Exhibit 10.2
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this “Agreement”) dated as of December 5, 2023, is made by and among Ascend Global Investment Fund SPC, a segregated portfolio company incorporated under the laws of the Cayman Islands, for and on behalf of Strategic SP (“Ascend”), BEP Special Situations IV LLC, a Delaware limited liability company (“BEP”) and 5E Advanced Materials, Inc., a company incorporated under the laws of the State of Delaware (the “Company”).
WHEREAS, this Agreement is being entered into in connection with the Restructuring Support Agreement to be entered into as of the date hereof (as amended, modified, supplemented or waived from time to time in accordance with its terms, the “Restructuring Support Agreement”) among the Company Parties (as defined in the Restructuring Support Agreement) and the Consenting Parties (as defined in the Restructuring Support Agreement) and the transactions contemplated by the Out-of-Court Restructuring (as defined in the Restructuring Support Agreement) (“Transactions”);
WHEREAS, Ascend is entering into the Debt Commitment Letter (as defined herein) in connection with the Restructuring Support Agreement, pursuant to which Ascend will purchase the Ascend Notes (as defined herein) on the terms and conditions set forth therein;
WHEREAS, in connection with the Committed Placement (as defined in the Restructuring Support Agreement), Ascend shall subscribe for and purchase the Ascend Subscription Shares (as defined herein) for the Ascend Purchase Price, and the Company shall issue and sell the Ascend Subscription Shares to Ascend in consideration of the payment of the Ascend Purchase Price therefor by or on behalf of Ascend to the Company, all on the terms and conditions set forth herein;
WHEREAS, the issue and sale of the Ascend Subscription Shares hereunder shall be made in reliance upon Section 4(a)(2) under the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be made hereunder; and
WHEREAS, substantially concurrently with the execution of this Agreement and/or prior to the Closing, Ascend and BEP acknowledge that the Company may enter into separate subscription agreements (“Other Subscription Agreements”) with certain other investors, including 5ECAP, LLC (collectively, the “Other Subscribers”), pursuant to which the Other Subscribers, severally and not jointly, have agreed or will agree to subscribe for certain shares of common stock of the Company (“Common Stock”) upon Closing.
NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants, and subject to the conditions, herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:
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“Material Adverse Effect” shall mean, with respect to any event, occurrence or condition, (a) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated by this Agreement, (b) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (c) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (other than as arising from, or relating to, the failure by Ascend or its Affiliates to perform their obligations under this Agreement); provided, however, that the determination of whether, there has been or will be a Material Adverse Effect shall not include any event, circumstance, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) any change, or proposed change in, or change in the interpretation of, any Law or accounting rules, including GAAP; (ii) events or conditions generally affecting the industries or geographic areas in which the Company operates; (iii) general economic, financial, credit, or political conditions, including changes in the credit, debt, securities, financial markets in general; (iv) any geopolitical conditions, outbreak of hostilities, civil unrest or similar disorder, acts of war (whether or not declared), sabotage, cyberterrorism, terrorism, military actions, earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires, any other natural or man-made disaster or acts of God, weather conditions, epidemics, pandemics and other force majeure events (including any escalation or general worsening thereof); (v) general changes in the price of the Company’s Common Stock or other securities; (vi) any actions required or permitted by the Note Purchase Agreement, the Restructuring Support Agreement and transactions contemplated thereby, or any action taken, any failure to take action or such other changes or events, in each case, which the Company has consented to in writing, and any effect resulting therefrom; (vii) delay or failure in obtaining, or revocation of, franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Authority (including without limitation any delay or failure with respect to any authorization or modification to any permit with the US Environmental Protection Agency); (viii) any failure by the Company to meet any internal or published projections, forecasts, guidance, estimates, milestones, budgets or financial or operating predictions of revenue, earnings, cash flow or cash position; (ix) any effect attributable to the announcement or execution, pendency, negotiation or consummation of the Restructuring Support Agreement and the transactions contemplated thereby; or (x) any matters, facts, or disclosures set forth in the Company SEC Documents.
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In consideration for and subject to Ascend’s purchase of the Ascend Subscription Shares in accordance with the terms and conditions of this Agreement, the Company shall pay an equity placement fee to Ascend by way of the issuance of the Ascend Equity Placement Fee Shares to Ascend upon Closing.
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None of the Company, any of its Subsidiaries, or any of the Company’s or its Subsidiaries’ Affiliates or any of their respective directors, officers, employees, or agents acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law or Anti-Corruption Law, (ii) engaging in or conspiring to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law or Anti-Corruption Law, or (iii) is a Blocked Person. None of the Company, any of its Subsidiaries, or to the Knowledge of the Company and any of their Affiliates, any of their respective directors, officers, employees, or agents, acting or benefiting in any capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law. The Company, its Subsidiaries and Affiliates, and to the Knowledge of the Company each of their respective directors, officers, employees, or agents are and have been in compliance with all applicable Anti-Terrorism Laws and Anti-Corruption Laws.
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If to the Company, to: |
| 5E Advanced Materials, Inc. 9329 Mariposa Road, Suite 210 Hesperia, California 92344 Attention: Paul Weibel E-mail: pweibel@5eadvancedmaterials.com |
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With a copy (which shall not constitute notice or delivery of process) to: |
| Winston & Strawn LLP 800 Capitol Street, Suite 2400 Houston, Texas 77002 Attention: J. Eric Johnson E-mail: jejohnson@winston.com |
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If to Ascend: |
| Ascend Global Investment Fund SPC for and on behalf of Strategic SP 1 Kim Seng Promenade #10-01 East Tower Great World City Singapore 237994 Attention: Mulyadi Tjandra and Michelle Tanuwidjaja E-mail: muljadi.tjandra@ascendcapitals.com, michelle.tanuwidjaja@ascendcapitals.com |
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With a copy (which shall not constitute notice or delivery of process) to: |
| Latham & Watkins LLP 9 Raffles Place #42-02 Republic Plaza Singapore 048619 Attention: Marcus Lee E-mail: marcus.lee@lw.com and Latham & Watkins LLP 1271 Avenue of the Americas New York, NY 10020 Attention: Adam Goldberg and George Klidonas E-mail: adam.goldberg@lw.com; george.klidonas@lw.com |
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If to BEP: |
| BEP Special Situations IV LLC 300 Crescent Court, Suite 1860 |
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| Dallas, Texas 75201 Attention: Jonathan Siegler E-mail: jasiegler@bluescapegroup.com |
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With a copy (which shall not constitute notice or delivery of process) to: |
| Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 Attention: Brian E. Schartz, P.C. and Allyson B. Smith E-mail: brian.schartz@kirkland.com; allyson.smith@kirkland.com |
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| Kirkland & Ellis LLP 300 North LaSalle Street Chicago, IL 60654 Attention: Claire E. Stephens E-mail: claire.stephens@kirkland.com |
(b) Each of Ascend and BEP hereby expressly consents to each of the Company, Ascend and the Other Subscribers entering into Other Subscription Agreements for the purposes of such Other Subscribers’ purchase of shares of Common Stock of the Company in connection with the Out-of-Court Restructuring and as contemplated in the Restructuring Support Agreement and the Restructuring Term Sheet (as defined in the Restructuring Support Agreement), subject to any requirements set forth therein or in this Agreement.
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[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.
5E ADVANCED MATERIALS, INC.
By: /s/ Paul Weibel |
Name: Paul Weibel Title: Chief Financial Officer |
BEP SPECIAL SITUATIONS IV LLC
By: /s/ Jonathan Siegler |
Name: Jonathan Siegler Title: Managing Director and Chief Financial Officer |
Ascend Global Investment Fund SPC FOR AND ON BEHALF OF STRATEGIC SP
By: /s/ Mulyadi Tjandra |
Name: Mulyadi Tjandra Title: Director |
[Signature Page to Ascend Subscription Agreement]