Standstill Agreement dated November 9, 2023
STANDSTILL AGREEMENT
This STANDSTILL AGREEMENT (this “Agreement”) is entered into as of November 9, 2023 (the “Standstill Effective Date”), by and among 5E Advanced Materials, Inc., a Delaware corporation (the “Issuer”), BEP Special Situations IV LLC (“Bluescape”), Alter Domus (US) LLC (“Collateral Agent”), Ascend Global Investment Fund SPC – Strategic SP (“Ascend”), and Mayfair Ventures Pte Ltd (“Mayfair”) in connection with that certain Note Purchase Agreement dated as of August 11, 2022, among the Issuer, certain subsidiaries of the Issuer as guarantors, Bluescape as Purchaser, and the Collateral Agent (as amended, modified and supplemented from time to time, the “Note Purchase Agreement”). The Issuer, Bluescape, the Collateral Agent, Ascend and Mayfair collectively with their respective successors and assigns, are collectively referred to herein as the “Parties”, and each individually, collectively with their respective successors and assigns, a “Party”.
WHEREAS, the Issuer, Bluescape, and Ascend are working to document a recapitalization transaction contemplated among Issuer, Bluescape, and Ascend (the “Transaction”).
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Agreement, terms defined in the Note Purchase Agreement are used herein as defined therein. For purposes of this Agreement, the following terms shall have the following meanings:
“Standstill Termination Date” means the earliest to occur of (a) December 1, 2023, (b) the initiation or other exercise of any remedy by any creditor (other than any Purchaser or the Collateral Agent) holding Indebtedness of the Issuer or any guarantor in an amount greater than US$750,000.00, and (c) the date on which Issuer begins an Insolvency Proceeding, or an Insolvency Proceeding is begun against Issuer (other than by any Purchaser or the Collateral Agent).
Section 2. Standstill. Until the occurrence of the Standstill Termination Date, (i) Issuer, Bluescape, and the Collateral Agent hereby covenant and agree that any Purchaser and the Collateral Agent shall not exercise their rights, remedies, powers, privileges and defenses under the Note Documents with respect to the occurrence of any Default or Event of Default (other than with respect to the charging of any default interest, as may be applicable, in accordance with the terms of the Note Purchase Agreement), nor shall any Purchaser direct the Collateral Agent to do the same, and (ii) each Party hereby covenants and agrees that it shall forbear from instituting or pursuing as against any other Party any suit or proceeding in any court, or taking any other formal action, or sending any legal notice, concerning, or in connection with, the Note Documents or matters arising therefrom or related thereto, and the Parties further agree that any such suit or proceeding or formal action or legal notice shall be null and void and without force or effect.
Section 3. Conditions Precedent. The effectiveness of this Agreement and the obligations of Parties hereunder are subject to the satisfaction of the following conditions:
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of authority shall be acceptable to Bluescape in its sole discretion. At all times during the Standstill Period and thereafter until Bluescape in its sole discretion agrees that the Chief Restructuring Officer role is no longer needed, the Issuer shall maintain the appointment of the Chief Restructuring Officer as provided for in the immediately preceding sentence. If the Chief Restructuring Officer resigns for any reason, Issuer shall appoint a replacement Chief Restructuring Officer acceptable to Bluescape, in its sole discretion, within five (5) Business Days.
Section 4. No Waiver; Reservation of Rights.
Section 5. Representations and Warranties. Each Party hereto represents and warrants to each other Party hereto that it has the requisite power and authority to enter into this Agreement and to undertake its respective obligations contemplated hereby. The Issuer hereby represents and warrants to the other Parties party hereto that its Board of Directors has approved moving forward to document the Transaction.
Section 6. Amendments. No amendment, modification, termination or waiver of any provision of this Agreement shall in any event be effective without the written concurrence of each Party hereto (which may be provided by e-mail).
Section 7. Miscellaneous. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. Delivery of an executed counterpart of a signature page to this Agreement by electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement and any agreements referred to herein constitute the entire contract among the parties hereto relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This
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Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Section 8. Governing Law. This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, without application of any choice of law provisions that would require the application of the law of another jurisdiction.
Section 9. Jurisdiction; etc.
Section 10. Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES IN CONNECTION HEREWITH. EACH PARTY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF THIS AGREEMENT) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY ENTERING INTO THIS AGREEMENT.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.
| PARTIES: |
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| 5E ADVANCED MATERIALS, INC., |
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| By: /s/ Paul Weibel____________________________ |
| Title: Chief Financial Officer |
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| BEP SPECIAL SITUATIONS IV LLC |
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| By: /s/ Jonathan Siegler_________________________ |
| Title: Managing Director |
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| ALTER DOMUS (US) LLC |
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| By: /s/ Pinju Chiu______________________________ |
| Title: Associate Counsel |
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| ASCEND GLOBAL INVESTMENT FUND SPC - STRATEGIC SP |
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| By: /s/ Mulyadi Tjandra_________________________ |
| Title: Director |
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| MAYFAIR VENTURES PTE LTD. |
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| By: /s/ Chow Woei Horng_______________________ |
| Title: Director |
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Signature Page to Standstill Agreement