Supplemental Agreement, dated August 28, 2024, by and between Canoo Inc. and YA II PN, Ltd

Exhibit 10.1

SUPPLEMENTAL AGREEMENT

This Supplemental Agreement (this “Agreement”), dated as of August 28, 2024, is entered into by and between YA II PN, LTD., a Cayman Islands exempt limited company (the “Investor”), CANOO INC., a corporation organized and existing under the laws of the State of Delaware (the “Company”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the July Prepaid Advance Agreement (as defined below).

BACKGROUND

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 the Investor hereby agree as follows:

1.             Second Prepaid Advance Amount

1.1.            The Company hereby requests, and the Investor hereby agrees to fund, a second Prepaid Advance in the amount of $25,158,219.18 (the “Second Prepaid Advance”). The Second Prepaid Advance shall be governed by the terms and conditions of the July Prepaid Advance Agreement, except as expressly set forth in this Agreement. Solely with respect to the Second Prepaid Advance, the parties hereby agree that (i) the Purchase Price shall mean the lower of (a) $1.7554 per share (i.e., a price per share equal to 120% of the VWAP on the Trading Day immediately prior to the Pre-Advance Date of the Second Prepaid Advance), or (b) 95% of the lowest daily VWAP during five Trading Days immediately preceding each Purchase Notice Date, but not lower than the Floor Price and (ii) Section 2.01 (solely with respect to the Maximum Advance Amount) of the July Prepaid Advance Agreement shall not apply in respect of the Second Prepaid Advance.

1.2            Additional Agreements.

(a)            For the avoidance of doubt, any failure by the Company to observe or perform any material covenant, agreement or warranty contained in this Agreement or any other agreement between the parties hereof shall be an Event of Default under the July Prepaid Advance Agreement.

(b)            The Company shall first use the necessary portion of the proceeds from the Second Prepaid Advance to repay the Outstanding June PPA Amount. In connection with such repayment, the Investor waives (i) the Redemption Premium (as defined in the June PPA) on the Outstanding June PPA Amount and (ii) any prior notice period required, in each case, pursuant to Section 2.03(d) of the June PPA. Such proceeds shall not be transferred to the Company by the Investor in respect of the Second Prepaid Advance and shall be offset against the Outstanding June PPA Amount. Following such offset, the Outstanding June PPA Amount shall be fully retired and no amounts shall be due under the June PPA.

(c)            Pursuant to Section 2.02 of the July Prepaid Advance Agreement, in connection with the Second Prepaid Advance, the Company shall issue to the Investor a warrant to purchase 2,848,354 shares of Common Shares each at an exercise price of $1.7554 per share, exercisable beginning on February 28, 2025, and with an expiration date of August 28, 2029.

(d)            The Company shall call and hold an annual meeting of its shareholders on or before November 13, 2024, and shall obtain board of director approval to file any proxy statement for such meeting on or before September 9, 2024, for the purposes (among others) of obtaining the consent of the shareholders of the Company (i) in accordance with Nasdaq Listing Rule 5635(d), for the issuance of all shares of its Common Shares that could be issued pursuant to the July Prepaid Advance Agreement, including in excess of the Exchange Cap and (ii) the reduction of the Floor Price in respect of the July Prepaid Advance Agreement and the 2022 PPA (as “Floor Price” is defined therein) to an amount not to exceed 20% of the lower of (i) $1.7554 and (ii) the Nasdaq Official Closing Price on the Trading Day immediately preceding that date the proxy statement for such meeting is mailed (collectively, the matters set forth in the preceding clauses (i) and (ii), the “Proposals”). The Company’s board of directors shall recommend that the Company’s shareholders vote in favor of the Proposals, and the Company shall solicit proxies from its shareholders in connection therewith and management-appointed proxyholders shall vote their proxies in favor of the Proposals. The Company shall file the preliminary proxy relating to such proposal as soon as practicable following receipt of the aforementioned board approval and in no event later than September 11, 2024.

(e)            If at any time following the date hereof and prior to the repayment of all amounts due under the July Prepaid Advance Agreement and the 2022 PPA (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 Shares available under the Exchange Cap (to the extent the Exchange Cap remains applicable at any time of determination) or (iii) any of the Common Shares to be issued under either the July Prepaid Advance Agreement or the 2022 PPA are not eligible to be sold pursuant to a Registration Statement for a period of ten (10) consecutive Trading Days (each of the events set forth in the foregoing clauses (i), (ii) and (iii), a “Trigger Event”), the Company shall immediately begin drawing on its “at-the-market” facility and making minimum payments equal to $3,000,000 per week and $15,000,000 per month until all amounts owed under the July Prepaid Advance Agreement and the 2022 PPA have been repaid in full.

2.             Representations, Warranties and Covenants.

2.1           Representations and Warranties. Each party represents and warrants to the other as of the date of this Agreement that:

2.2           The Company represents and warrants that as of August 27, 2024, the authorized capital of the Company consists of 2,010,000,000 shares of capital stock, of which 2,000,000,000 shares are designated Common Shares, and 10,000,000 shares are preferred stock. As of the date hereof, the Company had 77,976,863 shares of Common Shares outstanding and 61,500 shares of preferred stock outstanding.

2.3           Cleansing Disclosures. As soon as possible (and prior to the open of business on August 29, 2024) the Company shall file with the SEC a report on Form 8-K or such other appropriate form as determined by counsel to the Company, relating to the transactions contemplated by this Agreement disclosing all information relating to the transaction contemplated hereby required to be disclosed therein, disclosing all information relating to the closing of the Second Prepaid Advance required to be disclosed therein (collectively, the “Cleansing Disclosure”). From and after the issuance of the Cleansing Disclosure, the Company represents to the Investor that it shall have publicly disclosed all material, non-public information delivered to the Investor by the Company in connection with the transactions contemplated by this Agreement and the July Prepaid Advance Agreement. The Company promptly shall prepare and file with the SEC a preliminary Prospectus Supplement pursuant to Rule 424(b) of the Securities Act and an updated Plan of Distribution, necessary to register the transactions contemplated herein, including, without limitation, all shares of Common Shares issuable pursuant to the Second Prepaid Advance, and any other filings, reports, supplements, or amendments that may be required to keep the Registration Statement and related Prospectus Supplements used in connection with such Registration Statement updated and effective, including, without limitation, the continued use of the Prospectus in connection with the Second Prepaid Advance.

2.5           The Company shall at all times reserve 110,000,000 shares of Common Stock for issuance to the Investor in connection with the July Prepaid Advance Agreement.

3.             Counterparts and delivery. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.

4.             Choice of Law/Jurisdiction. This Agreement, and any and all claims, proceedings or causes of action relating to this Agreement or arising from this Agreement or the transactions contemplated herein, including, without limitation, tort claims, statutory claims and contract claims, shall be interpreted, construed, governed and enforced under and solely in accordance with the substantive and procedural laws of the State of New York, in each case as in effect from time to time and as the same may be amended from time to time, and as applied to agreements performed wholly within the State of New York. The Parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this Agreement. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, THE PERFORMANCE THEREOF OR THE FINANCINGS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.