Form 8-K
8-K — Energy Vault Holdings, Inc.
Accession: 0001828536-26-000083
Filed: 2026-07-01
Period: 2026-06-26
CIK: 0001828536
SIC: 3690 (MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES)
Item: Entry into a Material Definitive Agreement
Item: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item: Unregistered Sales of Equity Securities
Item: Regulation FD Disclosure
Item: Financial Statements and Exhibits
Documents
8-K — nrgv-20260626.htm (Primary)
EX-4.1 (exhibit41-nrgvxamendedarco.htm)
EX-10.1 (exhibit101-nrgvxfirstamend.htm)
EX-10.2 (exhibit102redacted-calisto.htm)
EX-10.3 (exhibit103redacted-crosstr.htm)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
Filename: nrgv-20260626.htm · Sequence: 1
nrgv-20260626
0001828536FALSE00018285362026-06-262026-06-26
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 26, 2026
Energy Vault Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 001-39982 85-3230987
(State or other jurisdiction
of incorporation) (Commission
File Number) (IRS Employer
Identification No.)
4165 East Thousand Oaks Blvd., Suite 100
Westlake Village, California
91362
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (805) 852-0000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol Name of each exchange
on which registered
Common Stock, par value $0.0001 per share NRGV New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to AR Convertible Debentures Securities Purchase Agreement
As previously disclosed, on May 18, 2026, Energy Vault Holdings, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with YA II PN, Ltd. (the “Investor”), pursuant to which the Company agreed to issue and sell senior secured convertible debentures in multiple tranches with an aggregate principal amount of up to $75.0 million and an initial tranche of $42.0 million funded at closing (the “Tranche 1 AR Convertible Debenture”). The size and availability of the facility is determined and supported by the Company’s current contracted backlog and third-party commercial activity.
Due to a material increase in the Company’s commercial backlog since the previously issued Quarterly Report for the quarter ended March 31, 2026 (please see Item 7.01 to this Current Report on Form 8-K for additional information), on June 29, 2026, the Company and the Investor entered into the first amendment to the Purchase Agreement (the “First Amendment”), pursuant to which the Company agreed to issue and sell an additional $38.0 million of senior secured convertible debentures to the Investor at a purchase price equal to 95% of such additional principal amount. In connection with the foregoing, the Company amended and restated the Tranche 1 AR Convertible Debenture (as amended and restated, the “Amended and Restated AR Convertible Debenture”) to give effect to the increased aggregate principal amount of $80.0 million.
The Amended and Restated AR Convertible Debenture continues to bear interest at a rate of 7.50% per annum, increased the monthly installment amounts correspondingly and extended the maturity date from May 17, 2027 to July 1, 2027. The Amended and Restated AR Convertible Debenture is convertible into shares of the Company’s common stock at a conversion price equal to 97% of the lowest daily volume-weighted average price of the common stock during the four consecutive trading days immediately preceding the applicable conversion date, subject to a floor price of $1.19 per share. The Amended and Restated AR Convertible Debenture also provides that the $4.22 million in principal amount plus all accrued and unpaid interest in respect of such amount of the December 29, 2026 installment may be converted by the Investor in accordance with the conditions set forth in the Amended and Restated AR Convertible Debenture. The Company may not issue shares of common stock upon conversion to the extent such issuance would exceed 19.99% of the Company’s outstanding common stock as of closing, unless stockholder approval to exceed such cap is obtained in accordance with the rules and regulations of the NYSE (the “Exchange Cap”). Pursuant to the Exchange Cap, the Amended and Restated AR Convertible Debenture is convertible for a maximum of 33,251,333 shares of common stock. The additional tranche was funded at closing on June 29, 2026. Net proceeds are expected to be approximately $34.6 million after deductions for an original issue discount of 5% and a structuring fee of $1.25 million. The Company and Investor also mutually agreed to increase the aggregate principal amount issuable under the Purchase Agreement to $150.0 million.
The foregoing descriptions of the First Amendment and the form of Amended and Restated AR Convertible Debenture are qualified in their entirety by reference to the full text of the First Amendment and the form of Amended and Restated AR Convertible Debenture, which are attached as Exhibit 10.1 and Exhibit 4.1, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Consent, Waiver and Amendment to CRC Note Purchase Agreement
As previously disclosed, on April 4, 2025, Calistoga Resiliency Center, LLC (“CRC”), a wholly-owned subsidiary of the Company, entered into a Note Purchase Agreement, as amended by Amendment No. 1 thereto, dated as of August 4, 2025 (the “CRC Note Purchase Agreement”), with Eagle Point Credit Management, LLC, pursuant to which CRC issued $27.8 million in aggregate principal amount of senior secured notes (the “CRC Senior Notes”). Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the CRC Note Purchase Agreement.
On June 26, 2026, CRC, the holders party thereto, and Wilmington Trust, National Association, as collateral agent, entered into the Consent, Waiver and Amendment No. 2 to the CRC Note Purchase Agreement (the “CRC Amendment”). Pursuant to the CRC Amendment, the holders (i) consented to a voluntary prepayment of the CRC Senior Notes in an aggregate principal amount of approximately $5.0 million, (ii) waived the make-whole amount and related certificate delivery requirements otherwise applicable to such prepayment, (iii) consented to the release, withdrawal and transfer of excess reserve amounts for application to such prepayment and (iv) deferred the testing date for the Debt Service Coverage Ratio covenant to November 30, 2026.
The foregoing description of the CRC Amendment is qualified in its entirety by reference to the full text of the CRC Amendment, which is attached as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Consent and Waiver to Cross Trails Credit Agreement
As previously disclosed, on July 23, 2025, Cross Trails Energy Storage Project, LLC (the “Cross Trails”), a subsidiary of the Company, entered into a credit agreement (the “Cross Trails Credit Agreement”) with Wilmington Trust, National Association, as administrative agent and collateral agent, and each of the lenders party thereto. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Cross Trails Credit Agreement.
On June 29, 2026, Cross Trails entered into the Consent and Waiver to the Cross Trails Credit Agreement (the “Cross Trails Consent”) with Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto. Pursuant to the Cross Trails Consent, the lenders (i) consented to certain modifications to the methodology for calculating the debt service coverage ratios under the Cross Trails Credit Agreement for each fiscal quarter beginning on March 31, 2026 and ending on December 31, 2027, (ii) reduced the minimum Historical Debt Service Coverage Ratio and the minimum Pro Forma Debt Service Coverage Ratio, and (iii) waived any default under the Cross Trails Credit Agreement arising from Cross Trails’ failure to comply with the debt service coverage ratio requirements for the fiscal quarters ending on March 31, 2026 and June 30, 2026.
The foregoing description of the Cross Trails Consent is qualified in its entirety by reference to the full text of the Cross Trails Consent, which is attached as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 with respect to the Amended and Restated AR Convertible Debenture, the CRC Amendment and the Cross Trails Consent is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 relating to the issuance of any shares to be issued in connection with a conversion of some or all of the Amended and Restated AR Convertible Debenture and relating to the issuance of the Amended and Restated AR Convertible Debenture, is incorporated by reference herein in its entirety.
The issuance of the Amended and Restated AR Convertible Debenture pursuant to the First Amendment was made in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933. This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy the securities discussed herein, nor shall there be any offer, solicitation, or sale of the securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Item 7.01 Regulation FD Disclosure.
The Company’s sales backlog increased materially from $1.3 billion as of March 31, 2026. See the Company’s Quarterly Report for the quarter ended March 31, 2026 filed with the Securities and Exchange Commission on May 19, 2026 for the definition and additional information regarding determination of the Company’s backlog.
The Company cannot guarantee that its bookings will result in actual revenue in the originally anticipated period, or at all. The Company’s customers may experience project delays or cancel orders as a result of external market factors and economic or other factors beyond our control. Many of the Company’s projects require government approvals, third-party financing, and other contingencies, many of which are beyond its control. If the Company’s bookings fail to result in revenue as anticipated or in a timely manner, the Company could experience a reduction in revenue, profitability, and liquidity. See “Risk Factors - Our total backlog, bookings, and developed pipeline may not be indicative of our future revenue, which could have a material impact on our business, financial condition, and results of operations” in the Company’s Annual Report for the year ended December 31, 2025 filed with the Securities and Exchange Commission on March 18, 2026.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
No. Description
4.1*
Form of Amended and Restated AR Convertible Debenture
10.1*
First Amendment to Securities Purchase Agreement, dated June 29, 2026, by and between Energy Vault Holdings, Inc. and YA II PN, LTD
10.2*#
Consent, Waiver and Amendment No. 2 to Note Purchase Agreement, dated June 26, 2026, by and among Calistoga Resiliency Center, LLC, Wilmington Trust, National Association, as collateral agent, and the holders party thereto
10.3*#
Consent and Waiver to Credit Agreement, dated June 29, 2026, by and among Cross Trails Energy Storage Project, LLC, Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto
104
Cover page from this Current Report on Form 8-K, formatted in Inline XBRL
________________
* Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the Securities and Exchange Commission upon request.
# Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the Securities and Exchange Commission, certain portions of this exhibit have been redacted because the Company customarily and actually treats such omitted information as private or confidential and because such omitted information is not material.
SIGNATURES
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.
ENERGY VAULT HOLDINGS, INC.
Date: July 1, 2026
By: /s/ Michael Beer
Name: Michael Beer
Chief Financial Officer
EX-4.1
EX-4.1
Filename: exhibit41-nrgvxamendedarco.htm · Sequence: 2
Document
Exhibit 4.1
NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
ENERGY VAULT HOLDINGS, INC.
Amended and Restated AR Convertible Debenture
Original Principal Amount: $42,000,000.00
Original Issuance Date: May 18, 2026
Additional Principal Amount (purchased on the Issuance Date): $38,000,000
Outstanding Principal Amount: $80,000,000.00
Issuance Date: June 29, 2026
Number: NRGV-AR1/A
FOR VALUE RECEIVED, ENERGY VAULT HOLDINGS, INC., an entity organized under the laws of Delaware (the “Company”), hereby promises to pay to YA II PN, LTD., or its registered assigns (the “Holder”) the amount set out above as Outstanding Principal Amount (or such lesser amount as reduced pursuant to the terms hereof pursuant to repayment, redemption, conversion or otherwise, the “Principal”), in each case when due, and to pay interest (“Interest”) on any outstanding Principal at the Interest Rate (as defined below) from and including the date set out above as the Original Issuance Date (in respect of the Original Principal Amount) (the “Original Issuance Date”) to the date set out above as the Issuance Date (the “Issuance Date”) and from and including the Issuance Date (in respect of the Outstanding Principal Amount) until such amounts become due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof) and Interest on any outstanding Principal at the Default Rate (if applicable) as set forth herein. The Original Issuance Date is the date of the first issuance of the AR Convertible Debenture, and the Issuance Date is the date of the first issuance of the Amended and Restated AR Convertible Debenture (as amended, amended and restated, extended, supplemented or otherwise modified in writing from time to time, this “Debenture”) regardless of the number of transfers and regardless of the number of instruments, which may be issued to evidence such
Debenture. This Debenture was issued pursuant to the Securities Purchase Agreement between the Company and the Buyers listed on the Schedule of Buyers attached thereto, dated as of May 18, 2026, as amended on June 29, 2026 (as it may be further amended from time to time, the “Securities Purchase Agreement”). Certain capitalized terms used herein are defined in Section (14).
(1)GENERAL TERMS
(a)Maturity Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Debenture. The “Maturity Date” shall be July 1, 2027. Other than as specifically permitted by this Debenture, the Company may not prepay or redeem any portion of the outstanding Principal and accrued and unpaid Interest.
(b)Interest Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to 7.50% (the “Interest Rate”), which Interest Rate shall increase to an annual rate of 18.00% (the “Default Rate”) upon the occurrence of an Event of Default (for so long as such event remains uncured). Interest shall be calculated based on a three hundred sixty-five (365)-day year and the actual number of days elapsed, to the extent permitted by applicable law.
(2)REDEMPTIONS.
(a)(i) Monthly Cash Redemptions. The Company shall, at its own option, (A) redeem in cash each Installment Amount (as defined in Section (14)) set forth on the Redemption Schedule (as defined in Section (14)) (a “Company Redemption”) on each applicable Redemption Date (as defined in Section (14)), subject to the provisions of this Section (2)(a)(i) and Section (2)(b) below, (B) provided the Equity Conditions are satisfied, allow such Installment Amount to be converted by the Holder in accordance with Section (4)(b), or (C) provided the Equity Conditions are satisfied, elect a combination of a Company Redemption and a conversion described in clause (B) above. On or prior to each Redemption Date, the Company shall deliver written notice in the form attached hereto as Exhibit II(a)(i) (each, an “Company Redemption Notice”) to the Holder which Company Redemption Notice shall either: (i) state that the Company elects to redeem, in whole or in part, the applicable Installment Amount in cash pursuant to a Company Redemption, and/or (ii) confirm that all or the applicable portion of the applicable Installment Amount may be converted by the Holder in whole, or in part, pursuant Section (4)(b) any time after the applicable Redemption Date.
If the Company does not timely deliver a Company Redemption Notice on or prior to the Redemption Date in accordance with this Section (2)(a)(i), then, provided the Equity Conditions are satisfied, the Company shall be deemed to have delivered a Company Redemption Notice confirming that the applicable Installment Amount may be converted by the Holder in accordance with Section (4)(b). For the avoidance of doubt, upon the delivery, or deemed delivery, of a Company Redemption Notice allowing such Installment Amount to be converted by the Holder, the Company’s obligation to redeem such Installment Amount pursuant to this Section (2)(a) shall be satisfied on the applicable Redemption Date and Interest on the related Principal amount shall cease to accrue as of the date that the Holder exercises its right to convert such Installment Amount in accordance with Section (4)(b).
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Without limiting the foregoing or any other obligation hereunder of the Company, the Company acknowledges and agrees that the Company shall be deemed to have delivered a Company Redemption Notice, without regard to the Equity Conditions requirement, confirming that $4,220,000 in Principal amount, plus all accrued and unpaid interest in respect of such amount, of the December 29, 2026 Installment Amount (the “Investor Elected Mandatory Conversion Amount”) may be converted by the Holder in accordance with Section (4)(b).
Notwithstanding the foregoing, in the event that as of any Redemption Date there is an Event of Default or an Amortization Event in effect which has not been cured, then, in respect of such Redemption Date, (i) the Company shall be required to redeem in cash through a Company Redemption, and (ii) the applicable Installment Amount shall be the greater of the Installment Amount set forth on the Redemption Schedule or the Amortization Installment Amount.
Any Optional Redemptions made by the Company pursuant to this Debenture on or before any Redemption Date shall have the effect of adjusting the Redemption Schedule by reducing the Installment Amount of future payments coming due in reverse chronological order (i.e. starting with the latest payments first).
(ii)Mandatory Redemptions. The Company shall redeem in cash each Mandatory Redemption Amount (as defined in Section (14)) on each Redemption Date, subject to the provisions of this Section (2)(a)(ii) and Section (2)(b) below. On or prior to each Redemption Date with respect to a Mandatory Redemption Event, the Company shall deliver written notice in the form attached hereto as Exhibit II(a)(ii) (each, an “Mandatory Redemption Notice”) to the Holder which Mandatory Redemption Notice shall confirm the Mandatory Redemption Amount for a Mandatory Redemption Event that has occurred. Any such waivers of any particular Mandatory Redemption Amount shall not waive or be deemed a course of conduct to waive any additional or future Mandatory Redemption Amounts that arise under this Section 2(a)(ii).
If the Company does not timely deliver a Mandatory Redemption Notice on or prior to the applicable Redemption Date in accordance with this Section (2)(a)(ii), then an Event of Default shall automatically and immediately occur hereunder. Any redemption pursuant to this Section (2)(a)(ii) may, at the Company’s discretion, be pursuant to a Mandatory Redemption Notice given prior to the completion or occurrence of a Mandatory Redemption Event, and such redemption or notice may, at the Holder’s discretion, be subject to the completion or occurrence of the related Mandatory Redemption Event or other transaction or event, as the case may be.
Any Mandatory Redemption Amounts shall be paid in cash under this Debenture and the Other Debentures pro rata as provided herein and therein.
Any Mandatory Redemption Amounts actually paid in cash on or before any Redemption Date shall have the effect of adjusting the Redemption Schedule by reducing the Installment Amount of future payments coming due in reverse chronological order (i.e., starting with the latest payments first).
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Notwithstanding anything to the contrary herein, a Mandatory Redemption Amount shall not include the Investor Elected Mandatory Conversion Amount unless otherwise agreed in writing by the Holder.
(b)Company Redemption; Mandatory Redemption. If (i) the Company elects or is required to make a Company Redemption in cash in accordance with Section (2)(a)(i), then the amount to be paid shall be the sum of the applicable Installment Amount (or Amortization Installment Amount, if applicable) or (ii) the Company is required to pay any Mandatory Redemption Amount in cash in accordance with Section 2(a)(ii), then the amount to be paid in cash shall be the sum of the Mandatory Redemption Amount (in either such case of clause (b)(i) above or (b)(ii) above, collectively referred to herein as the “Redemption Amount”). The Redemption Amount shall be paid by the Company on or before such Redemption Date, by wire transfer of immediately available funds.
(c)Company Additional Optional Redemption. The Company at its option shall have the right, but not the obligation, to redeem early a portion or all amounts outstanding under this Debenture as described in this Section (each such option, an “Optional Redemption”); provided, that the Company provides the Holder with written notice (each, an “Optional Redemption Notice”) of its desire to exercise an Optional Redemption, which Optional Redemption Notice shall be delivered to the Holder after the close of regular trading hours on a Trading Day. Each Optional Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Debenture to be redeemed and the applicable Optional Redemption Amount. Notwithstanding anything to the contrary herein, an Optional Redemption Amount shall not include the Investor Elected Mandatory Conversion Amount unless otherwise agreed in writing by the Holder.
(i)Change of Control Transaction Optional Redemption. The Company at its option shall have the right, but not the obligation, to redeem early all, but not less than all, amounts outstanding under this Debenture if a Change of Control Transaction occurs (a “Change of Control Transaction Optional Redemption”). The “Optional Redemption Amount” in respect of a Change of Control Transaction Optional Redemption shall be an amount equal to (a) the outstanding Principal balance being redeemed by the Company plus (b) all accrued and unpaid interest hereunder as of the date of such redemption.
(iii) After receipt of an Optional Redemption Notice, the Holder shall have seven (7) Trading Days (beginning with the Trading Day immediately following the date the Optional Redemption Notice is delivered to the Holder in accordance with the terms of this Section (2)(c)) to elect to convert the Principal amount, and accrued and unpaid Interest, subject to the Optional Redemption. On the eighth (8th) Trading Day following the delivery of the applicable Optional Redemption Notice, the Company shall deliver to the Holder the Optional Redemption Amount with respect to the Principal amount redeemed to the extent not converted or otherwise repaid after giving effect to the conversions or other payments made during such seven (7) Trading Day period.
(d)Additional Redemptions. Without limiting the foregoing, the Company affirms and confirms its obligations to repay principal under this Debenture in cash or, at the election of the Buyer, convert amounts required to be paid by conversion into Common Shares as set forth in Section (4)(s)(v) of the Securities Purchase Agreement. Any failure to take the steps required under such Section (4)(s)(v) shall give rise to an Event of Default hereunder
(e)Payments Generally.
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(i)Payment Dates. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(ii)Principal Payments. Each payment of Principal (whether paid in cash or by conversion into Common Shares) under this Debenture shall be accompanied by all accrued and unpaid Interest thereon (which shall be paid in the same manner as such Principal payment).
(3)EVENTS OF DEFAULT.
(a)An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body, in each case of competent jurisdiction) shall have occurred:
(i)The Company’s failure to pay to the Holder any amount of Principal, Redemption Amount (including on the applicable Redemption Date for any Mandatory Redemption Event), Interest, or other amounts when and as due under this Debenture or any other Transaction Document and such failure continues for a period of five (5) Business Days;
(ii)(A) The Company or any Guarantor and each other Significant Subsidiary (as defined in Rule 102(w) of Regulation S-X) (each such Person, an “Impacted Person”) shall commence, or there shall be commenced against any Impacted Person, any proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or any Impacted Person commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to such Impacted Person, in any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of sixty one (61) days; (B) any Impacted Person is adjudicated insolvent or bankrupt; (C) any order of relief or other order approving any such case or proceeding is entered; (D) any Impacted Person suffers any appointment of any custodian, private or court appointed receiver or the like for it or all or substantially all of its property which continues undischarged or unstayed for a period of sixty one (61) days; (E) any Impacted Person makes a general assignment of all or substantially all of its assets for the benefit of creditors; (F) any Impacted Person shall fail to pay, shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (G) any Impacted Person shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; (H) any Impacted Person shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or (I) any corporate or other action is taken by any Impacted Person for the purpose of effecting any of the foregoing;
(iii)Any Impacted Person shall default in any of its obligations (A) under any note, debenture, mortgage, credit agreement or other facility, indenture agreement, guarantee or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money of such Impacted Person or as to which such Impacted Person is a guarantor, in an amount exceeding $3,500,000, whether such indebtedness now exists or shall hereafter be created and such default is not cured within the time prescribed by the documents governing such indebtedness or if no time is prescribed, within ten (10) Trading Days, and shall result in such indebtedness becoming or being declared due and payable; or (B) under any Existing Convertible Debenture, whether such indebtedness now exists or shall hereafter be created and such default is not cured within the time prescribed by the
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documents governing such indebtedness or if no time is prescribed, within ten (10) Trading Days, and shall result in such indebtedness becoming or being declared due and payable;
(iv)A final judgment or judgments for the payment of money in excess of $3,500,000 in the aggregate are rendered against the Company and/or any of its Subsidiaries and which judgments are not, within forty five (45) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance or an indemnity from a creditworthy party shall not be included in calculating the $3,500,000 amount set forth above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within forty five (45) days of the issuance of such judgment;
(v)The Common Stock shall cease to be quoted or listed for trading, as applicable, on any Principal Market for a period of ten (10) consecutive Trading Days;
(vi)A Change of Control Transaction (as defined in Section (14)) occurs unless in connection with such Change of Control Transaction this Debenture is redeemed in full under Section (2)(c);
(vii)The Company’s (A) failure to deliver the required number of shares of Common Stock to the Holder within two (2) Trading Days after the applicable Share Delivery Date (after giving effect to any permitted extensions) or (B) notice to any holder of the Debenture, including by way of public announcement, at any time, of its intention not to comply with a request for conversion of all or a portion of this Debenture into shares of Common Stock that is tendered in accordance with the provisions of this Debenture, other than pursuant to Section (4)(d);
(viii)The Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined below) within five (5) Business Days after such payment is due;
(ix)The Company’s failure to file with the Commission any Periodic Report on or before the due date of such filing as established by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under Rule 12b-25 under the Exchange Act and such failure continues for a period of five (5) Business Days;
(x)Any representation or warranty made or deemed to be made by or on behalf of the Company or any Guarantor in or in connection with any Transaction Document, or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed made;
(xi)The Company uses the proceeds of the issuance of this Debenture, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose;
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(xii)Failure of the Company or any of its Subsidiaries to comply with or to perform any covenant set forth in Section (4)(m), (4)(n), (4)(o), (4)(p), (4)(q), (4)(r) or (4)(s) of the Securities Purchase Agreement within the time periods set forth therein, if any;
(xiii)(A) Any material provision of any Security Document or any Guaranty Agreement shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against any Person intended to be a party thereto or otherwise be in full force and effect; or (B) the validity or enforceability of any provision of any Security Document or any Guaranty Agreement shall be contested in any manner by the Company, any of the Guarantors or Grantors (or such other applicable term used therein), any Governmental Entity having jurisdiction over any of them or any other Person, seeking to establish the invalidity of unenforceability thereof; or (C) the Company or any of the Guarantors or Grantors (or such other applicable term used therein) shall deny in writing that it has any liability or obligation purported to be created under any Security Document or any Guaranty Agreement;
(xiv)Any Security Document shall for any reason (other than as a direct result of the action or inaction of the Holder) fail or cease to create a valid and perfected, first priority Lien in favor of the Buyers on Collateral identified therein, or shall fail or cease to permit the Buyers to readily enforce any remedial rights thereunder;
(xv)Any material damage to, or loss, theft or destruction of any material portion of any Collateral, whether or not insured;
(xvi)Any “Event of Default” (howsoever defined under any Security Document or other Transaction Document)(after the expiration of any applicable grace period set forth therein) occurs;
(xvii)Other than as provided in this Section (3)(a), (A) any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder, ceases to be in full force and effect, other than if caused directly by any action or inaction of a Holder or any of its Affiliates; (B) the Company (acting in bad faith) or any Guarantor or any other authorized Person on the Company’s behalf contests in writing the validity or enforceability of any material provision of any Transaction Document; or (C) the Company (acting in bad faith) or any Guarantor unreasonably denies in writing that it has any or further liability or obligation under any Transaction Document, or purports in writing to revoke, terminate (other than in line with the relevant termination provisions) or rescind any Transaction Document;
(xviii)The Company or any Guarantor shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach or default of any provision of this Debenture (except as may be otherwise covered by any of the paragraphs set forth above in this Section (3)(a)) or any other Transaction Document which is not cured or remedied within the time prescribed or if no time is prescribed within thirty (30) Business Days.
(b)During the time that any portion of this Debenture is outstanding, if any Event of Default has occurred (other than an event with respect to the Company described in Section (3)(a)(ii)), the full unpaid Principal amount of this Debenture, together with interest and other amounts owing in respect of this Debenture, to the date of acceleration shall become at the Holder’s election given by notice pursuant to Section (7), immediately due and payable in cash; provided that, in the case of any event with respect to the Company described in Section (3)(a)(ii), the full unpaid Principal amount of this Debenture, together with accrued and unpaid interest and other amounts owing in respect of this Debenture to the date of acceleration, shall
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automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company. Furthermore, in addition to any other remedies, the Holder shall have the right (but not the obligation) to convert, at the Conversion Price determined in accordance with part (B) of Section (4)(a)(ii), on one or more occasions all or part of the unpaid Principal amount of this Debenture, together with interest and other amounts owing in respect of this Debenture, in accordance with Section (4) and subject to the limitations in Section (4)(d) (but not subject to any other limitations contained herein) at any time after (x) an Event of Default (provided that such Event of Default is continuing) or (y) the Maturity Date, provided that this Debenture remains outstanding. The Holder need not provide, and the Company hereby waives any presentment, demand, protest or other notice of any kind, (other than any required notice of conversion) and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by the Holder in writing at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
(4)CONVERSION OF DEBENTURE. This Debenture shall be convertible into shares of Common Stock, on the terms and conditions set forth in this Section (4).
(a)Conversion Right. Subject to the limitations of Section (4)(d), at such time or times on or after the Original Issuance Date as provided herein, the Holder shall be entitled to convert any portion or such portion of the outstanding and unpaid Conversion Amount (as defined below) that may be subject to conversion by the Investor as provided herein into fully paid and nonassessable shares of Common Stock in accordance with Section (3)(b) or Section (4)(b), at the applicable Conversion Price (as defined below). The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to this Section (4)(a) shall be determined by dividing (x) such Conversion Amount by (y) the applicable Conversion Price. The Company shall not issue any fraction of a share of Common Stock upon any conversion. All calculations under this Section (4) shall be rounded to the nearest $0.0001. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.
(i)“Conversion Amount” means the portion of the Principal, Interest, or other amounts outstanding under this Debenture to be converted or otherwise with respect to which this determination is being made.
(ii)“Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination with respect to a conversion pursuant to the terms of this Debenture, 97% of the lowest daily VWAP for the Common Stock during the four (4) consecutive Trading Days immediately preceding the Conversion Date (the “Market Price”), but which Market Price shall not be lower than the Floor Price. The Conversion Price shall be adjusted from time to time pursuant to the other terms and conditions of this Debenture.
(b)Market Price Conversions. For (i) any Installment Amount (or other additional amounts as may be agreed by the Company) subject to a Company Redemption Notice confirming that the applicable Installment Amount (or other additional amounts as may be agreed by the Company) or (ii) the portion of the December 29, 2026 Installment Amount that may be converted by the Holder in the amount of the Investor Elected Mandatory Conversion Amount (or other additional amounts as may be agreed by the Company), in either such case of sub-clauses (b)(i) and (b)(ii) herein, for which the Holder may elect to convert, at any time and from time to time after such applicable Redemption Date, the Holder may convert a Conversion Amount up to the applicable Installment Amount (or other additional amounts as may be agreed
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by the Company, or any portion thereof) at the Conversion Price by serving a Conversion Notice on the Company in accordance with Section (4)(c).
(c)Mechanics of Conversion.
(i)Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall (A) transmit by email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit III (the “Conversion Notice”) to the Company and (B) if required by Section (4)(c)(iii), surrender this Debenture to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture in the case of its loss, theft or destruction). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) if legends are not required to be placed on certificates or the book-entry position of the Shares of Common Stock and provided that the Transfer Agent is participating in the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer Program, instruct such transfer agent to credit such aggregate number of Shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate or book-entry position, registered in the name of the Holder or its designee, for the number of Shares of Common Stock to which the Holder shall be entitled which certificates shall bear restrictive legends unless not required pursuant to rules and regulations of the Commission. If this Debenture is physically surrendered for conversion and the outstanding Principal of this Debenture is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after receipt of this Debenture and at its own expense, issue and deliver to the holder a new Debenture representing the outstanding Principal not converted. The Person or Persons entitled to receive the Shares of Common Stock issuable upon a conversion of this Debenture shall be treated for all purposes as the record holder or holders of such Shares of Common Stock upon the receipt by the Company of a Conversion Notice.
(ii)Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery Date (or, if such failure occurs through no fault of the Company, on or prior to the second (2nd) Trading Day following the Share Delivery Date) to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such Holder’s conversion of any Conversion Amount (a “Conversion Failure”), and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of Common Stock issuable upon such conversion that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out of pocket expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Common Stock to which the Holder is entitled with respect to such Conversion Notice and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, multiplied by (B) the Closing Price on the Conversion Date.
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(iii)Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance with the terms hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion Amount represented by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture. The Holder and the Company shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon any conversion.
(d)Limitations on Conversions.
(i)Beneficial Ownership. The Holder shall not have the right to convert any portion of this Debenture to the extent that after giving effect to such conversion the Holder, together with any Affiliate thereof, would beneficially own (as determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion (the “Beneficial Ownership Cap”). Since the Holder will not be obligated to report to the Company the number of shares of Common Stock it may hold at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of the Beneficial Ownership Cap, the Holder shall have the authority and obligation to determine whether the Beneficial Ownership Cap will limit any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the Principal amount of this Debenture is convertible shall be the responsibility and obligation of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount of this Debenture that, without regard to any other shares that the Holder or its Affiliates may beneficially own, would result in the issuance in excess of the Beneficial Ownership Cap, the Company shall notify the Holder of this fact and shall honor the conversion for the maximum Principal amount permitted to be converted on such Conversion Date in accordance with Section (4)(a) and, any Principal amount tendered for conversion in excess of the permitted amount hereunder shall remain outstanding under this Debenture. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other Holder) upon not less than sixty-five (65) days prior notice to the Company. Other Holders shall be unaffected by any such waiver.
(ii)Principal Market Limitation. Notwithstanding anything in this Debenture to the contrary, the Company shall not issue any Shares of Common Stock upon conversion of this Debenture, or otherwise, if the issuance of such Shares of Common Stock, together with any Shares of Common Stock issued in connection with any other related transactions that may be considered part of the same series of transactions, would exceed the aggregate number Shares of Common Stock that the Company may issue in a transaction in compliance with the Company’s obligations under the rules or regulations of the Principal Market and shall be referred to as the “Exchange Cap,” except that such limitation shall not apply if the Company’s stockholders have approved such issuances on such terms in excess of the Exchange Cap in accordance with the rules and regulations of Principal Market.
(e)Other Provisions.
(i)All calculations under this Section (4) shall be rounded to the nearest $0.0001 or whole share.
(ii)So long as this Debenture or any Other Debentures remain outstanding, the Company shall have reserved from its duly authorized share capital, and shall
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have instructed the Transfer Agent to irrevocably reserve, the maximum number of Shares of Common Stock issuable upon conversion of this Debenture and the Other Debentures (assuming for purposes hereof that (x) this Debenture and such Other Debentures are convertible at the Floor Price as of the date of determination, and (y) any such conversion shall not take into account any limitations on the conversion of the Debenture or Other Debentures set forth herein or therein (the “Required Reserve Amount”)), provided that at no time shall the number of Shares of Common Stock reserved pursuant to this Section (4)(e)(ii) be reduced other than pursuant to the conversion of this Debenture and the Other Debentures in accordance with their terms, and/or cancellation, or reverse stock split. If at any time while this Debenture or any Other Debentures remain outstanding, the Company does not have a sufficient number of authorized and unreserved Shares of Common Stock to satisfy the obligation to reserve for the issuance the Required Reserve Amount, the Company will promptly take all corporate action necessary to propose to a meeting of its stockholders an increase of its authorized share capital necessary to meet the Company’s obligations pursuant to this Debenture, and cause its board of directors to recommend to the stockholders that they approve such proposal.
(iii)Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (3) herein for the Company’s failure to deliver certificates representing shares of Common Stock upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
(iv)Legal Opinions. The Company is obligated to use commercially reasonable efforts to cause its legal counsel to deliver legal opinions to the Company’s transfer agent in connection with any legend removal upon the expiration of any holding period or other requirement for which the Underlying Shares may bear legends restricting the transfer thereof (i) following any sale of such Underlying Shares pursuant to Rule 144, (ii) if such Underlying Shares are eligible for sale and about to be sold under Rule 144, or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC); provided, however, that such Holder has delivered such reasonably requested representations to such transfer agent, the Company and the Company’s legal counsel in connection with the request for such opinion. To the extent a legal opinion is not provided (either timely or at all), then, in addition to being an Event of Default hereunder, the Company agrees to reimburse the Holder for all reasonable costs incurred by the Holder in connection with any legal opinions paid for by the Holder in connection with the sale or transfer of the Underlying Shares of Common Stock. The Holder shall notify the Company of any such costs and expenses it incurs that are referred to in this section from time to time and all amounts owed hereunder shall be paid by the Company with reasonable promptness.
(5)Adjustments to Conversion Price
(a)Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company, at any time while this Debenture is outstanding, shall (a) pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (b) subdivide outstanding shares of Common Stock into a larger number of shares, (c) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (d) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Floor Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of
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Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b)[Reserved].
(c)Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock that is not a Change of Control Transaction (a “Corporate Event”), the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon a conversion of this Debenture, at the Company’s option, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Debenture) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had this Debenture initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Price. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the Holder. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Debenture.
(d)Notice of Adjustments to Conversion Price. Whenever the Conversion Price is adjusted pursuant to Section (5) hereof, the Company shall promptly provide the Holder with a written notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
(e)Mergers or Consolidations; Etc. In case of any (1) merger or consolidation of the Company with or into another Person, or (2) sale by the Company of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, in one or a series of related transactions, a Holder shall have the right to (A) convert the aggregate amount of this Debenture then outstanding into the shares of stock and other securities, cash and property receivable upon or deemed to be held by holders of Common Stock following such merger, consolidation or sale, and such Holder shall be entitled upon such event or series of related events to receive such amount of securities, cash and property as the shares of Common Stock into which such aggregate Principal amount of this Debenture could have been converted immediately prior to such merger, consolidation or sales would have been entitled. The terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder the right to receive the securities, cash and property set forth in this Section upon any conversion or redemption following such event. This provision shall similarly apply to successive such events.
(6)REISSUANCE OF THIS DEBENTURE.
(a)Register. The Company shall maintain at its principal executive offices or with the Transfer Agent (or at such other office or agency of the Company as it may designate by notice to each holder of this Debenture ), a register for this Debenture in which the Company shall record the name and address of the Person in whose name this Debenture has been issued
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(including the name and address of each transferee), the principal amount (and stated interest) of this Debenture held by such Person. The Company shall maintain the register in a manner that complies with the “registered form” requirements in Section 5f.103-1(c) of the United States Treasury Regulations.
(b)Transfer. Holder shall not transfer this Debenture other than to its Affiliates. If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will forthwith issue and deliver to the Holder a new Debenture (in accordance with Section (6)(e)), registered in the name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and unpaid Interest thereof) and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance with Section (6)(e)) to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of Section (4)(c)(iii) following conversion or redemption of any portion of this Debenture, the outstanding Principal represented by this Debenture may be less than the Principal stated on the face of this Debenture.
(c)Lost, Stolen or Mutilated Debenture. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and substance and, in the case of mutilation, upon surrender and cancellation of this Debenture, the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section (6)(e)) representing the outstanding Principal.
(d)Debenture Exchangeable for Different Denominations. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Debenture or Debentures (in accordance with Section (6)(e)) representing in the aggregate the outstanding Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.
(e)Issuance of New Debentures. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture, the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section (6)(a) or Section (6)(d), the Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the Original Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture, and (v) shall represent accrued and unpaid Interest from and including the Original Issuance Date to the Issuance Date in respect of the Original Principal Amount and from and including the Issuance Date in respect of the Outstanding Principal Amount.
(7)Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by letter or electronic mail (“e-mail”) and will be deemed to have been delivered (i) upon receipt, when delivered personally, (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, as applicable or (iii) receipt, when sent by e-mail, and, in each case of the foregoing clauses (i), (ii) and (iii), properly addressed to the party to receive the same. The addresses and email addresses for such communications shall be:
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If to the Company, to: Energy Vault Holdings, Inc.
4165 Thousand Oaks Blvd, Suite 100
Westlake Village, CA 91362
Attn: General Counsel
Email: Legal@energyvault.com
with a copy (which shall not constitute notice) to:
Vinson & Elkins L.L.P.
1114 Avenue of the Americas, 32nd Floor
New York, NY 10036
Attention: Brenda Lenahan; Katherine Frank; Caitlin Lawrence
Email: blenahan@velaw.com; kfrank@velaw.com; caitlinlawrence@velaw.com
If to the Holder: YA II PN, Ltd
c/o Yorkville Advisors Global, LLC
1012 Springfield Avenue
Mountainside, NJ 07092
Attention: Mark Angelo
Telephone: 201-985-8300
Email: Legal@yorkvilleadvisors.com
or at such other address and/or e-mail address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party in accordance with this Section at least three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (a) given by the recipient of such notice, consent, waiver or other communication, (b) electronically generated by the sender’s email service provider containing the time, date, recipient email address or (c) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt from a nationally recognized overnight delivery service or receipt by e-mail in accordance with clause (i), (ii) or (iii) above, respectively.
(8)NO IMPAIRMENT. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute and unconditional, to pay the Principal of, and Interest and other charges (if any) on, this Debenture at the time, place, and rate, and in the currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture is outstanding, the Company shall not and shall cause each of its subsidiaries not to, without the consent of the Holder, enter into any agreement, arrangement or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability of the Company to perform its obligations under this Debenture, including, without limitation, the obligation of the Company to make cash payments hereunder.
(9)Stockholder Rights. This Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings of the Company, unless and to the extent converted into shares of Common Stock in accordance with the terms hereof.
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(10)CHOICE OF LAW; VENUE; WAIVER OF JURY TRIAL
(a)Governing Law. This Debenture and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (the “Governing Jurisdiction”) (including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction, validity and performance.
(b)Jurisdiction; Venue; Service.
(i)The Company and the Holder each hereby irrevocably consent to the non-exclusive personal jurisdiction of the state courts of the Governing Jurisdiction and, if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Governing Jurisdiction.
(ii)The Company and the Holder each agrees that venue shall be proper in any court of the Governing Jurisdiction or, if a basis for federal jurisdiction exists, in any United States District Court in the Governing Jurisdiction. The Company waives any right to object to the maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience of forum.
(iii)Any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise, brought by the Company against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company shall not file any counterclaim against the Holder in any suit, claim, action, litigation or proceeding brought by the Holder against the Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought such suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding brought by the Company against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any other Transaction Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit, claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by applicable law, in such federal court. The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(iv)The Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim, action, litigation or proceeding by e-mail or the mailing of copies thereof by registered or certified mail postage
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prepaid, to it at the e-mail address or physical address, as applicable, provided for notices in this Debenture, such service to become effective thirty (30) days after the date of e-mail or mailing, as applicable.
(v)Nothing herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or to otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c)WAIVER OF JURY TRIAL. THE PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS DEBENTURE OR ANY MATTER RELATING TO THIS DEBENTURE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(11)TAX MATTERS.
(a)On or prior to the Original Issuance Date (and from time to time thereafter upon the reasonable request of the Company), the Holder shall provide the Company with a duly completed and executed Internal Revenue Service Form W-9 or appropriate W-8 (and, if applicable, a certificate establishing that such Holder satisfies the portfolio interest exemption).
(b)No Debenture shall be held or owned or purchased or otherwise acquired by either a “specified foreign entity” or a “foreign-influenced entity” (as such terms are defined in Section 7701(a)(51)(B) or (D), as applicable, of the Internal Revenue Code of 1986, as amended (the “Code”), or in temporary, proposed or final United States Treasury Regulations or other guidance promulgated or proposed thereunder or issued in respect thereof).
(12)Waivers; Etc. Any waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon strict adherence to any term of this Debenture 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 Debenture. No provision of this Debenture may be waived or amended other than by a written agreement signed by the parties to this Debenture. No custom or practice of the parties at variance with the terms hereof shall constitute a waiver by any party of its right to exercise any right, power or remedy available to it hereunder or any other right, power or remedy or to demand strict compliance with the terms of this Debenture.
(13)Invalidity; Etc. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any Interest or other amount deemed Interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the Principal of or Interest on this Debenture as contemplated herein,
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wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power as though no such law has been enacted.
(14)CERTAIN DEFINITIONS. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Securities Purchase Agreement. For purposes of this Debenture, the following terms shall have the following meanings:
(a)“Affiliate” of any Person means any other Person which directly or indirectly controls or is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of this definition, “control” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
(b)“Amortization Event” shall mean (i) the daily VWAP is less than the Floor Price then in effect for five (5) Trading Days during a period of seven (7) consecutive Trading Days, (ii) the Company has issued in excess of 99% of the Common Stock available under the Exchange Cap, where applicable, or (iii) any time (a) from and after the six month anniversary of the Original Issuance Date with respect to the Underlying Shares issuable pursuant to the Original Principal Amount, and (b) from and after the six month anniversary of the Issuance Date with respect to the Underlying Shares issuable pursuant to the Additional Principal Amount, the Holder is unable to sell Underlying Shares pursuant to Rule 144 (the first day of each such occurrence, an “Amortization Event Date”).
(c)“Amortization Installment Amount” means an amount equal to 20% of the outstanding Principal amount of this Debenture as of the date of the applicable Amortization Event Date.
(d)“Asset Vault” means Asset Vault, LLC, a Delaware limited liability company.
(e)“Bloomberg” means Bloomberg Financial Markets (or if not available, a similar service provider of nationally recognized standing).
(f)“Borrowing Base Adjusted Amount” means as of any date of determination (as approved by the Holder) an amount equal to (i) the Borrowing Base Aggregate Amount, less (in each case as of the applicable date of determination) (ii) that portion of “Backlog” not owned unconditionally by the Company or any EV Party and is otherwise subject to any receivables purchase agreement or other similar arrangement, less (iii) that portion of “Backlog” for which the Buyers do not have a perfected, first priority Lien on at all times, less (iv) that portion of “Backlog” encumbered by any Lien or security interest or otherwise pledged to or conditionally sold to any Person (including any Governmental Entity) other than the Buyers under a Security Document, less (v) that portion of “Backlog” derived from any Project / work order with Asset Vault or any of its Subsidiaries or any other Subsidiaries of the Company that are not EV Parties, less (vi) (A) for projects included in “Backlog”, that portion of “Backlog” derived from any Project / work order where less than fifteen percent (15%) of the milestones has been completed in accordance with the applicable EEQ Agreement, EPC Agreement or LTSA and (in each such case) industry standard, or (B) for projects not included in “Backlog” but included in the “Borrowing Base Aggregate Amount” as a 2026 Approved Contract (as defined therein), if the amount invoiced under any such contract is less than fifteen percent (15%) of the contract amount thereof, then deduction to be made shall be the amount equal to (1)
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the contract amount included in the “Borrowing Base Aggregate Amount” under clause (c) thereof, less (2) the invoiced amount, divided by fifteen percent (15%), less (vii) that portion of “Backlog” that could not reasonably be expected to convert into accounts receivable for completed Projects / work orders in accordance with the applicable EEQ Agreement, EPC Agreement or LTSA and (in each such case) industry standard prior to date that is twelve (12) months following the fiscal quarter end date for the applicable Form 10-Q or Form 10-K from which “Backlog” was determined, less (viii) that portion of “Backlog” derived from any Customer or any of such Customer’s Affiliates and Subsidiaries, in one or more EEQ Agreements / work orders / EPC Agreements / LTSA(s) for any or all such agreements and orders in excess of (A) 50% from the Original Issuance Date herein to but not including the date that is ninety (90) days following the Original Issuance Date and (B) 33% at all times thereafter, in each case, of the Borrowing Base Adjusted Amount (determined prior to any reduction to the Borrowing Base Adjusted Amount by this sub-clause (viii)). The Borrowing Base Adjusted Amount as of the First Closing Date is $42.0 million. Pursuant to the Form 10-Q filed by the Company for the quarter ended March 31, 2026, the total Remaining Performance Obligations of the Company (as defined therein) were $142.4 million of which 68% are due within the next 12 months, which equated to $96.8 million. The Company has then added the proceeds from the sale of equipment detailed in the subsequent events section of such Form 10-Q of $10.3 million, the total Borrowing Base Aggregate Amount as of the First Closing Date is $107.1 million. After applying the concentration limit and the 50% discount as described above, the Borrowing Base Adjusted Amount as of the First Closing Date is $42.0 million.
(g)“Borrowing Base Aggregate Amount” means, as of any date of determination, the sum of: (a)(i) the amount identified as “Backlog” derived from any of the EEQ Business, the EPC Business or the LTSA Business of the Company and the EV Parties as an off-Balance Sheet item in the Company’s Balance Sheet, as reported in the Company’s most recent Form 10-K or Form 10-Q filed with the SEC in accordance with the SEC rules and regulations and, solely in respect of the Company’s Form 10-Q for fiscal quarter ending March 31, 2026 as filed as provided herein above, such amounts reported in such Form 10-Q for commercial contracts for the sale of equipment, or (ii) if no such Form 10-K or Form 10-Q has been filed with the SEC in accordance with the SEC rules and regulations or if such “Backlog” amount is not so identified therein, then $0; provided, however, for the period from June 29, 2026 to the date that the Company’s Form 10-Q for the fiscal quarter ending September 30, 2026 is filed with the SEC in accordance with the SEC rules and regulations, the aggregated contact amount for the 2026 Approved Contracts (as defined below)(without giving effect to any dollar cap thereto) shall be deducted from “Backlog” for purposes hereof; plus without duplication of the foregoing amount, (b) (i) the amount identified as equipment sale proceeds in the Company’s Balance Sheet, as reported in the Company’s most recent Form 10-K or Form 10-Q filed with the SEC in accordance with the SEC rules and regulations, or (ii) if no such Form 10-K or Form 10-Q has been filed with the SEC in accordance with the SEC rules and regulations or if such equipment sale proceeds are not so identified therein, then $0; plus without duplication of the forgoing amounts, (c) the aggregate contracted amount for 2026 Approved Contracts not to exceed $200,000,000 in the aggregate. As used herein, “2026 Approved Contracts” shall mean those contracts entered into by the Company or Energy Vault, Inc. during the 2026 calendar year for which the Holder has consented to in writing.
(h)“Borrowing Base Certificate” means a borrowing base certificate in form, scope and substance satisfactory to the Holder that is delivered to the Holder from time to time as set forth in the Securities Purchase Agreement or any other Transaction Document, signed by the Chief Financial Officer or the Chief Executive Officer of the Company, which certificate:
(i) certifies to and sets forth (A) the Borrowing Base Aggregate Amount and the Borrowing Base Adjusted Amount and further identifies that portion of the
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Borrowing Base Aggregate Amount and Borrowing Base Adjusted Amount derived from International Projects and Domestic Projects, (B) the Borrowing Base Adjusted Amount and each item of reduction as set forth in the definition thereof, (C) with respect to the Borrowing Base Aggregate Amount and, separately, the Borrowing Base Adjusted Amount, a list of the Projects that comprise the “Backlog” included therein and the location of each such Project, the Customers and (as applicable) the EEQ Agreements, EPC Agreements and LTSA with respect to each such Project, the percentage of work already completed under each such Project, the timeline for completion of expected milestone payments (broken down by specific milestones) for each such Project and for each such Project if any material issues have occurred or are reasonably foreseeable to occur that could impact future milestone payments; and
(ii) attaches such other documentation as requested by the Holder.
(i)“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of New York are authorized or required by law or other government action to close.
(j)“Buy-In” shall have the meaning set forth in Section (4)(c)(ii).
(k)“Buy-In Price” shall have the meaning set forth in Section (4)(c)(ii).
(l)“Change of Control Transaction” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting power of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible securities of the Company shall not constitute a Change of Control Transaction for purposes hereof) or (b) the merger, consolidation or sale of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, in one or a series of related transactions. No transfer to a wholly-owned Subsidiary shall be deemed a Change of Control Transaction under this provision.
(m)“Closing Price” means the price per share in the last reported trade of the Common Stock on a Principal Market or on the exchange which the Common Stock is then listed as quoted by Bloomberg.
(n)“Commission” means the Securities and Exchange Commission.
(o)“Common Stock” means the shares of common stock, par value $0.0001, of the Company and stock of any other class into which such shares may hereafter be changed or reclassified.
(p)“Company Redemption” shall have the meaning assigned in Section (2)(a).
(q)“Company Redemption Notice” shall have the meaning assigned in Section (2)(a).
(r)“Conversion Notice” shall have the meaning set forth in Section (4)(c).
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(s)“Conversion Price” shall have the meaning set forth in Section (4)(a)(ii).
(t)“Convertible Securities” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for Common Stock.
(u)“Customer” refers to a third-party (other than the Company or any of its Subsidiaries or Affiliates) party to an EEQ Agreement, an EPC Agreement or an LTSA, in any such case, who is obligated to make payments to the Company and its Subsidiaries thereunder.
(v)“Domestic Projects” means Projects located in the United States of America.
(w)“EEQ Agreement” means the main/principal written agreement between the Company or any of the other EV Parties, on the one hand, for services under the EEQ Business to be rendered to the Customer thereunder, and all other related agreements and documents; each as amended, restated, supplemented or otherwise modified from time to time.
(x)“EEQ Business” means engineered equipment business line of the Company and the other EV Parties.
(y)“EPC Agreement” means the main/principal written agreement between the Company or any of the other EV Parties, on the one hand, for services under the EPC Business to be rendered to the Customer thereunder, and all other related agreements and documents; each as amended, restated, supplemented or otherwise modified from time to time.
(z)“EPC Business” means the business line of the Company and the other EV Parties whereby such Persons self-perform engineering, procurement, and construction activities.
(aa)“Equity Conditions” means that each of the following conditions is satisfied: (i) on each Trading Day during the three (3) consecutive Trading Days prior to the date of determination (the “Equity Conditions Measuring Period”), either (x) a registration statement covering the resale of the Underlying Stock has been declared effective and available for the resale of all applicable shares of Common Stock to be issued in connection with the event requiring determination or (y) all applicable shares of Common Stock to be issued in connection with the event requiring determination shall be eligible for sale pursuant to an exemption from the registration requirements of the Securities Act; (ii) on each day during the Equity Conditions Measuring Period, the Common Stock is designated for quotation on the Principal Market and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension by such exchange or market have been threatened or pending in writing by such exchange or market, unless such deficiency has been subsequently resolved; (iii) any applicable shares of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating Section (4)(d) hereof; and (iv) during the Equity Conditions Measuring Period, there shall not have occurred either (A) an Event of Default, (B) an Amortization Event, or (C) an event that with the passage of time or giving of notice would constitute an Event of Default or an Amortization Event.
(ab)“Exchange Act” means the Securities Exchange Act of 1934, as amended.
(ac)“Floor Price” means $1.19.
(ad)“Fundamental Transaction” means any of the following: (1) the Company effects any merger or consolidation of the Company with or into another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly
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owned Subsidiary of the Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property.
(ae)“Grantor” means any Person who signs a Security Document entered into pursuant to the Securities Purchase Agreement, this Debenture or any other Transaction Document and grants or purports to grant security interest in or lien on any of its assets in favor of the Buyers.
(af)“Installment Amount” means the total of the Installment Principal Amount set out in the Redemption Schedule, and all accrued and unpaid Interest outstanding as of the applicable Redemption Date.
(ag)“International Projects” means Projects located in a jurisdiction other than the United States of America.
(ah) “Investor Elected Mandatory Conversion Amount” shall have the meaning set forth in Section (2)(a)(i).
(ai)“LTSA” means a long-term services arrangement pursuant to which the Company provides services to a Customer.
(aj)“LTSA Business” means the business line of the Company and the other EV Parties whereby such Persons provide services pursuant to a LTSA.
(ak)“Mandatory Redemption Amount” means, as of the date of determination, an amount equal to the amount by which (i) the aggregate principal amount outstanding under this Debenture and the Other Debentures exceeds (ii) (A) the amount equal to fifty percent (50%) of the Borrowing Base Adjusted Amount most recently approved by the Holder as of such date of determination, if determined prior to the date that is ninety (90) days prior to the Maturity Date and (B) the amount equal to thirty-three percent (33%) of the Borrowing Base Adjusted Amount as of such date of determination, if determined on or after the date that is ninety (90) days prior to the Maturity Date; in either such case, determined on a pro rata basis for this Debenture and the Other Debentures, in each case, as of the applicable Mandatory Redemption Date.
(al) “Mandatory Redemption Event” means, as of any date of determination, (i) the aggregate principal amount outstanding under this Debenture and the Other Debentures as of such date of determination is greater than (ii) (A) fifty percent (50%) of the Borrowing Base Adjusted Amount as of such date of determination if determined prior to the date that is ninety (90) days prior to the Maturity Date, and (B) thirty-three percent (33%) of the Borrowing Base Adjusted Amount as of such date of determination, if determined on or after the date that is ninety (90) days prior to the Maturity Date.
(am)“Optional Redemption” shall have the meaning assigned in Section (2)(c).
(an)“Optional Redemption Amount” shall have the meaning assigned in Section (2)(c).
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(ao)“Optional Redemption Notice” shall have the meaning assigned in Section (2)(c).
(ap)“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(aq)“Other Debentures” means any other outstanding AR Convertible Debentures issued pursuant to the Securities Purchase Agreement and any other debentures, notes, or other instruments issued in exchange, replacement, or modification of the foregoing.
(ar)“Periodic Reports” shall mean all of the Company’s reports required to be filed by the Company with the Commission under applicable laws and regulations (including, without limitation, Regulation S-K), on Form 10-K and Form 10-Q, for so long as any amounts are outstanding under this Debenture or any Other Debenture; provided that all such Periodic Reports shall include, when filed, all information, financial statements, audit reports (when applicable) and other information required to be included in such Periodic Reports in compliance with all applicable laws and regulations.
(as)“Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.
(at)“Principal Market” means the New York Stock Exchange; provided however, that in the event the Common Stock is ever listed or traded on the Nasdaq Stock Market or any successor thereto, and such exchange is the principal trading market for the Common Stock in the United States, then the “Principal Market” shall mean Nasdaq Stock Market or such successor thereto.
(au)“Project(s)” means a project(s) under any of the EEQ Business, EPC Business or LTSA Business that is actively in progress, which such Project(s) have been identified by the Company to the Holder as of the Original Issuance Date and thereafter as of the date a Borrowing Base Certificate is delivered to the Holder in reasonable detail and to the satisfaction of the Holder.
(av)“Redemption Amount” shall have the meaning set forth in Section (2)(b).
(aw)“Redemption Date” means either (i) except in respect of any Mandatory Redemption Event, each date listed under the “Redemption Date” column in the Redemption Schedule and shall include the Maturity Date and (ii) for any Mandatory Redemption Event, the first Business Day immediately following the occurrence of such Mandatory Redemption Event.
(ax)“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ay)“Subsidiary” shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein as “Subsidiaries.”
(az)“Trading Day” means a day on which the shares of Common Stock are quoted or traded on a Principal Market on which the shares of Common Stock are then quoted or listed; provided, that in the event that the shares of Common Stock are not listed or quoted, then Trading Day shall mean a Business Day.
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(ba)“Underlying Shares” means the shares of Common Stock issuable upon conversion of this Debenture in accordance with the terms hereof.
(bb)“VWAP” means, for any Trading Day as of any date, the daily volume-weighted average price of the Common Stock for such Trading Day on the Principal Market during regular trading hours as reported by Bloomberg L.P.
(15)AMENDMENT AND RESTATEMENT. This Debenture amends and restates in its entirety, with effect as of the Issuance Date, the terms and provisions of the AR Convertible Debenture, dated May 18, 2026, between the Company and the Holder (the “Original AR Convertible Debenture”). To the extent that any rights, benefits or provisions in favor of the parties hereto existed in the Original AR Convertible Debenture and continue to exist in this Debenture, then such rights, benefits or provisions are reaffirmed and acknowledged to be and to continue to be effective from and after the Original Issuance Date. The parties hereto agree and acknowledge that any and all rights, remedies and obligations under the Original AR Convertible Debenture shall continue and survive the execution and delivery of this Debenture. All collateral and guaranties, as applicable, given for such Original AR Convertible Debenture shall secure or guarantee, as applicable, this Debenture. All amounts and (if applicable) interest periods outstanding under such Original AR Convertible Debenture shall be deemed automatically outstanding hereunder. It is the intention of the Company and the Holder that the execution and delivery of this Debenture does not effectuate a novation of the obligations and liabilities of the Company (or any other party to the Original AR Convertible Debenture) to the Holder under the Original AR Convertible Debenture, but merely serves as an amendment and restatement thereof, and supersedes and replaces the same. Upon the effectiveness of this Debenture, each reference to the Original AR Convertible Debenture in any other document, instrument or agreement shall mean and be a reference to this Debenture. Nothing contained herein, unless expressly herein stated to the contrary, is intended to amend, modify or otherwise affect any other instrument, document or agreement executed and/or delivered in connection with the Original AR Convertible Debenture.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has caused this Amended and Restated AR Convertible Debenture to be duly executed by a duly authorized officer as of the date set forth above.
COMPANY:
ENERGY VAULT HOLDINGS, INC.
By:
Name: Michael Beer
Title: Chief Financial Officer
Acknowledged and Received as of the Issuance Date:
HOLDER
YA II PN, LTD.
By: Yorkville Advisors Global, LP
By: Yorkville Advisors Global II, LLC
Its: General Partner
By:
Name: Matt Beckman
Title: Manager
EXHIBIT I
REDEMPTION SCHEDULE
EXHIBIT II(a)(i)
COMPANY REDEMPTION NOTICE
EXHIBIT II(a)(ii)
MANDATORY REDEMPTION NOTICE
EXHIBIT III
CONVERSION NOTICE
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EX-10.1
EX-10.1
Filename: exhibit101-nrgvxfirstamend.htm · Sequence: 3
Document
Exhibit 10.1
FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this “Amendment”), dated as of June 29, 2026, is between ENERGY VAULT HOLDINGS, INC., a company incorporated under the laws of the State of Delaware, with principal executive offices located at 4165 East Thousand Oaks Blvd., Suite 100, Westlake Village, CA, 91362 (the “Company”), and YA II PN, LTD., in its capacity as a “Buyer” under the Original SPA referred to below (the “Buyer”).
WITNESSETH
WHEREAS, the Company and the Buyer are parties to that certain Securities Purchase Agreement, dated as of May 18, 2026 (the “Original SPA”; and the Original SPA, as amended by this Amendment, the “SPA”); capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the SPA), with respect to the issuance of the AR Convertible Debenture, issued on May 18, 2026 in the original principal amount of $42,000,000, with Number NRGV-AR1 (the “Initial AR Convertible Debenture”);
WHEREAS, the Original SPA capped the aggregate principal amount of Convertible Debentures issued thereunder to $75,000,000 pursuant to Section 1(a) thereof;
WHEREAS, pursuant to Section 12 of the Original SPA, and subject to the terms and conditions set forth in this Amendment, the Company and the Buyer desire to amend the Original SPA to, among other things, permit the Company to issue and sell to the Buyer identified on the amended Schedule I attached hereto as Exhibit C, $38,000,000 of additional principal (the “Additional Principal Amount”), which shall be memorialized by an Amended and Restated AR Convertible Debenture in the form attached hereto as Exhibit A (the “Amended and Restated AR Convertible Debenture”); and
WHEREAS, contemporaneously with the execution and delivery of this Amendment, the Company is delivering an updated Irrevocable Transfer Agent Instructions (the “Updated Irrevocable Transfer Agent Instructions”) to its transfer agent in the form attached hereto as Exhibit B.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1.Incorporation of Recitals. The parties hereto acknowledge and agree that the recitals hereinabove set forth are true and correct in all respects and that the same are incorporated herein and made a part hereof.
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2.Acknowledgments and Amendments to SPA and Convertible Debentures.
(a)The Company and the Buyer each consent the purchase by the Buyer from the Company of the Additional Principal Amount pursuant to the Amended and Restated AR Convertible Debenture to be issued on the Effective Date (as defined below), which such Amended and Restated AR Convertible Debenture shall include all outstanding principal under the Initial AR Convertible Debenture (and accrued and unpaid interest thereon). The purchase price for such Additional Principal Amount shall be equal to 95% thereof (or $36,100,000). Following the issuance of the Amended and Restated AR Convertible Debenture any additional Convertible Debenture that may be issued under the SPA is subject to the mutual agreement between the Company and the Buyer. The Amended and Restated AR Convertible Debenture is, for all purposes under the SPA and the other Transaction Documents a Convertible Debenture and a Security.
(b)The Company acknowledges and agrees that, with respect to up to $42,000,000 of principal amount of the Initial AR Convertible Debenture issued and sold to the Buyer on May 18, 2026 (plus accrued and unpaid interest thereon, the “Initial Purchase Amount”), upon conversions of any portion of the Initial Purchase Amount into Common Shares in accordance with the Amended and Restated AR Convertible Debenture, the Buyer shall be entitled to tack its holding period for such Common Shares received upon conversion back to the date on which the Buyer paid the purchase price for the applicable portion of such Initial Purchase Amount for purposes of Rule 144.
(c)In connection with the bring-down of any representations and warranties in connection with this Amendment (including, for the avoidance of doubt, under Sections 3(i) and 5(c) of this Amendment), (i) the Disclosure Schedules shall refer to those Disclosure Schedules attached hereto as Exhibit F and shall be deemed a part hereof and qualify any representation or warranty otherwise made herein to the extent of such disclosure and (ii) SEC Documents shall refer to those that are available on the SEC’s website through the EDGAR system at least one (1) Business Day prior to the date of this Amendment (unless the context provides otherwise).
(d)Section 1(a) of the Original SPA is hereby amended by replacing the reference to “$75,000,000” with a reference to “$150,000,000”.
(e)Section 3(b) of the Original SPA is hereby amended by amending and restating the term “Security Documents” in its entirety as follows:
(b) “Security Documents” means, collectively, (i) a guaranty and security agreement, in form, scope and substance reasonably satisfactory to the
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Buyer(s) (a “GSA”) executed by the Company and each Guarantor, (ii) each other agreement, instrument or document entered into by the Company or any Guarantor to grant a security interest in the assets and properties (including all such agreements, instruments and documents entered into in jurisdictions other than the United States of America) of the Company or such Guarantor in favor of the Buyer(s) as herein provided, (iii) all filings (whether foreign or otherwise) made in connection with any of the foregoing to perfect such interests, and (iv) any other document pursuant to which a security interest or pledge (whether foreign or otherwise) is made in favor of the Buyer(s) to secure the obligations arising under the Transaction Documents; in each case, as amended, restated, supplemented, or otherwise modified from time to time.
(f)Section 3(o)(i) of the Original SPA is hereby amended and restated in its entirety as follows:
(i) Authorized and Outstanding Capital Stock. As of May 18, 2026, the authorized capital stock of the Company consists of (A) 500,000,000 shares of common stock, of which, 178,221,198 are issued and outstanding and (B) 5,000,000 shares of preferred stock, none of which are issued and outstanding. As of the date hereof, the Company has reserved 121,845,343 Common Shares for issuance to parties or Persons other than the Buyers. As of June 29, 2026, the authorized capital stock of the Company consists of (A) 500,000,000 shares of common stock, of which, 179,940,017 are issued and outstanding and (B) 5,000,000 shares of preferred stock, none of which are issued and outstanding. As of June 29, 2026, the Company has reserved 131,888,579 Common Shares for issuance to parties or Persons other than the Buyers.
(g)Section 4(e) of the Original SPA is hereby amended and restated in its entirety as follows:
(e) Upfront Payment and Fees. Prior to the date hereof, Company has made to YA II PN, Ltd., as the lead Buyer (“Yorkville”), an unallocated upfront payment of $125,000. Upon the presentment of customary invoices, the Company shall reimburse Yorkville for fees actually incurred by its outside legal counsel (including local counsel for foreign law matter related documentation) in connection with the negotiation, execution, and delivery of the Transaction Documents in an amount not to exceed $400,000 in the aggregate and the transactions contemplated thereby.
(h)Schedule I of the Original SPA (Schedule of Buyers) is hereby amended and restated in its entirety as set forth on Exhibit C to this Amendment.
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(i)Schedule II of the Original SPA (Post-Closing Obligations) is hereby amended and restated in its entirety as set forth on Exhibit D to this Amendment.
(j)Exhibit D of the Original SPA (Form of Borrowing Base Certificate) is hereby amended and restated to read in its entirety as set forth on Exhibit E to this Amendment.
3.Conditions Precedent to Effectiveness of this Amendment. The acknowledgments and amendments contained in Section 2 above are, notwithstanding Section 7 of the SPA, subject to, and contingent upon, each of the following conditions to the satisfaction of the Buyer (the date that each of the following conditions are satisfied, the “Effective Date”):
(a)The Buyer shall have received a duly executed counterpart of this Amendment signed by the Company and acknowledged by Energy Vault, Inc. (“Energy Vault”).
(b)The Buyer shall have received a duly executed Amended and Restated AR Convertible Debenture in the form attached hereto as Exhibit A.
(c)The Buyer shall have received a duly executed Updated Irrevocable Transfer Agent Instructions in the form attached hereto as Exhibit B.
(d)Buyer shall have received the opinion of counsel to the Company and the Guarantor, dated as of the Effective Date, in the form reasonably acceptable to Buyer.
(e)The Company shall have delivered to Buyer a customary officer’s certificate, duly executed by an authorized officer of the Company and Energy Vault, certifying and attaching copies of the certified charter, as well as any shareholder or operating agreements, of the Company and Energy Vault, resolutions of the board of directors (or such other applicable governing body) of the Company and Energy Vault approving the transactions under this Amendment and the other Transaction Documents (and said approvals shall not have been amended, rescinded or materially modified in any manner and shall be in full force and effect as of the Effective Date) and incumbency.
(f)The Company shall have delivered to Buyer a certificate evidencing the incorporation and good standing of the Company and Energy Vault as of a date within ten (10) days of the Effective Date.
(g)Buyer shall have received (A) all customary UCC, tax, pending litigation, judgment, bankruptcy and other diligence searches (and the foreign equivalent thereof for Company and any foreign Subsidiary), in each case, reasonably requested by such Buyer and (B)
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payoff letters and UCC-3 Amendment (termination statements)(or the foreign equivalent) requested by Buyer for debt or liens not permitted pursuant to the terms of the Transaction Documents.
(h)Buyer shall be satisfied that the Buyer has a perfected, first priority security interest and Lien in the Collateral (subject to the post-closing obligations set forth on Schedule II attached to the SPA (after giving effect to this Amendment)).
(i)Each and every representation and warranty of the Company and each Guarantor shall be true and correct in all material respects (other than representations and warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of each Effective Date as though originally 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 specific date) and the Company and such Guarantor shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions set forth in each Transaction Document required to be performed, satisfied or complied with by the Company or such Guarantor at or prior to the Effective Date.
(j)The Common Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been suspended, as of the Effective Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened, as of the Effective Date, either (I) in writing by the SEC or the Principal Market or (II) by receiving a notification from the Principal Market of falling below the minimum maintenance requirements of the Principal Market that is not subject to a cure period.
(k)No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.
(l)Since the date of the Company’s most recent Form 10-K filing (without amendment) being filed with the SEC in accordance with the rules and regulations of the SEC, no event or series of events shall have occurred that has resulted in or would reasonably be expected to result in a Material Adverse Effect or an Event of Default (as defined in the Convertible Debentures).
(m)Buyer shall have received a Closing Statement.
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(n)(i) From and after May 18, 2026 to the Effective Date, trading in the Common Shares shall not have been suspended by the SEC or the Principal Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and (ii) at any time from May 18, 2026 to the Effective Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on the Principal Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of Buyer, makes it impracticable or inadvisable to purchase the Securities on the Effective Date.
(o)The board of directors of the Company and each Guarantor has approved the transactions contemplated by the Transaction Documents; said approval has not been amended, rescinded or materially modified and remains in full force and effect as of the Effective Date, and a true, correct and complete copy of such resolutions duly adopted by the board of directors of the Company and each such Guarantor shall have been provided to the Buyer.
(p)The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions contemplated by this Amendment as such Buyer or its counsel may reasonably request.
(q)No default or Event of Default under the Transaction Documents shall have occurred and be continuing immediately prior to or immediately following the purchase and sale of the Amended and Restated AR Convertible Debenture; and there are no facts or circumstances that with the giving of time or notice, if such facts or circumstances continue uncured, could give rise to a default or Event of Default under the Transaction Documents.
(r)The Company shall have paid to the Buyer the Structuring Fee (referred to in Section 4 below) in immediately available funds.
(s)The Company shall have paid to the Buyer all reasonable and documented out-of-pocket costs and expenses of the Buyer as set forth in Section 4 below and Section 4(e) of the SPA.
(t)The Company shall have delivered to the Buyer a compliance certificate executed by an executive officer of the Company certifying that Company has complied with all
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of the conditions precedent set forth herein and which may be relied upon by the Buyer as evidence of satisfaction of such conditions without any obligation to independently verify.
4.Structuring Fee; Other Fees. Without limiting the obligation of the Company to reimburse the Buyer for reasonable and documented out-of-pocket costs and expenses incurred by the Buyer as specified in the SPA, the Company shall pay to the Buyer a non-refundable structuring fee in the amount of $1,250,000 (the “Structuring Fee”), which Structuring Fee shall be deemed fully earned as of the Effective Date. In addition, subject to Section 4(e) of the SPA (as amended hereby), the Company agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses of the Buyer in connection with the preparation, execution and delivery of this Amendment and the other agreements, instruments and documents contemplated hereby, including, without limitation, reasonable and documented attorneys’ fees as presented by the Buyer to the Company. It is acknowledged and agreed by the Company that any documentation related to the fees and expenses of counsel shall be limited to a customary one-page invoice identifying only such fees and expenses in aggregate.
5.Representations and Warranties of the Company and its Subsidiaries. The Company hereby represents and warrants to the Buyer that on and as of the date hereof and after giving effect to this Amendment:
(a)(i) the Company has the requisite corporate power and authority to enter and perform its obligations under this Amendment, the SPA (as amended hereby), the Amended and Restated AR Convertible Debenture and the other Transaction Documents; (ii) each of this Amendment, the Amended and Restated AR Convertible Debenture and the other Transaction Documents has been duly executed and delivered by the Company; and (iii) this Amendment, the Amended and Restated AR Convertible Debenture, the SPA (as amended hereby) and the other Transaction Documents constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms as of the date hereof, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditor’s rights and remedies;
(b)The issuance of the Amended and Restated AR Convertible Debenture by the Company, the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Amended and Restated AR Convertible Debenture have been duly authorized by the Company’s board of directors;
(c)The Company’s representations and warranties set forth in the SPA and in the other Transaction Documents are true, correct and complete in all material respects (other than representations and warranties qualified by materiality or Material Adverse Effect, which
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shall be true and correct in all respects) as of the date hereof (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date);
(d)no default or Event of Default under the Transaction Documents has occurred and is continuing or will occur following the execution of this Amendment;
(e)all liabilities and obligations of the Company under the SPA and the Company and the other Guarantors and Grantors under the other Transaction Documents are valid and enforceable and are not impaired or limited by the execution or effectiveness of this Amendment or the other Transaction Documents. No financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except filings evidencing Permitted Liens. The rights in the Collateral in favor of the Buyers securing payment of the Obligations (as defined in the GSA) pursuant to the Transaction Documents are hereby ratified and confirmed by the Company in all respects; and
(f)The Company acknowledges that the Buyer is specifically relying upon the representations, warranties, and agreements contained herein and that such representations, warranties and agreements constitute a material inducement to the Buyer in entering into this Amendment and the other Transaction Documents.
6.Affirmation of Obligations and Collateral Matters. Each of the Company and Energy Vault hereby affirms and confirms their respective obligations under the GSA as a Guarantor and a Grantor. Energy Vault hereby, jointly and severally with the other Guarantors under the GSA, absolutely, unconditionally, and irrevocably guarantees, as primary obligor and not merely as surety, the Debenture Obligations (which includes the obligations under the Amended and Restated AR Convertible Debenture). Each of the Company and Energy Vault, as collateral security for the payment and performance in full of all the Secured Obligations (including, for the avoidance of doubt the obligations under the Amended and Restated AR Convertible Debenture), hereby affirms and confirms its prior pledge to the Secured Parties (as defined in the GSA) and hereby pledges to the Secured Parties, and grants to the Secured Parties a Lien on and security interest in and to, all of its right, title and interest in, to and under the Pledged Collateral (as defined in the GSA) owned by it, wherever located, and whether now existing or hereafter arising or acquired from time to time.
7.Reference to SPA and Transaction Documents; No Waiver.
(a)References. Upon the effectiveness of this Amendment, each reference in the SPA to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall mean and be a reference to the SPA, as amended hereby. The term “Transaction Documents” as
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defined in Section 3(b) of the SPA shall include (in addition to the Transaction Documents described in the SPA) this Amendment and any other agreements, instruments or other documents executed in connection herewith.
(b)No Waiver. The Buyer’s failure, at any time or times hereafter, to require strict performance by the Company of any provision or term of the SPA, this Amendment, or the other Transaction Documents shall not waive, affect or diminish any right of the Buyer hereafter to demand strict compliance and performance herewith or therewith. Any suspension or waiver by the Buyer of a breach of this Amendment or any Event of Default under the SPA shall not, except as expressly set forth in a writing signed by the Buyer, suspend, waive or affect any breach of this Amendment or any Event of Default under the SPA, whether the same is prior or subsequent thereto and whether of the same or of a different kind or character. None of the undertakings, agreements, warranties, covenants, and representations of the Company contained in this Amendment, shall be deemed to have been suspended or waived by the Buyer unless such suspension or waiver is (i) in writing and signed by the Buyer and (ii) delivered to the Company. In no event shall the Buyer’s execution and delivery of this Amendment establish a course of dealing among the Buyer, the Company, or any other obligor, or in any other way obligate the Buyer to hereafter provide any consents, amendments, or waivers with respect to the SPA or other Transaction Documents. The terms and provisions of this Amendment shall be limited precisely as written and shall not be deemed (x) to be a consent to any waiver, amendment or modification of any other term or condition of the SPA or of any of the Transaction Documents (except as expressly provided herein); or (y) to prejudice any right or remedy which the Buyer may now have under or in connection with the SPA or any of the Transaction Documents. Neither this Amendment nor any uncertainty or ambiguity herein shall be construed or resolved against the Buyer, whether under any rule of construction or otherwise.
(c)Full Force and Effect. Except as expressly provided herein, the SPA and all other Transaction Documents shall remain in full force and effect against the Company and are hereby ratified and confirmed by the Company. This Amendment shall not be construed as a waiver or amendment of any other provision of the SPA or for any purpose except as expressly set forth herein. Notwithstanding the foregoing, in the event of a conflict between the provisions of this Amendment and the SPA, the terms of this Amendment shall supersede such provisions and shall control.
8.Severability; Amendments. Whenever possible, each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Amendment shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Amendment. The parties hereto have participated jointly in the negotiation and drafting of this
9
Amendment. In the event an ambiguity or question of intent or interpretation arises, this Amendment shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Amendment. This Amendment may be amended or modified only by mutual agreement of the parties evidenced in writing and signed by the party to be charged therewith.
9.Incorporation by Reference. Sections 9(a) (Governing Law), 9(b) (Jurisdiction; Venue; Service), 9(c) (Waiver of Jury Trial), 9(d) (Counterparts), 9(e) (Headings; Gender), 9(f) (Entire Agreement, Amendments), 9(g) (Notices), 9(h) (Successors and Assigns), 9(j) (No Strict Construction) of the SPA are incorporated herein, mutatis mutandis, as if fully set forth herein with references to this “Agreement” to be understood to refer to the SPA, as amended by this Amendment.
[Signatures appear on following pages]
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IN WITNESS WHEREOF, the Company and the Buyer have caused their respective signature page to this Amendment to be duly executed as of the date first written above.
COMPANY:
ENERGY VAULT HOLDINGS, INC.
By:/s/ Michael Beer
Name: Michael Beer
Title: Chief Financial Officer
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IN WITNESS WHEREOF, the Company and the Buyer have caused their respective signature page to this Amendment to be duly executed as of the date first written above.
BUYER:
YA II PN, LTD.
By: Yorkville Advisors Global, LP
Its: Investment Manager
By: Yorkville Advisors Global II, LLC
Its: General Partner
By:/s/ Matt Beckman
Name: Matt Beckman
Title: Member
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GUARANTOR ACKNOWLEDGMENT
The undersigned hereby acknowledges receiving a copy of the First Amendment to Securities Purchase Agreement to which this Guarantor Acknowledgement is attached, has reviewed such First Amendment, and understands and agrees to the terms thereof. The undersigned acknowledges and agrees that the undersigned has had the opportunity to review such First Amendment with counsel. The undersigned acknowledges and confirms its obligations under such First Amendment, including without limitation, Sections 7 and 9 thereof. The undesigned hereby represents and warrants that it has the requisite corporate power and authority to enter and perform its obligations under this Guarantor Acknowledgment and the other Transaction Documents; (ii) each of this Guarantor Acknowledgment and the other Transaction Documents has been duly executed and delivered by the undersigned; and (iii) this Guarantor Acknowledgment and the other Transaction Documents constitutes the legal, valid and binding obligation of the undersigned, enforceable against the undersigned in accordance with its respective terms as of the date hereof, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditor’s rights and remedies.
ENERGY VAULT, INC.
By: /s/ Michael Beer
Name: Michael Beer
Title: Chief Financial Officer
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EXHIBIT A
FORM OF AMENDED AND RESTATED AR CONVERTIBLE DEBENTURE
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EXHIBIT B
15
FORM OF UPDATED IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
16
EXHIBIT C
UPDATED SCHEDULE OF BUYERS
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EXHIBIT D
UPDATED SCHEDULE OF POST-CLOSING OBLIGATIONS
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EXHIBIT E
UPDATED BORROWING BASE CERTIFICATE
EXHIBIT F
DISCLOSURE SCHEDULES
EX-10.2
EX-10.2
Filename: exhibit102redacted-calisto.htm · Sequence: 4
Document
Exhibit 10.2
Execution Version
CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE OMITTED PORTIONS OF THIS DOCUMENT ARE INDICATED BY [***].
Consent, Waiver and Amendment No. 2 to Note Purchase Agreement and Waiver under the Depositary Agreement
This CONSENT, WAIVER AND AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT AND WAIVER UNDER THE DEPOSITARY AGREEMENT, dated as of June 26, 2026 (this “Agreement”), is among CALISTOGA RESILIENCY CENTER, LLC, a Delaware limited liability company (the “Company”); the Holders party hereto; and WILMINGTON TRUST, NATIONAL ASSOCIATION, in its capacities as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and depositary (in such capacity, together with its successors and assigns in such capacity, the “Depositary”).
R e c i t a l s
A.WHEREAS, the Company and the Purchasers are parties to that certain Note Purchase Agreement, dated as of April 4, 2025, as amended by Amendment No. 1 thereto dated August 4, 2025 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, including pursuant to the terms hereof, the “Note Purchase Agreement”), pursuant to which the Purchasers have purchased certain Notes issued by the Company;
B.WHEREAS, the Company, the Collateral Agent and the Depositary are parties to that certain Depositary Agreement, dated as of April 4, 2025, as amended by Amendment No. 1 thereto dated December 15, 2025 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Depositary Agreement”);
C.WHEREAS, Section 9.2 of the Note Purchase Agreement provides that the Company may optionally prepay all or any part of the Notes at 100% of the principal amount so prepaid, together with any accrued interest and the Make-Whole Amount determined for the prepayment date (the “Make-Whole Requirement”);
D.WHEREAS, in accordance with Section 9.2 of the Note Purchase Agreement, the Company hereby notifies the holders of the Notes that on or around July 1, 2026 (the “Prepayment Date”), the Company will make a voluntary prepayment of the principal amount of the Notes in an aggregate amount equal to $4,122,427.32 (the “Specified Prepayment”) in the amounts specified hereto on Annex I;
E.WHEREAS, in connection with the Specified Prepayment and pursuant to Section 18.1 of the Note Purchase Agreement, the Company has requested that the Holders (a) waive any applicable Make-Whole Amount then due and payable with respect to the Make-Whole Requirement in connection with such Specified Prepayment, and (b) waive the delivery of a certificate of a Senior Financial Officer specifying the calculation of the Make-Whole Amount as of the Prepayment Date, as required under Section 9.2 of the Note Purchase Agreement (such waivers, the “Make-Whole Waivers”);
F.WHEREAS, (a) pursuant to Section 18.1 of the Note Purchase Agreement, the Company has further requested that the Holders consent to decrease the amount of the Operating Reserve Requirement to $1,000,000 and (b) after giving effect to the Specified
Prepayment, the Excess Amount on deposit in the Debt Service Reserve Account would be $[***];
G. WHEREAS, in connection with the Specified Prepayment, the Company has requested that the Holders and the Depositary consent to (a) the release, withdrawal and transfer of $[***] from the Operating and Major Maintenance Reserve Account (the “O&M Excess Amount”) and $[***] from the Debt Service Reserve Account (the “DSRA Excess Amount” together with the O&M Excess Amount, collectively, the “Excess Reserve Amounts”) for application to the Specified Prepayment on the Prepayment Date pursuant to a Withdrawal Certificate delivered to the Depositary three (3) Business Days prior to the Prepayment Date and (b) waive the requirement under Section 3.03(e) of the Depositary Agreement that the DSRA Excess Amount be transferred to the Distribution Reserve Account, and (c) waive the requirement under Section 3.04(e) of the Depositary Agreement that the O&M Excess Amount be transferred to the Distribution Reserve Account (collectively, the “Depositary Waiver”);
H.WHEREAS, the Holders acknowledge (a) pursuant to Section 9.1 of the Note Purchase Agreement, in connection with the Specified Prepayment, the replacement of Annex II in its entirety with Schedule I attached hereto and (b) for purposes of the calculation of the Debt Service Coverage Ratio pursuant to Section 11.18 of the Note Purchase Agreement, the Debt Service shall be calculated after giving effect to the Specified Prepayment.
I.WHEREAS, Section 11.18 of the Note Purchase Agreement requires that, commencing with the first Calculation Date to occur following the first anniversary of COD, the Debt Service Coverage Ratio shall not be less than 1.00 to 1.00;
J.WHEREAS, pursuant to Section 18.1(b) of the Note Purchase Agreement, the Company has further requested that the Holders consent to an amendment of Section 11.18 of the Note Purchase Agreement such that the calculation of the Debt Service Coverage Ratio shall begin on November 30, 2026, the second Calculation Date after the first anniversary of COD.
K.NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Defined Terms. Each capitalized term which is defined in the Note Purchase Agreement, but which is not defined in this Agreement, shall have the meaning ascribed to such term in the Note Purchase Agreement. Unless otherwise indicated, all section, exhibit and schedule references in this Agreement refer to sections, exhibits or schedules of the Note Purchase Agreement.
Section 2.Consent and Waiver.
2.1As of the Effective Date, subject to the conditions precedent set forth in Section 6 and in reliance upon the representations, warranties and covenants of the Company contained in this Agreement, (a) the Holders hereby consent to the Make-Whole Waivers and (b) the Holders and Depositary hereby consent to the Depositary Waiver and (c) the Depositary hereby consents to the release, withdrawal and transfer of the Excess Reserve Amounts for application to the Specified Prepayment on or around the Prepayment Date pursuant to a Withdrawal Certificate delivered to the Depositary three (3) Business Days prior to the Prepayment Date.
Section 3.Amendments. As of the Effective Date, subject to the conditions precedent set forth in Section 6 and in reliance upon the representations, warranties and covenants of the Company contained in this Agreement, the Holders hereby consent to the following amendments to the Note Purchase Agreement:
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3.1Amortization Schedule. Annex II of the Note Purchase Agreement is hereby replaced in its entirety with Schedule I attached hereto.
3.2Debt Service Coverage Ratio. Section 11.18 of the Note Purchase Agreement is hereby deleted and replaced in its entirety as follows:
“Section 11.18 Debt Service Coverage Ratio. On each Calculation Date, commencing with the second Calculation Date to occur following the first anniversary of COD, the Debt Service Coverage Ratio shall not be less than 1.00 to 1.00.”
3.3Operating Reserve Requirement. The defined term “Operating Reserve Requirement” in Schedule A to the Note Purchase Agreement is hereby deleted and replaced in its entirety as follows:
““Operating Reserve Requirement” means $1,000,000.”
Section 4.Acknowledgements. The Holders hereby acknowledge that, for purposes of the calculation of the Debt Service Coverage Ratio pursuant to Section 11.18 of the Note Purchase Agreement, the Debt Service shall be calculated based on the Amortization Schedule in effect after giving effect to the Specified Prepayment, and shall exclude the Specified Prepayment, any Make-Whole Amount waived in connection with the Specified Prepayment.
Section 5.Waiver and Amendment.
5.1The consent, waivers and amendments set forth in Sections 2 and 3 of this Agreement shall be effective only in the specific instances described herein and nothing herein shall be construed to limit or bar any rights or remedies of the Secured Parties. For the avoidance of doubt and without limiting the generality of the foregoing, the parties agree that, other than as expressly contemplated in this Agreement, no change, amendment, waiver or consent with respect to the terms and provisions of any of the Financing Documents is intended or contemplated hereby (which terms and provisions remain unchanged and in full force and effect other than as expressly set forth herein).
Section 6.Conditions Precedent to Effective Date. The effectiveness of this Agreement is subject to the satisfaction of each of the following conditions precedent (the date upon which all such conditions are so satisfied is referred to herein as the “Effective Date”):
6.1The Collateral Agent shall have (i) duly executed this Agreement and (ii) received from each of the Company, the Depositary and the Holders counterparts of this Agreement duly executed on behalf of such Persons.
6.2All corporate and other proceedings in connection with the transactions contemplated by this Amendment and all documents and instruments incident to such transactions shall be satisfactory to the Holders and their counsel, and such Holders shall have received all such counterpart originals or certified or other copies of such documents as such Holders or such counsel may reasonably request.
6.3The Company shall have paid on or before the Effective Date (to the extent reflected in an invoice rendered to the Company at least one (1) Business Day prior to the Effective Date) the reasonable fees, charges and disbursements of Winston Taylor LLP, special counsel to the Holders.
Section 7.Representations and Warranties of the Company. The Company represents and warrants to the Collateral Agent and the Holders that, as of the date hereof, after giving effect to the effectiveness of this Agreement:
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7.1No Material Adverse Change shall have occurred and be continuing.
7.2The Company is a limited liability corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has the limited liability company power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and to perform the provisions hereof.
7.3This Agreement has been duly authorized by all necessary organizational action on the part of the Company, and this Agreement and the Note Purchase Agreement constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except, in each case, as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and (b) general equitable principles (whether enforceability is sought by proceedings in equity or at law).
7.4The execution, delivery and performance by the Company of this Agreement will not (a) contravene, result in a breach of, constitute a default under, or result in the creation of any Lien (other than the Liens created by the Financing Documents) in respect of any property of the Company under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter, regulations or by-laws, shareholders agreement or any other agreement or instrument to which the Company is bound or by which any of its properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company, or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company.
7.5No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the execution, delivery and performance of this Agreement, except (i) consents, authorizations, filings and notices which have been obtained or made and are in full force and effect, (ii) consents, authorizations, filings and notices required by securities, regulatory or other applicable Legal Requirements in connection with an exercise of remedies, and (iii) which, if not obtained or made, would not reasonably be expected to result in a Material Adverse Effect.
7.6No Default or Event of Default has occurred and is continuing or will result from the entry into by the Company of this Agreement.
7.7The representations and warranties set forth in the Note Purchase Agreement and the other Financing Documents are true and correct (i) in the case of the representations and warranties qualified as to materiality, in all respects and (ii) otherwise, in all material respects, in each case on and as of the date hereof, except, in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall be so true and correct on and as of such prior date.
Section 8.Miscellaneous.
8.1Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constate one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.
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8.2ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE PURCHASE AGREEMENT AND THE OTHER FINANCING DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
8.3GOVERNING LAW; WAIVER OF TRIAL BY JURY. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. SECTION 23.7 (WAIVER OF TRIAL BY JURY) OF THE NOTE PURCHASE AGREEMENT IS HEREBY INCORPORATED BY REFERENCE.
8.4Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the parties hereto shall enter into good-faith negotiations to replace the invalid, illegal or unenforceable provision.
8.5Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to the Note Purchase Agreement and their respective successors and assigns permitted thereby.
8.6Ratification; Agreement Unchanged. The Note Purchase Agreement as amended hereby is in all respects ratified and confirmed, and the terms, covenants and agreements thereof shall remain unchanged and in full force and effect except as otherwise amended hereby.
8.7Financing Document; Collateral Confirmation. The Company confirms and agrees that this Agreement shall be deemed a Financing Document for all purposes of the Note Purchase Agreement. The Company reaffirms and reconfirms the grant of a security interest to the Collateral Agent set forth in the applicable Security Documents to which it is a party and that such grant shall remain in full force and effect notwithstanding the amendment of the Note Purchase Agreement pursuant to the terms and conditions of this Amendment.
[Signatures begin next page.]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
COMPANY:
CALISTOGA RESILIENCY CENTER, LLC
By: /s/ Michael Beer
Name: Michael Beer
Title: Treasurer
[Signature Page to Consent, Waiver and Amendment No. 2 to Note Purchase Agreement]
COLLATERAL AGENT:
WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely in its capacity as Collateral Agent
By: /s/ Rebecca Ritter
Name: Rebecca Ritter
Title: Vice President
DEPOSITARY:
WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely in its capacity as Depositary
By: /s/ Rebecca Ritter
Name: Rebecca Ritter
Title: Vice President
[Signature Page to Consent, Waiver and Amendment No. 2 to Note Purchase Agreement]
HOLDERS:
CALISTOGA 2025 I BORROWER, LLC
By: /s/ Donald J. Puglisi
Name: Donald J. Puglisi
Title: Authorized Signatory
[Signature Page to Consent, Waiver and Amendment No. 2 to Note Purchase Agreement]
Schedule I
Amortization Schedule
Amortization Payments
Interest Payments
2026
8/31/2026
$0.00
$165,134.70
2027
2/28/2026
$435,680.40
$487,282.80
2027
8/31/2027
$98,931.50
$474,652.70
2028
2/29/2028
$488,971.20
$464,804.60
2028
8/31/2028
$178,736.60
$446,650.80
2029
2/28/2029
$555,184.20
$430,955.00
2029
8/31/2029
$254,879.90
$411,694.00
2030
2/28/2030
$616,994.90
$393,004.00
2030
8/31/2030
$333,911.10
$370,166.50
2031
2/28/2031
$685,969.40
$348,454.70
2031
8/31/2031
$469,174.50
$321,589.50
2032
2/29/2032
$774,206.10
$295,972.20
Maturity -> 2032
4/4/2032
$5,508,426.10
$51,613.20
EX-10.3
EX-10.3
Filename: exhibit103redacted-crosstr.htm · Sequence: 5
Document
Exhibit 10.3
Execution Version
CERTAIN INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE OMITTED PORTIONS OF THIS DOCUMENT ARE INDICATED BY [***].
Waiver, Consent and Amendment No. 1 to Credit Agreement
This WAIVER, CONSENT AND AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of June 29, 2026 (this “Agreement”), is by and between CROSS TRAILS ENERGY STORAGE PROJECT, LLC, a Delaware limited liability company (the “Borrower”) and the Lenders party hereto constituting the Majority Lenders (the “Majority Lenders”).
R e c i t a l s
A.WHEREAS, the Borrower, the Agents and the Lenders are parties to that certain Credit Agreement, dated as of July 23, 2025 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time pursuant to the terms hereof, the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.
B.WHEREAS, pursuant to Section 6.17 of the Credit Agreement, the Borrower is required to maintain (i) a Historical Debt Service Coverage Ratio of at least 1.10:1.00 and (ii) a Pro Forma Debt Service Coverage Ratio of at least 1.10:1.00, in each case, measured as of the end of each fiscal quarter.
C.WHEREAS, pursuant to Section 7.01(b)(i) of the Credit Agreement, the failure by the Borrower to comply with Section 6.17 of the Credit Agreement constitutes an Event of Default;
D.WHEREAS, at the end of the fiscal quarter ended on March 31, 2026, the Borrower was unable to maintain the required Historical Debt Service Coverage Ratio and Pro Forma Debt Service Coverage Ratio, and (ii) as of the fiscal quarter ending June 30, 2026, without giving effect to the equity contribution specified below, the Borrower would be unable to maintain the required Historical Debt Service Coverage Ratio and Pro Forma Debt Service Coverage Ratio (the “Specified Default”);
E.WHEREAS, the Borrower now requests that the Lenders waive any Default or Event of Default arising in connection with or as a result of the Specified Default (the “Requested Waiver”) and permit the Borrower (i) to receive certain cash equity contributions in an aggregate amount of $[***] from the Sponsor which will allow the Borrower to comply with the Debt Service Coverage Ratio for the fiscal quarters ending March 31, 2026 and June 30, 2026 (the “Historical Cure Amounts”) and an historical revenue credit in respect of insurance proceeds reasonably expected to be received by the Borrower during the first fiscal quarter of 2026 in an amount of $[***] (the “Historical Revenue Credit”) and (ii) to apply the Historical Cure Amounts and the Historical Revenue Credit to cure the Specified Default as further set forth below.
F.WHEREAS, the Borrower and the Lenders desire to amend the Credit Agreement to provide for an equity cure right for the Borrower; and
G.WHEREAS, pursuant to Section 9.03 of the Credit Agreement, the consent of the Majority Lenders is required for any amendments or modifications of the Credit Agreement;
H.NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1.Defined Terms. Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Agreement, shall have the meaning ascribed to such term in the Credit Agreement. Unless otherwise indicated, all section, exhibit and schedule references in this Agreement refer to sections, exhibits or schedules of the Credit Agreement.
Section 2.Consents and Waiver.
As of the Effective Date, subject to the conditions precedent set forth in Section 5 and in reliance upon the representations, warranties and covenants of the Borrower contained in this Agreement, the undersigned Lenders hereby (a) grant the Requested Waiver and (b) consent to the Borrower’s application of the Historical Cure Amounts and Historical Revenue Credit within ten (10) Business Days after the Effective Date hereof to cure the Specified Default.
Section 3.Amendment.
3.1As of the Effective Date, subject to the conditions precedent set forth in Section 5 and in reliance upon the representations, warranties and covenants of the Borrower contained in this Agreement, the undersigned Lenders hereby consent to add the following new Section 7.06 to the Credit Agreement:
(a)“7.06 Cure Right.
(b)Notwithstanding anything to the contrary contained in Section 7.01, a failure of the Borrower to comply with the requirements of the financial covenants set forth in Section 6.17 (each, a “Financial Covenant”) shall not constitute an Event of Default hereunder if at any time on or prior to the tenth (10th) Business Day after the date on which the financial statements of the Borrower referred to in Sections 5.01(a) or 5.01(b) are required to be delivered with respect to the applicable fiscal quarter (the last day of such period being the “Anticipated Cure Deadline”), the Borrower shall have received cash contributions from the Pledgor or any direct or indirect owner of the Pledgor (the “Cure Right”), the proceeds of which shall not exceed the amount necessary to cure the Financial Covenant breach and shall be applied in accordance with the Accounts Agreement to increase Net Cash Flow and ensure compliance with any such Financial Covenant.
(c)Upon receipt by the Borrower of the cash proceeds pursuant to the exercise of the Cure Right (the “Cure Amount”), such Financial Covenant shall be recalculated, giving effect to a pro forma increase in the Net Cash Flow for such fiscal quarter and the applicable subsequent periods that include such fiscal quarter in an amount equal to such Cure Amount; provided that (i) such pro forma increase shall be made solely for the purpose of determining the existence of a Default or Event of Default under such Financial Covenant with respect to any applicable period that includes such fiscal quarter and not for any other purposes under any Loan Document, (ii) there shall be no reduction in Indebtedness in connection with any Cure Amount contributed in order to comply with such Financial Covenant and no Cure Amount will reduce Indebtedness in the calculations of such Financial Covenant for such fiscal quarter or any subsequent fiscal quarter and (iii) the Cure Amount shall not be taken into account when assessing whether the Borrower has satisfied the Distribution Conditions.
(d)If, after the exercise of any Cure Right and the recalculations pursuant to clause (b) of this Section, the Borrower shall be in compliance with the requirements of such Financial Covenant as of the end of such fiscal quarter, the Borrower shall be deemed to have been in compliance with such Financial Covenant as of the relevant date
Page 2
of determination with the same effect as if there had been no failure to comply with such Financial Covenant on such date, and the applicable Default or Event of Default shall be deemed to have never occurred.
(e)The Borrower shall have the right to exercise the Cure Right four (4) times during the term of this Agreement and once in consecutive fiscal quarter periods; provided that the cure of the Specified Default effected through the application of the Historical Cure Amounts and the Historical Revenue Credit as set forth in the Waiver, Consent and Amendment No 1 to the Credit Agreement, dated as of June 29, 2026, shall not count toward, and shall be in addition to, such four (4) permitted exercises of the Cure Right. The Borrower shall not be allowed to use the Cure Right for the fiscal quarter ending September 30, 2026.
(f)Upon receipt by the Administrative Agent of written notice, on or prior to the Anticipated Cure Deadline, that the Borrower intends to exercise the Cure Right in respect of any failure to comply with a Financial Covenant, neither the Administrative Agent nor the Lenders shall be permitted to accelerate all or any portion of the Loans, charge interest at the Default Rate or exercise remedies against the Collateral or any other rights and remedies under any of the Loan Documents that are available during the continuance of an Event of Default on the basis of a failure to comply with the requirements of such Financial Covenant, unless and until such failure is not cured pursuant to the exercise of the Cure Right on or prior to the Anticipated Cure Deadline; provided, that nothing contained herein shall prevent or prohibit the Administrative Agent and the Lenders from exercising any and all rights as a result of any other Event of Default.”
Section 4.Limited Effect.
The consents and waiver set forth in Section 2 of this Agreement and the amendment set forth in Section 3 of this Agreement shall be effective only in the specific instances described herein and nothing herein shall be construed to limit or bar any rights or remedies of the Secured Parties. For the avoidance of doubt and without limiting the generality of the foregoing, the parties agree that, other than as expressly contemplated in this Agreement, no change, amendment, waiver or consent with respect to the terms and provisions of any of the Loan Documents is intended or contemplated hereby (which terms and provisions remain unchanged and in full force and effect other than as expressly set forth herein).
Section 5.Conditions Precedent to Effective Date. The effectiveness of this Agreement is subject to the satisfaction of each of the following conditions precedent (the date upon which all such conditions are so satisfied is referred to herein as the “Effective Date”):
5.1Each of the Borrower and the Majority Lenders shall have duly executed this Agreement.
Section 6.Representations and Warranties. The Borrower represents and warrants to the Majority Lenders that, as of the Effective Date, after giving effect to the transactions contemplated herein:
6.1This Agreement and the Credit Agreement constitute legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other or similar laws affecting the enforcement of creditors’ rights generally and subject to general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).
6.2Neither the execution or delivery of this Agreement by the Borrower, nor the performance by the Borrower of this Agreement and the Credit Agreement or compliance with
Page 3
the terms and provisions thereof and the other transactions contemplated therein, will (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien (other than the creation of any Liens pursuant to the Loan Documents) in respect of any Property of the Borrower under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, limited liability company agreement, or any other agreement or instrument to which the Borrower is bound or by which the Borrower or any of its properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions, or provisions of any order, judgment, decree, or ruling of any court, arbitrator, or Governmental Authority applicable to the Borrower, or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Borrower.
6.3The representations and warranties set forth in the Credit Agreement and the other Loan Documents are true and correct (i) in the case of the representations and warranties qualified as to materiality, in all respects and (ii) otherwise, in all material respects, in each case on and as of the date hereof, except, in the case of any such representation and warranty that expressly relates to a prior date, in which case such representation and warranty shall be so true and correct on and as of such prior date.
Section 7.Conditions Subsequent.
7.1The Borrower shall have paid within three (3) Business Days following the Effective Date (to the extent reflected in an invoice rendered to the Borrower on or prior to the Effective Date) the reasonable fees, charges and disbursements of Winston Taylor LLP, special counsel to the Lenders.
7.2To the extent that the ERCOT West merchant pricing is available, the Borrower agrees to prepare and deliver to each Lender no later than July 31, 2026 (or, if not received from Ascend Analytics by such date, within five (5) Business Days following the Borrower’s receipt thereof from Ascend Analytics) an updated project model containing refreshed ERCOT West merchant pricing. In the event such model does not support the current debt sizing under the original underwriting debt service coverage ratio thresholds ([***]) the parties may agree to enter into an agreement whereby the amount of the Borrower’s Indebtedness will be resized to take into account such updated model.
Section 8.Miscellaneous.
8.1Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement in electronic (i.e., “PDF” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.
8.2ENTIRE AGREEMENT. THIS AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
8.3GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICTS OF LAW PROVISIONS. SECTIONS 9.22 (WAIVER OF JURY TRIAL) AND 9.15 (GOVERNING LAW) OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE.
Page 4
8.4Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the parties hereto shall enter into good-faith negotiations to replace the invalid, illegal or unenforceable provision.
8.5Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties to the Credit Agreement and their respective successors and assigns permitted thereby.
8.6Loan Document. This Agreement is a “Loan Document” as defined and described in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to Loan Documents shall apply hereto.
8.7Electronic Signatures. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, 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, or any other similar state laws based on the Uniform Electronic Transaction Act.
[Signatures begin next page.]
Page 5
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
CROSS TRAILS ENERGY STORAGE PROJECT, LLC
By: /s/ Michael Beer
Name: Michael Beer
Title: Chief Financial Officer
[Signature Page to Amendment No. 1 to Credit Agreement]
LENDERS:
EAGLE POINT ENHANCED INCOME FUND LP
By: Eagle Point Credit Management, LLC, its advisor
By: /s/ Taylor Pine
Name: Taylor Pine
Title: Principal, Director of Operations
EAGLE POINT ENHANCED INCOME TRUST
By: Eagle Point Enhanced Income Management, LLC, its advisor
By: /s/ Taylor Pine
Name: Taylor Pine
Title: Authorized Person
[Signature Page to Amendment No. 1 to Credit Agreement]
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