Filing Details

FF Top and FF Global agreed to cause all actions in the Court of Chancery of the State of Delaware, or any other forum, filed by FF Top, FF Global and/or any of their respective controlled affiliates as of the effective date of the Heads of Agreement, naming Issuer or any of its directors or officers, to be dismissed without prejudice no later than September 27, 2022;

Effective as of September 23, 2022, Issuer (a) increased the size of the Board from nine to ten, (b) appointed Mr. Adam He to fill the vacancy resulting from such increase in the size of the Board until the 2022 annual general meeting of stockholders of Issuer (the “2022 AGM”), (c) appointed Mr. He to the Audit Committee and the Nominating and Corporate Governance Committee of the Board and (d) agreed to not remove Mr. He from either committee prior to the 2022 AGM;

Effective as of September 23, 2022, Mr. Jordan Vogel, as the Lead Independent Director of Issuer, resigned as a member of the Nominating and Corporate Governance Committee of the Board and agreed to not thereafter to seek or accept reappointment thereto; and

Issuer, FF Global and FF Top agreed to the following matters, and have further agreed to work expeditiously, cooperatively and in good faith to draft, negotiate, execute and deliver definitive documentation, including an amendment to the Shareholder Agreement, by no later than September 30, 2022 (or such later date as may be agreed by the parties in writing), with the Heads of Agreement constituting the binding agreement of the parties with respect to such matters unless and until such further definitive documentation is entered into:

the resignation of Issuer’s executive chairperson, Ms. Susan Swenson, from all non-director positions at Issuer and all Board leadership and committee positions, upon Issuer receiving $13.5 million in funding that is immediately available for Issuer’s general use.  It was also agreed that Ms. Swenson would not thereafter seek or accept new non-director positions at Issuer;

the reinstitution of the former FF Transformation Committee, to be comprised of Issuer’s Global CEO, Founder/Chief Product and User Ecosystem Officer, Chief Financial Officer and General Counsel and other senior leadership team members invited by members of the FF Transformation Committee from time to time, with an FF Top designee being given committee observer status subject to certain customary non-disclosure and confidentiality agreements;

Subject to Issuer having entered into definitive agreements providing for at least $85 million of additional or (in certain circumstances, accelerated) financing commitments in the aggregate and having received funding of at least $35 million in connection therewith (the “Implementation Condition”):

Issuer will call, convene, hold and complete the 2022 AGM on the earliest date permitted under Delaware law and applicable Nasdaq and SEC requirements;

the size of the Board will be reduced to seven members effective with the election of directors at the 2022 AGM;

the following individuals will be nominated for election to the Board and included on the Board’s recommended slate at the 2022 AGM: (a) Carsten Breitfeld, (b) three directors selected by FF Top, at least one of whom will be an independent director, and (c) three independent directors selected by a committee, consisting of a designee from the Nominating and Corporate Governance Committee of the Board reasonably acceptable to FF Top, the Global CEO of Issuer and a person designated by FF Top reasonably acceptable to Issuer (the “Selection Committee”), from a pool of candidates recruited with the assistance of an executive search firm;

no re-nomination of existing directors of Issuer (other than Mr. Breitfeld and Mr. He) at the 2022 AGM, without the consent of the Selection Committee;

FF Top’s right to maintain three FF Top-nominated directors on the Board through Issuer’s 2026 annual general meeting of stockholders, (subject to certain conditions) as long as FF Top maintains a Shareholder Share Percentage (as defined in the Shareholder Agreement) of at least five percent (5%), and thereafter the right to nominate directors to the Board based on the formula in the Shareholder Agreement;

the resignation of Ms. Susan Swenson and Mr. Brian Krolicki from the Board.  It was also agreed that (i) Ms. Swenson and Mr. Krolicki would not thereafter seek or accept re-appointment, re-nomination or re-election to the Board and (ii) that following their resignations from the Board, their seats would be left empty until the 2022 AGM (which would result in Issuer having an eight person board until the 2022 AGM).

the issuance, in the aggregate, of more than 19.999% of the number of shares of outstanding Common Stock (under Nasdaq Rule 5635(d)) as a result of certain issuances of shares pursuant to that certain Securities Purchase Agreement, dated as of August 14, 2022 and as amended on September 23, 2022, by and among Issuer, its subsidiaries party thereto, the Purchasers and the Agent (the “SPA”) as follows:

the issuance of up to (x) $57 million in principal amount of senior secured Tranche A convertible notes at a conversion price of not below $1.05 per share of Class A Common Stock for $27 million, and the remainder ($30 million) at a conversion price of not below $2.69 per share of Class A Common Stock, (y) $57 million in principal amount of senior secured Tranche B convertible notes at a conversion price of not below $1.05 per share of Class A Common Stock for $27 million, and the remainder ($30 million) at a conversion price of not below $2.69 per share of Class A Common Stock, and (z) 26,822,724 shares of Class A Common Stock upon the exercise of associated warrants, in each case, pursuant to the SPA and subject to the full-ratchet anti-dilution and most favored nation protections therein;

the issuance of up to 73,675,656 shares of Class A Common Stock upon the exercise of all previously issued convertible notes and warrants of Issuer; and

the issuance of up to $60 million in principal amount of senior secured convertible notes pursuant to the Existing SPA and the joinder thereto by Senyun International Ltd. and/or its affiliates; and

an increase to the number of authorized shares of Common Stock to 900 million.