAC system.
(ii) Reservation and Authorization of Common Stock. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Series A Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments set out in Section 8(f)) upon the conversion of all outstanding shares of Series A Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid, non-assessable and free and clear of all liens and other encumbrances.
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(iii) Additional Reserved Shares. Notwithstanding anything else contrary to the foregoing herein (including Section 8(a)), the Corporation may not effect any conversion of the Series A Preferred Stock, and a Holder will not have the right to convert any portion of the Series A Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any other person or entity acting as a group together with such Holder or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates will include the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series A Preferred Stock beneficially owned by such Holder or any of its Affiliates, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including any warrants) beneficially owned by such Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 8(c)(iii), beneficial ownership will be calculated in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 8(c)(iii) applies, the determination of whether the Series A Preferred Stock is convertible (in relation to other securities owned by such Holder together with any affiliates) and of how many shares of Series A Preferred Stock are convertible will be in the sole discretion of such Holder, and the submission of a Notice of Conversion will be deemed to be such Holder’s determination of whether the shares of Series A Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates) and how many shares of the Series A Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation will have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder. For purposes of this Section 8(c)(iii), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Corporation’s most recent periodic or annual filing with the SEC, as the case may be, (B) a more recent public announcement by the Corporation or (C) a more recent notice by the Corporation or the Corporation’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Corporation shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Series A Preferred Stock, by such Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The provisions of this paragraph will be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 8(c)(iii) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph will apply to a successor holder of Series A Preferred Stock.
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(iv) Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the conversion of the Series A Preferred Stock. In determining the number of shares of Common Stock to be issued upon the conversion of the Series A Preferred Stock, such number shall be rounded down to the nearest whole share in the case of any resulting fractional number of shares of Common Stock.
(d) Transfer Taxes. The issuance of certificates (or book entry notations) for shares of the Common Stock upon conversion of the Series A Preferred Stock shall be made without charge to any Holder for any documentary stamp, issue, transfer or similar taxes or duties that may be payable in respect of the issue or delivery of such certificates (or such book entry notation), provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate (or such book entry notation) upon conversion in a name other than that of the registered Holders of such shares of Series A Preferred Stock and the Corporation shall not be required to issue or deliver such certificates (or such book entry notation) unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.
(e) Status as Stockholder. Upon the Conversion Date: (i) the shares of Series A Preferred Stock shall be deemed converted into shares of Common Stock; and (ii) the Holders’ rights as holders of such converted shares of Series A Preferred Stock shall cease and terminate, excepting only the right to receive book entry notations for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holders because of a failure by the Corporation to comply with the terms of this Certificate of Designation. In all cases, the Holders shall retain all of its rights and remedies for the Corporation’s failure to convert Series A Preferred Stock.
(f) Conversion Price Adjustment. The Conversion Price and the number and kind of shares of stock of the Corporation issuable on conversion shall be adjusted from time to time as follows:
(i) Subdivisions and Stock Splits. If the Corporation shall at any time or from time to time after the First Tranche Closing Date effect a subdivision of the outstanding Common Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the First Tranche Closing Date combine the outstanding shares of Common Stock, the Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 8(f)(i) shall become effective at the close of business on the date the subdivision or combination becomes effective.
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(ii) Certain Dividends and Distributions. If at any time or from time to time after the First Tranche Closing Date the Corporation shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, if such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:
(1) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
(2) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
(3) Notwithstanding the foregoing, (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price of each series of Preferred Stock shall be adjusted pursuant to this Section 8(f)(ii) as of the time of actual payment of such dividends or distributions; and (b) no such adjustment shall be made if the Holders simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of such Series A Preferred Stock had been converted into Common Stock on the date of such event.
(iii) Other Dividends and Distributions. If at any time or from time to time after the First Tranche Closing Date the Corporation shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property, then and in each such event the Holders shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Series A Preferred Stock had been converted into Common Stock on the date of such event.
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(iv) Deferral of Issuance of Additional Shares in Connection with Conversions between a Record Date and Occurrence of Triggering Event.
In any case in which this Section 8(f) requires that an adjustment as a result of any event becomes effective from and after a record date, the Corporation may elect to defer until after the occurrence of the event issuing to the Holders of any shares of Series A Preferred Stock converted after the record date and before the occurrence of the event the additional shares of Common Stock issuable upon such conversion over and above the shares issuable on the basis of the Conversion Price in effect immediately before adjustment. In any such case, the Corporation shall issue or cause a transfer agent to issue evidence, in a form reasonably satisfactory to the Holders of such shares of Series A Preferred Stock, of the right to receive the shares as to which the issuance is deferred.
(v) Postponement of Small Adjustments.
Any adjustment in the Conversion Price otherwise required to be made by this Section 8 may be postponed until the day prior to the Conversion Date.
(vi) No Adjustment for Participating Transactions.
The Corporation shall not make any adjustment pursuant to this Section 8(f) if Holders of shares of Series A Preferred Stock are permitted to participate, concurrently with the holders of Common Stock and on an as-converted basis, in any transaction described in this Section 8(f).
(vii) No Adjustment for Other Actions or Transactions.
No adjustment shall be made to the conversion rights of the Series A Preferred Stock except as specifically set forth in this Section 8(f), including, but not limited to, any private or public equity or equity-linked offerings effected by the Company.
(viii) Successive Adjustments; Multiple Adjustments.
After an adjustment is made to the Conversion Price under this Section 8, any subsequent event requiring an adjustment under this Section 8 shall cause an adjustment to such Conversion Price, as so adjusted.
| 9. | Voting Rights. |
Except as otherwise provided herein or as otherwise required by the DGCL, the Series A Preferred Stock shall have no voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Series A Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend this Certificate of Designation, amend or repeal any provision of, or add any provision to, the Certificate of Incorporation or bylaws of the Corporation, or file any articles of amendment, certificate of designations, preferences, limitations and relative rights of any series of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A Preferred Stock in a manner materially different than the effect on the Common Stock, regardless of whether any of the foregoing actions shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise, (ii) issue further shares of Series A Preferred Stock or increase or decrease (other than by conversion) the number of authorized shares of Series A Preferred Stock (other than the First Tranche and the Second Tranche), or (iii) enter into any agreement with respect to any of the foregoing.
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| 10. | Uncertificated Shares and Certificated Shares; Transfer of Shares; Record Holders. |
(a) Restrictive Legends.
(i) Legends. Until such time as the Series A Preferred Stock and Common Stock issued upon the conversion of Series A Preferred Stock, as applicable, have been sold pursuant to an effective registration statement under the Securities Act, or the Series A Preferred Stock or Common Stock issued upon the conversion of Series A Preferred Stock, as applicable, are eligible for resale pursuant to Rule 144 promulgated under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, each book-entry account or certificate issued with respect to a share of Series A Preferred Stock or any Common Stock issued upon the conversion of Series A Preferred Stock will, in addition to any legend required in respect of any applicable Series A Preferred Stock Purchase Agreement or any other agreement applicable to such shares, contain a legend in substantially the following form:
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, ANY SUCH TRANSFER OR OTHER DISPOSITION IS SUBJECT TO THE CONDITIONS CONTAINED IN A CONVERTIBLE SERIES A PREFERRED STOCK PURCHASE AGREEMENT, DATED [●], 2024. A COPY OF SUCH CONDITIONS WILL BE PROVIDED TO THE HOLDERS HEREOF UPON REQUEST.
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(ii) Removal of Legend. In connection with a sale of the Series A Preferred Stock or Common Stock issued upon the conversion of Series A Preferred Stock, as applicable, in reliance on Rule 144 promulgated under the Securities Act, the applicable Holder or its broker shall deliver to the Corporation a broker representation letter providing to the Corporation any information the Corporation reasonably deems necessary to determine that such sale is made in compliance with Rule 144 promulgated under the Securities Act, including, as may be appropriate, a certification as to the length of time the applicable equity interests have been held. Upon receipt of such representation letter, the Corporation shall promptly remove the restrictive legend, and the Corporation shall bear all costs associated with the removal of such legend. At such time as Series A Preferred Stock and Common Stock issued upon the conversion of Series A Preferred Stock, as applicable, (A) have been sold pursuant to an effective registration statement under the Securities Act, (B) have been held by the applicable Holders for more than one year where the Holders are not, and have not been in the preceding three months, affiliates of the Corporation (as defined in Rule 144 promulgated under the Securities Act), or (C) no longer require such restrictive legend, as set forth in an opinion of counsel reasonably satisfactory to the Corporation, if the restrictive legend is still in place, the Corporation agrees, upon request of such Holders, to take all steps necessary to promptly effect the removal of such legend, and the Corporation shall bear all costs associated with such removal of such legend. The Corporation shall cooperate with the applicable Holders to effect the removal of such legend at any time such legend is no longer appropriate.
(b) Shares of Series A Preferred Stock.
(i) Form and Dating. Unless otherwise requested in writing by a Holder to the Corporation, the shares of Series A Preferred Stock and any shares of Common Stock issued upon conversion thereof shall be in uncertificated, book-entry form. If certificated shares of Series A Preferred Stock are requested by a Holder, then certificates representing shares of Series A Preferred Stock and the Transfer Agent’s certificate of authentication will be substantially in the form set forth in Exhibit A, which is hereby incorporated in and expressly made a part of this Certificate of Designation. Each Series A Preferred Stock certificate may have notations, legends or endorsements required by law or stock exchange rules, provided that any such notation, legend or endorsement is in a form acceptable to the Corporation. Each Series A Preferred Stock certificate will be dated the date of its authentication.
(ii) Execution and Authentication. Two officers of the Corporation shall sign each Series A Preferred Stock certificate for the Corporation by manual or facsimile signature.
(A) If an officer of the Corporation whose signature is on a Series A Preferred Stock certificate no longer holds that office at the time the Transfer Agent authenticates the Series A Preferred Stock certificate, the Series A Preferred Stock certificate will be valid nevertheless.
(B) A Series A Preferred Stock certificate will not be valid until an authorized signatory of the Transfer Agent manually signs the certificate of authentication on the Series A Preferred Stock certificate. The signature will be conclusive evidence that the Series A Preferred Stock certificate has been authenticated under this Certificate of Designation.
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(C) The Transfer Agent shall authenticate and deliver certificates for shares of Series A Preferred Stock for original issue upon a written order of the Corporation signed by two officers of the Corporation. Such order will specify the number of shares of Series A Preferred Stock to be authenticated and the date on which the original issue of the Series A Preferred Stock is to be authenticated.
(D) The Transfer Agent may appoint an authenticating agent reasonably acceptable to the Corporation to authenticate the certificates for the Series A Preferred Stock. Unless limited by the terms of such appointment, an authenticating agent may authenticate certificates for the Series A Preferred Stock whenever the Transfer Agent may do so. Each reference in this Certificate of Designation to authentication by the Transfer Agent includes authentication by such agent. An authenticating agent has the same rights as the Transfer Agent or agent for service of notices and demands.
(iii) Transfer. When any certificate representing shares of Series A Preferred Stock is presented to the Transfer Agent with a request to register the transfer of such shares, the Transfer Agent shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that such shares being surrendered for transfer will be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Corporation and the Transfer Agent, duly executed by the Holders thereof or its attorney duly authorized in writing, and accompanied by a certification in substantially the form of Exhibit C hereto.
(iv) Replacement Certificates. If any of the Series A Preferred Stock certificates are mutilated, lost, stolen or destroyed, the Corporation shall issue, in exchange and in substitution for and upon cancellation of the mutilated Series A Preferred Stock certificate, or in lieu of and substitution for the Series A Preferred Stock certificate lost, stolen or destroyed, a new Series A Preferred Stock certificate of like tenor and representing an equivalent amount of shares of Series A Preferred Stock, but only upon receipt of evidence of such loss, theft or destruction of such Series A Preferred Stock certificate and indemnity, if requested, satisfactory to the Corporation and the Transfer Agent.
(v) Cancellation. In the event the Corporation purchases or otherwise acquires certificates representing shares of Series A Preferred Stock, the same will thereupon be delivered to the Transfer Agent for cancellation. The Transfer Agent and no one else shall cancel and destroy all Series A Preferred Stock certificates surrendered for transfer, exchange, replacement or cancellation and deliver a certificate of such destruction to the Corporation unless the Corporation directs the Transfer Agent to deliver canceled Series A Preferred Stock certificates to the Corporation. The Corporation may not issue new Series A Preferred Stock certificates to replace Series A Preferred Stock certificates to the extent they evidence Series A Preferred Stock which the Corporation has purchased or otherwise acquired.
(c) Record Holders. Prior to due presentment for registration of transfer of any shares of Series A Preferred Stock, the Transfer Agent and the Corporation may deem and treat the Person in whose name such shares are registered as the absolute owner of such Series A Preferred Stock, and neither the Transfer Agent nor the Corporation shall be affected by notice to the contrary.
(d) No Obligation of the Transfer Agent. The Transfer Agent will have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Certificate of Designation or under applicable law with respect to any transfer of any interest in any Series A Preferred Stock other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Certificate of Designation, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
| 11. | No Other Rights. |
Without limiting the rights and obligations of the Corporation and any Holder of Series A Preferred Stock pursuant to any contract or agreement between the Corporation and any such Holder of Series A Preferred Stock, the shares of Series A Preferred Stock will not have any powers, designations, preferences or relative, participating, optional or other special rights, nor will there be any qualifications, limitations or restrictions or any powers, designations, preferences or rights of such shares, other than as set forth in this Certificate of Designation, the Certificate of Incorporation, the bylaws of the Corporation or as may be provided by law.
[Signature page follows]
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to be signed and attested this day of November ___, 2024.
| THE CORPORATION: | |||
| FREYR BATTERY, INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
| Attest: | ||
| Name: | ||
| Title: |
[Signature page to Certificate of Designation]
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EXHIBIT A
FORM OF CONVERTIBLE SERIES A PREFERRED STOCK
FACE OF SECURITY
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. IN ADDITION, ANY SUCH TRANSFER OR OTHER DISPOSITION IS SUBJECT TO THE CONDITIONS CONTAINED IN A CONVERTIBLE SERIES A PREFERRED STOCK PURCHASE AGREEMENT, DATED [●], 2024. A COPY OF SUCH CONDITIONS WILL BE PROVIDED TO THE HOLDERS HEREOF UPON REQUEST.
Exhibit A-1
| Certificate Number | [●] Shares of |
| [●] | Convertible Series A Preferred Stock |
Convertible Series A Preferred Stock
of
FREYR BATTERY, INC.
FREYR BATTERY, INC., a Delaware corporation (the “Corporation”), hereby certifies that [●] (the “Holder”) is the registered owner of [●] fully paid and non-assessable shares of preferred stock, par value $0.01 per share, of the Corporation designated as the Series A Preferred Stock (the “Series A Preferred Stock”). The shares of Series A Preferred Stock are transferable on the books and records of the Transfer Agent, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Series A Preferred Stock represented hereby are issued and will in all respects be subject to the provisions of the Certificate of Designation adopted by the Corporation on [●], 2024, as the same may be amended from time to time (the “Certificate of Designation”). Capitalized terms used but not otherwise defined herein will have the respective meanings given to such terms in the Certificate of Designation. The Corporation will provide a copy of the Certificate of Designation to a Holder without charge upon written request to the Corporation at its principal place of business.
Reference is hereby made to select provisions of the Series A Preferred Stock set forth on the reverse hereof, and to the Certificate of Designation, which provisions and the Certificate of Designation will for all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Certificate of Designation and is entitled to the benefits thereunder.
Unless the Transfer Agent’s Certificate of Authentication hereon has been properly executed, these shares of Series A Preferred Stock will not be entitled to any benefit under the Certificate of Designation or be valid or obligatory for any purpose.
Exhibit A-2
IN WITNESS WHEREOF, the Corporation has executed this certificate this [●] day of [●], 2024.
| FREYR BATTERY, INC. | |||
| By: | |||
| Name: | |||
| Title: | |||
| By: | |||
| Name: | |||
| Title: | |||
Exhibit A-3
TRANSFER AGENT’S CERTIFICATE OF AUTHENTICATION
These are shares of the Series A Preferred Stock referred to in the within-mentioned Certificate of Designation.
Dated: [●], 2024
| [Continental Stock Transfer & Trust Company], as Transfer Agent, | ||
| By: | ||
| Authorized Signatory | ||
Exhibit A-4
REVERSE OF SECURITY
The shares of Series A Preferred Stock will be convertible into shares of the Corporation’s Common Stock at the option of the Holder or the Corporation and redeemable by the Corporation, in each case, upon the satisfaction of the respective conditions and in the respective manner and according to the respective terms set forth in the Certificate of Designation.
The Corporation will furnish without charge to each Holder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock and the qualifications, limitations or restrictions of such preferences or rights.
Exhibit A-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of Series A Preferred Stock evidenced hereby to:
| (Insert assignee’s social security or tax identification number) | |
| (Insert address and zip code of assignee) | |
| and irrevocably appoints: | |
agent to transfer the shares of Series A Preferred Stock evidenced hereby on the books of the Transfer Agent. The agent may substitute another to act for him or her.
| Date:________________________________ | |
| Signature:____________________________ |
(Sign exactly as your name appears on the other side of this Series A Preferred Stock Certificate)
Signature Guarantee: _______________2
| 2 | Signature must be guaranteed by an “eligible guarantor institution” that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Transfer Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. |
Exhibit A-6
EXHIBIT B
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER
TO
CONVERT SHARES OF SERIES A PREFERRED STOCK)
The undersigned Holder hereby irrevocably elects to convert the number of shares of Non-Voting Convertible Series A Preferred Stock indicated below, represented by stock certificate No(s). [_] (the “Series A Preferred Stock Certificates”), into shares of Common Stock, par value $0.01 per share (the “Common Stock”), of FREYR Battery, Inc., a Delaware corporation (the “Corporation”), as of the date written below. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation (the “Certificate of Designation”) of Non-Voting Convertible Series A Preferred Stock (the “Series A Preferred Stock”) filed by the Corporation on [_], 2024.
Conversion calculations:
Date to Effect Conversion: __________________
Number of shares of Series A Preferred Stock owned prior to Conversion (all such shares will be converted): __________________
Number of shares of Common Stock to be Issued:__________________
DWAC Instructions: __________________
Broker no:__________________
Account no: __________________
| [HOLDER] | ||
| By: | ||
| Name: | ||
| Title | ||
| Date: | ||
Exhibit B-1
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON
REGISTRATION OF TRANSFER OF SERIES A PREFERRED STOCK
Re: Convertible Series A Preferred Stock (the “Series A Preferred Stock”) of FREYR Battery, Inc., a Delaware corporation (the “Corporation”)
This Certificate relates to [●] shares of Series A Preferred Stock held by [●] (the “Transferor”).
The Transferor has requested the Transfer Agent by written order to register the transfer of Series A Preferred Stock.
In connection with such request and in respect of such Series A Preferred Stock, the Transferor does hereby certify that the Transferor is familiar with the Certificate of Designation relating to the above-captioned Series A Preferred Stock and that the transfer of this Series A Preferred Stock does not require registration under the Securities Act of 1933, as amended (the “Securities Act”), because (please check the applicable box):
| ☐ | such shares of Series A Preferred Stock are being acquired for the Transferor’s own account without transfer; |
| ☐ | such shares of Series A Preferred Stock are being transferred to the Corporation; |
| ☐ | such shares of Series A Preferred Stock are being transferred to a qualified institutional buyer (as defined in Rule 144A under the Securities Act), in reliance on Rule 144A; or |
| ☐ | such shares of Series A Preferred Stock are being transferred in reliance on, and in compliance with, another exemption from the registration requirements of the Securities Act (and based on an opinion of counsel if the Corporation so requests). |
| [●] | ||
| By: | ||
| Date:________________________ | ||
Exhibit C-1
Exhibit 10.2
FORM OF SENIOR UNSECURED PROMISSORY NOTE
THIS note has not BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES. THIS NOTE is SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THIS NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
| [●], 2024 | Maximum Principal Amount: $150,000,000 |
FOR VALUE RECEIVED, FREYR Battery, Inc., a Delaware corporation (the “Issuer”), hereby unconditionally promises to pay to Trina Solar (Schweiz) AG, a company organized under the laws of Switzerland (the “Holder”), the original principal sum of One Hundred Fifty Million Dollars ($150,000,000), together with accrued but unpaid interest thereon (the “Total Balance”), as more fully set forth in this Senior Unsecured Promissory Note (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Note”), by wire transfer of immediately available funds to an account designated in writing by the Holder, all in accordance with the terms and conditions set forth herein.
This Note is issued in connection with the transactions contemplated by that certain Transaction Agreement, dated as of [●], 2024 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Transaction Agreement”; all terms capitalized but not defined herein shall have the meanings set forth therein), by and between the Issuer and the Holder. This Note is the “Note” referred to in the Transaction Agreement. In the event of any conflict between the provisions of this Note and the provisions of the Transaction Agreement, the provisions of the Transaction Agreement shall control.
ARTICLE
I
DEFINITIONS
As used in this Note, the following terms have the respective meanings specified below:
“Business Day” means each day that is not (a) a Saturday, Sunday, or (b) other day on which banking institutions located in Shanghai, People’s Republic of China or New York, New York, are or obligated by law or executive order to close.
“Common Stock” means shares of common stock, par value $0.01 per share, of the Issuer.
“Convertible Note” means (i) the $80,000,000 aggregate principal amount of Issuer’s convertible unsecured note, issuable pursuant to a convertible note instrument dated the date hereof pursuant to the Transaction Agreement (the “Convertible Note Instrument”) or (ii) if applicable, in the event of a CFIUS Turndown or if such convertible note is not converted pursuant to the Convertible Note Instrument, any note issued in respect of the redemption and repayment of the Convertible Note (the “Replacement Note”).
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
“Maturity Date” means the earlier to occur of (a) [●], 20291, and (b) the date on which the Total Balance becomes immediately due and payable pursuant to the final paragraph of Section 4.1.
“Redemption Note” means the note issued in the event the Issuer redeems the Share Consideration from the Holder pursuant to the Transaction Agreement.
“Senior Secured Credit Facility” means the USD 235 million senior secured credit facilities provided under that certain Credit Agreement dated as of July 16, 2024 by and among TUM 1, as borrower, the lenders from time to time party thereto, HSBC Bank USA, N.A., as administrative and collateral agent, Standard Chartered Bank, Société Générale and HSBC Bank USA, N.A., as joint lead arrangers, and Standard Chartered Bank, as green loan coordinator.
“Trina Notes” means (i) this Note, (ii) the Convertible Note, (iii) the Replacement Note, if any, and (iv) the Redemption Note, if any.
ARTICLE
II
PAYMENTS; INTEREST; REGISTER; NOTES
2.1. Principal. Issuer will repay the principal amount of this Note in cash in accordance with the schedule set forth in Schedule A. Each such repayment shall be accompanied by interest accrued on the principal amount repaid to the date of repayment as provided in Section 2.2(a).
2.2. Interest.
(a) Interest on the outstanding principal amount of this Note shall accrue quarterly in arrears at a rate per annum equal of 1% (the “Interest Rate”). Interest on this Note shall (i) commence accruing on the date hereof at the Interest Rate, (ii) be computed on the basis of a 360-day year and twelve 30-day months and (iii) be payable in cash (x) on the last day of each calendar quarter and (y) on the date of any repayment or prepayment of the principal amount of this Note.
(b) In no event shall any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable Law and if any such payment is paid by the Issuer, then such excess sum shall be credited by the Holder as a payment of principal.
2.3. Prepayments. This Note may be prepaid by the Issuer in its discretion, in whole or in part, at any time prior to the Maturity Date without premium or penalty. Each prepayment of this Note shall be accompanied by interest accrued to the date of prepayment on the principal amount prepaid.
2.4. Payments Generally. Subject to Section 6.8, all payments made by the Issuer hereunder shall be made without recoupment, counterclaim or deduction of any kind and shall be made by wire transfer of funds in United States dollars pursuant to instructions provided by the Holder to the Issuer. Any payment which is stated to be due on a day that is not a Business Day shall be due on the next succeeding Business Day and any applicable interest shall continue to accrue.
| 1 | Note to Draft: To be the date that is five years following the Closing Date. |
2
2.5. Withholding. All payments made by the Issuer on account of this Note shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If the Issuer or any other Person is required by applicable Law to deduct or withhold any amount from any payment made or to be made to the Holder pursuant to this Note, the Issuer shall remit the amount required to be deducted or withheld to the applicable taxation authority and the payment made or to be made to the Holder shall be reduced by the amount so remitted, provided that such reduction shall not take into account any taxes required to be remitted to the applicable taxation authority in respect of “forgone interest” (within the meaning of section 7872(e)(2) of the Code). The Parties will take commercially reasonable efforts to reduce any deduction or withholding for any Taxes for payments made with respect to this Note, including the Holder providing the Issuer with a duly completed and executed Internal Revenue Service Form W-9 or applicable Form W-8.
2.6. Register. The Issuer shall keep at its principal office in the United States a register (the “Register”) in which shall be entered the name and address of the registered holder of this Note, the outstanding principal balance and stated interest rate payable under this Note and a recordation of all transfers of this Note. References herein to the “Holder” shall mean the Person listed in the Register as the payee of this Note unless the payee shall have presented this Note to the Issuer for transfer and the transferee shall have been entered in the Register as a subsequent holder, in which case the term shall mean such subsequent holder. The ownership of this Note shall be proven by the Register, absent manifest error. For the purpose of paying interest and principal on this Note, the Issuer shall be entitled to rely on the names and addresses in the Register. This Section 2.6 shall be construed so that this Note is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code of 1986, as amended, and any related regulations (and any other relevant or successor provisions of the Code or such regulations).
2.7. Replacement of Note. Upon receipt by the Issuer of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it, or, in the case of mutilation, upon surrender and cancellation thereof, the Issuer shall, at the Holder’s own expense, execute and deliver, in lieu thereof, a new Note with principal equal to the principal amount outstanding under such lost, stolen, destroyed or mutilated Note, bearing interest from the last date when interest has been paid on such lost, stolen, destroyed or mutilated Note.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
3.1. Organization and Good Standing. The Issuer is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and the Issuer has all requisite corporate or other organizational power and authority to carry on its businesses as now being conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As used in this Note, “Material Adverse Effect” means any material adverse effect on (i) the condition (financial or otherwise), prospects, earnings, business or properties of the Issuer, taken as a whole, whether or not arising from transactions in the ordinary course of business or (ii) the ability of the Issuer to perform its obligations under this Note.
3.2. Authorization; Enforcement; Validity.
(a) The Issuer has all requisite corporate power and authority to enter into this Note in connection with the transactions contemplated hereby, and to issue and deliver this Note in accordance with the terms hereof. The execution and delivery by the Issuer of this Note and the consummation of the issuance and delivery of this Note and the Issuer’s obligations hereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of the Issuer.
3
(b) This Note has been duly executed and delivered by the Issuer and constitutes the valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
ARTICLE
IV
EVENTS OF DEFAULT
4.1. Events of Default. The occurrence of any of following events shall constitute an “Event of Default” hereunder:
(a) the failure of the Issuer to pay any amounts due under this Note when due, whether at maturity or at a date fixed for prepayment or by declaration or otherwise;
(b) the Issuer’s material breach of any covenants of the Issuer under this Note (provided, however, if the Issuer is reasonably capable of curing such breach within thirty (30) days after its receipt of written notice of such breach, an Event of Default shall not occur hereunder unless and until the Issuer has failed to cure such breach within such thirty (30) day period), or any representation or warranty made by the Issuer in this Note shall prove to have been false or incorrect in any material respect at the time when made;
(c) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Issuer or any of its Subsidiaries or its debts, or of a substantial part of its assets, under any Debtor Relief Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any of its Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered and not dismissed within such 60 day period;
(d) the Issuer or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Debtor Relief Law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (c) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any of its Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(e) there is entered against the Issuer or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $5,000,000 (five million United States dollars) (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied or failed to acknowledge coverage), or (ii) a non-monetary final judgment or order that, either individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;
(f) any Indebtedness shall be incurred by the Issuer or any of its Subsidiaries, other than (i) Indebtedness incurred to finance the construction of the Issuer’s or any of its Subsidiaries’ solar module or solar cell manufacturing facilities contemplated by the Transaction Agreement, (ii) any unsecured Indebtedness incurred by the Issuer or any of its Subsidiaries that is subordinated to the Issuer’s or any of its Subsidiaries’ obligations under the Trina Notes, or (iii) Indebtedness incurred with the Holder’s prior written consent;
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(g) any Commercial Agreement is terminated as a result of a material breach by the Issuer or any of its Subsidiaries (after giving effect to any applicable cure or grace period); or
(h) the Issuer or any of its Subsidiaries: (i) fails to pay any principal or interest in respect of any Indebtedness when due and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or (ii) fails to perform or observe any other covenant, term, condition or agreement relating to any Indebtedness referred to in clause (i) above or contained in any instrument or agreement evidencing or relating thereto, or any other event occurs or condition exists, the effect of which failure or other event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice, if required, such 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 to be made, prior to its stated maturity; or any such Indebtedness is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof, provided that a default, event or condition described in clause (i) or (ii) of this Section 4.1(h) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i) and (ii) of this Section 4.1(h) has occurred and is continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $5,000,000 (five million United States dollars)).
Upon the occurrence of any Event of Default, the outstanding Total Balance under this Note shall become immediately due and payable upon election of the Holder without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Issuer; provided that, upon the occurrence of any Event of Default described in Section 4.1(c) or (d), the Total Balance under this Note shall be accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by the Issuer. Upon the occurrence of any Event of Default, the Holder may, in addition to declaring all amounts due hereunder to be immediately due and payable (or in addition to such amounts becoming automatically due and payable), pursue any available remedy, whether at law or in equity.
4.2. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. No right or remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or exercise of any other right or remedy. No delay or omission of the Holder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Holder.
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ARTICLE V
SENIORITY AND LIQUIDATION PRIORITY
5.1. Seniority of Note. The Holder’s right to payment of all or any portion of the outstanding Total Balance under this Note and any other Trina Notes is and shall remain, (i) senior or pari-passu in right of payment to all other Indebtedness except for (1) the Senior Secured Credit Facility and (2) any Indebtedness which would not cause an Event of Default pursuant to Section 4.1(f)(i) or Section 4.1(f)(iii), and (ii) senior in right of payment to all preferred Equity Interests and Common Stock of the Issuer.
5.2. Preferred Payments. The Issuer shall not permit any payment to be made on or in respect of any preferred Equity Interests of the Issuer (a “Preferred Equity Payment”) if at such time the Issuer shall be in default in the making of any payment of principal or interest then due to the Holder on this Note (a “Note Payment Default”), or if a Note Payment Default would result from the making of any such Preferred Equity Payment. Any such Preferred Equity Payment otherwise due but remaining unpaid as a result of the application of the foregoing restriction shall continue to accrue and shall be permitted to be paid at such time as no Note Payment Default shall then exist or would result from the making of such Preferred Equity Payment.
ARTICLE
VI
MISCELLANEOUS
6.1. Modification of Note. This Note may not be amended, restated, renewed, replaced, supplemented or otherwise modified except by an instrument in writing executed by the Issuer and the Holder.
6.2. Governing Law, Jurisdiction, Jury Trial Waiver, Etc.
(a) This Note, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Note, or the negotiation, administration, performance, or enforcement of this Note, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Note, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
(b) Each of the parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Note or the transactions contemplated hereby, for and on behalf of itself or any of its properties or assets, in accordance with Section 6.2(c) or in such other manner as may be permitted by applicable law, and nothing in this Section 6.2(b) shall affect the right of any party to serve legal process in any other manner permitted by applicable law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Note or the transactions contemplated hereby; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Note or the transactions contemplated hereby shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Note or the transactions contemplated hereby in any court other than the Chosen Courts. Each of the Issuer and the Holder agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 6.2(b), each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 6.4. Nothing in this Section 6.2(b) shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Note or the transactions contemplated hereby or (y) be deemed to confer rights on any Person other than the parties.
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(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS NOTE OR THE TRANSACTION. EACH PARTY ACKNOWLEDGES AND AGREES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 6.2(c).
6.3. Waiver of Presentment. The parties hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein. The Holder of this Note by acceptance of this Note agrees to be bound by the provisions of this Note which are expressly binding on the Holder.
6.4. Notices. Any notice or other communication required shall be in writing addressed to the respective party and delivered as set forth under Section 11.2 of the Transaction Agreement.
6.5. Effect of Titles and Headings; References. The titles and headings herein are for convenience only and shall not affect the construction hereof. References herein to Sections and Articles are to Sections and Articles of this Note, unless otherwise expressly provided.
6.6. Entire Agreement; Interpretation; Severability. Except as expressly set forth herein, this Note constitutes the entire agreement between the parties with respect to the subject matter hereof and is the final expression of the intentions of the Issuer and the Holder. This Note is the result of negotiations among the Issuer and the Holder, has been reviewed (or each party has had the opportunity to have it reviewed) by counsel to such parties and is the product of all parties. Accordingly, this Note shall not be construed more strictly against any party hereto merely because of such party’s involvement in its preparation. If any provision of this Note is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall not be affected thereby, and each provision of this Note shall continue to be valid and enforceable to the fullest extent permitted by applicable law.
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6.7. Successors and Assigns. This Note shall be binding upon and inure to the benefit of the Issuer and the Holder. Neither the Issuer nor the Holder may assign or otherwise transfer this Note to any other Person without the prior written consent of the other party hereto, and any such purported assignment or other transfer without such consent shall be null and void.
6.8. Set-off. Notwithstanding anything to the contrary in this Note or otherwise, following the final determination (whether pursuant to a final judgment, settlement or agreement) that Issuer is entitled to a payment from the Holder. in connection with any Actions arising out of or with respect to any Related Agreement, the Issuer may set off and apply such amount against any amounts of the outstanding Total Balance due to the Holder on the Maturity Date.
6.9. Effectiveness; Electronic Execution. This Note shall become effective upon the execution and delivery of a duly executed counterpart hereof by each of the parties hereto. Each of the parties hereto may execute this Note by electronic means and recognizes and accepts the use of electronic signatures and records by any other party hereto in connection with the execution and storage hereof. The words “execution,” “signed,” and “signature,” shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state laws based on the Uniform Electronic Transactions Act.
6.10. Counterparts. This Note may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Note by electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.
[Remainder of page left intentionally blank]
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IN WITNESS WHEREOF, the parties have caused this Note to be duly executed as of the date first written above.
| FREYR BATTERY, INC., as the Issuer | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Acknowledged and agreed: | ||||
| TRINA SOLAR (SCHWEIZ) AG, as the Holder | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
[Signature Page – Project Sol Promissory Note]
PRINCIPAL REPAYMENT SCHEDULE
| Payment | Date | Principal Repayment Amount | ||
| 1 | [●], 20262 | $ | 7,500,000 | |
| 2 | [●] | $ | 7,500,000 | |
| 3 | [●] | $ | 7,500,000 | |
| 4 | [●] | $ | 7,500,000 | |
| 5 | [●] | $ | 7,500,000 | |
| 6 | [●] | $ | 7,500,000 | |
| 7 | [●] | $ | 7,500,000 | |
| 8 | [●] | $ | 7,500,000 | |
| 9 | [●] | $ | 7,500,000 | |
| 10 | [●] | $ | 7,500,000 | |
| 11 | [●] | $ | 7,500,000 | |
| 12 | [●] | $ | 7,500,000 | |
| 13 | [●] | $ | 7,500,000 | |
| 14 | [●] | $ | 7,500,000 | |
| 15 | [●] | $ | 7,500,000 | |
| 16 | [●] | $ | 7,500,000 | |
| 17 | Maturity Date | $ | 30,000,000 |
| 2 | Note to Draft: To be the first calendar quarter ending after the one-year anniversary of the date of issuance of this Note. |
Exhibit 10.3
FORM OF CONVERTIBLE UNSECURED NOTE
NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES. THIS NOTE AND SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THIS NOTE AND ANY SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
Issuance Date: [●], 2024
FOR VALUE RECEIVED, FREYR Battery, Inc., a Delaware corporation (the “Issuer”), hereby unconditionally promises to pay to Trina Solar (Schweiz) AG, a company organized under the laws of Switzerland or its registered assigns (as permitted in accordance with the terms hereof) (the “Holder”), the Principal Amount (as defined below) (together with any accrued and unpaid Interest (as defined below), the “Outstanding Amount”) when due, whether on a Conversion Date, the Repayment Date, or upon the conversion, redemption or upon acceleration or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any Principal Amount at the applicable Interest Rate (as defined below) from the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable on a Conversion Date or the Repayment Date, as applicable (in each case in accordance with the terms hereof).
This convertible note (including all convertible notes issued in exchange, transfer or replacement hereof) (the “Note”) is issued in connection with the transactions contemplated by that certain Transaction Agreement, dated as of November 6, 2024 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Transaction Agreement”; all terms capitalized but not defined herein shall have the meanings set forth therein), by and between the Issuer and the Holder. This Note is the “Convertible Note Instrument” referred to in the Transaction Agreement. In the event of any conflict between the provisions of this Note and the provisions of the Transaction Agreement, the provisions of the Transaction Agreement shall control.
In no event shall any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable Law and if any such payment is paid by the Issuer, then such excess sum shall be credited by the Holder as a payment of principal.
1. Definitions. Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated:
“Business Day” means each day that is not (a) a Saturday, Sunday, or (b) other day on which banking institutions located in Shanghai, People’s Republic of China or New York, New York, are or obligated by law or executive order to close.
“CFIUS Approval” means (a) CFIUS has concluded that the Conversion is not a “covered transaction” and not subject to review under Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder (the “DPA”), (b) CFIUS has issued a written notice that it has completed a review or investigation of the notification voluntarily provided pursuant to the DPA with respect to the Conversion, and has concluded all action under the DPA or (c) if CFIUS has sent a report to the President of the United States requesting the President’s decision and (i) the President has announced a decision not to take any action to suspend or prohibit the Conversion or (ii) having received a report from CFIUS requesting the President’s decision, the President has not taken any action after fifteen (15) days from the earlier of the date the President received such report from CFIUS or the end of the investigation period.
“CFIUS Turndown” shall be deemed to have occurred if (a) CFIUS has informed the Parties in writing, after reasonable best efforts by the Parties to negotiate with CFIUS to receive CFIUS Approval, that it has unresolved national security concerns with respect to the Conversion and that it intends to send or has sent a report to the President of the United States recommending that the President of the United States act to suspend or prohibit the Conversion or (b) if after the Parties use reasonable best efforts to negotiate with CFIUS in good faith, CFIUS has informed the Parties it will impose a Burdensome Condition (as defined in the Transaction Agreement) as a condition of CFIUS Approval.
“Common Stock” means shares of common stock, par value $0.01 per share, of the Issuer.
“Conversion” means the First Conversion and the Second Conversion.
“Conversion Shares” means the aggregate of the First Conversion Shares and the Second Conversion Shares.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
“Dividend Amount” means, with respect to any date on which the Issuer pays a dividend or distribution on its outstanding Common Stock, the amount of such dividend or distribution that is paid per share of Common Stock multiplied by the Conversion Shares.
“First Conversion” means the conversion of this Note into the First Conversion Shares.
“First Conversion Date” means the date falling five (5) Business Days after the date the Issuer notifies the Holder in writing that CFIUS Approval has been obtained.
“First Conversion Shares” means 12,521,653 shares of the Issuer Common Stock, as may be adjusted as a result of any share consolidation, stock split, stock dividend, or similar event effected with respect to the Issuer’s Common Stock.
“Interest Rate” means seven percent (7%) per annum as may be increased pursuant to Section 3(b).
“Party” means each of the Issuer and the Holder.
“Principal Amount” means $80,000,000, as may be reduced in accordance with Section 4(a)(ii).
“Redemption Note” means the note issued in the event the Issuer redeems the Share Consideration from the Holder pursuant to the Transaction Agreement.
“Replacement Note” is defined in Section 4(b)(i).
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“Repayment Date” means the date on which the Repayment occurs.
“Requisite Stockholder Approval” means obtaining the approval of the Second Conversion by the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of the Issuer’s Common Stock present at the meeting of stockholders of the Issuer, as required pursuant to the Transaction Agreement.
“Second Conversion” means the conversion of any Outstanding Amount of this Note into the Second Conversion Shares.
“Second Conversion Date” means the date falling five (5) Business Days after the date the Issuer notifies the Holder in writing that Requisite Stockholder Approval has been obtained.
“Second Conversion Shares” means 17,918,460 shares of the Issuer’s Common Stock, as may be adjusted as a result of any share consolidation, stock split, stock dividend, or similar event effected with respect to the Issuer’s Common Stock.
“Senior Note” means the $150,000,000 aggregate principal amount senior unsecured note, issued to the Holder pursuant to the Transaction Agreement.
“Trina Notes” means (i) this Note, (ii) the Senior Note, (iii) the Replacement Note, if any, and (iv) the Redemption Note, if any.
2. Transaction Agreement; Transfer. This Note is subject to the terms and conditions of, and entitled to the benefit of, the provisions of the Transaction Agreement. This Note is transferable and assignable by the Holder subject to the provisions of Section 8 of this Note. The Issuer may not assign or delegate any of its rights or obligations under this Note without the prior written consent of the Holder.
3. Payment of Interest; Other Payment.
(a) Interest on this Note shall (i) commence accruing on the Issuance Date at the Interest Rate on a quarterly basis and (ii) be computed on the basis of a 360-day year and twelve 30-day months.
(b) (i) The Interest Rate shall increase by an additional 3% per annum (1) on the date falling six (6) months after the Closing and (2) on the first day of each subsequent 60-day period until the Second Conversion Date or Repayment Date, (ii) interest shall be computed on the basis of a 360-day year and twelve 30-day months and (iii) the interest accrued in each 60-day period shall be payable in cash on the date of each subsequent Interest Rate increase. Additional interest will cease to accrue on the Conversion or Repayment Date.
(c) All payments made by the Issuer hereunder shall be made in lawful money of the United States at such place as the Holder hereof may from time to time designate in writing to the Issuer. Unless otherwise stated in this Note, payment shall be credited first to the accrued interest then due and payable and the remainder shall be applied to principal.
(d) All payments made by the Issuer on account of this Note shall be made without deduction or withholding for any Taxes, except as required by applicable Law. No Person, including the Issuer, shall be obligated to pay any additional amounts to the Holder as a result of any withholding or deduction for, or on account of, any present or future Taxes.
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4. Conversion.
(a) Conversion
(i) This Note may be converted only as provided in this Section 4.
(ii) On the First Conversion Date, the Issuer shall mark down this Note so that the Principal Amount of this Note following the First Conversion will be $47,091,704 and shall issue to the Holder the First Conversion Shares.
(iii) On the Second Conversion Date, the Outstanding Amount under the Note shall be automatically converted into the Second Conversion Shares.
(iv) Upon the Second Conversion of this Note, the Issuer shall cancel this Note without any further action by the Holder, and the Issuer shall owe no monies to the Holder in connection therewith.
(v) The First Conversion shall occur only on the First Conversion Date and the Second Conversion shall occur only on the Second Conversion Date.
(vi) If any fractional shares would be delivered upon any Conversion pursuant to this Section 4, the Issuer shall round down to the nearest whole number of shares of Common Stock. The Issuer agrees that all shares of Common Stock issued pursuant to Section 4 hereof will be duly and validly issued and fully paid and non-assessable, and free from all taxes, liens and charges with respect to the issue thereof, except as created or imposed by the Holder.
(vii) The Person or Persons entitled to receive the shares of Common Stock issuable upon a Conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the relevant Conversion Date.
(viii) The Issuer’s settlement of each conversion pursuant to this Section 4 shall be deemed to satisfy in full its obligations to pay the principal and interest of the Note converted.
(b) No conversion
(i) In the event of a (i) CFIUS Turndown, or (ii) if this Note does not become eligible for Conversion pursuant to this Note; provided that such failure to become eligible for Conversion is not caused by any deliberate action of the Holder or any of its respective Affiliates, in either case under (i) or (ii), within twelve (12) months following the Closing Date which date may be extendable by the Holder in its sole discretion, this Note shall be redeemed and repaid by the Issuer with a newly issued unsecured senior note (the “Replacement Note”) substantially on the same terms as the Secondary Note Instrument (the “Repayment”). The Replacement Note will have an aggregate principal amount equal to the amount of principal and accrued but unpaid interest under this Note at the time of the Repayment.
(ii) In no event will the CFIUS Turndown or the Company not being able to effect a Conversion trigger cash repayment of this Note.
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5. Tax Treatment.
(a) Solely for United States federal income tax purposes, upon the issuance of this Note, the Holder shall be treated as holding common stock of the Issuer equal to the Conversion Shares, and, accordingly, for such purposes this Note shall be considered not outstanding.
(b) In the event that this Note is redeemed and repaid with the Replacement Note pursuant to Section 4(b), then the Holder will be treated, solely for United States federal income tax purposes, as if the Conversion Shares are redeemed in exchange for the Replacement Note.
(c) Nothing in this Section 5 will require the Issuer to convert this Note into the Conversion Shares prior to a Conversion and the Holder agrees that it will not be the beneficial holder of the Conversion Shares unless it is issued in connection with a Conversion.
6. Representations and Warranties of the Issuer.
(a) Organization and Good Standing. The Issuer is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and the Issuer has all requisite corporate or other organizational power and authority to carry on its businesses as now being conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As used in this Note, “Material Adverse Effect” means any material adverse effect on (i) the condition (financial or otherwise), prospects, earnings, business or properties of the Issuer, taken as a whole, whether or not arising from transactions in the ordinary course of business or (ii) the ability of the Issuer to perform its obligations under this Note.
(b) Authorization; Enforcement; Validity.
(i) The Issuer has all requisite corporate power and authority to enter into this Note in connection with the transactions contemplated hereby, and to issue and deliver this Note in accordance with the terms hereof. The execution and delivery by the Issuer of this Note and the consummation of the issuance and delivery of this Note and the Issuer’s obligations hereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of the Issuer.
(ii) This Note has been duly executed and delivered by the Issuer and constitutes the valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
7. Seniority and Preferred Payments.
(a) The Holder’s right to payment of all or any portion of the Outstanding Amount under this Note and any other Trina Notes is and shall remain, (i) senior or pari passu in right of payment to all other Indebtedness except for (1) the Senior Secured Credit Facility and (2) any Indebtedness which would not cause an Event of Default pursuant to Section 10(f)(i) or Section 10(f)(iii), and (ii) senior in right of payment to all preferred Equity Interests and Common Stock of the Issuer.
(b) The Issuer shall not permit any payment to be made on or in respect of any preferred Equity Interests of the Issuer (a “Preferred Equity Payment”) if at such time the Issuer shall be in default in the making of any payment of principal or interest then due to the Holder on this Note (a “Note Payment Default”), or if a Note Payment Default would result from the making of any such Preferred Equity Payment. Any such Preferred Equity Payment otherwise due but remaining unpaid as a result of the application of the foregoing restriction shall continue to accrue and shall be permitted to be paid at such time as no Note Payment Default shall then exist or would result from the making of such Preferred Equity Payment.
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8. Transfer Restrictions and Related Provisions.
(a) This Note may not be directly or indirectly offered, sold, assigned or transferred by the Holder. The Holder acknowledges and agrees that this Note may not be resold, transferred, pledged or otherwise disposed of by the Holder absent an effective registration statement under the Securities Act except (i) to the Issuer or a subsidiary thereof or (ii) pursuant to another applicable exemption from the registration requirements of the Securities Act, and in each of cases (i) and (ii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or book-entry positions representing this Note and any shares of Common Stock issued may contain a restrictive legend to such effect in accordance with any applicable securities laws and stock exchange requirements (including any required admission to trading). Any offer, sale, assignment or other transfer of this Note is also subject to the restrictive legends of this Note.
(b) The Issuer shall maintain and keep updated a register (the “Register”) for the recordation of the names and addresses of the holders of this Note and the Outstanding Amount of this Note. The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Issuer and the Holder shall treat each Person whose name is recorded in the Register as the owner of this Note or the new Note for all purposes, including, without limitation, the right to receive payments hereunder, notwithstanding notice to the contrary. A Note may be assigned or sold in whole but not in part, to the extent permitted pursuant to Section 8(a) and any other terms hereof, only by registration of such assignment or sale on the Register. This Section 8(b) shall be construed so that such obligations are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code of 1986, as amended, and any related regulations (and any other relevant or successor provisions of the Code or such regulations).
9. Reissuance of this Note.
(a) Lost, Stolen, Destroyed or Mutilated Note. Upon receipt by the Issuer of evidence reasonably satisfactory to the Issuer of the loss, theft, destruction or mutilation of this Note and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Issuer in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Issuer shall execute and deliver to the Holder a new Note (in accordance with Section 9(b)), representing the Outstanding Amount.
(b) Issuance of New Notes. Whenever the Issuer is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal Amount, (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall be subject to transfer restrictions set forth in Section 8 hereof, and (v) shall be timely prepared and issued by the Issuer subject to the timely receipt of the evidence reasonably satisfactory to the Issuer pursuant to Section 8(a).
10. Event of Default. The occurrence of any of following events shall constitute an “Event of Default” hereunder:
(a) the failure of the Issuer to pay any amounts due under this Note when due, whether at maturity or at a date fixed for prepayment or by declaration or otherwise;
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(b) the Issuer’s material breach of any covenants of the Issuer under this Note (provided, however, if the Issuer is reasonably capable of curing such breach within thirty (30) days after its receipt of written notice of such breach, an Event of Default shall not occur hereunder unless and until the Issuer has failed to cure such breach within such thirty (30) day period), or any representation or warranty made by the Issuer in this Note shall prove to have been false or incorrect in any material respect at the time when made;
(c) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Issuer or any of its Subsidiaries or its debts, or of a substantial part of its assets, under any Debtor Relief Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any of its Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered and not dismissed within such 60 day period;
(d) the Issuer or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Debtor Relief Law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (c) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any of its Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(e) there is entered against the Issuer or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $5,000,000 (five million United States dollars) (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied or failed to acknowledge coverage), or (ii) a non-monetary final judgment or order that, either individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;
(f) any Indebtedness shall be incurred by the Issuer or any of its Subsidiaries, other than (i) Indebtedness incurred to finance the construction of the Issuer’s or any of its Subsidiaries’ solar module or solar cell manufacturing facilities contemplated by the Transaction Agreement, (ii) any unsecured Indebtedness incurred by the Issuer or any of its Subsidiaries that is subordinated to the Issuer’s or any of its Subsidiaries’ obligations under the Trina Notes, or (iii) Indebtedness incurred with the Holder’s prior written consent;
(g) any Commercial Agreement is terminated as a result of a material breach by the Issuer or any of its Subsidiaries (after giving effect to any applicable cure or grace period); or
(h) the Issuer or any of its Subsidiaries: (i) fails to pay any principal or interest in respect of any Indebtedness when due and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or (ii) fails to perform or observe any other covenant, term, condition or agreement relating to any Indebtedness referred to in clause (i) above or contained in any instrument or agreement evidencing or relating thereto, or any other event occurs or condition exists, the effect of which failure or other event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice, if required, such 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 to be made, prior to its stated maturity; or any such Indebtedness is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof, provided that a default, event or condition described in clause (i) or (ii) of this Section 10(h) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i) and (ii) of this Section 10(h) has occurred and is continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $5,000,000 (five million United States dollars).
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Upon the occurrence of any Event of Default, the Outstanding Amount under this Note shall become immediately due and payable upon election of the Holder without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Issuer; provided that, upon the occurrence of any Event of Default described in Section 10(c) or (d), the Outstanding Amount under this Note shall be accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by the Issuer. Upon the occurrence of any Event of Default, the Holder may, in addition to declaring all amounts due hereunder to be immediately due and payable (or in addition to such amounts becoming automatically due and payable), pursue any available remedy, whether at law or in equity.
11. No Rights as a Stockholder. This Note does not by itself entitle the Holder to any voting rights or other rights as a stockholder of the Issuer. In the absence of Conversion of this Note, no provisions of this Note, and no enumeration herein of the rights or privileges of the Holder, shall cause the Holder to be a stockholder of the Issuer for any purpose. However, if the Issuer pays a dividend on outstanding shares of Common Stock (that is not payable in shares of Common Stock) while this Note is outstanding, the Issuer will pay the Dividend Amount to the Holder at the same time.
12. Miscellaneous.
(a) Powers and Remedies Cumulative; No Waiver. No right or remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or exercise of any other right or remedy. No delay or omission of the Holder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Holder.
(b) Modifications of Note. This Note may not be amended, restated, renewed, replaced, supplemented or otherwise modified except by an instrument in writing executed by the Issuer and the Holder.
(c) Governing Law, Jurisdiction, Jury Trial Waiver, Etc.
(i) This Note, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Note, or the negotiation, administration, performance, or enforcement of this Note, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Note, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
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(ii) Each of the parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Note or the transactions contemplated hereby, for and on behalf of itself or any of its properties or assets, in accordance with this Section 12(c) or in such other manner as may be permitted by applicable law, and nothing in this Section 12(c) shall affect the right of any party to serve legal process in any other manner permitted by applicable law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Note or the transactions contemplated hereby; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Note or the transactions contemplated hereby shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Note or the transactions contemplated hereby in any court other than the Chosen Courts. Each of the Issuer and the Holder agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 12(c), each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 12(f). Nothing in this Section 12(c) shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Note or the transactions contemplated hereby or (y) be deemed to confer rights on any Person other than the parties.
(iii) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS NOTE OR THE TRANSACTION. EACH PARTY ACKNOWLEDGES AND AGREES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12(c).
(d) Amendments in Writing. Any term of this Note may be amended, modified or waived upon the written consent of the Issuer and the Holder. No such waiver or consent in any one instance shall be construed to be a continuing waiver or a waiver in any other instance unless it expressly so provides.
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(e) Waivers of Presentment. The parties hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein. The Holder of this Note by acceptance of this Note agrees to be bound by the provisions of this Note which are expressly binding on the Holder.
(f) Notices. Any notice or other communication required shall be in writing addressed to the respective party and delivered as set forth under Section 11.2 of the Transaction Agreement.
(g) Effect of Titles and Headings; References. The titles and headings herein are for convenience only and shall not affect the construction hereof. References herein to Sections and Articles are to Sections and Articles of this Note, unless otherwise expressly provided.
(h) Entire Agreement; Interpretation; Severability. Except as expressly set forth herein, this Note constitutes the entire agreement between the parties with respect to the subject matter hereof and is the final expression of the intentions of the Issuer and the Holder. This Note is the result of negotiations among the Issuer and the Holder, has been reviewed (or each party has had the opportunity to have it reviewed) by counsel to such parties and is the product of all parties. Accordingly, this Note shall not be construed more strictly against any party hereto merely because of such party’s involvement in its preparation. If any provision of this Note is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall not be affected thereby, and each provision of this Note shall continue to be valid and enforceable to the fullest extent permitted by applicable law.
(i) Successors and Assigns. This Note shall be binding upon and inure to the benefit of the Issuer and the Holder. Neither the Issuer nor the Holder may assign or otherwise transfer this Note to any other Person without the prior written consent of the other party hereto, and any such purported assignment or other transfer without such consent shall be null and void.
(j) Effectiveness; Electronic Execution. This Note shall become effective upon the execution and delivery of a duly executed counterpart hereof by each of the parties hereto. Each of the parties hereto may execute this Note by electronic means and recognizes and accepts the use of electronic signatures and records by any other party hereto in connection with the execution and storage hereof. The words “execution,” “signed,” and “signature,” shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state laws based on the Uniform Electronic Transactions Act.
(k) Counterparts. This Note may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Note by electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Issuer has caused this Note to be signed in its name effective as of the date first above written.
| FREYR BATTERY, INC., as the Issuer | ||
| By: | ||
| Name: | ||
| Title: | ||
| Acknowledged and agreed: | ||
| TRINA SOLAR (SCHWEIZ) AG, as the Holder | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Convertible Unsecured Note]
Exhibit 10.4
FORM OF UNSECURED PROMISSORY NOTE
THIS note has not BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES. THIS NOTE is SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THIS NOTE MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
[●], 2024
FOR VALUE RECEIVED, FREYR Battery, Inc., a Delaware corporation (the “Issuer”), hereby unconditionally promises to pay to Trina Solar (Schweiz) AG, a company organized under the laws of Switzerland (the “Holder”), the original principal sum of [●], together with accrued but unpaid interest thereon (the “Total Balance”), as more fully set forth in this Unsecured Promissory Note (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Note”), by wire transfer of immediately available funds to an account designated in writing by the Holder, all in accordance with the terms and conditions set forth herein.
This Note is issued in connection with the transactions contemplated by that certain Transaction Agreement, dated as of [●], 2024 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Transaction Agreement”; all terms capitalized but not defined herein shall have the meanings set forth therein), by and between the Issuer and the Holder. This Note is the “Secondary Note” referred to in the Transaction Agreement. In the event of any conflict between the provisions of this Note and the provisions of the Transaction Agreement, the provisions of the Transaction Agreement shall control.
ARTICLE
I
DEFINITIONS
As used in this Note, the following terms have the respective meanings specified below:
“Business Day” means each day that is not (a) a Saturday, Sunday, or (b) other day on which banking institutions located in Shanghai, People’s Republic of China or New York, New York, are or obligated by law or executive order to close.
“Common Stock” means shares of common stock, par value $0.01 per share, of the Issuer.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
“Determination Date” means, with respect to any portion of this Note, means the earliest to occur of (a) [●]1, (b) the date on which the Put Election is delivered, and (c) the date on which the Payment Amount with respect to the full Note becomes immediately due and payable pursuant to the final paragraph of Section 4.1.
“Dividend Amount” means, with respect to any date on which the Issuer pays a dividend or makes any distributions on its outstanding Common Stock, the amount of such dividend that is paid per share of Common Stock multiplied by the Share Number.
“Payment Date” means the earliest to occur of (a) [●]2, (b) the Repurchase Date, and (c) the date on which the Payment Amount with respect to the full Note becomes immediately due and payable pursuant to the final paragraph of Section 4.1.
“Payment Amount” means, with respect to any portion of this Note, the greater of (x) the proportionate amount of principal and accrued but unpaid interest under this Note on the Payment Date, or (y) an amount equal to the proportionate Share Number multiplied by the 30-day VWAP stock price on the date the applicable Determination Date.
“Share Number” means [●]3 shares of Common Stock, as may be adjusted as a result of any share consolidation, stock split, stock dividend, or similar event effected with respect to the Issuer’s Common Stock.
“Senior Note” means the $150,000,000 aggregate principal amount senior unsecured note, issued to the Holder pursuant to the Transaction Agreement.
“Senior Secured Credit Facility” means the USD 235 million senior secured credit facilities provided under that certain Credit Agreement dated as of July 16, 2024 by and among TUM 1, as borrower, the lenders from time to time party thereto, HSBC Bank USA, N.A., as administrative and collateral agent, Standard Chartered Bank, Société Générale and HSBC Bank USA, N.A., as joint lead arrangers, and Standard Chartered Bank, as green loan coordinator.
“Trina Notes” means (i) this Note, or (ii) the Senior Note.
ARTICLE
II
PAYMENTS; INTEREST; REGISTER; NOTES
2.1. Repayment. On the Payment Date, Issuer will repay the Payment Amount to the Holder in cash.
2.2. Interest. Interest on the outstanding principal amount of this Note shall accrue quarterly in arrears at a rate per annum equal of 1% (the “Interest Rate”). Interest on this Note shall (i) commence accruing on the date hereof at the Interest Rate, (ii) be computed on the basis of a 360-day year and twelve 30-day months and (iii) be payable in cash on the Payment Date in accordance with Section 2.1. In no event shall any interest charged, collected or reserved under this Note exceed the maximum rate then permitted by applicable Law and if any such payment is paid by the Issuer, then such excess sum shall be credited by the Holder as a payment of principal.
2.3. No Prepayment. This Note may not be prepaid by the Issuer.
| 1 | Note to Draft: To be the date that is ten years following the Closing Date. |
| 2 | Note to Draft: To be the date that is ten years following the Closing Date. |
| 3 | Note to Draft: To be the number of shares unconverted/repurchased. |
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2.4. Payments Generally. Subject to Section 6.8, all payments made by the Issuer hereunder shall be made without recoupment, counterclaim or deduction of any kind and shall be made by wire transfer of funds in United States dollars pursuant to instructions provided by the Holder to the Issuer. Any payment which is stated to be due on a day that is not a Business Day shall be due on the next succeeding Business Day and any applicable interest shall continue to accrue.
2.5. Withholding. All payments made by the Issuer on account of this Note shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If the Issuer or any other Person is required by applicable Law to deduct or withhold any amount from any payment made or to be made to the Holder pursuant to this Note, the Issuer shall remit the amount required to be deducted or withheld to the applicable taxation authority and the payment made or to be made to the Holder shall be reduced by the amount so remitted, provided that such reduction shall not take into account any taxes required to be remitted to the applicable taxation authority in respect of “forgone interest” (within the meaning of section 7872(e)(2) of the Code). The Parties will take commercially reasonable efforts to reduce any deduction or withholding for any Taxes for payments made with respect to this Note, including the Holder providing the Issuer with a duly completed and executed Internal Revenue Service Form W-9 or applicable Form W-8.
2.6. Register. The Issuer shall keep at its principal office in the United States a register (the “Register”) in which shall be entered the name and address of the registered holder of this Note, the outstanding principal balance and stated interest rate payable under this Note and a recordation of all transfers of this Note. References herein to the “Holder” shall mean the Person listed in the Register as the payee of this Note unless the payee shall have presented this Note to the Issuer for transfer and the transferee shall have been entered in the Register as a subsequent holder, in which case the term shall mean such subsequent holder. The ownership of this Note shall be proven by the Register, absent manifest error. For the purpose of paying interest and principal on this Note, the Issuer shall be entitled to rely on the names and addresses in the Register. This Section 2.6 shall be construed so that this Note is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code of 1986, as amended, and any related regulations (and any other relevant or successor provisions of the Code or such regulations).
2.7. Replacement of Note. Upon receipt by the Issuer of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it, or, in the case of mutilation, upon surrender and cancellation thereof, the Issuer shall, at the Holder’s own expense, execute and deliver, in lieu thereof, a new Note with principal equal to the principal amount outstanding under such lost, stolen, destroyed or mutilated Note, bearing interest from the last date when interest has been paid on such lost, stolen, destroyed or mutilated Note.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
3.1. Organization and Good Standing. The Issuer is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and the Issuer has all requisite corporate or other organizational power and authority to carry on its businesses as now being conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As used in this Note, “Material Adverse Effect” means any material adverse effect on (i) the condition (financial or otherwise), prospects, earnings, business or properties of the Issuer, taken as a whole, whether or not arising from transactions in the ordinary course of business or (ii) the ability of the Issuer to perform its obligations under this Note.
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3.2. Authorization; Enforcement; Validity.
(a) The Issuer has all requisite corporate power and authority to enter into this Note in connection with the transactions contemplated hereby, and to issue and deliver this Note in accordance with the terms hereof. The execution and delivery by the Issuer of this Note and the consummation of the issuance and delivery of this Note and the Issuer’s obligations hereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of the Issuer.
(b) This Note has been duly executed and delivered by the Issuer and constitutes the valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
ARTICLE
IV
EVENTS OF DEFAULT
4.1. Events of Default. The occurrence of any of following events shall constitute an “Event of Default” hereunder:
(a) the failure of the Issuer to pay any amounts due under this Note when due, whether at maturity or at a date fixed for prepayment or by declaration or otherwise;
(b) the Issuer’s material breach of any covenants of the Issuer under this Note (provided, however, if the Issuer is reasonably capable of curing such breach within thirty (30) days after its receipt of written notice of such breach, an Event of Default shall not occur hereunder unless and until the Issuer has failed to cure such breach within such thirty (30) day period), or any representation or warranty made by the Issuer in this Note shall prove to have been false or incorrect in any material respect at the time when made;
(c) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Issuer or any of its Subsidiaries or its debts, or of a substantial part of its assets, under any Debtor Relief Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any of its Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered and not dismissed within such 60 day period;
(d) the Issuer or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Debtor Relief Law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (c) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any of its Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(e) there is entered against the Issuer or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding $5,000,000 (five million United States dollars) (to the extent not covered by independent third-party insurance as to which the insurer has been notified of such judgment or order and has not denied or failed to acknowledge coverage), or (ii) a non-monetary final judgment or order that, either individually or in the aggregate, has or would reasonably be expected to have a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;
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(f) any Indebtedness shall be incurred by the Issuer or any of its Subsidiaries, other than (i) Indebtedness incurred to finance the construction of the Issuer’s or any of its Subsidiaries’ solar module or solar cell manufacturing facilities contemplated by the Transaction Agreement, (ii) any unsecured Indebtedness incurred by the Issuer or any of its Subsidiaries that is subordinated to the Issuer’s or any of its Subsidiaries’ obligations under the Trina Notes, or (iii) Indebtedness incurred with the Holder’s prior written consent;
(g) any Commercial Agreement is terminated as a result of a material breach by the Issuer or any of its Subsidiaries (after giving effect to any applicable cure or grace period); or
(h) the Issuer or any of its Subsidiaries: (i) fails to pay any principal or interest in respect of any Indebtedness when due and such failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; or (ii) fails to perform or observe any other covenant, term, condition or agreement relating to any Indebtedness referred to in clause (i) above or contained in any instrument or agreement evidencing or relating thereto, or any other event occurs or condition exists, the effect of which failure or other event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice, if required, such 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 to be made, prior to its stated maturity; or any such Indebtedness is declared to be due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in each case prior to the stated maturity thereof, provided that a default, event or condition described in clause (i) or (ii) of this Section 4.1(h) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i) and (ii) of this Section 4.1(h) has occurred and is continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $5,000,000 (five million United States dollars)).
Upon the occurrence of any Event of Default, the Payment Amount with respect to the full Note shall become immediately due and payable upon election of the Holder without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Issuer; provided that, upon the occurrence of any Event of Default described in Section 4.1(c) or (d), the Payment Amount with respect to the full Note shall be accelerated and become due and payable automatically and immediately, without presentment, demand, protest or notice of any kind, all of which are expressly waived by the Issuer. Upon the occurrence of any Event of Default, the Holder may, in addition to declaring all amounts due hereunder to be immediately due and payable (or in addition to such amounts becoming automatically due and payable), pursue any available remedy, whether at law or in equity.
4.2. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default. No right or remedy herein conferred upon or reserved to the Holder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or exercise of any other right or remedy. No delay or omission of the Holder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein; and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Holder.
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ARTICLE
V
SENIORITY AND RIGHTS
5.1. Seniority of Note. The Holder’s right to payment of all or any portion of the outstanding Total Balance under the Trina Notes is and shall remain, (i) senior or pari-passu in right of payment to all other Indebtedness except for (1) the Senior Secured Credit Facility and (2) any Indebtedness which would not cause an Event of Default pursuant to Section 4.1(f)(i) or Section 4.1(f)(iii), and (ii) senior in right of payment to all preferred Equity Interests and Common Stock of the Issuer.
5.2. Preferred Payments. The Issuer shall not permit any payment to be made on or in respect of any preferred Equity Interests of the Issuer (a “Preferred Equity Payment”) if at such time the Issuer shall be in default in the making of any payment on this Note (a “Note Payment Default”), or if a Note Payment Default would result from the making of any such Preferred Equity Payment. Any such Preferred Equity Payment otherwise due but remaining unpaid as a result of the application of the foregoing restriction shall continue to accrue and shall be permitted to be paid at such time as no Note Payment Default shall then exist or would result from the making of such Preferred Equity Payment.
5.3. Dividends and Distributions. If the Issuer pays a dividend or makes any distributions on outstanding shares of Common Stock (that is not payable in shares of Common Stock) while this Note is outstanding, the Issuer will pay the Dividend Amount to the Holder at the same time.
5.4. Repurchase. At any time following the first anniversary of the date hereof, the Holder may, at its sole option, require the Issuer to repurchase all or any portion of this Note from the Holder by delivering to the Issuer a written notice of its election setting out the portion of the Note to be repurchased (the “Put Election Notice”). The Issuer shall repurchase such portion of this Note from the Holder on the six-month anniversary of the delivery of the Put Election Notice (the “Repurchase Date”), for a purchase price equal to Payment Amount.
ARTICLE
VI
MISCELLANEOUS
6.1. Modification of Note. This Note may not be amended, restated, renewed, replaced, supplemented or otherwise modified except by an instrument in writing executed by the Issuer and the Holder.
6.2. Governing Law, Jurisdiction, Jury Trial Waiver, Etc.
(a) This Note, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Note, or the negotiation, administration, performance, or enforcement of this Note, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Note, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
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(b) Each of the parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Note or the transactions contemplated hereby, for and on behalf of itself or any of its properties or assets, in accordance with Section 6.2(c) or in such other manner as may be permitted by applicable law, and nothing in this Section 6.2(b) shall affect the right of any party to serve legal process in any other manner permitted by applicable law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Note or the transactions contemplated hereby; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Note or the transactions contemplated hereby shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Note or the transactions contemplated hereby in any court other than the Chosen Courts. Each of the Issuer and the Holder agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 6.2(b), each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 6.4. Nothing in this Section 6.2(b) shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Note or the transactions contemplated hereby or (y) be deemed to confer rights on any Person other than the parties.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS NOTE OR THE TRANSACTION. EACH PARTY ACKNOWLEDGES AND AGREES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 6.2(c).
6.3. Waiver of Presentment. The parties hereto hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein. The Holder of this Note by acceptance of this Note agrees to be bound by the provisions of this Note which are expressly binding on the Holder.
6.4. Notices. Any notice or other communication required shall be in writing addressed to the respective party and delivered as set forth under Section 11.2 of the Transaction Agreement.
6.5. Effect of Titles and Headings; References. The titles and headings herein are for convenience only and shall not affect the construction hereof. References herein to Sections and Articles are to Sections and Articles of this Note, unless otherwise expressly provided.
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6.6. Entire Agreement; Interpretation; Severability. Except as expressly set forth herein, this Note constitutes the entire agreement between the parties with respect to the subject matter hereof and is the final expression of the intentions of the Issuer and the Holder. This Note is the result of negotiations among the Issuer and the Holder, has been reviewed (or each party has had the opportunity to have it reviewed) by counsel to such parties and is the product of all parties. Accordingly, this Note shall not be construed more strictly against any party hereto merely because of such party’s involvement in its preparation. If any provision of this Note is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall not be affected thereby, and each provision of this Note shall continue to be valid and enforceable to the fullest extent permitted by applicable law.
6.7. Successors and Assigns. This Note shall be binding upon and inure to the benefit of the Issuer and the Holder. Neither the Issuer nor the Holder may assign or otherwise transfer this Note to any other Person without the prior written consent of the other party hereto, and any such purported assignment or other transfer without such consent shall be null and void.
6.8. Set-off. Notwithstanding anything to the contrary in this Note or otherwise, following the final determination (whether pursuant to a final judgment, settlement or agreement) that Issuer is entitled to a payment from the Holder in connection with any Actions arising out of or with respect to any Related Agreement, the Issuer may, only on the applicable Payment Date, set off and apply such amount against the Payment Amount.
6.9. Effectiveness; Electronic Execution. This Note shall become effective upon the execution and delivery of a duly executed counterpart hereof by each of the parties hereto. Each of the parties hereto may execute this Note by electronic means and recognizes and accepts the use of electronic signatures and records by any other party hereto in connection with the execution and storage hereof. The words “execution,” “signed,” and “signature,” shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state laws based on the Uniform Electronic Transactions Act.
6.10. Counterparts. This Note may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Note by electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.
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IN WITNESS WHEREOF, the parties have caused this Note to be duly executed as of the date first written above.
| FREYR BATTERY, INC., as the Issuer | ||
| By: | ||
| Name: | ||
| Title: | ||
Acknowledged and agreed:
TRINA SOLAR (SCHWEIZ) AG, as the Holder
| By: | ||
| Name: | ||
| Title: |
[Signature Page – Unsecured Promissory Note]
Exhibit 10.5
COOPERATION AGREEMENT
This Cooperation Agreement (this “Agreement”), dated as of [●], 2024 (the “Effective Date”), is by and among Trina Solar (Schweiz), AG, a company organized under the laws of Switzerland (the “Stockholder”), and FREYR Battery, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Company and the Stockholder have entered into a transaction agreement dated as of [●], 2024, (the “Transaction Agreement”), pursuant to which, the Company has acquired from the Stockholder, directly or indirectly, certain U.S. solar manufacturing assets as further described in the Transaction Agreement (the “Transaction”) in exchange for the Purchase Price (as defined in the Transaction Agreement), including (i) [●] newly issued shares of Common Stock (the “Initial Investment”); (ii) the issuance of a convertible note in the aggregate principal amount of USD 80,000,000, which is convertible into [●] shares of Common Stock upon receipt of (1) CFIUS Approval and (2) a further [●] shares of Common Stock upon receipt of Company stockholder approval of the transactions contemplated thereby. Capitalized but not defined terms in this Agreement shall have the meanings set forth in the Transaction Agreement;
WHEREAS, the Closing has occurred as of the date hereof; and
WHEREAS, the Company and the Stockholder desire to enter into an agreement regarding the composition of the board of directors of the Company (the “Board”) and certain other matters, in each case, on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of and reliance upon the mutual covenants and agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the Stockholder and the Company agree as follows:
Section 1. Board of Directors.
(a) Trina Directors.
(i) For such time as the Stockholder, directly or indirectly, holds the Initial Investment, the Stockholder shall be entitled to designate for nomination by the Board one (1) director from time to time. If at any time the Stockholder beneficially owns, directly or indirectly, in the aggregate fifteen percent (15%) or more of all issued and outstanding shares of Common Stock, the Stockholder shall be entitled to designate for nomination by the Board two (2) directors (with such directors having the qualifications as set forth in Section 1(d)) from time to time (any director designated by the Stockholder pursuant to this Section 1(a)(i), the “Trina Director”). The Stockholder shall not be entitled to designate any Trina Directors if at any time the Stockholder ceases to hold, directly or indirectly, the entire Initial Investment.
(ii) Within two (2) Business Days following (1) the Effective Date, the Board and all applicable committees thereof shall take (or shall have taken) such actions as are necessary to appoint the first (1st) Trina Director as a member of the Board, and (2) the Conversion, the Board and all applicable committees thereof shall take (or shall have taken) such actions as are necessary to appoint the second (2nd) Trina Director as a member of the Board, each with an initial term expiring at the next annual meeting of stockholders of the Company at which directors of the Company are to be elected or removed following such appointment (the “Annual Meeting”).
(iii) The initial Trina Directors shall be [●] following the Effective Date and [●] following the Conversion, provided that Trina has the right to change its director nominations by sending a written notice indicating such intention to the Company not less than ten (10) Business Days before the date of their appointment.
(b) Vacancies and Replacements.
(i) If the number of Trina Directors that the Stockholder has the right to designate to the Board is decreased pursuant to Section 1(a) (each such occurrence, a “Decrease in Designation Rights”), then:
(1) unless a majority of directors (with the Trina Directors abstaining) agree in writing that a Trina Director or Trina Directors shall not resign as a result of a Decrease in Designation Rights, the Stockholder shall use its reasonable best efforts to cause the appropriate number of Trina Directors that the Stockholder ceases to have the right to designate to serve as Trina Directors to offer to tender his, her or their resignation(s), and each of such Trina Directors so tendering a resignation, as applicable, shall resign within thirty (30) days from the date that the Stockholder incurs a Decrease in Designation Rights. In the event any such Trina Director does not resign as a director by such time as is required by the foregoing, the Stockholder as holder of shares of Common Stock, the Company and the Board, to the fullest extent permitted by law and, with respect to the Board, subject to its fiduciary duties to the Company’s stockholders, shall thereafter take all Necessary Action, including voting in accordance with Section 2(a), to cause the removal of such individual as a director; and
(2) the vacancy or vacancies created by such resignation(s) and/or removal(s) may be filled with one or more directors, as applicable, designated by the Board in its discretion.
(ii) The Stockholder shall have the sole right to request that one or more of its designated Trina Directors, as applicable, tender their resignations as Trina Directors of the Board, in each case, with or without cause at any time, by sending a written notice to such Trina Director and the Company’s Secretary stating the name of the Trina Director or Trina Directors whose resignation from the Board is requested (the “Removal Notice”). If the Trina Director subject to such Removal Notice does not resign within thirty (30) days from receipt thereof by such Trina Director, the Stockholder, the Company and the Board, to the fullest extent permitted by law and, with respect to the Board, subject to its fiduciary duties to the Company’s stockholders, shall thereafter take all Necessary Action, including voting in accordance with Section 2(a) to cause the removal of such Trina Director from the Board (and such Trina Director shall only be removed by the parties to this Agreement in such manner as provided herein).
(iii) Except with respect to a Decrease in Designation Rights subject to Section 1(b)(i), the Stockholder shall have the exclusive right to designate a replacement Trina Director for nomination or election by the Board to fill vacancies created by death, disability, retirement, resignation, removal (with or without cause) of the Trina Directors, or otherwise by designating a successor for nomination or election by the Board to fill the vacancy of the Trina Directors created thereby on the terms and subject to the conditions of Section 1(a).
(c) Annual Meeting Nominees. The Company shall include the Trina Director(s) as director nominee(s) on its slate for election at each Annual Meeting for as long as the Stockholder has the right to designate Trina Directors to the Board. The Board and all applicable committees thereof shall take such actions as are necessary so that the slate of nominees recommended by the Board in the Company’s proxy statement and on its proxy card relating to the Annual Meeting shall include the Trina Director(s).
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(d) Trina Director Information. Any Trina Director designated, including those designated pursuant to Section 1(a)(iii), by the Stockholder shall be eligible to serve as a director in accordance with the organizational documents of the Company, applicable law and the listing and corporate governance rules and regulations of the New York Stock Exchange, as determined by the Board (to the extent such determination with respect to the New York Stock Exchange corporate governance rules and regulations is within the Board’s discretion to determine). The Trina Director(s) agree(s) to provide and the Stockholder shall use its reasonable best efforts to ensure the Trina Director(s) provide(s) to the Company (x) information requested by the Company that is required to be disclosed in a proxy statement or other filing under any applicable law, stock exchange rule, or listing standard, or as may be requested or required by any regulatory or governmental authority having jurisdiction over the Company or its Affiliates and (y) such other information reasonably requested by the Company generally applicable to directors of the Company.
(e) New Director Agreements, Arrangements, and Understandings. The Stockholder represents, warrants, and agrees that neither it nor any of its Affiliates (i) has paid or will pay any compensation to the Trina Director in connection with their nomination to or service on the Board or any committee thereof or (ii) has or will have any agreement, arrangement or understanding, written, or oral, with the Trina Director in connection with such individual’s nomination to or service on the Board or any committee thereof, in each case except with respect to any employment arrangements between the Trina Directors and the Stockholder or its Affiliates.
(f) Company Policies. The parties acknowledge that the Trina Director, upon election or appointment to the Board, will be governed by the same protections and obligations regarding confidentiality, conflicts of interest, related person transactions, fiduciary duties, codes of conduct, trading, and disclosure policies, director resignation policy, stock ownership guidelines, and other governance guidelines and policies of the Company as other directors of the Company (collectively, the “Company Policies”), and shall have the same rights and benefits, including with respect to insurance, indemnification, compensation, and fees, as are applicable to all non-management directors of the Company and the Trina Director shall deliver executed copies of customary onboarding materials applicable to all non-executive directors of the Board. The Company represents and warrants that any changes to the Company Policies, or new Company Policies, will be adopted in good faith and not for the purpose of undermining or conflicting with the arrangements contemplated hereby. The Company acknowledges and agrees that (i) no Company Policy shall in any way inhibit any Board members (including the Trina Directors) from engaging in dialogue with the Stockholder so long as they comply with applicable law, their confidentiality obligations to the Company, their fiduciary duties to the Company, the Company’s Corporate Governance Guidelines in their capacity as Board members, and, with respect to the Trina Directors, this Agreement, (ii) no Company Policy shall be violated by the Trina Directors receiving indemnification and/or reimbursement of expenses from the Stockholders or their respective Affiliates in connection with his or her service or action as an employee or advisor of the Stockholder or an Affiliate of the Stockholder (and not in connection with his or her service or action as a director of the Company), and (iii) no Company Policy shall apply to the Stockholder (excluding the Trina Directors) and their Affiliates as a result of the Trina Directors’ appointments to, or service on, the Board, including Company Policies with respect to trading in the Company’s securities (other than the Trina Directors), as the Stockholder and their Affiliates are not directors or employees of the Company; provided, that this sentence does not in any way limit and shall not be deemed to exclude the Stockholder and their Affiliates from any limitations or obligations under applicable law, including federal securities laws.
(g) Board Committees. For so long as there is at least one (1) Trina Director on the Board and at least one (1) Trina Director is an independent director in accordance with the applicable law and listing rules and determined by the Board, the Board shall appoint one (1) Trina Director to each of the Nominating and Corporate Governance Committee and the Compensation Committee.
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Section 2. Cooperation.
(a) Voting. In connection with each Annual Meeting (and any adjournments or postponements thereof) at which the Stockholder has the right to designate Trina Directors to the Board, so long as the Trina Director or Directors have been nominated and recommended by the Board for re-election as a director or directors, the Stockholder will cause all of the Common Stock that the Stockholder or any of its Affiliates (or those under common Control) has the right to vote (or to direct the vote), as of the record date for such Annual Meeting, to be present in person or by proxy for quorum purposes and to be voted at such Annual Meeting (or at any adjournment or postponement thereof) (i) in favor of each director nominated and recommended by the Board for election at such Annual Meeting (including the Trina Director) and (ii) otherwise in accordance with the recommendations by the Board on all other nominations, proposals, resolutions, or business that may be the subject of stockholder action (including any proposal or resolution related to the removal of any director of the Board); provided, however, that the Stockholder and its Affiliates shall be permitted to vote in their sole discretion on any proposal with respect to any Extraordinary Transaction that was not initiated in breach of Section 2(b); provided, that in the event that both Institutional Shareholder Services and Glass Lewis & Co. (including any successors thereof) issue a voting recommendation that differs from the voting recommendation of the Board with respect to any Company-sponsored proposal submitted to stockholders at a shareholder meeting (other than with respect to any matter relating to the Board, including any nomination, proposal, resolution or business in connection with the nomination and election of directors to the Board, the removal of directors from the Board, the size of the Board or the filling of vacancies on the Board), the Stockholder and its Affiliates shall be permitted to vote in accordance with any such recommendation.
(b) Standstill. From the date hereof until such date as the Stockholder ceases to hold, directly or indirectly, the entire Initial Investment (the “Standstill Period”),the Stockholder will not, and will cause its Affiliates and its and their respective Representatives acting on their behalf (collectively with the Stockholder, the “Restricted Persons”) to not, directly or indirectly, without the prior written consent, invitation, or authorization of the Company or the Board:
(i) acquire, or offer, or agree to acquire, by purchase or otherwise, or direct any Third Party in the acquisition of record or beneficial ownership of or economic exposure to any Voting Securities or engage in any swap or hedging transaction, or other derivative agreement of any nature with respect to any Voting Securities, in each case, if such acquisition, offer, agreement or transaction would result in the Stockholder, together with its Affiliates, having beneficial ownership of, a Net Long Position in, or aggregate economic exposure to more than nineteen and nine-tenths percent (19.9%) of the Voting Securities outstanding at such time;
(ii) alone or in concert with any one or more Third Parties, (A) call or seek to call (publicly or otherwise) a meeting of the Company’s stockholders or act by written consent in lieu of a meeting (or call or seek to call for the setting of a record date therefor), (B) seek election or appointment to, or representation on, the Board or nominate or propose the nomination of, or recommend the nomination of, any candidate to the Board, except as expressly set forth in Section 1, (C) make or be the proponent of any stockholder proposal relating to the Company, the Board or any of its committees or support, in any forum open to any Third Party stockholder, any such proposal, (D) seek (including through any “withhold” or similar campaign) the removal of any member of the Board , except as expressly set forth in Section 1 with respect to the Trina Director, (E) seek any change in the number or identity of directors of the Company or the filling of any vacancy of the Board other than as provided under Section 1 of this Agreement, or (F) conduct, call for, or publicly support any other stockholder who conducts or calls for any referendum of stockholders of the Company;
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(iii) engage in any “solicitation” (as such term is used in the proxy rules of the SEC, but including, notwithstanding anything to the contrary in Rule 14a-2 under the Exchange Act, solicitations of ten (10) or fewer stockholders that would otherwise be excluded from the definition of “solicitation” pursuant to Rule 14a-2(b)(2) under the Exchange Act) of one or more proxies or consents with respect to the election or removal of one or more directors of the Company or any other matter or proposal relating to the Company or become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A under the Exchange Act) in any such solicitation of proxies or consents;
(iv) disclose to any Third Party, either publicly or in a manner that would reasonably be expected to result in or require public disclosure, its voting or consent intentions or any vote as to any matter submitted to a stockholder vote during the Standstill Period (it being understood that instructing a Third Party to implement any such vote or consent in a ministerial manner in accordance with this Agreement would not be a violation of this provision), except that such disclosure may be made with respect to any Extraordinary Transaction that were not initiated in breach of this Section 2(b), or to the extent legally required or permitted by the prior written consent of the Company;
(v) make or submit to the Company or any of its Affiliates any proposal, announcement, statement or request, or offer for or relating to (with or without one or more conditions), either alone or in concert with others, any Extraordinary Transaction, either publicly or in a manner that would reasonably be expected to result in or require public disclosure by the Company or any of the Restricted Persons (it being understood that the foregoing shall not restrict the Restricted Persons from tendering shares, receiving consideration or other payment for shares, or otherwise participating in any Extraordinary Transaction on the same basis as other stockholders of the Company);
(vi) make or submit (either publicly or privately) any proposal, announcement, statement or request, either alone or in concert with others, for or with respect to (A) any change in the capitalization, capital allocation policy or dividend policy of the Company or sale, spin-off, split-off or other similar separation of one or more business units, (B) any other change to the Board or the Company’s management or corporate or governance structure, (C) any waiver, amendment or modification to the Company’s Amended and Restated Certificate of Incorporation or Bylaws, (D) causing the Common Stock to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (E) causing the Common Stock to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
(vii) knowingly encourage or advise any Third Party or knowingly assist any Third Party in encouraging or advising any other Person with respect to (A) the giving or withholding of any proxy relating to, or other authority to vote, any Voting Securities or (B) conducting any type of referendum relating to the Company (including for the avoidance of doubt with respect to the Company’s management or the Board), other than such encouragement or advice that is consistent with the Board’s recommendation in connection with such matter, or as otherwise expressly permitted by this Agreement;
(viii) form, join, knowingly encourage or knowingly participate in or act in concert with any Group with respect to any Voting Securities, other than solely with Affiliates of the Stockholder with respect to Voting Securities now or hereafter owned by them;
(ix) enter into any voting trust, arrangement or agreement with respect to any Voting Securities, or subject any Voting Securities to any voting trust, arrangement or agreement (excluding customary brokerage accounts, margin accounts, prime brokerage accounts and the like), in each case other than (A) this Agreement, (B) solely between or among the Stockholder and its Affiliates or (C) granting any proxy in any solicitation approved by the Board and consistent with the recommendation of the Board;
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(x) engage in any short sale or any purchase, sale, or grant of any option, warrant, convertible security, share appreciation right, or other similar right (including any put or call option or “swap” transaction) with respect to any security (other than any index fund, exchange-traded fund, benchmark fund or broad basket of securities) that includes, relates to, or derives any significant part of its value from a decline in the market price or value of any of the Company’s securities and would, in the aggregate or individually, result in the Stockholder ceasing to have a Net Long Position in the Company;
(xi) institute, solicit or join as a party any litigation, arbitration or other proceeding against or involving the Company, any of its subsidiaries or any of its or their respective current or former directors or officers (including derivative actions); provided, however, that for the avoidance of doubt, the foregoing shall not prevent the Stockholder from (A) bringing litigation against the Company to enforce any provision of this Agreement instituted in accordance with and subject to Section 10, (B) making any counterclaim with respect to any proceeding initiated by, or on behalf of, the Company or its Affiliates against any Restricted Person, (C) bringing bona fide commercial disputes that do not relate to the subject matter of this Agreement, (D) exercising statutory appraisal rights, or (E) responding to or complying with validly issued legal process, or (F) bringing litigation against the Company to enforce any provision of the Transaction Agreement or any Related Agreements (as defined in the Transaction Agreement) or otherwise bringing disputes in connection with the Transaction;
(xii) make any disclosure, communication, announcement or statement, either publicly or in a manner reasonably likely to result in or require public disclosure, regarding any intent, purpose, submission, or proposal with respect to the Board, the Company, its management, policies, affairs, strategy, operations, or financial results, any of its securities or assets or this Agreement, except in a manner consistent with the provisions of this Agreement; provided, that this Section 2(b)(xii) shall not prevent the Trina Director from disclosing his views privately to the Board;
(xiii) enter into any negotiation, agreement, arrangement, or understanding (whether written or oral) with any Third Party to take any action that the Restricted Persons are prohibited from taking pursuant to this Section 2(b);
(xiv) enter into or maintain any economic, compensatory or pecuniary agreement, arrangement or understanding (written or oral) with any director of the Company or nominee for director of the Company; provided, that this Section 2(b)(xiv) shall not apply to the Trina Director for any economic, compensatory or pecuniary agreement, arrangement or understanding (written or oral) entered into and not related to the Trina Director’s service on the Board;
(xv) advise, knowingly encourage, support, instruct, or influence any Person with respect to any of the matters covered by this Section 2 or with respect to the voting or disposition of any securities of the Company at any annual or special meeting of stockholders, except in accordance with Section 1, or seek to do so; or
(xvi) make any request or submit any proposal to amend or waive any of the terms of this Agreement (including this subclause), in each case publicly or that would reasonably be expected to result in a public announcement or disclosure of such request or proposal or give rise to a requirement to so publicly announce or disclose such request or proposal;
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provided, that the restrictions in this Section 2(b) shall terminate automatically upon the earliest of the following: (i) any material breach of this Agreement by the Company (including, without limitation, a failure to appoint the Trina Directors in accordance with Section 1(a), a failure to include the Trina Directors in the slate of director nominees recommended by the Board in the Company’s proxy statement and on its proxy card relating to each Annual Meeting in accordance with Section 1(b), or a failure to issue the Press Release in accordance with Section 5 upon ten (10) Business Days’ written notice by the Stockholder to the Company if such breach has not been cured within such notice period, provided, that the Stockholder is not in material breach of this Agreement at the time such notice is given or prior to the end of the notice period; (ii) the Company’s entry into (x) a definitive agreement with respect to any Extraordinary Transaction that, if consummated, would result in the acquisition by any Person or Group of more than fifty percent (50%) of the Voting Securities or assets having an aggregate value exceeding fifty percent (50%) of the aggregate market capitalization of the Company; and (iii) the commencement of any tender or exchange offer (by any Person or Group other than the Stockholder or its Affiliates) which, if consummated, would constitute an Extraordinary Transaction that would result in the acquisition by any Person or Group of more than fifty percent (50%) of the Voting Securities, where the Company files with the SEC a Schedule 14D-9 (or amendment thereto) that does not recommend that its stockholders reject such tender or exchange offer (it being understood that nothing herein will prevent the Company from issuing a “stop, look and listen” communication pursuant to Rule 14d-9(f) promulgated by the SEC under the Exchange Act in response to the commencement of any tender or exchange offer). Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement (including the restrictions in this Section 2(b)) will prohibit or restrict any Restricted Person from (I) making any public or private statement or announcement with respect to any Extraordinary Transaction that is publicly announced by the Company or a Third Party, (II) making any factual statement to comply with any subpoena or other legal process or respond to a request for information from any governmental authority with jurisdiction over such Restricted Person, (III) negotiating, evaluating and/or trading, directly or indirectly, in any index fund, exchange traded fund, benchmark fund which may contain or otherwise reflect the performance of, but not primarily consist of, securities of the Company, or (IV) communicating with the Company privately to any director, the Executive Chairperson of the Board, the Company’s Chief Executive Officer, Chief Financial Officer or Chief Legal Officer, and its advisors and employees (in accordance with the Company Policies) regarding any matter, or privately requesting a waiver of any provision of this Agreement, as long as such private communications or requests does not or would not reasonably be expected to require public disclosure of such communications or requests by the Company or any of the Restricted Persons.
(c) Lock-Up.
(i) The Stockholder shall not Transfer any shares of Common Stock that are held by the Stockholder during the period commencing from the date hereof and ending on the earlier of (a) the first (1st) anniversary of the date hereof, and (b) the date the Company receives a CFIUS Turndown (as defined in the Transaction Agreement) (the “Lock-Up Period”). Notwithstanding the foregoing, if during the Lock-up Period, Encompass Capital Advisors LLC notifies the Company that it must transfer shares because its aggregate investment in the Lock-Up Shares (as defined in the Encompass Lock-Up Agreement) constitutes more than fifteen percent (15%) of the Encompass Capital Advisors LLC’s assets under management, as determined by Encompass Capital Advisors LLC in its sole discretion (the “Permitted Window”), then the Stockholder may Transfer any shares it holds during the Permitted Window.
(ii) During the Lock-Up Period, subject to applicable law, the Stockholder shall be permitted to Transfer shares of Common Stock to any Affiliates of the Stockholder subject to the execution and delivery by such Affiliate to the Company of a joinder agreement substantially in the form attached hereto as Exhibit A, and provided, further, that if such Affiliate ceases to be an Affiliate of the Stockholder, then the shares of Common Stock transferred to and held by such Affiliate shall immediately be transferred back to the Stockholder or an Affiliate of the Stockholder at such time.
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(iii) If any Transfer is made or attempted contrary to the provisions of this Agreement, such Transfer shall be null and void ab initio, and the Company shall refuse to recognize any such transferee of the shares of Common Stock as one of its equity holders for any purpose. In order to enforce this Section 2(c)(iii), the Company may impose stop-transfer instructions with respect to the shares of Common Stock of the Stockholder (and any permitted transferees and assigns thereof) until the end of the Lock-Up Period.
(iv) During the Lock-Up Period, each book entry evidencing the shares of Common Stock held by the Stockholder shall include appropriate restrictions to reflect the fact that such shares of Common Stock are subject to the restrictions on Transfer set forth in this Agreement.
(v) For the avoidance of any doubt, the Stockholder shall retain all of its rights as a stockholder of the Company with respect to the shares of Common Stock during the Lock-Up Period, including the right to vote any shares of Common Stock.
(d) Stockholder’s Rights. In addition to any voting requirements contained in the organizational documents of the Company, the Company shall not Transfer all or substantially all of the property and assets of the Company in the United States, taken as a whole (whether by merger, consolidation or otherwise) without the prior written approval of the Stockholder until the earlier of (i) such time as the Stockholder ceases to hold, directly or indirectly, the entire Initial Investment, and (ii) the end of the Lock-Up Period.
(e) Anti-Dilution Rights.
(i) Subject to applicable law, so long as the Stockholder holds securities in the Company, in the event that the Company decides to issue any new Voting Securities (“Capital Raising Transaction”), the Stockholder shall have the right, but not the obligation, to purchase, on the same terms and conditions as the other participants in such issuance, such number of newly issued Voting Securities, so that the Stockholder’s proportionate ownership of Voting Securities following the Capital Raising Transaction will be the same as before the Capital Raising Transaction (the “Capital Raising Anti-Dilution Right”).
(ii) The Company shall give written notice to the Stockholder (an “Issuance Notice”) of any proposed issuance of Voting Securities, (1) in the case of an underwritten public offering or a private offering made to Qualified Institutional Buyers (as such term is defined in Rule 144A under the Securities Act) or non-U.S. Persons (as such term is defined under Rule 902(k) under the Securities Act) for resale pursuant to Rule 144A or Regulation S under the Securities Act, thirty (30) Business Days prior to the launch of such offering and (2) in all other cases, no later than twenty (20) Business Days prior to the proposed issuance date. The Issuance Notice shall set forth the following terms and conditions of the proposed issuance: (a) the number of the securities to be issued or sold and the percentage of the outstanding Voting Securities such issuance or sale would represent; (b) the class and material terms of the securities to be issued or sold; (c) the proposed issuance or sale date; and (d) the anticipated price.
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(iii) The Capital Raising Anti-Dilution Right shall be exercisable by delivery of a written notice by the Stockholder to the Company no later than the fifteen (15th) Business Day following receipt of any Issuance Notice (as extended pursuant to Section 2(e)(iv), the “Capital Raising Issuance Deadline”), specifying the number of securities to be purchased by the Stockholder in connection with such Capital Raising Transaction, which written notice shall, except to the extent expressly contemplated by Section 2(e)(iv), constitute a binding agreement of the Stockholder to purchase such number of securities on the terms and conditions set out in the Issuance Notice (the “Capital Raising Acceptance Notice”).
(iv) In the event that any material terms and conditions set out in the Issuance Notice, including the price and number of Voting Securities to be issued, are modified after the date of the Capital Raising Acceptance Notice, then the Company shall deliver to the Stockholder as soon as reasonably practicable after the Company agrees to such change, an updated Issuance Notice, which shall include a reasonable description of such differences and, in that case, the Capital Raising Issuance Deadline shall be seventy-two (72) hours following the date on which the Stockholder receives such updated Issuance Notice.
(v) The closing of any purchase by the Stockholder shall be consummated concurrently with the consummation of the Capital Raising Transaction; provided, that any such closing shall be extended beyond the closing of the Capital Raising Transaction to the extent necessary (1) to obtain any required approval of a Governmental Entity or (2) to the extent the Company’s stockholder approval is required under the applicable stock exchange rules, in which case the Company shall use their respective reasonable best efforts to obtain any such approval(s).
(vi) If the Stockholder shall not have delivered a Capital Raising Acceptance Notice to the Company by the Capital Raising Issuance Deadline, the Stockholder shall be deemed to have waived all of its rights under this Section 2(e) with respect to the purchase of the securities in such Capital Raising Transaction, provided, however, such waiver only refers to such specific Capital Raising Transaction as indicated in the Capital Raising Acceptance Notice, and under no circumstances does it represent the Stockholder’s waiver of its rights under this Section 2(e) for any future Capital Raising Transaction.
(vii) In the event that the Stockholder fails to exercise the Capital Raising Anti-Dilution Right by the Capital Raising Issuance Deadline, the Company shall thereafter be entitled during the period of ninety (90) days following Capital Raising Issuance Deadline to sell the Voting Securities not elected to be purchased by the Stockholder pursuant to this Section 2(e), (1) at a price that is not ten percent (10%) less than the price set out in the Issuance Notice and (2) upon other terms and conditions not materially more favorable in the aggregate to the purchasers of such Voting Securities than those set out in the Issuance Notice, as determined in good faith by the Board (a “Third Party Issuance”). In the event the Company has not sold such Voting Securities by the Capital Raising Issuance Deadline, the Company shall not thereafter issue or sell such Voting Securities without first offering such Voting Securities to the Stockholder in the manner provided pursuant to this Section 2(e). If such Third Party Issuance is subject to regulatory approval, the Capital Raising Issuance Deadline in respect of such Third Party Issuance shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event later than two hundred and seventy (270) days from the date of the Issuance Notice.
(viii) The provisions of this Section 2(e) shall not apply to any issuances of Voting Securities by the Company (1) to its directors or employees for compensatory purposes pursuant to an equity incentive plan approved by the Board, (2) as consideration in a bona fide direct or indirect merger, acquisition, strategic transaction, partnership or alliance or similar transaction that is approved by the Board or any other strategic or commercial transaction that is approved by the Board in which the Company issues Voting Securities, or (3) in connection with any pro rata stock split, combination, stock dividend, recapitalization, reorganization or any similar transaction in each case, in which the voting and economic rights of the shares of Common Stock are preserved.
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(ix) Notwithstanding the foregoing, in the event the Board reasonably determines in good faith that there is a bona fide business need to consummate an issuance of Voting Securities promptly without first complying with this Section 2(e), the Company may issue Voting Securities to one or more Persons without first complying with the terms of Section 2(e) (such an issuance an “Emergency Issuance”), as promptly as is reasonably practicable following such Emergency Issuance (and in any event within ten (10) Business Days), at the Company’s election, (1) the purchasers of such Voting Securities shall offer to sell to the Stockholder the portion of such purchased Voting Securities for which the Stockholder would have been entitled to subscribe had the Company complied with the foregoing provisions of this Section 2(e) or (2) the Company shall offer to issue an incremental amount of Voting Securities to the Stockholder such that following the issuance and purchase of such Voting Securities, the Stockholder’s proportionate ownership of Voting Securities following the Emergency Issuance will be the same as before the Emergency Issuance, in each case, at a price no more than that paid by such purchasers and on substantially the same, and no less favorable in the aggregate, terms, with any such amendments as the Stockholder may agree to, as those applicable to such purchasers.
Section 3. Representations and Warranties of the Company. The Company represents and warrants to the Stockholder that: (i) the Company has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated by this Agreement; (ii) this Agreement has been duly and validly authorized, executed, and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company and, assuming the valid execution and delivery hereof by each of the other parties, is enforceable against the Company in accordance with its terms, except as enforcement of this Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or similar laws generally affecting the rights of creditors and subject to general equity principles; (iii) the execution, delivery, and performance of this Agreement by the Company does not require the approval of the stockholders of the Company; and (iv) the execution, delivery and performance of this Agreement by the Company does not and will not (A) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Company or (B) result in any breach or violation of or constitute a default (or an event that, with notice or lapse of time or both, could constitute a breach, violation or default) under or pursuant to, result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.
Section 4. Representations and Warranties of the Stockholder. The Stockholder represents and warrants to the Company that: (a) the Stockholder has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated by this Agreement; (b) this Agreement has been duly and validly authorized, executed and delivered by the Stockholder, constitutes a valid and binding obligation and agreement of the Stockholder and, assuming the valid execution and delivery hereof by each of the other parties, is enforceable against the Stockholder in accordance with its terms, except as enforcement of this Agreement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles; (c) the execution, delivery and performance of this Agreement by the Stockholder does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Stockholder or (ii) result in any breach or violation of or constitute a default (or an event that, with notice or lapse of time or both, could constitute a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Stockholder is a party or by which it is bound.
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Section 5. Public Announcement. Not later than four business days following the Effective Date, the Company shall issue a press release (the “Press Release”) and shall file with the SEC a Current Report on Form 8-K (the “Form 8-K”) disclosing its entry into this Agreement and including a copy of this Agreement and the Press Release as exhibits thereto. The Company shall provide the Stockholder with a copy of such Form 8-K prior to its filing with the SEC and shall consider any timely comments of the Stockholder or its representatives. Neither of the Company or any of its Affiliates nor the Stockholder or any of its Affiliates shall make any public statement regarding the subject matter of this Agreement, this Agreement or the matters set forth in the Press Release, unless required by relevant NYSE or SEC rules and regulations, prior to the issuance of the Press Release without the prior written consent of the other party; provided that, nothing herein shall prohibit any public statement that is substantially consistent with previous press releases, including the Press Release, public disclosures or public statements made by the parties in compliance with this Section 5.
Section 6. Definitions. For purposes of this Agreement:
(a) the term “Affiliate” of any Person means another Person that directly or indirectly through one of more intermediaries Controls, is Controlled by or is under common Control with, such first Person;
(b) the terms “beneficial owner” and “beneficially own” have the meanings set forth in Rule 13d-3 under the Exchange Act, except that a Person will also be deemed to be the beneficial owner of all shares of the Company’s Common Stock that (i) such Person has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to the exercise of any right in connection with any securities or any agreement, arrangement or understanding (whether or not in writing), regardless of when such rights may be exercised and whether they are conditional and (ii) such Person or any of such Person’s Affiliates has or shares the right to vote or dispose;
(c) the term “Business Day” means each day that is not (i) a Saturday, Sunday, or (ii) other day on which banking institutions located in Shanghai, People’s Republic of China, or Wilmington, Delaware are closed or obligated by law or executive order to close;
(d) the term “CFIUS Approval” means (a) the Committee on Foreign Investment in the United States and each member agency thereof acting in such capacity (“CFIUS”) has concluded that the Conversion (as defined in the Transaction Agreement) is not a “covered transaction” and not subject to review under Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder (the “DPA”), (b) CFIUS has issued a written notice that it has completed a review or investigation of the notification voluntarily provided pursuant to the DPA with respect to the Conversion, and has concluded all action under the DPA or (c) if CFIUS has sent a report to the President of the United States requesting the President’s decision and (i) the President has announced a decision not to take any action to suspend or prohibit the Conversion or (ii) having received a report from CFIUS requesting the President’s decision, the President has not taken any action after fifteen (15) days from the earlier of the date the President received such report from CFIUS or the end of the investigation period.
(e) the term “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Securities, by contract, or otherwise. “Controlled” and “under common Control with” have correlative meanings;
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(f) the term “Common Stock” means the Company’s common stock, par value $0.01 per share;
(g) the term “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder;
(h) the term “Extraordinary Transaction” means any tender offer, exchange offer, merger, consolidation, acquisition, sale of all or substantially all assets, sale, spin-off, split-off or other similar separation of one or more business units, business combination, recapitalization, restructuring, reorganization, liquidation, separation, dissolution or similar extraordinary transaction involving the Company or one or more of its direct or indirect subsidiaries and joint ventures or any of their respective securities or assets, in each case, for the avoidance of doubt, excluding (i) the Transaction (including all transactions contemplated thereby and the finalization and entry into any agreements necessary to effect the Transaction); and (ii) the non-voting preferred stock issued pursuant to that certain preferred stock purchase agreement by and among the Company and [Encompass Capital], dated [●], 2024;
(i) the term “Governmental Entity” means any (a) federal, state, provincial, local or other government (U.S. or non-U.S.), (b) any federal, state, provincial, local, or other governmental or supra-national entity, regulatory or administrative authority, taxing authority, agency, department, board, division, instrumentality or commission, educational agency, political party, body, or judicial or arbitral body, board, tribunal, or court (U.S. or non-U.S.), (c) any public international organization (e.g., the World Bank, the Red Cross, etc.), (d) any industry self-regulatory authority or (e) any business, entity, or enterprise owned or controlled by any of the foregoing;
(j) the term “Group” has the meaning set forth in Section 13(d)(3) of the Exchange Act;
(k) the term “Necessary Action” means, with respect to a specified result, all commercially reasonable actions required to cause such result that are within the power of a specified Person, including (i) voting or providing a written consent or proxy with respect to the equity securities owned by the Person obligated to undertake the necessary action, (ii) voting in favor of the adoption of stockholders’ resolutions and amendments to the organizational documents of the Company, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result;
(l) the term “Net Long Position” has the meaning set forth in Rule 14e-4 under the Exchange Act;
(m) the terms “Person” or “Persons” shall be interpreted broadly to include any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature;
(n) the term “Representatives” means a party’s Affiliates, directors, principals, members, general partners, managers, officers, employees, agents, advisors and other representatives;
(o) the term “SEC” means the U.S. Securities and Exchange Commission;
(p) the term “Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
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(q) the term “Third Party” means any Person that is not a party to this Agreement or an Affiliate thereof, a director or officer of the Company, or legal counsel to any party to this Agreement; and
(r) the term “Transfer” shall mean the (i) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, as amended, and the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to, any security, (ii) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) public announcement of any intention to effect any transaction specified in clause (i) or (ii) above.
(s) the term “Voting Securities” means the Common Stock and any other Company securities entitled to vote in the election of directors, or securities convertible into, or exercisable or exchangeable for, such shares or other securities, whether or not subject to the passage of time or other contingencies; provided that, as pertains to any obligation of the Stockholder or any other Restricted Person (including under Section 2(b)), “Voting Securities” will not include any securities contained in any index fund, exchange-traded fund, benchmark fund or broad basket of securities that may contain or otherwise reflect the performance of, but does not primarily consist of, securities of the Company.
Section 7. Notices. All notices, consents, requests, instructions, approvals, and other communications provided for herein and all legal process in regard to this Agreement will be in writing and will be deemed delivered given and received (a) when (x) delivered in person or (y) transmitted by email (with written confirmation of completed transmission other than any automated reply), (b) on the third business day following the mailing thereof by certified or registered mail (return receipt requested) or transmission by email, as applicable or (c) when delivered by an express courier (with written confirmation of delivery) to the parties hereto at the following addresses (or to such other address as such party may have specified in a written notice given to the other parties); provided that any notice delivered pursuant to clauses (a)(x), (b) or (c) of this Section 7 is also contemporaneously delivered to the email address of such party set forth below (for the avoidance of doubt, such email shall not in and of itself be deemed delivery given and received of such communications and legal process):
If to the Company:
FREYR Battery, Inc.
6&8 East Court Square, Suite 300,
Newnan, Georgia 30263
Attention: Compliance Officer
E-mail: compliance-officer@freyrbattery.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London, EC2N 4BQ
| Attention: | Denis Klimentchenko | |
| Danny Tricot | ||
| Email: | denis.klimentchenko@skadden.com | |
| danny.tricot@skadden.com |
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If to the Stockholder:
[Trina Solar (Schweiz), AG]
Address: [●]
Attention: [●]
with a copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019-6119
| Attention: | Catherine X. Pan-Giordano | |
| Anthony W. Epps | ||
| David J. Mack | ||
| Email: | pan.catherine@dorsey.com | |
| epps.anthony@dorsey.com | ||
| mack.david@dorsey.com |
At any time, any party may, by notice given in accordance with this Section 7 to the other party, provide updated information for notices under this Agreement.
Section 8. Expenses. All fees, costs and expenses incurred in connection with this Agreement and all matters related to this Agreement will be paid by the party incurring such fees, costs or expenses.
Section 9. Specific Performance; Remedies; Venue; Waiver of Jury Trial.
(a) The Company and the Stockholder acknowledge and agree that irreparable injury to the other party would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that the Company and the Stockholder will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. FURTHERMORE, THE COMPANY AND THE STOCKHOLDER AGREE: (1) THE NON-BREACHING PARTY WILL BE ENTITLED TO INJUNCTIVE AND OTHER EQUITABLE RELIEF, WITHOUT PROOF OF ACTUAL DAMAGES; (2) THE BREACHING PARTY WILL NOT PLEAD IN DEFENSE THERETO THAT THERE WOULD BE AN ADEQUATE REMEDY AT LAW AND (3) THE BREACHING PARTY WAIVES THE POSTING OF A BOND OR OTHER SECURITY UNDER ANY APPLICABLE LAW, IN THE CASE THAT ANY OTHER PARTY SEEKS TO ENFORCE THE TERMS BY WAY OF EQUITABLE RELIEF.
(b) This Agreement will be governed in all respects, including validity, interpretation, and effect, by the laws of the State of Delaware without giving effect to the choice of law principles of such state. The Company and the Stockholder (i) irrevocably and unconditionally submits to the exclusive jurisdiction of the Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, the federal or other state courts located in Wilmington, Delaware) for any action or proceeding based on, relating to, or arising in connection with this Agreement, (ii) agrees that it will not attempt to deny or defeat such jurisdiction by motion or other request for leave from any such court, (iii) agrees that any action or proceeding based on, relating to, or arising in connection with this Agreement or the transactions contemplated by this Agreement shall be brought, tried, and determined only in such courts, (iv) waives any claim of improper venue or any claim that those courts are an inconvenient forum and (v) agrees that it will not bring any action based on, relating to, or arising in connection with this Agreement or the transactions contemplated by this Agreement in any court other than such courts. The parties to this Agreement agree that the delivery of process or other papers based on, relating to, or arising in connection with any such action or proceeding in the manner provided in Section 7 or in such other manner as may be permitted by applicable law as sufficient service of process, shall be valid and sufficient service thereof; provided that such process or other papers based on, relating to, or arising in connection with any such action or proceeding is also contemporaneously delivered to the email address of such party set forth in Section 7 hereof (for the avoidance of doubt, such email shall not in and of itself constitute effective service of process).
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(c) EACH OF THE PARTIES, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED ON, RELATING TO OR ARISING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. NO PARTY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
Section 10. Severability. If, at any time subsequent to the Effective Date, any provision of this Agreement is held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision will be of no force and effect, but the illegality, voidness or unenforceability of such provision will have no effect upon the legality or enforceability of any other provision of this Agreement.
Section 11. Termination. This Agreement will terminate upon the earlier to occur of (i) the expiration of the Standstill Period or (ii) any material breach of this Agreement by the parties hereto upon ten (10) Business Days’ written notice by the non-breaching party to the breaching party if such breach has not been cured by the end of such notice period; provided that the non-breaching party is not in material breach of this Agreement at the time such notice is given or during the notice period. Upon such termination, this Agreement shall have no further force and effect Notwithstanding anything to the contrary in the foregoing part of this Section 11, Section 6 to Section 16 shall survive termination of this Agreement, and no termination of this Agreement shall relieve any party of liability for any breach of this Agreement arising prior to such termination.
Section 12. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but both or all of which shall constitute the same agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (.pdf) form or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature. For the avoidance of doubt, no party shall be bound by any contractual obligation to the other parties until all counterparts to this Agreement have been duly executed by each of the parties and delivered to the other parties (including by means of electronic delivery).
Section 13. No Third-Party Beneficiary. This Agreement is solely for the benefit of the Company and the Stockholder and is not enforceable by any other Person. No party to this Agreement may assign its rights or delegate its obligations under this Agreement, whether by operation of law or otherwise, without the prior written consent of the other parties in their respective sole discretions, and any assignment in contravention hereof will be null and void.
Section 14. No Waiver. No failure or delay by any party in exercising any right or remedy under this Agreement will operate as a waiver thereof or of any breach of any provision hereof, nor will any single or partial waiver thereof preclude any other or further exercise thereof or the exercise of any other right or remedy under this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. No waiver shall be effective unless in writing, executed by the waiving party.
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Section 15. Entire Understanding; Amendment. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all prior and contemporaneous agreements, memoranda, arrangements, and understandings, whether written or oral, between the parties, or any of them, with respect to the subject matter of this Agreement. This Agreement may be amended only by an agreement in writing executed by the Company and the Stockholder.
Section 16. Interpretation and Construction. The Company and the Stockholder acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same after having had an adequate opportunity to seek the advice of said counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties will be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguity in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by the Company and the Stockholder, and any controversy over any interpretation of this Agreement will be decided without regard to events of drafting or preparation. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” When a reference is made in this Agreement to any Section, such reference shall be to a Section of this Agreement, unless otherwise expressly indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The words “hereof,” “herein”, “hereto”, and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “will” shall be construed to have the same meaning as the word “shall.” The word “or” is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement, instrument, law, rule or statute defined or referred to herein means, unless otherwise indicated, such agreement, instrument, law, rule or statute as from time to time amended, modified or supplemented, except that references to specified rules promulgated by the SEC shall be deemed to refer to such rules in effect as of the date of this Agreement.
[Signature pages follow]
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.
| [TRINA SOLAR (SCHWEIZ), AG] | |||
| By: | |||
| Name: | [●] | ||
| Title: | Authorized Signatory | ||
[Signature Page to Cooperation Agreement]
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date hereof.
| FREYR BATTERY, INC. | |||
| By: | |||
| Name: | [●] | ||
| Title: | Authorized Signatory | ||
[Signature Page to Cooperation Agreement]
EXHIBIT A
FORM OF JOINDER AGREEMENT
The undersigned is executing and delivering this Joinder Agreement pursuant to the Cooperation Agreement, dated as of [●], 2024 (the “Cooperation Agreement”), by and among [Trina Solar (U.S.) Holding Inc., a Delaware corporation] (the “Stockholder”), and FREYR Battery, Inc., a Delaware corporation (the “Company”). Capitalized terms used but not defined herein have the respective meanings ascribed to them in the Cooperation Agreement.
By executing this Joinder Agreement and delivering it to each of the parties to the Cooperation Agreement (and any other party who may from time to time become a signatory to the Cooperation Agreement), the undersigned hereby agrees to become a party to, to be bound by, to be subject and to comply with the terms and conditions of the Cooperation Agreement, in the same manner as if the undersigned were an original signatory to the Cooperation Agreement and to be entitled to enforce the Cooperation Agreement in its capacity as a “Stockholder” as of the date hereof for as long as the undersigned remains an Affiliate of the Stockholder.
The undersigned hereby represents, warrants and undertakes to each of the other parties to the Cooperation Agreement (and any other stockholder of the Company who may from time to time become a signatory to the Cooperation Agreement) that the representations and warranties set forth in Section 4 of the Cooperation Agreement, including any undertakings under the Cooperation Agreement, shall be deemed to be given on the date of this Joinder Agreement and shall be deemed to refer to this Joinder Agreement as well as the Cooperation Agreement.
Accordingly, the undersigned has executed and delivered this Joinder Agreement as of the [●] of [●], [●].
| Signature of Affiliate | |
| Print Name of Affiliate | |
| Street Address | |
Exhibit 10.6
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of [●], 2024 (the “Agreement”), by and among FREYR Battery, Inc., a Delaware corporation (the “Company”), and Trina Solar (Schweiz) AG, a company organized under the laws of Switzerland (the “Investor”). The Investor and any other party that may become a party hereto pursuant to Section 9(c) are referred to collectively as the “Stockholders” and individually each as a “Stockholder.”
RECITALS
WHEREAS, the Company and the Investor have entered into that certain transaction agreement dated as of [●], 2024, (the “Transaction Agreement”), pursuant to which, the Company has acquired from the Investor, directly or indirectly, certain U.S. solar manufacturing assets as further described in the Transaction Agreement in exchange for the Purchase Price (as defined in the Transaction Agreement), including (i) [●] newly issued shares of Common Stock; and (ii) the issuance of a convertible note in the aggregate principal amount of USD 80,000,000, which is convertible into [●] shares of Common Stock upon receipt of (1) CFIUS Approval (as defined below) and (2) a further [●] shares of Common Stock upon receipt of Company stockholder approval of the transactions contemplated thereby (the “Transaction,” and such shares of Common Stock in (i) and (ii), the “Investor Common Stock”);
WHEREAS, the Company and the Investor have entered into that certain cooperation agreement, dated on or about the date hereof (the “Cooperation Agreement”), pursuant to which, among other things, subject to limited exceptions, the Investor shall not Transfer (as defined in the Cooperation Agreement) any shares of Common Stock during the Lock-Up Period;
WHEREAS, as a condition to the obligations of the Company and the Investor under the Transaction Agreement, the Company and the Investor desire to enter into this Agreement, pursuant to which the Company shall grant the Stockholders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement;
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
AGREEMENT
Section 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following respective meanings:
“Action” means any demand, claim, charge, action, suit, investigation, proceeding (whether at law or in equity), hearing, inquiry, audit, examination petition, complaint, notice of violation, arbitration or other litigation or similar proceeding, whether arbitral, civil, criminal, administrative, investigative or appellate proceeding, commenced, brought, conducted or heard by or before, or otherwise involving, any court or other governmental authority or any arbitrator or arbitration panel.
“Adverse Disclosure” means public disclosure of material non-public information that, in the good faith judgment of the Company: (i) would be required to be made in any Registration Statement, Prospectus or report filed with the SEC by the Company so that such Registration Statement or Prospectus would not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they are made, not misleading; (ii) would not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement or Prospectus; and (iii) the Company has a bona fide business purpose for not disclosing publicly.
“Affiliate” of any Person means another Person that directly or indirectly through one of more intermediaries Controls, is Controlled by or is under common Control with, such first Person.
“Agreement” has the meaning given in the Preamble.
“Block Sale” has the meaning given in Section 3(a).
“Business Day” means each day that is not (i) a Saturday, Sunday, or (ii) other day on which banking institutions located in Shanghai, People’s Republic of China, or New York, New York, are closed or obligated by law or executive order to close.
“CFIUS Approval” means (a) the Committee on Foreign Investment in the United States and each member agency thereof acting in such capacity (“CFIUS”) has concluded that the Conversion (as defined in the Transaction Agreement) is not a “covered transaction” and not subject to review under Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder (the “DPA”), (b) CFIUS has issued a written notice that it has completed a review or investigation of the notification voluntarily provided pursuant to the DPA with respect to the Conversion, and has concluded all action under the DPA or (c) if CFIUS has sent a report to the President of the United States requesting the President’s decision and (i) the President has announced a decision not to take any action to suspend or prohibit the Conversion or (ii) having received a report from CFIUS requesting the President’s decision, the President has not taken any action after fifteen (15) days from the earlier of the date the President received such report from CFIUS or the end of the investigation period.
“Chosen Court” has the meaning given in Section 9(i).
“Common Stock” means all shares currently or hereafter existing of the Company’s common stock, par value USD 0.01 per share.
“Company” has the meaning given in the Preamble and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled” and “under common Control with” have correlative meanings.
“Cooperation Agreement” has the meaning given in the Recitals.
“Covered Person” has the meaning given in Section 5(a).
“Demand Follow-up Notice” has the meaning given in Section 3(a).
“Demand Notice” has the meaning given in Section 3(a).
“Demand Party” has the meaning given in Section 3(a).
“Demand Registration” has the meaning given in Section 3(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.
“FINRA” means the Financial Industry Regulatory Authority.
“Free Writing Prospectus” has the meaning given in Section 4(a).
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“Holdback Period” means the period commencing on the date of an underwriters’ request (which shall be no earlier than four (4) Business Days prior to the expected “pricing” of the related underwritten offering) and continuing for not more than ninety (90) calendar days after the date of the final prospectus (or final prospectus supplement if the offering is made pursuant to a shelf registration), pursuant to which such underwritten offering shall be made, or such lesser period as is required by such underwriters (which shall also apply equally to all Holders) or as applies to the Company.
“Holder” means any Stockholder holding Registrable Securities.
“Indemnified Party” has the meaning given in Section 5(c).
“Investor” has the meaning given in the Preamble.
“Lock-Up Period” has the meaning given in the Recitals.
“Losses” has the meaning given in Section 5(a).
“NYSE” means the New York Stock Exchange.
“Permitted Transferee” means a person or entity, who is not a “foreign person” as defined under the DPA, to whom the Investor is permitted to transfer its Registrable Securities prior to the expiration of the Lock-Up Period under the applicable Cooperation Agreement.
“Person” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof, any other form of entity or any group comprised of two or more of the foregoing.
“Postponement Period” has the meaning given in Section 3(d).
“Prospectus” means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement (including any preliminary or final prospectus supplement prepared in connection with any shelf take-down), with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.
“Quarterly Blackout Period” has the meaning given in Section 3(a).
“register”, “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement or the automatic effectiveness of such registration statement, as applicable.
“Registrable Securities” means (a) the Investor Common Stock, (b) any shares of Common Stock issued to the Investor pursuant to the Investor’s Capital Raising Anti-Dilution Right (as defined in the Cooperation Agreement), and (c) any other securities issued or issuable with respect to any such shares of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization. As to any particular Registrable Securities, once issued, such securities shall cease to be Registrable Securities when (i) they are sold pursuant to an effective Registration Statement under the Securities Act, (ii) they are sold pursuant to Rule 144 (or other exemption from registration under the Securities Act after which such securities are not “restricted securities” under Rule 144), (iii) in the case of any shares of Common Stock held by a Holder, all shares of Common Stock held by such Holder constitute less than one percent (1%) of all outstanding shares of Common Stock and may be sold in a single day pursuant to Rule 144, (iv) they shall have ceased to be outstanding or (v) they have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities.
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“Registration Statement” means any registration statement of the Company filed with the SEC under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
“Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.
“SEC” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.
“Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.
“Short Form Registration Statement” has the meaning given in Section 3(e)(i).
“Stockholder” has the meaning given in the Preamble.
“Substantial Marketing Efforts” shall mean marketing efforts, in connection with an underwritten offering, that involve one-on-one in-person meetings with prospective purchasers of the Registrable Securities over multiple days and other customary marketing activities, as recommended by the underwriter(s).
“Transaction” has the meaning given in the Recitals.
“Transaction Agreement” has the meaning given in the Recitals.
Section 2. Incidental Registrations.
(a) Right to Include Registrable Securities. If the Company proposes to register its Common Stock under the Securities Act for a sale that will occur following the expiration of the Lock-Up Period (other than pursuant to a Registration Statement filed by the Company on Form S-4 or S-8, or any successor or other forms promulgated for similar purposes or filed solely in connection with an exchange offer or any employee benefit or dividend reinvestment plan), whether or not for sale for its own account, in a manner which would permit registration of Registrable Securities for sale to the public under the Securities Act, it will, at each such time, give prompt written notice to all Holders of its intention to do so and of such Holders’ rights under this Section 2. Upon the written request of any such Holder made within seven (7) calendar days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such Holder), the Company will use its reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Holders thereof, to the extent required to permit the disposition of the Registrable Securities so to be registered; provided that (i) if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason not to proceed with the proposed registration of the securities to be sold thereunder, the Company may, at its election, give written notice of such determination to each Holder and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the registration expenses pursuant to Section 6 hereof in connection therewith), without prejudice to the rights of the Holders to request that such registration be effected as a registration under Section 3, and (ii) if such registration involves an underwritten offering, all Holders requesting to be included in the Company’s registration and to participate in the underwritten offering must enter into an underwriting agreement to sell their Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company, with such differences, including any with respect to indemnification and liability, as are customary in combined primary and secondary offerings by the Company and the Investor. If a registration requested pursuant to this Section 2(a) involves an underwritten public offering, any Holder requesting to be included in such registration may elect, in writing at least two (2) Business Days prior to the effective date of the Registration Statement filed in connection with such registration , prior to the launch of such takedown, not to register such securities in connection with such registration. The Company shall not be required to maintain the effectiveness of the Registration Statement for a registration requested pursuant to this Section 2(a) beyond the earlier to occur of (i) one hundred and eighty (180) calendar days after the effective date thereof and (ii) consummation of the distribution by the Holders of the Registrable Securities included in such Registration Statement. Any Holder of Registrable Securities who has elected to sell Registrable Securities in an offering pursuant to this Section 2 shall be permitted to withdraw from such registration by written notice to the Company if the price to the public at which the Registrable Securities are proposed to be sold will be less than 90% of the average closing price of the class of stock being sold in the offering during the ten (10) trading days preceding the date on which the notice of such offering was given pursuant to this Section 2(a).
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(b) Priority in Incidental Registrations. The Company shall use reasonable efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit Holders who have requested to include Registrable Securities in such offering to include in such offering all Registrable Securities so requested to be included on the same terms and conditions as any other shares of capital stock, if any, of the Company included in the offering. Notwithstanding the foregoing, if the managing underwriter or underwriters of such underwritten offering have informed the Company in writing that it is their good faith opinion that the total amount of securities that are intended to be included in such offering is such as to adversely affect the success of such offering (including adversely affect the per-share offering price), then the amount of securities to be offered shall be reduced to the amount recommended by such managing underwriter or underwriters in its or their good faith opinion, which will be allocated in the following order of priority: (i) first, the securities to be proposed to be sold by the Company for its own account, (ii) second, the Registrable Securities of the Investor, (iii) third, the Registrable Securities of the Holders other than the Investor that have requested to participate in such underwritten offering, allocated pro rata among such Holders on the basis of the percentage of the Registrable Securities requested to be included in such underwritten offering by such Holders and (iv) fourth, for the account of any other holders of Common Stock that have requested to be included in such underwritten offering as a result of registration rights or otherwise.
Section 3. Registration on Request.
(a) Request by the Demand Party. Subject to the following paragraphs of this Section 3(a), unless the Company has an effective Short Form Registration Statement on file pursuant to Section 3(e) below, each Holder shall have the right, by delivering a written notice to the Company, to require the Company to register, (in the case of a Holder who is subject to transfer restrictions pursuant to the Cooperation Agreement during the Lock-Up Period, for sales to occur following expiration of the Lock-Up Period) and pursuant to the terms of this Agreement, under and in accordance with the provisions of the Securities Act, the number of Registrable Securities of such Holder requested to be so registered pursuant to the terms of this Agreement (any such written notice, a “Demand Notice”, any such registration, a “Demand Registration” and any such Holder, a “Demand Party”); provided, however, that a Demand Notice may only be made if the sale of the Registrable Securities requested to be registered by such Holder is reasonably expected to result in aggregate gross cash proceeds in excess of USD 50,000,000 (without regard to any underwriting discount or commission); provided, further, that the Company shall not be obligated to file a registration statement relating to any registration request under this Section 3(a), (i) within the period or such shorter period as may be specified by the Company’s insider trading policy as applicable to Company employees generally (the “Quarterly Blackout Period”) commencing on the fifth (5th) full Business Day before the end of the last month of the quarter and ending after the second (2nd) full Business Day following the release of the Company’s earnings for that quarter or (ii) within a period of sixty (60) calendar days after the effective date of any other registration statement relating to any registration request under this Section 3(a). Following receipt of a Demand Notice for a Demand Registration in accordance with this Section 3(a), the Company shall use its reasonable best efforts to file a Registration Statement as promptly as practicable within forty five (45) calendar days immediately after the Company’s receipt of such Demand Registration and shall use its reasonable best efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as practicable after the filing thereof.
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(i) No Demand Registration shall be deemed to have occurred for purposes of this Section 3 if (i) the Registration Statement relating thereto (x) does not become effective, (y) is not maintained effective for the period required pursuant to this Section 3 or (z) the offering of the Registrable Securities pursuant to such Registration Statement is subject to a stop order, injunction, or similar order or requirement of the SEC during such period, in which case, such requesting Holder shall be entitled to an additional Demand Registration in lieu thereof, (ii) more than seventy five percent (75%) of the Registrable Securities requested by the Demand Party to be included in the registration are not so included pursuant to Section 3(b) or (iii) in the case of a Demand Registration for an underwritten offering, the conditions to closing specified in any underwriting agreement, purchase agreement or similar agreement entered into in connection with the registration relating to such request are not satisfied (other than as a result of a material default or breach thereunder by such Demand Party) or otherwise waived by such Demand Party; provided that the Company’s obligation to pay the registration expenses pursuant to Section 6 hereof in connection therewith shall still apply.
(ii) As promptly as practicable within ten (10) Business Days after receipt by the Company of a Demand Notice in accordance with this Section 3(a), the Company shall give written notice (the “Demand Follow-up Notice”) of such Demand Notice to all other Holders and shall, subject to the provisions of Section 3(b) hereof, include in such registration all Registrable Securities with respect to which the Company received written requests for inclusion therein within five (5) calendar days after such Demand Follow-up Notice is given by the Company to such Holders, provided that the Company shall not provide a Demand Follow-up Notice to any other Holder or holder of the Company’s equity securities in the case of a sale of Registrable Securities by the Investor by means of a bought deal, a block trade or a similar transaction that is an underwritten offering (a “Block Sale”).
(iii) All requests made pursuant to this Section 3 will specify the number of Registrable Securities to be registered and the intended methods of disposition thereof.
(iv) The Company shall use its commercially reasonable efforts to maintain the effectiveness of the Registration Statement with respect to any Demand Registration for a period of at least one hundred and eighty (180) calendar days after the effective date thereof or such shorter period during which all Registrable Securities included in such Registration Statement have actually been sold; provided, however, that such period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such Registration Statement at the request of the Company or an underwriter of the Company pursuant to the provisions of this Agreement.
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(b) Priority on Demand Registration. If any of the Registrable Securities registered pursuant to a Demand Registration are to be sold in a firm commitment underwritten offering, and the managing underwriter or underwriters advise the Holders of such securities in writing that in its or their good faith opinion the total number or dollar amount of Registrable Securities proposed to be sold in such offering is such as to adversely affect the success of such offering (including, without limitation, securities proposed to be included by other holders of securities entitled to include securities in such Registration Statement pursuant to incidental or piggyback registration rights), then there shall be included in such firm commitment underwritten offering the number or dollar amount of Registrable Securities that in the good faith opinion of such managing underwriter or underwriters can be sold without adversely affecting such offering, and such number of Registrable Securities shall be allocated as follows, unless the underwriter or underwriters require a different allocation:
(i) first, to the Investor until all Registrable Securities requested for registration by the Investor have been included in such registration;
(ii) second, to any Holders other than the Investor requesting such Demand Registration (whether pursuant to a Demand Notice or pursuant to incidental or piggyback registration rights) among such Holders pro rata on the basis of the percentage of Registrable Securities owned by each such Holder relative to the number of Registrable Securities owned by all such Holders;
(iii) third, the securities for which inclusion in such Demand Registration, as the case may be, was requested by any other holders of Common Stock as a result of registration rights or otherwise; and
(iv) fourth, the securities for which inclusion in such Demand Registration was requested by the Company.
(c) Cancellation of a Demand Registration. Each Demand Party and the Holders of a majority of the Registrable Securities which are to be registered in a particular offering pursuant to this Section 3 shall have the right, prior to the effectiveness of the Registration Statement, to notify the Company that it or they, as the case may be, has or have determined that such Registration Statement be abandoned or withdrawn, in which event the Company shall abandon or withdraw such registration statement. Any Holder who has elected to sell Registrable Securities in an underwritten offering pursuant to this Section 3 (including the Demand Party of such Demand Registration) shall be permitted to withdraw from such registration by written notice to the Company if the price to the public at which the Registrable Securities are proposed to be sold will be less than 90% of the average closing price of the class of stock being sold in the offering during the ten (10) trading days preceding the date on which the Demand Notice of such offering was given pursuant to Section 3(a).
(d) Postponements in Requested Registrations. If the Company shall at any time furnish to the Holders a certificate signed by its chairman of the board or chief executive officer stating that the filing of a Registration Statement, in the good faith judgment of the board of directors of the Company, (i) require the Company to make an Adverse Disclosure or (ii) materially interfere with any material proposed acquisition, disposition, financing, reorganization, recapitalization or similar transaction involving the Company or any of its subsidiaries then under consideration, the Company may postpone the filing (but not the preparation) of a Registration Statement required by this Section 3 until such circumstance is no longer continuing but not to exceed sixty (60) days (such period, a “Postponement Period”); provided that the Company shall at all times in good faith use its commercially reasonable best efforts to cause any Registration Statement required by this Section 3 to be filed as soon as possible; provided, further, that the Company shall not be permitted to commence a Postponement Period pursuant to this Section 3(d) more than once in any 180-day period. The Company shall promptly give the Holders requesting registration thereof pursuant to this Section 3 written notice of any postponement made in accordance with the preceding sentence.
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(e) Short Form Registration Statement.
(i) The Company agrees that, within thirty (30) calendar days following the date on which the Investor’s PCAOB Audited Financials (as defined in the Transaction Agreement) become available, the Company shall file with the SEC a Short Form Registration Statement (on Form S-3 to the extent permissible) (a “Short Form Registration Statement”) covering the resale of all Registrable Securities, and shall use its reasonable best efforts to have the Short Form Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 120th calendar day following the filing date thereof if the SEC notifies the Company that it will “review” the Short Form Registration Statement and (ii) the 10th Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the Short Form Registration Statement will not be “reviewed” or will not be subject to further review; provided, however, that the Company obligations to include the Registrable Securities in the Short Form Registration Statement are contingent upon the Holder furnishing in writing to the Company such information regarding the Holder, the Registrable Securities and the intended method of disposition of the Registrable Securities as shall be reasonably necessary and requested by the Company to effect the registration, and the Holder shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations, including providing that the Company shall be entitled to postpone and suspend the effectiveness or use of the Short Form Registration Statement, if applicable, during any customary blackout or similar period. Upon filing the Short Form Registration Statement, the Company shall use its reasonable best efforts to keep such Short Form Registration Statement effective with the SEC at all times and to re-file such Short Form Registration Statement upon its expiration, and subject to Section 3(f), to cooperate in any shelf take-down, whether or not underwritten, by amending or supplementing the Prospectus related to such Short Form Registration Statement as may be reasonably requested by the Holders or as otherwise required, until such time as all Registrable Securities that could be sold in such Short Form Registration Statement have been sold or are no longer outstanding.
(ii) To the extent that the Company becomes ineligible to use Form S-3, the Company shall file a registration statement on Form S-1 registering the Registrable Securities for resale not later than sixty (60) calendar days after the date of such ineligibility and use its reasonable best efforts to have such registration statement declared effective as promptly as practicable.
(f) Selection of Underwriters. If a requested registration pursuant to this Section 3 involves an underwritten offering, the investment banker(s) and manager(s) and lead investment banker(s) and manager(s) to administer the offering shall be chosen by the Demand Party, provided that if a Holder other than the Investor is the Demand Party, the investment banker(s) and manager(s) and lead investment banker(s) and manager(s) to administer the offering shall be chosen by the Investor, provided, further, that if a Holder other than the Demand Party will sell at least fifty percent (50%) of the Registrable Securities proposed to be sold in such offering and the Investor is not participating in such offering, the investment banker(s) and manager(s) and lead investment banker(s) and manager(s) shall be chosen by such other Holder, in each case subject to the approval of the Company (not to be unreasonably delayed or withheld). If the offering is underwritten, the right of any Holder to registration pursuant to this Section 3 will be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise agreed by the Demand Party), and each such Holder will (together with the Company and the other Holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting (including pursuant to the terms of any over-allotment or “green shoe” option requested by the managing underwriter(s)); provided that (x) no Holder shall be required to sell more than the number of Registrable Securities that such Holder has requested the Company to include in any registration and (y) if any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw prior to launching the applicable underwritten offering by written notice to the Company, the managing underwriter or underwriters and, in connection with an underwritten registration pursuant to this Section 3, the Demand Party.
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Section 4. Registration Procedures.
(a) If and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2 and Section 3 hereof, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as expeditiously as possible:
(i) prepare and file, in each case as promptly as practicable, with the SEC a Registration Statement or Registration Statements on such form as shall be available for the sale of the Registrable Securities by the Holders thereof or by the Company in accordance with the intended method or methods of distribution thereof, make all required filings with FINRA and use its reasonable best efforts to cause such Registration Statement to become effective as soon as practicable and to remain effective as provided herein; provided, however, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including any free writing prospectuses under Rule 433 under the Securities Act (each a “Free Writing Prospectus”) and including such documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall furnish or otherwise make available to the Holders of the Registrable Securities covered by such Registration Statement, their counsel and the managing underwriters, if any, copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of such counsel, and such other documents reasonably requested by such counsel, including any comment letter from the SEC, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors. The Company shall not file any such Registration Statement or Prospectus or any amendments or supplements thereto (including any Free Writing Prospectuses and including such documents that, upon filing, would be incorporated or deemed to be incorporated by reference therein) with respect to a Demand Registration to which the Demand Party, the Holders of a majority of the Registrable Securities covered by such Registration Statement, or their counsel, or the managing underwriters, if any, shall reasonably object, in writing, on a timely basis, unless, in the opinion of the Company, such filing is necessary to comply with applicable law;
(ii) subject to Section 3(e), prepare and file with the SEC such amendments, post-effective amendments and supplements to each Registration Statement and the Prospectus used in connection therewith and such Free Writing Prospectuses and Exchange Act reports as may be necessary to keep such Registration Statement continuously effective during the period provided herein and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement; and cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the Registrable Securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act, in each case, until such time as all of such securities have been disposed of in accordance with the intended method or methods of disposition by the seller or sellers thereof set forth in such Registration Statement;
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(iii) notify each selling Holder, its counsel and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment or any Free Writing Prospectus has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if at any time the Company has reason to believe that the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 4(a)(xiv) below cease to be true and correct, (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (vi) of the happening of any event that makes any statement made in such Registration Statement, related Prospectus, Free Writing Prospectus, amendment or supplement thereto or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (which notice shall notify the selling Holders only of the occurrence of such an event and shall provide no additional information regarding such event to the extent such information would constitute material non-public information);
(iv) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest date reasonably practical;
(v) if requested by the managing underwriters, if any, the Demand Party with respect to the offering or the Holders of a majority of the then-issued and outstanding Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, or such Demand Party or Holders, as the case may be, may reasonably request in order to permit the intended method of distribution of such Registrable Securities and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 4(a) that are not, in the opinion of counsel for the Company, in compliance with applicable law;
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(vi) deliver to each selling Holder of Registrable Securities, its counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus) and each amendment, supplement or post-effective amendment thereto as such Persons may reasonably request from time to time in connection with the distribution of the Registrable Securities; and the Company, subject to the last paragraph of this Section 4, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto;
(vii) prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling Holders of Registrable Securities, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and to take any other action that may be necessary or advisable to enable such Holders of Registrable Securities to consummate the disposition of such Registrable Securities in such jurisdiction in accordance with the intended method or methods of disposition thereof; provided, however, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so required to qualify but for this paragraph (g) or (ii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject (other than service of process in connection with such registration or qualification or any sale of Registrable Securities in connection therewith);
(viii) cooperate with the selling Holders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written representations from each Holder of such Registrable Securities that the Registrable Securities represented by the certificates so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, or Holders may request;
(ix) use its reasonable best efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities within the United States as may be necessary in light of the business or operations of the Company to enable the seller or sellers thereof or the managing underwriters, if any, to consummate the disposition of such Registrable Securities, in accordance with the intended method or methods thereof, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Company will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals, as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Securities in accordance with the intended method or methods thereof;
(x) upon the occurrence of any event contemplated by Section 4(a)(iii)(vi) above, promptly prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state 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;
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(xi) prior to the effective date of the Registration Statement relating to the Registrable Securities, provide a CUSIP number for the Registrable Securities;
(xii) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement (and in connection therewith, if reasonably required by the Company’s transfer agent, the Company will cause an opinion of counsel as to the effectiveness of the Registration Statement to be delivered to such transfer agent, together with any other authorizations, certificates and directions reasonably required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without any legend upon sale by the Holder or the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, of such Registrable Securities under the Registration Statement);
(xiii) use its reasonable best efforts to cause all shares of Registrable Securities covered by such Registration Statement to be listed on the NYSE or other national securities exchange on which the Common Stock is then listed, prior to the effectiveness of such Registration Statement (or, if no Common Stock issued by the Company is then listed on any securities exchange, use its reasonable best efforts to cause such Registrable Securities to be so listed on the NYSE or NASDAQ, as determined by the Company);
(xiv) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other actions reasonably requested by the Demand Party or the Holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters, if any) to expedite or facilitate the disposition of such Registrable Securities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) make such representations and warranties to the underwriters, if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its reasonable best efforts to furnish to the underwriters, if any, opinions of outside counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any), addressed to each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (iii) use its reasonable best efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have certified the financial statements included in such Registration Statement, addressed to each selling Holder (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings, (iv) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures substantially to the effect set forth in Section 4 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the Holders, and (v) deliver such documents and certificates as may be reasonably requested by the managing underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to Section 4(a)(xiv)(i) above and to evidence compliance with any customary conditions contained in the underwriting agreement entered into between the Company and the managing underwriters. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;
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(xv) make available for inspection by a representative of the selling Holders, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorneys or accountants retained by such selling Holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement; provided, however, that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such Persons unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Person, is required by law or applicable legal process, or (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Person. In the case of a proposed disclosure pursuant to (i) or (ii) above, such Person shall be required to give the Company written notice of the proposed disclosure prior to such disclosure and, if requested by the Company, assist the Company in seeking to prevent or limit the proposed disclosure. Without limiting the foregoing, no such information shall be used by such Person as the basis for any market transactions in securities of the Company or its subsidiaries in violation of law;
(xvi) cause its officers, including its executive officers, to use their reasonable best efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including, without limitation, participation in “road shows” and other customary marketing activities) taking into account the Company’s business needs; and
(xvii) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA.
(b) The Company may require each Holder as to which any registration is being effected to furnish to the Company in writing such information required in connection with such registration regarding such seller and the distribution of such Registrable Securities as the Company may, from time to time, reasonably request in writing and the Company may exclude from such registration the Registrable Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request.
(c) The Company agrees not to file or make any amendment to any Registration Statement with respect to any Registrable Securities, or any amendment of or supplement to the Prospectus or any Free Writing Prospectus used in connection therewith, that refers to any Holder covered thereby by name, or otherwise identifies such Holder as the holder of any securities of the Company, without the consent of such Holder, such consent not to be unreasonably withheld or delayed, unless and to the extent such disclosure is required by law.
(d) If the Company files any Short Form Registration Statement for the benefit of the holders of any of its securities other than the Holders of Registrable Securities, the Company agrees that it shall use its reasonable best efforts to include in such registration statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Holders) in order to ensure that such Holders may be added to such Short Form Registration Statement at a later time through the filing of a Prospectus supplement rather than a post-effective amendment.
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(e) The Company will not expressly name or identify any Holder as an “underwriter” in any Registration Statement or related document without such Holder’s prior written consent; provided, however, that nothing in this sentence will require the consent of any Holder in connection with the inclusion in any Registration Statement or related document of customary language, without specifically naming any Holder, that selling securityholders may in certain circumstances be considered to be underwriters under federal securities laws.
(f) Each Holder agrees if such Holder has Registrable Securities covered by such Registration Statement that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(a)(iii)(ii), 4(a)(iii)(iii), 4(a)(iii)(iv), 4(a)(iii)(v) or 4(a)(iii)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(a)(x) hereof, or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided, however, that the time periods under Section 3 with respect to the length of time that the effectiveness of a Registration Statement must be maintained shall automatically be extended by the amount of time the Holder is required to discontinue disposition of such securities. For the avoidance of doubt, nothing in the previous sentence will prohibit or restrict any Holder from selling or transferring Registrable Securities other than pursuant to a Registration Statement or Prospectus (including pursuant to Rule 144) subject to compliance by such Holder with applicable securities laws in connection with such sale or transfer.
Section 5. Indemnification.
(a) Indemnification by the Company. The Company shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by law, each Holder whose Registrable Securities are or were covered by a Registration Statement or Prospectus, the directors, officers, partners, members, managers, shareholders, agents and employees of each of them, each Person who controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the directors, officers, partners, members, managers, shareholders, agents and employees of each such controlling person, each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter (each such person being referred to herein as a “Covered Person”), from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such party in connection with any investigation or proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), as incurred, arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in any Prospectus, offering circular, or other document (including any related Registration Statement, notification, or the like or Free Writing Prospectus or any amendment thereof or supplement thereto or any document incorporated by reference therein) incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation thereunder applicable to the Company and (without limitation of the preceding portions of this Section 5(a)) will reimburse each such Covered Person for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such Loss, provided that the Company will not be liable in any such case to the extent that any such Loss arises out of or is based on any untrue statement or omission by such Covered Person related to such Covered Person or its Affiliates (other than the Company or any of its subsidiaries, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, Prospectus, offering circular, Free Writing Prospectus or any amendment thereof or supplement thereto, or any document incorporated by reference therein, or other document in reliance upon and in conformity with written information furnished to the Company by such Covered Person with respect to such Covered Person for use therein. It is agreed that the indemnity agreement contained in this Section 5(a) shall not apply to amounts paid in settlement of any such Loss or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably delayed or withheld), provided that notwithstanding the foregoing, the indemnity agreement contained in this Section 5(a) shall apply to amounts paid in settlement of any Loss or action even if such settlement is effected without the consent of the Company if the Company does not timely reply to a request for its consent. For the avoidance of doubt, a person (and its officers, directors, partners, members, managers, shareholders, agents, employees and control persons as described above) that ceases to be a Holder will be entitled to indemnification in connection with Losses incurred as described above in such person’s capacity as a Holder.
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(b) Indemnification by Holder. Subject to Section 5(a), the Holder shall indemnify, to the fullest extent permitted by law, severally and not jointly with any other Holders, the Company, its directors and officers and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), from and against all Losses arising out of or based on any untrue statement of a material fact contained in any such Registration Statement, Prospectus, Free Writing Prospectus, offering circular, or other document, or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will (without limitation of the portions of this Section 5(b)) reimburse the Company, such directors, officers and controlling persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such Loss, provided that the Holder will not be liable in any such case for such untrue statements or omissions made in such Registration Statement, Prospectus, Free Writing Prospectus, offering circular, or other document in reliance upon and in conformity with written information not furnished to the Company by such Holder that is contained Registration Statement, Prospectus, offering circular or other document; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such Losses (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided, further, that the liability of such Holder shall be individual, not joint and several, for each Holder and shall be limited to the net proceeds received by such selling Holder from the sale of Registrable Securities covered by such Registration Statement, Prospectus, offering circular or other document containing such untrue statement (or alleged untrue statement) or omission (or alleged omission) (less the aggregate amount of any damages which such Holder has otherwise been required to pay in respect of such Loss or any substantially similar Loss arising from the sale of such Registrable Securities). As a condition to including Registrable Securities in any Registration Statement filed in accordance herewith, the Company may require that it shall have received an undertaking reasonably satisfactory to it from any underwriter to indemnify and hold it harmless to the extent customarily provided by underwriters with respect to similar securities.
(c) Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnification hereunder (an “Indemnified Party”), such Indemnified Party shall give prompt notice to the party from which such indemnity is sought (the “Indemnifying Party”) of any claim or of the commencement of any proceeding with respect to which such Indemnified Party seeks indemnification or contribution pursuant hereto; provided, however, that the delay or failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party from any obligation or liability except to the extent that the Indemnifying Party has been materially prejudiced by such delay or failure. The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Party promptly after the receipt of written notice from such Indemnified Party of such claim or proceeding, to, unless in the Indemnified Party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, assume, at the Indemnifying Party’s expense, the defense of any such claim or proceeding, with counsel reasonably satisfactory to such Indemnified Party; provided, however, that an Indemnified Party shall have the right to employ separate counsel in any such claim or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (i) the Indemnifying Party agrees to pay such fees and expenses; or (ii) the Indemnifying Party fails promptly to assume, or in the event of a conflict of interest cannot assume, the defense of such claim or proceeding or fails to employ counsel reasonably satisfactory to such Indemnified Party; in which case the Indemnified Party shall have the right to employ counsel and to assume the defense of such claim or proceeding at the Indemnifying Party’s expense; provided, further, however, that the Indemnifying Party shall not, in connection with any one such claim or proceeding or separate but substantially similar or related claims or proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one firm of attorneys (together with appropriate local counsel) at any time for all of the Indemnified Parties, or for fees and expenses that are not reasonable. Whether or not such defense is assumed by the Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably delayed or withheld). Without the prior written consent of the Indemnified Party, the Indemnifying Party shall not consent to entry of any judgment or enter into any settlement that (x) does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation for which such Indemnified Party would be entitled to indemnification hereunder or (y) involves the imposition of equitable remedies or the imposition of any obligations on the Indemnified Party or adversely affects such Indemnified Party other than as a result of financial obligations for which such Indemnified Party would be entitled to indemnification hereunder.
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(d) Contribution. If the indemnification provided for in this Section 5 is unavailable to an Indemnified Party in respect of any Losses (other than in accordance with its terms), then each applicable Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made (or omitted) by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission.
(i) The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), an Indemnifying Party that is a selling Holder shall not be required to contribute any amount in excess of the net proceeds to such Holder from the Registrable Securities sold pursuant to the Registration Statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which the Holder has otherwise been required to pay in respect of such Loss or any substantially similar Loss arising from the sale of such Registrable Securities). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. No selling Holder shall be liable for contribution under this Section 5(d), except under such circumstances as such selling Holder would have been liable for indemnification under this Section 5 if such indemnification were enforceable under applicable law. Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten offering are more favorable to the Holders than the foregoing provisions, the provisions in the underwriting agreement shall control.
(e) Deemed Underwriter. To the extent that any of the Holders is, or would be expected to be, deemed to be an underwriter of Registrable Securities pursuant to any SEC comments or policies or any court of law or otherwise, the Company agrees that (i) the indemnification and contribution provisions contained in this Section 5 shall be applicable to the benefit of such Holder in its role as deemed underwriter in addition to its capacity as a Holder (so long as the amount for which any other Holder is or becomes responsible does not exceed the amount for which such Holder would be responsible if the Holder were not deemed to be an underwriter of Registrable Securities) and (ii) such Holder and its representatives shall be entitled to conduct the due diligence which would normally be conducted in connection with an offering of securities registered under the Securities Act, including receipt of customary opinions and comfort letters.
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(f) Non-Exclusivity. The obligations of the parties under this Section 5 shall be in addition to any liability which any party may otherwise have to any other party.
Section 6. Registration Expenses. All reasonable fees and expenses incident to the performance of or compliance with this Agreement by the Company (including, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the SEC, NYSE, or FINRA and (B) of compliance with securities or Blue Sky laws, including, without limitation, any fees and disbursements of counsel for the underwriters in connection with Blue Sky qualifications of the Registrable Securities, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriters, if any, the Demand Party or by the Holders of a majority of the Registrable Securities included in any Registration Statement), (iii) messenger, telephone and delivery expenses of the Company, (iv) fees and disbursements of counsel for the Company, (v) expenses of the Company incurred in connection with any road show, (vi) fees and disbursements of all independent certified public accountants (including, without limitation, the expenses of any “cold comfort” letters required by this Agreement) and any other persons, including special experts retained by the Company and (vii) reasonable, documented out-of-pocket fees and disbursements up to USD 100,000 of one counsel for the Holders whose shares are included in a Registration Statement (which counsel shall be selected as set forth in Section 8)) shall be borne by the Company whether or not any Registration Statement is filed or becomes effective and for each Demand Notice. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on the NYSE or such other national securities exchange on which the Common Stock is listed and rating agency fees and the fees and expenses of any Person, including special experts, retained by the Company.
(a) The Company shall not be required to pay (i) fees and disbursements of any counsel retained by any Holder or by any underwriter (except as set forth in this Section 6 and in Section 8 or pursuant to the underwriting agreement entered into in connection with such offering), (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by the Company), or (iii) any other expenses of the Holders not specifically required to be paid by the Company pursuant to the first paragraph of this Section 6.
Section 7. Rule 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Demand Party, make publicly available such information so long as necessary to permit sales of Registrable Securities pursuant to Rule 144), and it will take such further action as any Holder (or, if the Company is not required to file reports as provided above, any Demand Party) may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specific requirements with which it did not so comply. Notwithstanding anything contained in this Section 7, the Company may deregister under Section 12 of the Exchange Act if it then is permitted to do so pursuant to the Exchange Act and the rules and regulations thereunder.
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Section 8. Selection of Counsel. In connection with any registration of Registrable Securities pursuant to Section 2 or 3 hereof, if the Investor is participating in such registration pursuant to Section 2 or 3 hereof, the Investor may select one counsel to represent it and all other Holders participating in such registration, and if the Investor is not participating in such registration pursuant to Section 2 or 3 hereof, the Holders other than the Investor of a majority of the Registrable Securities covered by any such registration may select one counsel to represent such other Holders covered by such registration; provided, however, that in the event that the counsel selected as provided above is also acting as counsel to the Company in connection with such registration, the Holders shall be entitled to select one additional counsel at the Company’s expense to represent all Holders.
Section 9. Miscellaneous.
(a) Holdback Agreement. In consideration for the Company agreeing to its obligations under this Agreement, each Holder agrees in connection with any underwritten offering of the Company’s securities with respect to which the Company has complied with its obligations under Section 2 or Section 3 hereof, as applicable, and in which offering such Holder has an opportunity to participate subject to the priority set forth in Section 2(b) or Section 3(b),as applicable (whether or not such Holder is participating in such offering), upon the reasonable request of the underwriters managing any such underwritten offering, not to effect (other than pursuant to such offering) any public sale or distribution of Registrable Securities, including, but not limited to, any sale pursuant to Rule 144, or make any short sale of, grant any option for the purchase of, or otherwise dispose of any Registrable Securities, any other equity securities of the Company or any securities convertible into or exchangeable or exercisable for any equity securities of the Company, in each case without the prior written consent of such underwriters and subject to customary exceptions, during the Holdback Period; provided that nothing herein will prevent any Holder that is a partnership or corporation from making a transfer to an Affiliate that is otherwise in compliance with applicable securities laws. Notwithstanding the foregoing, any discretionary waiver or termination of this holdback provision by such underwriters with respect to any of the Holders shall apply to the other Holders as well, pro rata based upon the number of shares subject to such obligations.
(i) If any registration pursuant to Section 3 of this Agreement shall be in connection with any underwritten public offering, if reasonably requested by the managing underwriter or underwriters, the Company will not effect any public sale or distribution of any common equity (or securities convertible into or exchangeable or exercisable for common equity) (other than a registration statement (i) on Form S-4, Form S-8 or any successor forms thereto or (ii) filed solely in connection with an exchange offer or any employee benefit or dividend reinvestment plan) for its own account, during the Holdback Period.
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(b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent of each of the Company and the Holders of a majority of the Registrable Securities; provided, however, that (x) any amendment, modification, supplement, waiver or consent to departures from the provisions of this Agreement that would subject a Stockholder to adverse differential treatment relative to the other Stockholders shall require the agreement of the differentially treated Stockholder and (y) any amendment, modification, supplement, waiver or consent to departures from the provisions of this Agreement that would be adverse to a right specifically granted to a specific Stockholder herein (but not to other Stockholders) shall require the agreement of that Stockholder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities being sold by such Holders pursuant to such Registration Statement.
(c) Successors, Assigns and Transferees. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Prior to the expiration of the Lock-Up Period, the Investor may not assign or delegate its rights, duties or obligations under this Agreement, in whole or in part, except in connection with a Transfer of Registrable Securities by the Investor to an Affiliate pursuant to that certain Cooperation Agreement but only if such Affiliate agrees to become bound by the transfer restrictions set forth in this Agreement. After the expiration of the Lock-Up Period, the provisions of this Agreement which are for the benefit of the parties hereto other than the Company may be transferred or assigned to any Person in connection with a Transfer of Registrable Securities to such Person, subject to applicable law; provided, however, that (i) (insofar as practicable) prior written notice of such assignment of rights is given to the Company and (ii) such transferee agrees in writing to be bound by, and subject to, this Agreement as a “Holder” pursuant to a written instrument in form and substance reasonably acceptable to the Company. If the Company consolidates or merges with or into any Person or otherwise becomes party to a reorganization event and the Registrable Securities are, in whole or in part, converted into or exchanged for securities of a different issuer or become convertible or exchangeable into securities of a different issuer, and any Holder that immediately prior to such event holds Registrable Securities would, following completion of such event (x) hold securities that are (or, in the case of securities issuable upon the conversion or exchange of other securities, if then issued would be) “restricted securities” or “control securities” (as such terms are used for purpose of Rule 144 under the Securities Act) in the hands of such Holder or (y) beneficially own, together with such Holder’s Affiliates, at least five percent (5%) of the class of such securities when such securities are issued (or when such securities may be acquired upon conversion, exercise or exchange, in the case of securities issuable upon the Conversion, exchange or exercise of other securities), then the Company will use its best efforts to cause such issuer to assume all of the Company’s rights and obligations under this Agreement with respect to such securities of such issuer to the extent (treating such issuer as the “Company” hereunder with respect to such securities) any such securities are Registrable Securities, in a written instrument delivered to the Holders. Except as provided in Section 5 with respect to an Indemnified Party, nothing expressed or mentioned in this Agreement is intended or shall be construed to give any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, remedy or claim under, or in respect of this Agreement or any provision herein contained.
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(d) Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial messenger or courier service, or mailed by registered or certified mail (return receipt requested) or sent via email to the parties at the following addresses or to such other address as the party to whom notice is given may have previously furnished to the others in writing in the manner set forth above (provided that notice of any change of address shall be effective only upon receipt thereof):
if to the Company, to:
FREYR Battery, Inc.
6&8 East Court Square, Suite 300,
Newnan, Georgia 30263
Attention: Compliance Officer
Email: compliance-officer@freyrbattery.com
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom
(UK) LLP
22 Bishopsgate
London, EC2N 4BQ
| Attention: | Denis Klimentchenko |
| Danny Tricot | |
| Email: | denis.klimentchenko@skadden.com |
| danny.tricot@skadden.com |
if to the Holder, to:
Trina Solar (Schweiz) AG
No.2 Tianhe Road, Trina PV Industrial Park, Xinbei District, Changzhou, Jiangsu, China.
Attention: Hua Liu
Email: hua.liu@trinasolar.com
with a copy (which shall not constitute notice) to:
Dorsey & Whitney LLP
51 West 52nd Street
New York, NY 10019-6119
| Attention: | Catherine X. Pan-Giordano |
| Anthony W. Epps | |
| David J. Mack | |
| Email: | pan.catherine@dorsey.com |
| epps.anthony@dorsey.com | |
| mack.david@dorsey.com |
All such notices and other communications shall be deemed to have been duly given or sent (i) one (1) Business Day following the date mailed if sent by overnight commercial messenger or courier service or five (5) Business Days following the date mailed if sent by other mail service, (ii) on the date on which delivered personally or (iii) the date on which sent by email transmission, as the case may be, and addressed as aforesaid.
(e) Descriptive Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein.
(f) Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
(g) Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in.PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.
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(h) Governing Law. This Agreement, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Agreement, or the negotiation, administration, performance, or enforcement of this Agreement, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Agreement, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
(i) Consent to Jurisdiction. Each of the parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Agreement, for and on behalf of itself or any of its properties or assets, in accordance with Section 9(d) or in such other manner as may be permitted by applicable law, and nothing in this Section 9(i) shall affect the right of any party to serve legal process in any other manner permitted by applicable law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Agreement; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Agreement shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Agreement in any court other than the Chosen Courts. Each party agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 9(i), each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 9(d). Nothing in this Section 9(i) shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Agreement or (y) be deemed to confer rights on any Person other than the parties.
(j) Specific Performance. Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.
(k) Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.
(l) Termination. The provisions of this Agreement (other than Section 5 and Section 6) shall terminate upon the earliest to occur of (i) its termination by the written agreement of all parties hereto or their respective successors in interest, (ii) the date on which all shares of Common Stock and any other Registrable Securities have ceased to be Registrable Securities and (iii) the dissolution, liquidation or winding up of the Company. Nothing herein shall relieve any party from any liability for the breach of any of the agreements set forth in this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned has executed this Agreement or caused this Agreement to be duly executed on its behalf as of the date first written above.
| COMPANY: | |||
| FREYR BATTERY, INC. | |||
| By: | |||
| Name: | [●] | ||
| Title: | Authorized Signatory | ||
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the undersigned has executed this Agreement or caused this Agreement to be duly executed on its behalf as of the date first written above.
| HOLDER: | |||
| TRINA SOLAR (SCHWEIZ) AG | |||
| By: | |||
| Name: | [●] | ||
| Title: | Authorized Signatory | ||
[Signature Page to Registration Rights Agreement]
Exhibit 10.7
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 6, 2024, by and among FREYR Battery, Inc., a Delaware corporation (the “Company”), and Trinaway Investment Second Ltd., a British Virgin Islands company (the “Buyer”).
WHEREAS:
A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Regulation S (“Regulation S”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”); and
B. The Buyer wishes to purchase from the Company, and the Company wishes to sell to the Buyer, upon the terms and conditions stated in this Agreement, 14,050,000 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”).
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF SHARES.
a. Purchase of the Shares. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 5 and 6 below, on the Closing Date (as defined in Section 1.b), the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company, the Shares (the “Closing”). The purchase price of the Shares at the Closing shall be equal to $1.05 per Share (the “Share Purchase Price”).
b. The Closing Date. The date and time of the Closing (the “Closing Date”) shall be 9 a.m., New York City time, five (5) Business Days following the receipt of CFIUS Approval (as defined below) (or such later or earlier date as is mutually agreed to in writing by the Company and the Buyer), subject to satisfaction or waiver of all of the other conditions to Closing set forth in Sections 5 and 6. The Closing shall occur on the Closing Date by telephonic conference and electronic exchange of documents. For purposes of this Agreement, “Business Day” means any day other than Saturday, Sunday or other day on which banking institutions in Shanghai, People’s Republic of China, British Virgin Islands, Hong Kong or the City of New York are authorized or required by law or executive order to remain closed.
c. Form of Payment. On the Closing Date, (i) the Buyer shall pay the applicable Share Purchase Price to the Company for the Shares to be issued and sold to the Buyer on the Closing Date, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and (ii) the Company shall deliver to the Buyer a copy of the irrevocable instructions (the “Transfer Instructions”) to Continental Stock Transfer & Trust Company (the “Transfer Agent”) instructing the Transfer Agent to issue to the Buyer or its designee(s), in book-entry form, a number of Shares equal to the aggregate number of Shares that the Buyer is purchasing on the Closing Date.
d. Voting Agreement. Following the delivery by the Company and receipt of the Shares by the Buyer, such Buyer agrees to vote, or cause to be voted, all Shares owned by the Buyer or over which the Buyer has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at any special meeting of stockholders of the Company held or pursuant to any written consent of the stockholders of the Company solely in favor of and to approve (i) the transactions contemplated under that certain transaction agreement by and between the Company and Trina Solar (Schweiz) AG on the date hereof (the “Transaction Agreement”) and (ii) one or more adjournments of any special meeting of stockholders of the Company in connection with the matters set forth in the Transaction Agreement, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, one or more of the other proposals to be voted on at any special meeting of stockholders in connection with the matters set forth under the Transaction Agreement.
2. BUYER’S REPRESENTATIONS AND WARRANTIES.
The Buyer represents and warrants as of the date of this Agreement and the Closing Date to the Company that:
a. Investment Purpose. The Buyer understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and the Buyer is acquiring the Shares hereunder as principal for its own account and not with a view towards, or for resale in connection with, the public sale or distribution, except pursuant to sales registered under, or exempted from, the registration requirements of the Securities Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Shares for any minimum or other specific term and reserves the right to assign, transfer or otherwise dispose of any of the Shares at any time in accordance with or pursuant to an effective registration statement or an exemption under the Securities Act.
b. Accredited Investor Status. The Buyer is not a U.S. Person and it is located outside the United States, as such terms are defined in Rule 902 of Regulation S.
c. Reliance on Exemptions. The Buyer understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of the United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions.
d. Information. The Buyer acknowledges that it has had the opportunity to review this Agreement (including all exhibits and schedules thereto) and the SEC Documents (as defined below). The Buyer and its advisors, if any, have been afforded the opportunity to ask questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares. Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its advisors, if any, or its representatives shall modify, limit, amend or affect the Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below.
e. General Solicitation. The Buyer is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.
f. Experience of the Buyer. The Buyer, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Buyer is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
g. Independent Investment Decision. The Buyer has independently evaluated the merits of its decision to purchase Shares pursuant to this Agreement. The Buyer understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Buyer in connection with the purchase of the Shares constitutes legal, tax or investment advice. The Buyer has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares.
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h. Acknowledgment of Risks. The Buyer acknowledges and understands that its investment in the Shares involves a significant degree of risk, including, without limitation: (i) the Company may remain a development stage business with limited operating history and requires substantial funds in addition to the proceeds from the sale of the Shares; (ii) an investment in the Company is speculative, and only investors who can afford the loss of their entire investment should consider investing in the Company and the Common Stock; (iii) the Buyer may not be able to liquidate its investment; (iv) transferability of the Shares is extremely limited; (v) in the event of a disposition of the Shares, the Buyer could sustain the loss of its entire investment; (vi) the Company has not paid any dividends on its Common Stock since inception and does not anticipate the payment of dividends in the foreseeable future; (vii) the foregoing risks are more fully set forth in the SEC Documents; and (viii) that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.
i. Transfer or Resale. The Buyer understands that (i) the Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Buyer provides the Company with reasonable assurance that such Shares have been or can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act (or a successor rule thereto) (“Rule 144”); and (ii) neither the Company nor any other Person is under any obligation to register the Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder, except as provided in Section 4(g) and the Registration Rights Agreement. As used in this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof or any other legal entity.
j. Brokers and Finders. No Person will, to the Buyer’s knowledge, have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Buyer.
k. Certain Trading Activities. Other than with respect to the transactions contemplated herein, since the time that the Buyer was first contacted by the Company or any other Person regarding the transactions contemplated hereby until the public announcement of the transactions contemplated hereby, neither the Buyer nor any Affiliate of the Buyer which (i) had knowledge of the transactions contemplated hereby, (ii) has or shares discretion relating to the Buyer’s investments or trading or information concerning the Buyer’s investments, including in respect of the Shares, and (iii) is subject to the Buyer’s review or input concerning such Affiliate’s investments or trading (each a “Trading Affiliate”) has directly or indirectly, nor has any Person acting on behalf of the Buyer or Trading Affiliate, effected or agreed to effect any purchases or sales of the securities of the Company (including, without limitation, any short sales involving the Company’s securities) other than transactions with the Company or any of its Affiliates. For the purposes of this Agreement, “Affiliate” means any Person that directly or indirectly through one of more intermediaries Controls, is Controlled by or is under common Control with, such first Person and “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled” and “under common Control with” have correlative meanings.
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l. Legends. The Buyer understands that the certificates or other instruments representing the Shares, except as set forth below, shall bear a restrictive legend in substantially the following form (the “Securities Act Legend”):
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND WITHOUT A VIEW TO DISTRIBUTION AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), OR UNDER STATE SECURITIES LAWS. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION THEREIN MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS AND, IN THE CASE OF CLAUSE (B), UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASOANBLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, SUBJECT TO SECTION 4(I) THE SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITY.
Subject to Section 4(i), the Company acknowledges and agrees that the Buyer may from time to time pledge, and/or grant a security interest in, some or all of the legended Shares in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan. Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Buyer. No notice shall be required of such pledge. At the Buyer’s expense, the Company will execute and deliver such reasonable documentation as the Buyer may reasonably request in connection with a pledge or transfer of the Shares, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.
The Buyer further understands that the legends referenced above shall be removed, and the Company shall issue, pursuant to instructions provided by the Company to the Transfer Agent, a certificate or book-entry statement without such legend to the holder of the applicable Securities upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company (“DTC”), only if (i) such Securities are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the Company) or other available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, (ii) such Shares are eligible for sale under Rule 144, , or (iii) such Securities are registered for resale under the Securities Act.
m. Authorization; Enforcement; Validity. To the extent the Buyer is a corporation, partnership, limited liability company or other entity, the Buyer is a validly existing corporation, partnership, limited liability company or other entity and has the requisite corporate, partnership, limited liability or other organizational power and authority to enter into the transactions contemplated by this Agreement. This Agreement has been duly and validly authorized (as applicable), executed and delivered on behalf of the Buyer and is a legal, valid and binding agreement of the Buyer, enforceable against the Buyer in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, preference or similar laws affecting creditors’ rights generally and general principles of equity.
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n. No Conflicts. The execution, delivery and performance by the Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby will not (i) in the case that Buyer is a corporation, partnership, limited liability company or other entity, result in a violation of the organizational documents of Buyer, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Buyer to perform its obligations hereunder.
o. Reserved.
p. Representations by Non-United States persons. The Buyer hereby represents that the Buyer has satisfied the laws of the Buyer’s jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within the Buyer’s jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, and (iii) any governmental or other consents that may need to be obtained. The Buyer’s subscription and payment for, and the Buyer’s continued beneficial ownership of, the Shares will not violate any applicable securities or other laws of the Buyer’s jurisdiction.
q. No “Bad Actor” Disqualification Events. To Buyer’s knowledge, neither (i) the Buyer, (ii) any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any beneficial owner of the Company’s voting equity securities (in accordance with Rule 506(d) of the Securities Act) held by the Buyer is subject to any Disqualification Event, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed reasonably in advance of the Closing in writing in reasonable detail to the Company.
r. Anti-Bribery and Corruption; Sanctions and Compliance.
(i) Since the later of the respective date of incorporation and April 24, 2019: (i) neither the Buyer, nor its directors, officers, employees or agents, has violated any applicable Customs & Trade Laws or Sanctions (each as defined below); and (ii) the Buyer has not conducted, directly or indirectly, any business with, in, or involving any Sanctioned Jurisdiction, Sanctioned Person or Restricted Person (each as defined below). Neither the Buyer, nor its shareholders (direct or indirect), directors, officers, employees or agents is a Sanctioned Person or a Restricted Person (each as defined below). The Buyer has in place written policies, controls, and systems reasonably designed to ensure compliance with all applicable Customs & Trade Laws and Sanctions. The Buyer has not (i) made any voluntary, directed or involuntary disclosure to any governmental agency with respect to any actual, alleged or reasonably suspected violation of any Customs & Trade Laws or Sanctions, (ii) been the target of a past, current, pending or threatened investigation, or enforcement proceeding by a governmental agency for any actual or alleged violation of Customs & Trade Laws or Sanctions, or (iii) received any written or other notice concerning any actual or alleged violation of any Customs & Trade Laws or Sanctions.
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For the purposes of this Agreement, “Restricted Person” means any Person on the U.S. Department of Commerce’s Entity List, Denied Persons List, Unverified List, or Military End User List or the U.S. Department of State’s Debarred List and “Customs & Trade Laws” means all applicable export, import, customs and trade, and anti-boycott laws or programs administered, enacted or enforced by any governmental agency, including: (a) the U.S. Export Administration Regulations, the U.S. International Traffic in Arms Regulations, and the import laws and regulations administered by U.S. Customs and Border Protection, including the Uyghur Forced Labor Prevention Act; (b) the anti-boycott Laws and regulations administered by the U.S. Departments of Commerce and Treasury; and (c) any other similar export, import, anti-boycott, or other trade laws or programs in any relevant jurisdiction to the extent they are applicable to the Buyer or any of its Subsidiaries.
(ii) Since the later of the respective date of incorporation and April 24, 2019, the Buyer has obtained all required import and export licenses and all other necessary consents, notices, waivers, approvals, orders, authorizations, and declarations, and completed all necessary registrations and filings, required under applicable Customs & Trade Laws and Sanctions.
(iii) Since the later of the respective date of incorporation and January 1, 2021, neither the Buyer, nor any of its officers or directors, employees or agents is in violation of any applicable Anti-Corruption Law (as defined below) or has directly or knowingly indirectly, made, offered, promised, authorized, accepted or agreed to receive, any unlawful payment, gift, bribe or kickback: (i) to or for the benefit of any person for the purposes of influencing any official act or decision; (ii) to secure any improper advantage; or (iii) to induce any person to do or omit to do any act in violation of the lawful duty of such person. The Buyer has established and maintains a compliance program and adequate internal controls and procedures reasonably designed to ensure that the Buyer and its Affiliates and representatives (to the extent acting on their behalf) do not violate any Anti-Corruption Laws. Neither the Buyer, nor any of its officers or directors or employees or agents has (i) made any voluntary, directed or involuntary disclosure to any governmental agency with respect to any actual, alleged or reasonably suspected violation of any Anti-Corruption Laws, (ii) been the target of a past, current, pending or threatened whistleblower report, or investigation, or enforcement proceeding by a governmental agency for any actual or alleged violation of Anti-Corruption Laws, or (iii) received any written or other notice concerning any actual or alleged violation of any Anti-Corruption Laws. No employee of, or holder of a financial interest in, the Buyer, or its Affiliates, is currently a governmental official.
(iv) Since the later of the respective date of incorporation and January 1, 2021, neither the Buyer, nor any of its directors, officers, employees or agents, has violated any applicable Anti-Money Laundering Laws (as defined below). The Buyer has in place written policies, controls, and systems designed to ensure compliance with all applicable Anti-Money Laundering Laws. The Buyer has not (i) made any voluntary, directed or involuntary disclosure to any governmental agency with respect to any actual, alleged or reasonably suspected violation of any Anti-Money Laundering Laws, (ii) been the target of a past, current, pending or threatened investigation or enforcement proceeding by a governmental agency for any actual or alleged violation of Anti-Money Laundering Laws, or (iii) received any written or other notice concerning any actual or alleged violation of any Anti-Money Laundering Laws.
For the purposes of this Agreement, “Anti-Money Laundering Laws” means the financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, the money laundering laws (including any licensing or registration requirements applicable to money services businesses and payment institutions as well as statutes criminalizing money laundering such as 18 U.S.C. §§ 1956 and 1957) of all jurisdictions in which the Buyer conducts business, and any related or similar rules or guidelines issued, administered or enforced by any governmental authority.
s. Affiliate and Group Status; Voting Arrangements. There are no formal or informal stockholder agreements, voting trusts or other agreements or understandings to which the Buyer is a party or by which it is bound relating to the voting of any securities of the Company. The Buyer (i) has acted independently regarding its decision to enter into this Agreement and regarding its investment in the Shares, solely on its own behalf and (ii) by entering into this Agreement does not intend to form a “group” for purposes of Rule 13d-5(b)(1) of the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”) or any other similar provision of applicable law with any other party that may entering into similar securities purchase agreements with the Company.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants, as of the date of this Agreement and the Closing Date to the Buyer that:
a. Organization and Good Standing. The Company and each Subsidiary (as defined below) of the Company is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and the Company and each Subsidiary of the Company has all requisite corporate or other organizational power and authority to carry on its businesses as now being conducted and is qualified to do business and is in good standing as a foreign corporation or other legal entity in each jurisdiction where the conduct of its business requires such qualification, in each case except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the condition (financial or otherwise), prospects, earnings, business or properties of the Company and the Subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business or (ii) the ability of the Company to perform its obligations under this Agreement. For purposes of this Agreement, “Subsidiary” means any entity in which the Company, directly or indirectly, owns any of the outstanding capital stock, equity or similar interests or voting power of such entity at the time of this Agreement or at any time hereafter, whether directly or through any other Subsidiary.
b. Authorization; Enforcement; Validity; Consents and Approvals.
(i) The Company has all requisite corporate power and authority to enter into this Agreement in connection with the transactions contemplated hereby, and to issue and deliver the Shares in accordance with the terms hereof. The execution and delivery by the Company of this Agreement and the consummation of the issuance and delivery of the Shares and the Company’s obligations hereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of the Company.
(ii) This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
(iii) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental agency or body having jurisdiction over the Company or any of its respective properties or assets is required for the issue and sale of the Shares, the execution, delivery and performance by the Company of this Agreement, the consummation of the transactions contemplated hereby, except for (a) CFIUS Approval and (b) the filing of any requisite notices and/or application(s) to the Principal Market for the issuance and sale of the Shares and the listing of the Shares for trading or quotation, as the case may be, thereon in the time and manner required thereby.
c. Company Capital Structure. The only authorized shares of capital stock of the Company as of the date of this Agreement, are (a) 355,000,000 shares of Common Stock, of which 140,500,000 shares of Common Stock are issued and outstanding as of the date of this Agreement, and (b) 10,000,000 shares of preferred stock, of which no shares are outstanding as of the date of this Agreement.
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d. Valid Issuance. The Shares, are or will be duly authorized, validly issued, fully paid and non-assessable, and are free of all Liens and restrictions on transfer, other than restrictions on transfer under (a) this Agreement, the Company’s certificate of incorporation, as may be amended, or amended and restated, from time to time and (b) applicable securities laws. Assuming the accuracy of the Buyer’s representations and warranties set forth in Section 2, the Shares will be issued in compliance with all applicable federal and state securities laws. For the purposes of this Agreement, “Lien” means any lien, pledge, charge, claim, mortgage, security interest or other encumbrance of any kind or character whatsoever.
e. No Conflicts. The execution and delivery by the Company of this Agreement, and the consummation of the contemplated transactions herein, will not result in or give rise to any conflict in (i) any provision of the organizational documents of the Company, as amended (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Company, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
f. SEC Filings; Financial Statements; Sarbanes-Oxley.
(i) Since June 14, 2021, the Company has filed or otherwise furnished on a timely basis all registration statements, prospectuses, forms, reports, proxy statements, schedules, statements and documents required to be filed or furnished by it under the Exchange Act, as the case may be, together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder (collectively, “Sarbanes-Oxley”) (the “SEC Documents”). As of their respective filing dates, the SEC Documents did not contain any untrue statement of a material fact or omit 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, and complied with the applicable requirements of the Exchange Act or the Securities Act, as the case may be, and the applicable regulations of the SEC thereunder and the listing and corporate governance rules and regulations of the New York Stock Exchange (the “NYSE”).
(ii) The financial statements of the Company included in the SEC Documents fairly present in all material respects the financial position, results of operations and cash flows of the Company as of the dates and for the periods referred to therein in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
g. Internal Accounting Controls; Disclosure Controls and Procedures. The Company maintains a system of internal accounting controls 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 generally accepted accounting principles in the United States and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (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. The Company’s internal controls over financial reporting are effective and the Company is not aware of any material weakness in their internal controls over financial reporting. The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act; and such disclosure controls and procedures are effective.
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h. Absence of Certain Changes. Since September 30, 2024, and prior to the date hereof, (a) the operations of the Company as a whole have been conducted in the ordinary course of business, and (b) no Material Adverse Effect has occurred.
i. Absence of Litigation.
(i) Other than as disclosed in the SEC Documents, since January 1, 2021, to the knowledge of the Company, there have been no material Actions (as defined below) against the Company, any of its properties or tangible assets or any of its officers or directors (in their capacity as such) as a party. There is no material outstanding order, judgment, ruling, arbitral award, or other decision (including provisional remedies and injunctions) that specifically relates to and binds the Company, any of its respective properties or tangible assets or any of its officers or directors (in their capacity as such).
(ii) There is no current, pending, or to the knowledge of the Company, threatened, Action of any nature against the Company. There is no current or pending or, to the knowledge of the Company, threatened investigation or proceeding, against the Company by or before any governmental agency.
(iii) As used in this Agreement, “Action” means any demand, claim, charge, action, suit, investigation, proceeding (whether at law or in equity), hearing, inquiry, audit, examination petition, complaint, notice of violation, arbitration or other litigation or similar proceeding, whether arbitral, civil, criminal, administrative, investigative or appellate proceeding, commenced, brought, conducted or heard by or before, or otherwise involving, any court or other governmental agency or any arbitrator or arbitration panel.
j. Acknowledgment Regarding Buyer’s Purchase of the Shares. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of an arm’s-length purchaser with respect to the Company in connection with this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation by the Company and its representatives.
k. General Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Shares.
l. Listing. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from the NYSE that the Company is not in compliance with the listing or maintenance requirements of the NYSE (the “Principal Market”). The Company is as of the date hereof, will be as of the date of the issuance of Shares pursuant to this Agreement (after giving effect to the consummation of the transactions contemplated by this Agreement), and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is eligible for clearing through DTC, through its Deposit/Withdrawal At Custodian (DWAC) system, and the Company is eligible and participating in the Direct Registration System (DRS) of DTC with respect to the Common Stock.
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m. Anti-Bribery and Corruption; Sanctions and Compliance.
(i) Sanctions and Trade Laws. Neither the Company nor any of its directors, officers, employees or agents is a Sanctioned Person or a Restricted Person.
For the purposes of this Agreement, “Sanctioned Person” means any Person that is a target of Sanctions, including as a result of being: (a) listed on any Sanctions list maintained by the United States (including, without limitation, the Treasury’s Office of Foreign Assets Control and the Department of State), (ii) the European Union, (iii) any European Union member state, (iv) the United Nations, (v) the United Kingdom or (vi) any other governmental agency of a jurisdiction in which the Company conducts its business; (b) located, organized or resident in a Sanctioned Jurisdiction; or (c) directly or indirectly owned fifty percent or more or controlled, individually or in the aggregate, by one or more Persons described in the foregoing clauses (a) or (b); “Sanctions” means all applicable trade, economic and financial sanctions, embargoes, laws, and restrictive measures administered, enacted or enforced by (i) the United States (including, without limitation, the Treasury’s Office of Foreign Assets Control and the Department of State), (ii) the European Union, (iii) any European Union member state, (iv) the United Nations, (v) the United Kingdom, or (vi) any other governmental agency of a jurisdiction in which the Company or the Buyers conduct business; and “Sanctioned Jurisdiction” means a country or territory that is itself the subject of comprehensive country- or territory-wide Sanctions (at the time of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People’s Republic, and Luhansk People’s Republic regions of Ukraine), and the non-government controlled areas of Ukraine in the oblasts of Kherson and Zaporizhzhia).
(ii) Anti-Corruption Laws. Since January 1, 2021, the Company and its officers or directors, (or to the knowledge of the Company, the Company’s employees or agents) are not in violation of any applicable Anti-Corruption Law or has directly or knowingly indirectly, made, offered, promised, authorized, accepted or agreed to receive, any unlawful payment, gift, bribe or kickback: (a) to or for the benefit of any person for the purposes of influencing any official act or decision; (b) to secure any improper advantage; or (c) to induce any person to do or omit to do any act in violation of the lawful duty of such person; and (d) in relation to clauses (b) through (c) above, with the intention of winning or retaining business or a business advantage for any person, including the Company or any of its Affiliates. The Company has established and maintains a compliance program and adequate internal controls and procedures reasonably designed to ensure that the Company and its respective Affiliates and representatives (to the extent acting on their behalf) do not violate any Anti-Corruption Laws. None of the Company, its officers or directors or employees have (i) made any voluntary, directed or involuntary disclosure to any governmental agency with respect to any actual, alleged or reasonably suspected violation of any Anti-Corruption Laws, (ii) been the target of a past, current, pending or threatened whistleblower report, or investigation, or enforcement proceeding by a governmental agency for any actual or alleged violation of Anti-Corruption Laws, or (iii) received any written or, to the knowledge of the Company, other notice concerning any actual or alleged violation of any Anti-Corruption Laws. No employee of, or holder of a financial interest in, the Company, their respective Affiliates, is currently a governmental official.
For the purposes of this Agreement, “Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended, the United Kingdom Bribery Act of 2010 and any other applicable laws concerning anti-corruption, anti-bribery, or anti-money laundering of any other jurisdiction in which the Company conducts business, including, without limitation, applicable laws passed pursuant to the Organization of Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
n. Investment Company. The Company is not, and upon the Closing will not be, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
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o. No Disqualification Events. With respect to the Shares to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of the Company, any of its predecessors, any director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner (as that term is defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, any “promoter” (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the Closing, any placement agent or dealer participating in the offering of the Shares and any of such agents’ or dealer’s directors, executive officers, other officers participating in the offering of the Shares (each, a “Covered Person” and, together, “Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”). The Company has exercised reasonable care to determine (i) the identity of each person that is a Covered Person; and (ii) whether any Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e). With respect to each Covered Person, the Company has established procedures reasonably designed to ensure that the Company receives notice from each such Covered Person of (x) any Disqualification Event relating to that Covered Person, and (y) any event that would, with the passage of time, become a Disqualification Event relating to that Covered Person; in each case occurring up to and including the Closing Date. Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2, the Company is not for any other reason disqualified from reliance upon Rule 506 of Regulation D for purposes of the offer and sale of the Shares.
p. Manipulation of Prices. Except as set forth in the SEC Documents, neither the Company nor its respective officers, directors or Affiliates and, to the knowledge of the Company, no one acting on any such Person’s behalf has, (A) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (B) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Shares, or (C) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.
q. No Integrated Offering. Assuming the accuracy of the Buyer’s representations and warranties set forth in Section 2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such Shares under the Securities Act, or (ii) any applicable stockholder approval provisions of any Principal Market on which any of the securities of the Company are listed or designated.
(i) Compliance with Law; Permits. The Company is in compliance with all applicable laws, except where such non-compliance would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date hereof, the Company has not received any written communication from a governmental authority that alleges that the Company is not in compliance with or is in default or violation of any applicable law, except where such non-compliance, default or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(ii) Intellectual Property. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company (i) owns or otherwise possesses adequate rights to use all patents, trademarks, service marks, trade names, domain names, copyrights, and registrations and applications thereof, licenses, know-how, software, systems and technology (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures and other intellectual property) (together, “Intellectual Property”) necessary for the conduct of their respective businesses as current conducted (and as currently contemplated to be conducted); (ii) does not, through the conduct of its respective businesses, infringes, misappropriates or otherwise violates, and has not infringed, misappropriated or otherwise violated, any Intellectual Property rights of others; and (iii) has not received any written notice of any claim alleging infringement, misappropriation or other violation of any Intellectual Property rights of others.
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r. Tax Matters. The Company has timely filed all income tax returns and all other material tax returns that were required to be filed by or with respect to it under applicable law. All such tax returns were correct and complete in all material respects and have been prepared in material compliance with all applicable law. Subject to exceptions as would not be material, no claim has ever been made by a governmental authority in a jurisdiction where the Company does not file tax returns that the Company is subject to taxation by that jurisdiction. All material amounts of taxes due and owing by the Company (whether or not shown on any tax return) have been timely paid.
4. COVENANTS.
a. Best Efforts. Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Sections 5 and 6 of this Agreement.
b. Expenses. At the Closing, the Company and the Buyer shall each pay all of their own legal, due diligence and other expenses, including fees and expenses of attorneys, investigative and other consultants and travel costs and all other expenses, relating to negotiating and preparing this Agreement and consummating the transactions contemplated hereby. The Company shall pay all Transfer Agent fees incurred in connection with the sale and issuance of the Shares to the Buyer.
c. Disqualification Events. The Company will notify the Buyer in writing, prior to the Closing Date of (i) any Disqualification Event relating to any Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Covered Person.
d. Transfer Taxes. The Company shall be responsible for any liability with respect to any transfer, stamp or similar non-income taxes that may be payable in connection with the execution, delivery and performance of this Agreement, including any such taxes with respect to the issuance of the Shares.
e. CFIUS Approval. In the event of a CFIUS Turndown, the sale of the Shares by the Company to the Buyer (the “Transaction”) shall not proceed. The Company shall, in the six months following such CFIUS Turndown, use its commercially reasonable efforts to sell up to an equivalent number of shares of Common Stock in a private offering or public offering (the “Alternative Transaction”) at such price per share as the Company shall determine in its absolute direction (the “Alternative Transaction Purchase Price”). To the extent that the Alternative Transaction Purchase Price (net of any commissions, fees and expenses incurred in the Alternative Transaction) exceeds the Share Purchase Price (such excess being the “Excess”), the Company shall pay to the Buyer an amount equal to the Excess multiplied by the number of shares sold in the Alternative Transaction (up to the number of Shares proposed to be sold pursuant to this Agreement). In the event that the Company has not been able to complete an Alternative Transaction by the end of such six month period, no payment shall be due from the Company to the Buyer pursuant to this section 4(e). For the purposes of this Section 4(e), a “CFIUS Turndown” shall be deemed to have occurred if (i) CFIUS has informed the Parties in writing, after reasonable best efforts by the Parties to negotiate with CFIUS to receive CFIUS Approval, that it has unresolved national security concerns with respect to the Transaction and that it intends to send or has sent a report to the President of the United States recommending that the President of the United States act to suspend or prohibit the Transaction or (ii) if after the Parties use reasonable best efforts to negotiate with CFIUS in good faith, CFIUS has informed the Parties it will impose a Burdensome Condition (as defined in the Transaction Agreement) as a condition of CFIUS Approval.
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f. NYSE Stockholder Approval. If the NYSE determines that Company stockholder approval for the issue and sale of the Shares is required, then the Company shall use commercially reasonable efforts to obtain the approval of stockholders for such issuance and sale, and completion of the Transaction shall be conditioned upon receipt of such approval.
g. Registration Rights Agreement. Promptly following the date of this Agreement, the Buyer and the Company shall negotiate and agree on a registration rights agreement (the “Registration Rights Agreement”) containing such customary terms and conditions pursuant to which, among other things, the Company will agree to provide certain registration rights with respect to the resale of the Shares by the Buyer under the Securities Act and the rules and regulations promulgated thereunder and applicable state securities laws.
h. No Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security that would be integrated with the offer or sale of the Shares in a manner that would require the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Principal Market such that it would require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
i. Lock-up. For a period of six (6) months following the Closing, the Buyer shall not, without the prior written consent of the Company, sell or transfer any Shares except to its Affiliates.
5. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. The obligation of the Company to issue and sell the Shares to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions; provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Buyer with prior written notice thereof:
a. The Buyer shall have executed this Agreement and delivered the same to the Company.
b. The Buyer shall have delivered to the Company the Share Purchase Price for the Shares being purchased by the Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company.
c. The representations and warranties of the Buyer shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date), and the Buyer shall have in all material respects performed, satisfied and complied with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.
d. (i) CFIUS has concluded that the Transaction is not a “covered transaction” and not subject to review under Section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. §4565), and all rules and regulations issued and effective thereunder (the “DPA”), (ii) CFIUS has issued a written notice that it has completed a review or investigation of the notification voluntarily provided pursuant to the DPA with respect to the Transaction, and has concluded all action under the DPA or (iii) if CFIUS has sent a report to the President of the United States requesting the President’s decision and (x) the President has announced a decision not to take any action to suspend or prohibit the Transaction or (y) having received a report from CFIUS requesting the President’s decision, the President has not taken any action after fifteen (15) days from the earlier of the date the President received such report from CFIUS or the end of the investigation period, in each case of (i), (ii) and (iii) without the imposition of any Burdensome Condition ((i), (ii) or (iii) being referred to as “CFIUS Approval”).
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e. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement.
6. CONDITIONS TO BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Shares from the Company at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions; provided that these conditions are for the Buyer’s sole benefit and may be waived only by the Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
a. The Company shall have executed this Agreement and the Registration Rights Agreement and delivered the same to the Buyer.
b. The representations and warranties of the Company shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date) and the Company shall have in all material respects performed, satisfied and complied with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. .
c. The Company shall have executed and delivered the Transfer Instructions, acknowledged in writing by the Transfer Agent, with respect to the Shares being purchased by the Buyer at the Closing to the Transfer Agent and delivered a copy thereof to the Buyer.
d. The Board of Directors of the Company shall have adopted, and not rescinded or otherwise amended or modified, authorizations consistent with Section 3.b(i).
e. There shall have been no Material Adverse Effect since the date of this Agreement.
f. The Shares to be acquired by the Buyer hereunder (i) shall be listed on the NYSE and (ii) shall not have been suspended by the SEC or the NYSE from trading on the NYSE.
g. CFIUS Approval shall have been received without the imposition of any Burdensome Condition.
h. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement.
i. Trading in the Common Stock shall not have been (or threatened to be) suspended by the SEC or the Principal Market, either (i) in writing by the SEC or the Principal Market or (ii) by falling below the minimum listing maintenance requirements of the Principal Market.
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7. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction; Jury Trial.
(i) This Agreement, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Agreement, or the negotiation, administration, performance, or enforcement of this Agreement, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Agreement, shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the laws of any other jurisdiction.
(ii) Each of the parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby, for and on behalf of itself or any of its properties or assets, in accordance with Section 8.a(iii) or in such other manner as may be permitted by applicable law, and nothing in this Section 8.a(ii) shall affect the right of any party to serve legal process in any other manner permitted by applicable law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Agreement or the transactions contemplated hereby; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby in any court other than the Chosen Courts. Each of the Company and the Buyer agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 7.a(ii), each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 7.(f). Nothing in this Section 7.(a)(ii) shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby or (y) be deemed to confer rights on any Person other than the parties.
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(iii) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTION. EACH PARTY ACKNOWLEDGES AND AGREES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 8.a(iii).
b. Counterparts; Execution.
(i) This Agreement shall become effective upon the execution and delivery of a duly executed counterpart hereof by each of the parties hereto. Each of the parties hereto may execute this Agreement by electronic means and recognizes and accepts the use of electronic signatures and records by any other party hereto in connection with the execution and storage hereof. The words “execution,” “signed,” and “signature,” shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state laws based on the Uniform Electronic Transactions Act.
(ii) This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Agreement by electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.
c. Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
d. Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
e. Entire Agreement; Amendments; Waivers. This Agreement supersedes all other prior oral or written agreements among the Buyer, the Company and the Subsidiaries, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties hereto with respect to the matters covered herein and therein. No provision of this Agreement may be waived, modified, supplemented or amended other than by an instrument in writing signed by the Company and the Buyer. No failure or delay on the part of a party in either exercising or enforcing any right under this Agreement shall operate as a waiver of, or impair, any such right. No single or partial exercise or enforcement of any such right shall preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right. No waiver of any such right shall be deemed a waiver of any other right.
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f. Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered upon receipt, when delivered personally or by a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:
If to the Company:
FREYR Battery, Inc.
6&8 East Court Square, Suite 300
Newnan, Georgia 30263
Attention: Compliance Officer
Email: compliance-officer@freyrbattery.com
With copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London, EC2N 4BQ, United Kingdom
Attention: Denis Klimentchenko and Danny Tricot
Email: denis.klimentchenko@skadden.com; danny.tricot@skadden.com
If to the Buyer:
Trinaway Investment Second Ltd.
c/o ICS Corporate Services (BVI) Limited
Sea Meadow House, P. O. Box 116
Road Town, Tortola, British Virgin Islands
Email: gracewugao9@126.com
Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication; (B) provided by affidavit of personal delivery by a delivery service selected by the Company; or (C) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service or deposit with a nationally recognized overnight delivery service.
g. No Successors and Assigns. The Buyer shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company, provided that the Buyer may assign its rights to its Affiliates without the prior written consent of the Company, provided, further, that such assignee enters into a joinder agreement to be bound by the terms of this Agreement.
h. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
i. Survival. The representations and warranties of the parties hereunder shall terminate at Closing.
j. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
k. Termination. In the event that the Closing shall not have occurred on or before twelve (12) months from the date hereof, either party shall have the option to terminate this Agreement by written notice to the other party at or after the close of business on such date without liability of any party to any other party, provided that the foregoing termination right shall not be available to any party whose breach of this Agreement resulted in the failure of Closing to occur on or before such date. Section 4(e) (CFIUS Approval) and Section 7 shall survive termination of this Agreement.
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l. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties thereto express their mutual intent, and no rules of strict construction will be applied against any party.
m. Remedies. The parties hereto agree that (i) irreparable harm would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and (ii) money damages or other legal remedies would not be an adequate remedy for any such harm. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security or proving actual damages), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law.
n. Interpretative Matters. Unless the context otherwise requires, (i) all references to Sections are to Sections contained in this Agreement, (ii) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP, (iii) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter, (iv) the use of the word “including” in this Agreement shall be by way of example rather than limitation, and (v) the word “or” shall not be exclusive.
* * * * * *
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IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities Purchase Agreement to be duly executed as of the date first written above.
| COMPANY: | ||
| FREYR Battery, Inc. | ||
| By: | /s/ Daniel Barcelo | |
| Name: | Daniel Barcelo | |
| Title: | Authorized Signatory | |
| NAME OF BUYER: | ||
| Trinaway Investment Second Ltd. | ||
| By: | /s/ Chunyan Wu | |
| Name: | Chunyan Wu | |
| Title: | Authorized Signatory | |
| Aggregate Share Purchase Price: $14,752,500 | ||
| Number of Shares to be Acquired: 14,050,000 | ||
Exhibit 10.8
VOTING AND SUPPORT AGREEMENT
This VOTING AND SUPPORT AGREEMENT (this “Agreement”) is entered into as of November 6, 2024, by and between FREYR Battery, Inc. (“FREYR” or the “Company”), a Delaware corporation and Encompass Capital Advisors LLC (the “Stockholder”). FREYR and the Stockholder are sometimes referred to as a “Party” and collectively the “Parties”. For purposes of this Agreement, capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Transaction Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, FREYR and Trina Solar (Schweiz) AG (“Trina”) have entered into that certain transaction agreement, dated as of November 6, 2024 (the “Transaction Agreement”), pursuant to which, FREYR has acquired from Trina, directly or indirectly, certain U.S. solar manufacturing assets upon the terms and subject to the conditions set forth in the Transaction Agreement;
WHEREAS, as of the date hereof, the Stockholder is the record or beneficial owner (as defined in Rule 13d-3 and 13d-5(b)(1) of the Exchange Act, which meaning will apply for all purposes of this Agreement whenever the term “beneficial owner” or “beneficially owned” is used) of shares of Acquiror Common Stock, par value $0.01 per share (such shares of Acquiror Common Stock, together with any other shares of Acquiror Common Stock over which the Stockholder acquires record or beneficial ownership (including pursuant to Section 1.1) during the period from the date hereof through the termination of this Agreement, are collectively referred to herein as the “Shares”);
WHEREAS, in connection with the Purchase Price under the Transaction Agreement, FREYR and Trina will enter into that certain convertible note instrument on or before the Closing Date (the “Convertible Unsecured Note”), pursuant to which, among other things, FREYR shall issue a convertible note in the aggregate principal amount of USD 80,000,000, which, subject to CFIUS Approval is convertible in two conversions into shares of Acquiror Common Stock. The Second Conversion is subject to receiving the Requisite Stockholder Approval at the Acquiror Stockholder Meeting;
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the Parties agree as follows:
1.1 Agreement to Vote. The Stockholder agrees that, from and after the date hereof and until the earlier to occur of (x) the receipt of the Requisite Stockholder Approval and (y) one year from the Closing Date (the “Voting Covenant Expiration Date”), at the Acquiror Stockholder Meeting or any meeting of the stockholders of FREYR, however called, or in connection with any written consent of the stockholders of FREYR, in each case relating to any proposed action by the stockholders of FREYR with respect to the matters set forth in Section 1.1(b) below (each, a “Voting Event”), the Stockholder shall:
(a) appear at each such Voting Event or otherwise cause all Shares owned by the Stockholder at such time to be counted as present thereat for purposes of calculating a quorum; and
ARTICLE
I
VOTING
(b) vote (or cause to be voted), in person or by proxy, all Shares owned by the Stockholder at such time (i) in favor of adoption of the Second Conversion; (ii) in favor of any proposal to adjourn a meeting of the stockholders of FREYR to solicit additional proxies in favor of the adoption of the Second Conversion and (iii) against any other action, agreement or transaction that is intended to, or would reasonably be expected to, impede, interfere with, delay, postpone or discourage the Second Conversion or the performance by FREYR of its obligations under the Convertible Unsecured Note or by the Stockholder of its obligations under this Agreement.
ARTICLE
II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants as follows:
(a) Authorization; Validity of Agreement; Necessary Action. The Stockholder has all necessary corporate power and authority to enter into this Agreement and to carry out, or cause to be carried out, its obligations hereunder in accordance with the terms hereof. The execution and delivery by the Stockholder of this Agreement and the performance by the Stockholder of its obligations hereunder have been duly authorized by all requisite action on the part of the Stockholder, and no other action on the part of the Stockholder is necessary to authorize the execution and delivery by the Stockholder of this Agreement or the consummation of the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Stockholder, and assuming due authorization, execution and delivery by the Company, this Agreement constitutes the legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar Laws now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.
(b) Ownership. The Stockholder has and will have at all times through the Voting Covenant Expiration Date, with respect to all Shares owned by the Stockholder at such time, sole voting power, sole power of disposition, sole power to issue instructions with respect to the matters set forth in Article I or Article III hereof, and sole power to agree to all of the matters set forth in this Agreement.
2.2 Representations and Warranties of FREYR. FREYR hereby represents and warrants to the Stockholder as follows:
(a) Authorization; Validity of Agreement; Necessary Action.
(i) The Company has all requisite corporate power and authority to enter into this Agreement in connection with the transactions contemplated hereby. The execution and delivery by the Company of this Agreement and the consummation of the transactions hereunder have been duly authorized by all necessary corporate or similar organizational and other action on the part of the Company.
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(ii) This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to Laws of general application relating to bankruptcy, insolvency, moratorium, the relief of debtors and enforcement of creditors’ rights in general.
ARTICLE
III
COVENANTS
3.1 No Contravening Actions. The Stockholder further agrees not to take or agree or commit to take any action that would make any representation and warranty of the Stockholder contained in this Agreement inaccurate in any material respect.
ARTICLE
IV
MISCELLANEOUS
4.1 Termination. This Agreement shall terminate upon the earliest to occur of (a) the receipt of the Requisite Stockholder Approval and (b) one year from the Closing Date; provided, however, that the provisions of this Article IV shall survive any termination of this Agreement and shall continue to be binding upon the Parties hereto. Except as set forth in the proviso of the preceding sentence, in the event of such termination of this Agreement, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of any Party.
4.2 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by an internationally recognized overnight courier service, by email or registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for any Party as shall be specified by such Party in a notice given in accordance with this Section 4.2).
if to FREYR, to:
FREYR Battery, Inc.
6&8 East Court Square, Suite 300,
Newnan, Georgia 30263
Attention: Compliance Officer
Email: compliance-officer@freyrbattery.com
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with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom (UK) LLP
22 Bishopsgate
London, EC2N 4BQ
Attention: | Denis Klimentchenko Danny Tricot |
|
| Email: | denis.klimentchenko@skadden.com danny.tricot@skadden.com |
if to the Stockholder, to:
Encompass Capital Advisors LLC
200 Park Avenue, 16th Floor Suite 1604,
New York, NY 10166
Attention: Syed Kazmi, CFO
Email: finance@encompasscap.com
with a copy (which shall not constitute notice) to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, NY 10019
Attention: Mitchell Raab
Email: mraab@olshanlaw.com
Any of the foregoing addresses may be changed by giving notice of such change in the foregoing manner, except that notices for changes of address shall be effective only upon receipt.
4.3 Counterparts; Execution.
(a) This Agreement shall become effective upon the execution and delivery of a duly executed counterpart hereof by each of the Parties hereto. Each of the Parties may execute this Agreement by electronic means and recognizes and accepts the use of electronic signatures and records by any other party hereto in connection with the execution and storage hereof. The words “execution,” “signed,” and “signature,” shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other similar state Laws based on the Uniform Electronic Transactions Act.
(b) This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Agreement by electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart hereof.
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4.4 Entire Agreement; Assignment. This Agreement constitutes the entire agreement between FREYR and the Stockholder, with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, between FREYR and the Stockholder with respect to the subject matter hereof. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder, by operation of law or otherwise, without the prior written approval of the other Party, except that FREYR may assign all or any portion of its rights and obligations pursuant to this Agreement in connection with a merger or consolidation involving FREYR, or other disposition of all or substantially all of the assets of FREYR; it being understood that any such assignment will not relieve FREYR of any of its obligations under this Agreement or impede or delay the consummation of the transactions contemplated hereby. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. No assignment by any Party shall relieve such Party of any of its obligations hereunder. Any purported assignment of this Agreement without the consent required by this Section 4.4 is null and void.
4.5 Governing Law. This Agreement, and all claims, causes of action (whether in contract, tort or statute) or other matter that may result from, arise out of, be in connection with or relating to this Agreement, or the negotiation, administration, performance, or enforcement of this Agreement, including any claim or cause of action resulting from, arising out of, in connection with, or relating to any representation or warranty made in or in connection with this Agreement, shall be governed by, and construed and enforced in accordance with, the internal Laws of the State of Delaware, without giving effect to any choice or conflict of laws provision, rule, or principle (whether of the State of Delaware or any other jurisdiction) that would result in the application of the Laws of any other jurisdiction.
4.6 Consent to Jurisdiction. Each of the Parties (a) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as defined below)) in any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby, for and on behalf of itself or any of its properties or assets, in accordance with Section 4.2 or in such other manner as may be permitted by applicable Law, and nothing in this Section 4.6 shall affect the right of any party to serve legal process in any other manner permitted by applicable Law; (b) irrevocably and unconditionally consents and submits itself and its properties and assets in any Action to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arising out of or relating to this Agreement or the transactions contemplated hereby; (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court; (d) agrees that any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby shall be brought, tried and determined only in the Chosen Courts; (e) waives any objection that it may now or hereafter have to the venue of any such Action in the Chosen Courts or that such Action was brought in an inconvenient court and agrees not to plead or claim the same; and (f) agrees that it shall not bring any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby in any court other than the Chosen Courts. Each of the Company and the Stockholder agrees that a final judgment in any Action in the Chosen Courts shall be conclusive and may be enforced in other jurisdictions, either within or outside of the U.S., by suit on the judgment or in any other manner provided by applicable Law. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award or judgment. With respect to any Action for which it has submitted to jurisdiction pursuant to this Section 4.6, each party irrevocably consents to service of process in the manner provided for the giving of notices pursuant to Section 4.2. Nothing in this Section 4.6 shall affect the right of any party to serve process in any other manner permitted by law. The foregoing consent to jurisdiction shall not (x) constitute submission to jurisdiction or general consent to service of process in the State of Delaware for any purpose except with respect to any Action based on, arising out of or relating to this Agreement or the transactions contemplated hereby or (y) be deemed to confer rights on any Person other than the parties.
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4.7 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE PURSUANT TO, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING (WHETHER FOR BREACH OF CONTRACT, TORTIOUS CONDUCT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF, BASED ON OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY ACKNOWLEDGES AND AGREES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) IT MAKES THIS WAIVER VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.7.
4.8 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties hereto. The Parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
| FREYR BATTERY, INC. | ||
| By: | /s/ Daniel Barcelo | |
| Name: | Daniel Barcelo | |
| Title: | Authorized Signatory | |
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.
| ENCOMPASS CAPITAL ADVISORS LLC | ||
| By: | /s/ Syed Kazmi | |
| Name: | Syed Kazmi | |
| Title: | Chief Financial Officer | |
Exhibit 10.9
EMPLOYMENT TERMINATION AND CONSULTING CONTRACT (the “Contract”)
made on the 6th of November 2024
between
FREYR Battery Norway AS
(organisation
number: 929 340 019)
(hereinafter referred to as the “Company”)
and
Tom Einar Jensen
(hereinafter referred to as the “Employee” or the “Consultant”)
| 1 | Termination of Employment |
| 1.1 | This Contract governs the termination of the Employee’s employment with the Company. The Contract also sets out the terms of the Consulting Services (as defined below) to be delivered as a consultant in a transitional period until the Consulting Separation Date (as defined below). |
| 1.2 | The parties agree that the separation terms of this Contract combine and replaces the regulations on notice period, severance pay and compensation for the non-compete obligations outlined in the contract of employment between the parties made on the 28th of August 2024 (the “Contract of Employment”). |
| 1.3 | The Employee shall resign as the Chief Executive Officer of the FREYR Battery Group (consisting of FREYR Battery, Inc. or its successor (“FREYR Battery”), as the ultimate parent of the Company, and its subsidiaries (collectively hereinafter referred to as the “Group”)) with effect from November 6, 2024 (the “Employment Termination Date”). Except as otherwise set forth in this Contract, effective as of the Employment Termination Date, the Employee will resign from each position he holds as an employee, officer or director of the Company and any member of the Group. |
| 1.4 | The Employee recognizes and agrees that the Employee is entitled to six months’ Base Salary as severance under Section 16 of the Contract of Employment in connection with the Employee’s separation of employment from the FREYR Battery Group, which severance payment shall be payable in a lump sum within thirty (30) days following the Employment Termination Date. |
| 1.5 | Holiday allowance accrued in accordance with the Holiday Act (Nw.: ferieloven), but not taken, until the Employment Termination Date shall be payable in a lump sum within thirty (30) days following the Employment Termination Date. |
| 1.6 | The Company shall issue a letter of reference to the Employee within two weeks after the Employment Termination Date. |
| Page 1 of 5 |  |
| 2 | Restrictive covenants |
| 2.1 | The non-solicitation clauses and the other restrictive covenants outlined in Sections 12, 13, 14 and 15 of the Contract of Employment are incorporated by reference herein, remain in full force and effect, is hereby confirmed by the Employee, and shall survive the execution, delivery and performance of this Contract, provided that, (i) pursuant to Section 13.6 of the Contract of Employment, the Company hereby releases the Employee of the Non-Compete Clause, and (ii) the Non-Solicitation of Employees Clause shall not preclude solicitation, recruitment, or employment of, or offering employment to, employees who move to a Company affiliate under mutual agreement between the Company and the respective employee. |
| 3 | Performance Options |
| 3.1 | With respect to Employee’s Performance Options (as defined in the Contract of Employment), notwithstanding the terms of the Contract of Employment (including Annex 2 attached thereto), the Performance Options shall continue to remain outstanding and shall be subject to the same terms (including the performance vesting terms set forth in Annex 2 of the Contract of Employment) following the Employment Termination Date, except that, upon, and subject to, the closing of the Transaction (as defined below), the Performance Options shall vest as follows: (i) one-third of the Performance Options shall immediately vest upon the closing of the Transaction (such date, the “Closing Date”) and (ii) the remaining portion of the Performance Options shall vest 50% on each of the first and second anniversaries of the Closing Date, in each case, subject to Employee’s continued compliance with the terms of this Contract, including, without limitation, the restrictive covenants set forth in Section 2 of this Contract. For purposes of this Contract, “Transaction” shall mean that certain transaction contemplated by the transaction agreement entered into between FREYR Battery and Trina Solar (Schweiz), dated as of November 6, 2024. |
| 4 | Consulting Services |
| 4.1 | Commencing on the Employment Termination Date and continuing through the Consulting Separation Date, the Consultant shall be engaged by the Company as a consultant on a full-time basis in the role of Chief Executive Officer - Europe of the Company. The purpose of the services is to optimize the Group’s European Portfolio, including to actively cooperate to transition the role, duties and responsibilities to the new Chief Executive Officer of FREYR Battery Group (such working tasks and responsibilities, the “Consulting Services”). The Consulting Services shall be performed in close cooperation with the Company. The Consultant’s contact person when performing the Consulting Services is the Chief Executive Officer of the FREYR Battery or any other designated person or body. |
| 4.2 | The ownership rights to what the Consultant creates or produces in connection with the Consulting Services, or contributes to creating or producing, are transferred to the Company. This includes, but is not limited to, rights to intellectual property, inventions, trademarks, software, designs, domain names, business concepts, and know-how. |
| 4.3 | The Consultant’s engagement as a consultant with the Company shall terminate on the first to occur of: (i) the date that is the one-year anniversary of the Employment Termination Date (as such date may be extended by the Company in writing from time to time, in its sole discretion), (ii) the Consultant’s death or permanent disability, and (iii) any earlier date on which (x) the Consultant voluntarily resigns his engagement with the Company giving four weeks’ notice or (y) the Consultant’s engagement is terminated by the Company for any or no reason giving four weeks’ notice (the first to occur of such dates, the “Consulting Separation Date”). |
| Page 2 of 5 | |
| 4.4 | If any of the Parties terminate the contract, the Company may require the Consultant to: |
| (i) | Stop performing the Consulting Services while retaining the right to the Service Fee (as defined below) during the notice period; |
| (ii) | not to have any contact with customers, clients, suppliers, employees or member of FREYR Battery or any entity in the Group; |
| (iii) | not to attend any premises of FREYR Battery or any entity in the Group; and/or |
| (iv) | resign as a director or from any office of FREYR Battery or any entity in the Group. |
| 4.5 | The Consultant shall deliver the Consulting Services at the Company’s premises at Lysaker, Norway. The Consultant acknowledges and understands that the Consulting Services will require him to travel to and conduct part of the Consulting Servicesat FREYR Battery’s premises/headquarters in the USA on a regular basis. The Consultant acknowledges that the Consulting Services may necessitate a considerable amount of travel. The Consultant agrees to travel for FREYR Battery’s and the Group’s business (both within Norway and abroad) as may be required for the proper performance and exercise of the Consulting Services. The Consultant acknowledges and agrees that he may not unreasonably refuse such business trips. The Consultant’s unjustified refusal in this regard may result in sanctions, potentially including the termination of this Contract. |
| 5 | Service Fee |
| 5.1 | From the Employment Termination Date until the Consulting Separation Date the Company shall pay the Consultant a monthly service fee of $30,000 (thirty thousand) per month, which shall be pro-rated for any partial months and will be paid in arrears on or around the twentieth (20th) day of each calendar month to the bank account provided by the Consultant (the “Service Fee”). The Service Fee includes everything the Company shall pay to the Consultant, unless otherwise stated in this Contract. |
| 5.2 | The Company shall reimburse reasonable expenses incurred by the Consultant as a result of performance of the Consulting Services. |
| 5.3 | The Consultant is responsible for accounting, deduction and payment of all income tax, social security contributions, corporation tax and fees, etc. which is imposed on the Consultant in connection with the Consulting Services performed under the Contract. |
| 5.4 | The Consultant is responsible for the subscription and payment of all insurance policies necessary in connection with the Consulting Services and the Consultant’s activities. |
| 5.5 | The Company shall not be liable for payment of salary, holiday pay, tax, insurance or fees, etc. In the event that the Company is held liable for tax related to the Consultant’s Consulting Services, the Consultant shall indemnify the Company. |
| 6 | Return of property, etc. |
| 6.1 | Upon the Consulting Separation Date, or sooner, upon request of the Company, the Consultant shall return to the Company all property in his possession, custody or control belonging to the Company, FREYR Battery or the Group, including but not limited to access cards, business cards, credit and charge cards, keys, security and computer passwords, mobile phones, laptop, personal computer equipment, original and copy documents or other media on which information is held by the Consultant relating to the business or affairs of FREYR Battery or the Group. |
| Page 3 of 5 | |
| 6.2 | Upon the Consulting Separation Date, the Consultant shall repay any debts to FREYR Battery or any entity in the Group, and release the same of any guarantee or security for loans or responsibilities on behalf of the Consultant. |
| 7 | General |
| 7.1 | The Consultant declares having the capacity to sign this Contract which constitutes a valid, binding and enforceable agreement. |
| 7.2 | The Consultant acknowledges that he has carefully read this Contract, has had an opportunity to discuss it with advisors should so be desired, and understands all the terms and conditions therein. |
| 7.3 | Each party shall be responsible for taxes, duties etc. for which such party is liable to pay as a result of this agreement. Tax deductions are made pursuant to ordinary rules, and the amount will be reported to the tax authorities pursuant to applicable law. |
| 7.4 | If any provision of this Contract should be declared legally invalid or unenforceable by a competent court, such declaration shall in no way affect the validity or enforceability of any other provision thereof, nor shall any such declaration of legal invalidity or unenforceability operate to nullify or rescind this Contract, but shall only serve to render ineffective any such provision declared legally invalid or unenforceable. In lieu thereof, there shall be added a provision as similar in terms to such illegal, invalid and unenforceable provision as may be possible and be legal, valid and enforceable. |
| 7.5 | This Contract may not be modified or amended unless in writing signed by the undersigned parties and/or pursuant to the applicable legal provisions. Any notice required by this Contract shall be made in writing to the Company or to any other person as indicated from time to time, at the Company’s address, or to the Consultant at his residence address as lastly communicated by the Consultant to the Company. |
| 7.6 | The Contract resolves all outstanding matters in relation to the employment relationship and the termination of the employment and consulting relationship between the Employee and the Company. |
| 7.7 | The Employee/Consultant shall not disclose any confidential information of any nature, including the terms of this Contract, to any third party. The confidentiality undertakings in the Contract of Employment shall form an integrated part of this Contract. |
| 7.8 | This Contract shall be governed by and construed in accordance with Norway law, including any statutory modification or re-enactment during the time the Contract being in force and the parties give exclusive jurisdiction to the Norwegian Courts. |
[Remainder of page intentionally left blank.
Signature page follows.]
| Page 4 of 5 | |
This Contract has been drafted and signed by the parties of this Contract in two (2) identical original copies, one (1) copy having been delivered to and to be retained by each of the parties.
| For FREYR Battery Norway AS | Employee/Consultant | |
| /s/ Evan Calio | /s/ Tom Einar Jensen | |
| Name: Evan Calio, Director | Name: Tom Einar Jensen | |
| Date: November 6, 2024 | Date: November 6, 2024 |
| FREYR
Battery, Inc., confirms that the Employee is Chief Executive Officer - Europe |
|
| /s/ Daniel Barcelo | |
| Name: Daniel Barcelo, Chair of the Board | |
| Date: November 6, 2024 |
| Page 5 of 5 | |
Exhibit 99.1
News Release
FREYR Battery Announces Transformative Acquisition of Trina Solar’s U.S. Manufacturing Assets, Actions to Strengthen Board of Directors and Management Team
New York, Oslo, and Newnan, GA, November 6, 2024, FREYR Battery (NYSE: FREY) (“FREYR” or the “Company”) has announced that the Company has entered into an agreement to acquire the U.S. solar manufacturing assets of Trina Solar Co Ltd. (SHA: 688599) (“Trina Solar”). The transaction is subject to certain customary conditions precedent, including receipt of certain third-party consents, completion of the preferred stock issuance to Encompass Capital Advisors LLC and internal reorganization to be completed by Trina Solar and is expected to close around year end 2024.
Highlights
| ● | The transaction is expected to close year end 2024 and creates a leading integrated U.S.-owned and operated solar technology company with a pathway for value enhancing growth |
| ● | FREYR is acquiring 5 GW, 1.35 million square foot solar module manufacturing facility in Wilmer, Texas that started production on November 1, 2024 |
| ● | Trina Solar is a global leader in solar and renewable energy industry with an established U.S. commercial presence, global supply chains, advantaged technology, and a strong track record of manufacturing and project execution for U.S. customers |
| ● | FREYR is developing a new 5GW, U.S. solar cell manufacturing facility; site selection underway and targeting start of production in 2H 2026 |
| ● | FREYR provides 2025 EBITDA guidance of $75 - $125 million. FREYR expects to exit 2025 at full-year run rate EBITDA of $175 - $225 million |
| ● | Total consideration to Trina Solar of $340 million, comprised of $100 million of cash, $50 million repayment of an intercompany loan, $150 million loan note, 9.9% of FREYR outstanding common stock, and a convertible loan note that would convert into an additional 11.5% of FREYR outstanding common stock after certain conditions are satisfied |
| ● | Simultaneously, FREYR has secured a $100 million commitment for the issuance of preferred stock issuance to Encompass Capital Advisors LLC and $14.8 million through a private placement of FREYR common stock |
| ● | Daniel Barcelo, FREYR’s Chairman of the Board of Directors (the “Board”), assumes role of Chief Executive Officer of FREYR with immediate effect and Evan Calio will remain Chief Financial Officer. Subject to closing of the transaction, Mingxing Lin will be appointed Chief Strategy Officer and Dave Gustafson will be appointed Chief Operating Officer; while Peter del Vecchio will be joining as Interim Chief Legal Officer with immediate effect |
1 | News Release | FREYR Battery | www.freyrbattery.com/news-and-media
| ● | Co-founder Tom Einar Jensen appointed CEO of FREYR Europe and will oversee value optimization of European assets |
| ● | New CEO Daniel Barcelo to remain Chairman of the Board of Directors; W. Richard Anderson appointed to FREYR’s Board; Incoming Chief Strategy Officer Mingxing Lin has been selected as a Board nominee subject to closing of the transaction; Tom Einar Jensen to step down from the Board |
Under the terms of the agreement, FREYR will acquire Trina Solar’s 5 GW solar module manufacturing facility in Wilmer, Texas, which started production on November 1, 2024. The facility is expected to ramp up to full production in 2025 with 30% of estimated production volumes backed by firm offtake contracts with U.S. customers.
Upon closing of the transaction, FREYR will execute a multi-phase strategic plan to establish a vertically integrated U.S. solar manufacturing footprint. The next phase of the plan will be to construct a 5GW solar cell manufacturing facility in the U.S. Site selection is underway and FREYR is targeting a start of construction in 2Q 2025 with anticipated first solar cell production in 2H 2026. The creation of a U.S.-owned and operated company that can provide a turnkey solar technology solution is expected to solve a bottleneck for developers, create up to 1,800 direct jobs, satisfy local content requirements for U.S. solar projects, and competitively differentiate FREYR.
“We are pleased to announce this transformative transaction, which will immediately position the Company as one of the leading solar manufacturing companies in the U.S. We are proud to be partnered with Trina Solar, a global manufacturing and solar technology leader.” commented Daniel Barcelo, FREYR’s newly appointed Chief Executive Officer. “Domestic manufacturing capacity for solar and batteries is essential for energy transition and job creation. The U.S. was once the global leader in solar, and it can be again.”
Transaction details
Under the terms of the transaction agreement at closing, the total consideration to Trina Solar will consist of $100 million of cash, $50 million repayment of an intercompany loan, $150 million loan note, 9.9% of FREYR outstanding common stock, and an $80 million convertible loan note that would convert into an additional 11.5% of FREYR outstanding common stock after certain conditions are satisfied. FREYR has secured a $100 million commitment for the issuance of preferred stock to Encompass Capital Advisors LLC and $14.8 million for a private placement of 7.0% of FREYR outstanding common stock to Ms. Chunyan Wu, a co-founder and significant shareholder of Trina Solar. The funds will be used for general operational and working capital purposes.
Changes to strengthen FREYR’s management team and Board of Directors
Daniel Barcelo, FREYR’s current Chairman of the Board, has been appointed Chief Executive Officer. Tom Einar Jensen, FREYR’s co-founder, will assume the role of CEO of FREYR Europe and will oversee the optimization and monetization of FREYR’s European portfolio. Mr. Jensen is stepping down from FREYR’s Board of Directors to focus on FREYR’s European portfolio. All these changes are effective immediately.
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Joining FREYR upon closing will be Mingxing Lin, who has been appointed the Company’s Chief Strategy Officer, and Dave Gustafson, who has been appointed Chief Operating Officer. Mr. Lin and Mr. Gustafson bring decades of collective experience in multinational company management and the solar industry. Mr. Lin has been appointed a nominee to FREYR’s Board of Directors subject to closing of the transaction.
W. Richard Anderson has been appointed to FREYR’s Board, effective immediately. Mr. Anderson is currently the Chief Executive Officer of Coastline Exploration Ltd., and he brings more than 25 years of leadership experience in the global energy industry and more than 15 years as a board member of public and private energy companies to FREYR.
FREYR provides financial and operational guidance
In anticipation of the closing of the transaction and the start of solar module production at the Wilmer, Texas facility in Q4 2024, FREYR is initiating 2025 EBITDA guidance of $75 - $125 million and expects to exit 2025 at full-year run rate EBIDTA of $175 - $225 million.
FREYR European assets
FREYR is implementing a value optimization and monetization initiative in Europe to align with the Company’s strategy to focus on vertically integrating the U.S. solar business. As CEO of FREYR Europe, Tom Einar Jensen will oversee the process.
The Company has terminated its SemiSoldTM technology license with 24M Technologies (“24M”). Pursuant to the termination of the 24M license agreement, FREYR has no remaining financial obligations to 24M and no longer holds any equity ownership interest in 24M.
Presentation of Transaction Highlights
A presentation will be held today, November 6, 2025, at 8:00 am EDT to discuss the transaction. The presentation materials will be available for download at https://ir.freyrbattery.com.
To access the conference call, listeners should contact the conference call operator at the appropriate number listed below approximately 10 minutes prior to the start of the call.
Participant conference call dial-in numbers:
Conference ID 1923230
USA / International Toll +1 (646) 307-1963
USA - Toll-Free (800) 715-9871
Canada - Toronto (647) 932-3411
Canada - Toll-Free (800) 715-9871
Transaction advisors
Santander served as financial advisor, Skadden, Arps, Slate, Meagher & Flom (UK) LLP served as legal advisor, Arnold & Porter, Ernst & Young, Clean Energy Associates and Rystad Energy served as advisors to FREYR in support of the transaction. Dorsey & Whitney LLP served as U.S. legal advisor, CICC served as financial advisor and Deloitte served as tax advisor to Trina Solar.
***
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Investor contact:
Jeffrey Spittel
Senior Vice President, Investor Relations and Corporate Development
jeffrey.spittel@freyrbattery.com
Tel: (+1) 409 599-5706
Media contact:
Amy Jaick
Global Head of Communications
amy.jaick@freyrbattery.com
Tel: (+1) 973 713-5585
Cautionary Statement Concerning Forward-Looking Statements
All statements, other than statements of present or historical fact included in this presentation, including, without limitation, FREYR Battery, Inc.’s, a Delaware corporation, (“FREYR”) ability to establish a commercial presence in the U.S. solar market; the potential benefits of FREYR’s strategic acquisition of Trina Solar US Holding Inc., a Delaware corporation (“Trina”); the expected timeline to closing the transaction; FREYR’s ability to secure financing options for the solar cell manufacturing facility; the projected start of module production in Q4 2024; the construction of a solar cell manufacturing facility targeting start of production in H2 2026; the integration of U.S. solar module and solar cell capacity; FREYR’s ability to become a top 5 U.S. solar module producer; any resulting U.S. government incentives for clean energy technology manufacturing and development; the establishment of a domestic manufacturing footprint for FREYR’s integrated clean energy solution business; the creation of 1,500 local jobs; the integration of U.S. solar and battery energy storage system manufacturing; the monetization of FREYR’s legacy assets; any competitive advantages of integration; any potential benefits of the U.S. Inflation Reduction Act; the technological advantage of Trina’s modules; and the ability to replicate global supply chains in the U.S. are forward-looking statements.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Factors that may cause such differences include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the transaction agreement or could otherwise cause the transaction to fail to close; (2) the outcome of any legal proceedings that may be instituted against the Company following the announcement of the transaction; (3) the inability to complete the transaction, including due to failure to satisfy conditions to closing of the transaction; (4) any failure to obtain lender’s consent with respect to project finance prior to closing; (5) any material liabilities identified post-signing that may lead to the termination of the transaction agreement; (6) the risk that the transaction disrupts current plans and operations as a result of the announcement and consummation of the transaction; (7) the ability to recognize the anticipated benefits of the transaction; (8) costs related to the transaction; (9) changes in applicable laws or regulations; (10) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (11) any material modifications or repeal of the U.S. Inflation Reduction Act (“IRA”); (12) any enacted legislation that could limit the ability of companies with a certain percentage of Chinese ownership to receive tax credits under IRA; (13) any potential risk that the Chinese equity ownership in the Company may impact FREYR’s ability to develop a solar cell facility in the U.S.; (14) any increases to commodity pricing or US tariff and countervailing duty levels; and (15) potential operational risks associated with commissioning and ramp-up of production. The Company cautions that the foregoing list of factors is not exclusive. Most of these factors are outside FREYR’s control and are difficult to predict. Additional information about factors that could materially affect FREYR is set forth under the “Risk Factors” section in (i) FREYR’s post-effective amendment no. 1 to the Registration Statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”) on January 4, 2024, (ii) FREYR’s Registration Statement on Form S-4 filed with the SEC on September 8, 2023 and subsequent amendments thereto filed on October 13, 2023, October 19, 2023 and October 31, 2023, and (iii) FREYR’s annual report on Form 10-K filed with the SEC on February 29, 2024, and FREYR’s quarterly reports on Form 10-Q filed with the SEC on May 8 and August 9, 2024, and available on the SEC’s website at www.sec.gov. Except as otherwise required by applicable law, FREYR disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation. Should underlying assumptions prove incorrect, actual results and projections could differ materially from those expressed in any forward-looking statements.
FREYR intends to use its website as a channel of distribution to disclose information which may be of interest or material to investors and to communicate with investors and the public. Such disclosures will be included on FREYR’s website in the ‘Investor Relations’ sections. FREYR also intends to use certain social media channels, including, but not limited to, Twitter and LinkedIn, as means of communicating with the public and investors about FREYR, its progress, products and other matters. While not all the information that FREYR posts to its digital platforms may be deemed to be of a material nature, some information may be. As a result, FREYR encourages investors and others interested to review the information that it posts and to monitor such portions of FREYR’s website and social media channels on a regular basis, in addition to following FREYR’s press releases, SEC filings, and public conference calls and webcasts. The contents of FREYR’s website and other social media channels shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
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Exhibit 99.2
Transformative Acquisition of Trina Solar’s U.S. Photovoltaic Module Manufacturing Assets November 5, 2024
IMPORTANT NOTICES 2 Forward Looking Statements All statements, other than statements of present or historical fact included in this presentation, including, without limitat ion , FREYR Battery, Inc.’s, a Delaware corporation, (“FREYR”) ability to establish a commercial presence in the U.S. solar market; the potential benefits of FREYR’s strategic acquisition of Trina Solar US Holdi ng Inc., a Delaware corporation (“Trina”) ; the expected timeline to closing the transaction; FREYR’s ability to secure financing options for the solar cell manufacturing facility; the projected start of mo dul e production in Q4 2024; the construction of a solar cell manufacturing facility targeting start of production in H2 2026; the integration of U.S. solar module and solar cell capacity; FREYR’s ability to be com e a top 5 U.S. solar module producer; any resulting U.S. government incentives for clean energy technology manufacturing and development; the establishment of a domestic manufacturing footprint fo r FREYR’s integrated clean energy solution business; the creation of 1,500 local jobs; the integration of U.S. solar and battery energy storage system manufacturing; the monetization of FREYR’s leg acy assets; any competitive advantages of integration; any potential benefits of the U.S. Inflation Reduction Act; the technological advantage of Trina’s modules; and the ability to replicate gl oba l supply chains in the U.S. are forward - looking statements These forward - looking statements involve significant risks and uncertainties that could cause the actual results to differ mater ially from the expected results. Factors that may cause such differences include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the t erm ination of the transaction agreement or could otherwise cause the transaction to fail to close; (2) the outcome of any legal proceedings that may be instituted against the Company following the announcem ent of the transaction; (3) the inability to complete the transaction, including due to failure to satisfy conditions to closing of the transaction; (4) any failure to obtain lender’s consent with respect t o p roject finance prior to closing; (5) any material liabilities identified post - signing that may lead to the termination of the transaction agreement; (6) the risk that the transaction disrupts current plans and o per ations as a result of the announcement and consummation of the transaction; (7) the ability to recognize the anticipated benefits of the transaction; (8) costs related to the transaction; (9) changes in applicable laws or regulations; (10) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (11) any material modifications or repeal of the U.S. Inflation Reduction Act (“IRA”); (12) any enacted legislation that could limit the ability of companies with a certain percentage of Chinese ownership to receive tax credits under IRA; (13) an y p otential risk that the Chinese equity ownership in the Company may impact FREYR’s ability to develop a solar cell facility in the U.S.; (14) any increases to commodity pricing or US tariff and counte rva iling duty levels; and (15) potential operational risks associated with commissioning and ramp - up of production. The Company cautions that the foregoing list of factors is not exclusive. Most of these factors are outside FREYR’s control and are difficult to predict. Additional information about factors that could materially affect FREYR is set forth under the “Risk Factors” section in (i) FRE YR’s post - effective amendment no. 1 to the Registration Statement on Form S - 3 filed with the Securities and Exchange Commission (the “SEC”) on January 4, 2024, (ii) FREYR’s Registration Statement on Form S - 4 filed with the SEC on September 8, 2023 and subsequent amendments thereto filed on October 13, 2023, October 19, 2023 and October 31, 2023, and (iii) FREYR’s annual report on Form 10 - K filed wit h the SEC on February 29, 2024, and FREYR’s quarterly reports on Form 10 - Q filed with the SEC on May 8 and August 9, 2024, and available on the SEC’s website at www.sec.gov . Except as otherwise required by applicable law, FREYR disclaims any duty to update any forward - looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstance s a fter the date of this presentation. Should underlying assumptions prove incorrect, actual results and projections could differ materially from those expressed in any forward - looking statements. FREYR intends to use its website as a channel of distribution to disclose information which may be of interest or material to in vestors and to communicate with investors and the public. Such disclosures will be included on FREYR’s website in the ‘Investor Relations’ sections. FREYR also intends to use certain social media channe ls, including, but not limited to, Twitter and LinkedIn, as means of communicating with the public and investors about FREYR, its progress, products and other matters. While not all the informat ion that FREYR posts to its digital platforms may be deemed to be of a material nature, some information may be. As a result, FREYR encourages investors and others interested to review the informati on that it posts and to monitor such portions of FREYR’s website and social media channels on a regular basis, in addition to following FREYR’s press releases, SEC filings, and public conference ca lls and webcasts. The contents of FREYR’s website and other social media channels shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
3 FREYR’s New Executive Leadership Team • 30 years of experience as an institutional investor, equity research analyst, and energy company executive and board director • Founder and CEO of Alussa Energy, which led the 2021 business combination with FREYR • Chairman of FREYR’s Board of Directors, former Chair of Audit and Risk Committee; member of Nominating and Governance Committee Daniel Barcelo Chairman of the Board and Chief Executive Officer FREYR founding investor Evan Calio Chief Financial Officer • 30+ years of Wall St. and energy industry experience • Previously served as head of BTIG’s energy transition investment banking group • Prior experience as top ranked equity research analyst at Morgan Stanley and attorney for the U.S. Securities and Exchange Commission Mingxing Lin Chief Strategy Officer Dave Gustafson Chief Operating Officer • Extensive heavy industrial manufacturing leadership and engineering experience in solar industry • Currently overseeing solar giga scale factory projects as Co - General Manager, Trina U.S. Manufacturing • Served in U.S. Navy Civil Engineering Corps as Company Commander for Navy Mobile Construction Batallion 74 The right team to build a U.S. solar + storage leader • Chairman and new CEO Daniel Barcelo made the initial introduction to the Trina U.S. team in January 2024 and led the execution of the transaction • CFO Evan Calio architected the structure of the transaction to maximize value for all stakeholders • Mingxing Lin from Trina Solar to join as FREYR’s Chief Strategy Officer as of the transaction • Dave Gustafson appointed FREYR’s Chief Operating Officer as of the transaction • Dr. Andreas Bentzen, FREYR’s Chief Technology Officer, and Einar Kilde, FREYR’s EVP, Project Development, bring decades of experience, operational, and technical expertise from the solar manufacturing industry The right transaction and partnership • Expected to rapidly establish FREYR’s commercial presence in the U.S. solar market with key Trina customers • The acquisition of Trina’s Wilmer, TX solar module facility is expected to bring top line visibility and contracted cash flows with 40% of volumes tied to committed offtakes • 15+ years of finance and multinational management experience • Currently serves as Head of the Overseas Finance Center at Trina Solar Group, Director of Trina Solar Energy Development Pte and Board member of PT Trina Mas Agra Indonesia • Proven track record in multinational project financing and building multicultural teams FREYR’s new executive team will be supported by a deep bench of subject matter experts: • Co - founder Tom Einar Jensen, CEO of FREYR Europe • Dr. Andreas Bentzen, Chief Technology Officer • Einar Kilde, EVP, Project Development • Peter del Vecchio, Interim Chief Legal Officer
0 2 4 6 8 10 Hanwha Q-Cells First Solar FREYR Canadian Solar LONGi&Invenergy Solar4America Silfab JA Solar Runergy Imperial Star SEG Solar Meyer Burger Heliene Jinko Elin Hounen Mission Solar Others US Module Capacity (GW) Transformative Acquisition of U.S. Solar Assets FREYR is acquiring Trina’s U.S. solar module manufacturing facility • 5.0 GW solar module facility in Wilmer, TX • First module production started on November 1, 2024 • Full availability to Trina’s well established supply chain for module components • Firm offtake secured for 1.5 GW of module production • U.S. solar cell plant development targeting start of construction in 2025, positioned for domestic cell production to unlock significant additional contracted offtake • U.S. polysilicon supply secured for cell production • Establishes platform for FREYR’s integrated U.S. solar + battery storage strategy Strategic Rationale • FREYR partnering with a Top 3 global solar manufacturer with technology, supply chain, operational execution and customer base advantages • Projected to generate revenue and positive EBITDA in 2025 • Positions FREYR immediately as a potential Top 3 U.S. solar module producer • Expected to unlock significant U.S. government incentives for clean energy technology manufacturing and development for FREYR and its future U.S. customer base • Expected to establish a significant domestic manufacturing footprint for FREYR’s integrated clean energy solution business 4 Trina Solar module plant, Wilmer, TX Projected Year - End 2024 U.S. Solar Module Capacity Transaction to usher in a U.S. - focused platform to industrialize clean energy solutions FREYR positioned as a Top 3 U.S. module manufacturer Source: Rystad Energy, CEA.
FREYR is Partnering with a Global Solar Leader 5 Trina is competitively differentiated by technology, supply chain and financial strength Asset Map Global #2 2023 solar module manufacturing capacity (97 GW) 2 Global #3 2023 solar cell manufacturing capacity (97 GW) 2 140+ GW Global solar modules shipped 25 World Records For photovoltaic cell efficiency and module output • Founded 1997 • Publicly traded on Shanghai Stock Exchange (SSE: 688599) • $7.7 billion market capitalization 1 • 23 corporate and regional offices • 13 global manufacturing facilities • 150+ regions/countries served • 23,000+ employees worldwide • 2,400+ patents filed 1 Estimated market capitalization as of November 1, 2024 1 Rystad Energy Acquisition
Trina Solar Transaction Overview 6 Trina Solar US Module Plant Transaction Consideration Transaction - Related Financing Asset purchase Trina Solar US Solar Module Plant Expected close date December 2024 Location Wilmer, TX Facility size (million sq ft) 1.35 Solar module production capacity (GW) 5.0 US job creation 1,500 profession, high-tech direct hires Start of production November 1, 2024 • Equity : issuing Trina 15.4 million shares, representing 9.9% of shares outstanding, protected for dilution • Equity : Issuing Trina $80 million convertible loan note, convertible into 30.4 million shares of FREYR common equity, representing 10% of shares outstanding after certain conditions are satisfied (CFIUS approval and shareholder approval for share issuance) • Equity : FREYR is raising $14.8 million through a private placement of 14.0 million shares of FREYR common stock, subject to CFIUS approval • Preferred shares : FREYR is raising $100 million through the issuance of preferred stock to Encompass Capital Advisors, LLC in two $50 million tranches, convertible at $2.50/sh. The first tranche is issued at closing, and second tranche issuable, at FREYR’s discretion, at U.S. Solar Cell facility financing 1 FREYR to assume Trina’s $235 million credit agreement for Wilmer Module Plant project financing 2 FREYR note: 5 - year amortizing, 1% interest 3 Assumes $1.00/sh FREY share price 4 FREYR will distribute equity to Trina in three tranches: (1) upon transaction closing, (2) upon CFIUS approval, subject to voluntary filing with CFIUS, and (3) upon FREYR shareholder approval; excludes an additional 1.5% distributed to Trina employees 5 Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non - GAAP financial measure
2025e: $100 $500 $600 $700 $800 Wilmer Annual Run-Rate: $200 $1,000 $1,200 $1,400 $1,600 Wilmer + U.S. Cell Annual Run-Rate: $675 $3,375 $4,050 $4,725 $5,400 EBITDA ($ millions) Assumed EV/EBITDA multiples 5.0x 6.0x 7.0x 8.0x Guidance and Implied Valuation Metrics 7 Guidance: Operations, Sales and EBITDA Valuation: Implied FREYR Enterprise Value ($ millions) Current FREYR share count: 140.5 million Pro forma FREYR share count for the Trina transaction: 200.4 million Transaction positioned to deliver significant potential earnings and valuation upside for FREYR Integrated Wilmer Module Plant Wilmer/U.S. Cell Plants 2025e Annual Run-Rate Annual Run-Rate Annual Module Production (GW) 3.4 5.0 5.0 Annual Cell Production (GW) --- --- 5.0 Sales channel: contracted/merchant (%) 45%/55% 30%/70% 40%/60% Projected module cost ($/W) $0.300 - $0.325 $0.275 - $0.300 $0.375 - $0.400 Estimated EBITDA ($ millions) $75 - $125 $175 - $225 $650 - $700
Timeline and Steps to Transaction Closing 8 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Operational Steps First Conversion Upon obtaining CFIUS approval (bringing total to 19.9% of FREYR shares pre - transaction) Transaction Announcement Closing ( 9.9% of FREYR shares post - money) Second Conversion Upon obtaining FREYR’s shareholder approval, Trina reaches an aggregate ownership of 21.4% post - transaction) 1 Nov 5, 2024 Transaction Steps U.S. Cell Plant Site Selection Start of Construction U.S. Module Plant SOP: Nov 1, 2024 Target Ramp to Full Capacity 1 FREYR will distribute equity to Trina in three tranches: (1) upon transaction closing, (2) upon CFIUS approval, subject to vo lu ntary filing with CFIUS, and (3) upon FREYR shareholder approval; excludes an additional 1.5% distributed to Trina employees
9 FREYR is U.S. headquartered and NYSE listed • FREYR redomiciled to the U.S. in early 2024 • NYSE listed since July 2021 Advanced solar module manufacturing in the U.S. • 5 .0 GW solar module facility started production on November 1, 2024 • Expected to create 1,500 local jobs • Facility is fully capitalized and funded FREYR: Invest ing in American Clean Energy Manufactur ing Establishing a U.S. Manufacturing Footprint Solar module plant Wilmer, TX Developing domestic upstream solar cell manufacturing • Site selection of 5.0 GW solar cell manufacturing plant underway by FREYR • Estimated $850 million of capital spending • Expected to create additional ~1,800 local jobs • Targeting start of U.S. cell production in 2H 2026 • Upstream vertical integration Long - term plan to manufacture battery energy storage systems • Solar + battery: positioned to address growing customer demand for turnkey storage solutions P roject site Newnan, GA Solar cell plant (site TBD, USA)
Planning to establish a vertically integrated U.S. solar manufacturing presence to maximize IRA tax credits 10 • The IRA production tax credits for solar are intended to spur investment in a U.S. solar manufacturing base • FREYR’s strategy is to establish a vertically integrated U.S. solar module + cell manufacturing platform • Phase 1 of the plan is the acquisition of the Wilmer, TX solar module manufacturing facility • Phase 2 of the plan is to construct a U.S. solar cell production facility (site selection underway) • Both the module and cell plants are expected to be fully eligible for IRA production tax credits Solar IRA Incentives by Product Type ($/W) FREYR’s integrated U.S. solar module + cell expected to be an economic and competitive differentiator by maximizing IRA incentive capture for FREYR and customers Source: CEA. The U.S. IRA Provides Strong Policy Support $0.008 $0.052 $0.040 $0.070 $0.00 $0.05 $0.10 $0.15 $0.20 IRA Incentives Section 45X Production Tax Credits ($/W) Module Cell Wafer Polysilicon FREYR Eligibility
FREYR Investment Highlights 1. Complementary Solar + Battery Energy Storage Strategy 2. Significant U.S. Solar Manufacturing Footprint 3. Leveraging Trina’s Global Execution Excellence 4. The Trina Technology Advantage 5. U.S. Solar Cell Production: Driving Growth and Margin 11
1. Complementary Solar + Battery Energy Storage Strategy Pursuing a future integration strategy to fill a rapidly growing need for customers Long - term strategy to capture market opportunity • Solar + battery storage solutions are the fastest growing clean power generation applications • There is unmet customer demand in the U.S. market for utility scale solar + storage offerings Anticipated competitive advantages of integration • Providing a turnkey, integrated solar + battery storage solution is a differentiator with customers • Co - locating battery storage with solar enables more generation capacity to be installed per grid interconnection • Combined application of solar and battery storage mitigates intermittency, improves grid resilience, and enhances project value from peak shaving U.S. Solar Module vs. BESS Cell Demand 12 Cumulative 2024 U.S. Utility - Scale Electric Generating Capacity Additions (GW) Source: Rystad Energy, U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory, December 2023 0 20 40 60 80 100 0 20 40 60 80 100 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 U.S. BESS cell demand (GWh) U.S. solar PV module demand (GW) U.S. Solar PV module demand (GWdc) US BESS cell demand outlook (GWh) Solar , 49 .0 GW Battery storage , 19.2 GW Wind , 9.6 … Nuclear , 2.2 GW Natural gas , 3 .0 GW 23% 11% 3% 4% 23% 59% 83 GW
2. Significant U.S. Solar Manufacturing Footprint 13 ▪ Location: Wilmer, TX, ~17 miles south of Dallas, TX ▪ 1.35 million square feet, business - friendly Texas location ▪ 5.0 GW solar module manufacturing capacity ▪ 7 module assembly lines producing three types of modules for utility, commercial & industrial (C&I) and residential scale solar ▪ 1,500 full time employees, 80% skilled labor positions ▪ Attractive access to logistics: highways, ports, airports, railroads ▪ 30 MW power contract ▪ 185 - month lease agreement for building, land and infrastructure Trina Solar US Solar Module Plant Wilmer, TX DFW IAH LNC Interstate Corridors Cargo airports Port The Solar Module Value Chain Solar Market Entry Wilmer Solar Module Plant Source: Solar Energy Industries Association Port of Houston First assembly line started module production on November 1, 2024
2. Significant U.S. Solar Manufacturing Footprint (continued) 14 Wilmer Ramp Up: Production Lines 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Module Line Nameplate Capacity (MW) Line 7 Line 6 Line 5 Line 4 Line 3 Line 2 Line 1 Wilmer nameplate capacity: 5.2 GW 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Module Type Nameplate Capacity (GW) TOPCon C&I/Residential TOPCon Utility PERC Utility Wilmer Ramp Up: Module Type Wilmer nameplate capacity: 5.2 GW • Seven production lines producing three types of modules • Line 1 start of production estimated in Nov 2024 • Expected 12 - month ramp up to full capacity by Nov 2025 • 5.2 GW expected nameplate manufacturing capacity • Initial planned production of PERC and TOPCon based modules • Production focused on primarily supplying utility - scale customers • Production weighted towards TOPCon N - type modules with expected phase - out of PERC P - type in future years Source: Internal estimates.
3. Leveraging Trina’s Global Execution Excellence 15 China 63% Other 37% China 95% Other 5% China 97% Other 3% China 79% Other 21% China 71% Other 29% Solar Module Value Chain Global Market Share China dominates global solar manufacturing 1 Entrenched and experienced player across all elements of the value chain 2 Leveraging established raw material and equipment supply chain from Trina Hemlock Semiconductor U.S. polysilicon supply contract secured Hemlock Semiconductor Contract transferred to FREYR, domestic U.S. poly content secured Services agreement to be established between Trina and FREYR for solar cells and all other module equipment • Leveraging existing supply chain • Ensures cell supply for Wilmer module plant • Ensures competitive component pricing leveraging Trina’s economies of scale 50+ GW Global Silicon Wafer Production Capacity 75+ GW Global Cell Production Capacity 95+ GW Global Cell Production Capacity • Wilmer, TX Module Plant • Operations/IP agreement between Trina and FREYR 1 Source: Bernreuter Research 2 Production capacities based on Trina Solar estimates as of 2023
Trina produces modules that perform at the leading edge 16 4. The Trina Technology Advantage • Silicon - based PV technologies are the global industry standard • Silicon - based PV technologies are cheaper and more efficient than alternatives without relying upon toxic elements • Trina produces silicon - based TOPCon modules, which provide the highest power class/conversion efficiency in the market today (between 22.7% - 23.2%) • Trina’s silicon - module efficiency of 23.2% is among the highest in the industry PV Module Efficiency Comparison Among Top Global Competitors Source: CEA Note : TOPCon technology referenced for all companies above except PERC for Company F and Thin Film for Company G Trina’s advantaged technology supports expected ability to secure additional offtake contracts and sell volumes at favorable prices 17% 18% 19% 20% 21% 22% 23% 24% Trina (TOPCon) Company A Company B Company C Company D Company E Company F Company G Module Efficiency (%)
17 5. U.S. Solar Cell Production: Driving Growth and Margin 2025 strategic focus on advancing U.S. solar cell manufacturing Target U.S. Cell Facility Development Unlocking Accretive Economics to FREYR • Integrated module/cell estimated EBITDA (full year run rate): $650 million • Estimated capex: $850 million • 45X Production Tax Credit (PTC), Solar Cells: $0.04/W , full FREYR capture • Domestic cell content economics: Likely higher U.S. cell price acceptable for U.S. customers vs. Southeast Asia cell price • Module pricing structure: Cost + Margin structure, likely premium margin acceptable for module with U.S. cell content Strategic Rationale • Significant EBITDA accretion with upstream vertical integration into U.S. solar cell manufacturing to supply into Wilmer module production • Establishes FREYR as one of the few U.S. integrated cell/module solar manufacturers • Provides module customers with increased U.S. domestic content to qualify for meaningful Section 48 incentive bonuses Solar cell production capacity (GW) 5.0 Expected cell type TOPCon, 210-N, N-type Location United States, TBD Site selection 4Q 2024 Start of construction 2Q 2025 Start of production 2H 2026 Expected direct job creation ~ 1,800
FREYR Implementing Value Optimization in Europe Committed to generating value from monetization of strategic and non - core assets Strategy • FREYR’s Co - founder Tom Einar Jensen appointed CEO of FREYR Europe • Jensen will lead the value optimization and monetization of European portfolio FREYR’s Giga Arctic and Customer Qualification Plant in Norway • FREYR has continued to advance value optimization with leading strategic, industrial, and financial stakeholders based on less capital - intensive, value accretive business models • These include high value adjacencies to the battery value chain including digital battery platforms and data center opportunities for Giga Arctic balanced by Battery Energy Storage Solutions FREYR’s Cathode Active Material Project in Finland • LFP cathode manufacturing project in Finland based on a unique LFP technology platform with a deep sustainable basis benefitting from an EU grant of EUR 122 million 24M • FREYR has terminated the 24M license • FREYR has no additional financial obligations to 24M • FREYR no longer holds any equity ownership interest in 24M Customer Qualification Plant Giga Arctic 18
