AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of [_____] (the “Effective Date”), by and among MN8 Energy LLC, a Delaware limited liability company (“MN8 Energy”), MN8 Energy Holdings LLC, a Delaware limited liability company (“Ultimate Parent Company” or the “Company”), MN8 Energy, Inc., a Delaware corporation (“PubCo”), and WSI Fund II Holdings, LP (f/k/a MN8 Fund II Holdings, L.P.) (“Ridgewood Investor Member”). MN8 Energy, Ultimate Parent Company and PubCo (collectively, “MN8” and MN8 and their respective subsidiaries are herein referred to as “MN8 Entities,” and MN8 Energy, Ultimate Parent Company, PubCo and the Ridgewood Investor Member are herein referred to as the “Parties.” Capitalized terms used herein but not defined herein shall have the meanings assigned to such terms in the Second Amended and Restated Limited Liability Company Agreement of the Ultimate Parent Company, dated as of the Effective Date (the “Company LLC Agreement”).
Recitals
WHEREAS, on December 22, 2023, MN8 Energy entered into a Preferred Unit Purchase Agreement (the “Preferred Purchase Agreement”) with the Ridgewood Investor Member and certain other purchasers signatory thereto (collectively, the “Series A Preferred Members”), pursuant to which MN8 Energy issued certain Series A Preferred Units in MN8 Energy (the “MN8 Energy Preferred Units”) to the Series A Preferred Members;
WHEREAS, in connection with the consummation of the transactions contemplated by the Preferred Purchase Agreement, on March 28, 2024, each of MN8 Energy, Ultimate Parent Company, PubCo and the Ridgewood Investor Member entered into the Investor Rights Agreement, dated as of March 28, 2024, by and among such parties (the “Original Investor Rights Agreement”);
WHEREAS, on [ ], MN8 Holdings Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the Ultimate Parent Company (“Holdings Merger Sub”), merged with and into Ultimate Parent Company, with Ultimate Parent Company surviving such merger (the “Holdings Merger”) and concurrently with the Holdings Merger, MN8 Energy Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of Holdings Merger Sub, merged with and into MN8 Energy, with MN8 Energy surviving such merger (the “Energy Merger”);
WHEREAS, pursuant to the Energy Merger, Ridgewood Investor Member’s MN8 Energy Preferred Units were exchanged for Series A-1 Preferred Units and Ridgewood Investor Member was issued Series A-2 Preferred Units (such Series A-2 Preferred Units, together with the Series A-1 Preferred Units and any corresponding Preferred Stock, the “Preferred Securities”); and
WHEREAS, in connection with the consummation of the Holdings Merger and the Energy Merger, the parties desire to amend, restate and supersede the Original Investor Rights Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Parties hereto, the Parties hereby agree as follows:
Agreement
Section 1. Covenants.
(a) [Reserved.]
(b) Transfer Diligence Cooperation.
(i) At any time following the Initial Lock-Up Period, but in no event more than one (1) time, the Ridgewood Investor Member shall have the right, in connection with any Transfer of Series A Preferred Units permitted by the Company LLC Agreement (or in connection with the investigation or consideration of any such potential Transfer), to require the Company by written notice to use its reasonable efforts to reasonably cooperate for 180 days with potential acquirers in such prospective Transfer by taking the following actions: (i) attending management meetings of a reasonable number, scope and duration, (ii)(x) assisting in the preparation of no more than one (1) customary confidential information memorandum in the event the Company has any securities listed on any nationally or globally recognized securities exchange or has an effective registration statement on Form S-1 or (y) in all other instances not described in clause (ii)(x), preparing one (1) confidential information memorandum; provided that no such cooperation by the Company shall be required (A) until such acquirer executes and delivers to the Company (i) a customary confidentiality agreement, in form and substance reasonably satisfactory to the Board of Directors and (ii) a non-reliance agreement under Section 1(c), (B) to the extent such cooperation would unreasonably interfere with the normal business operations of the Company or any of its Subsidiaries and (C) to the extent the provision of any information would conflict with, or constitute a violation of, any applicable law, or cause a loss of attorney-client, work product or similar right, protection or privilege of the Company or any of its Subsidiaries; provided, further, that the Company shall in no event have any liability for the accuracy of the information contained in the proprietary materials disclosed other than for fraudulent misrepresentation; and provided, further, that the Ridgewood Investor Member shall reimburse the Company for all reasonable and documented third party costs and expenses incurred by the Company in connection with its cooperating under this Section 1(b)(i).
(ii) The Ultimate Parent Company hereby agrees that, if the Ridgewood Investor Member has not exercised the rights set forth in Section 1(b)(i) with respect to its Series A Preferred Units prior to an IPO, Section 1(b)(i) shall apply to proposed
transfers of any Preferred Stock held by the Ridgewood Investor Member in PubCo, mutatis mutandis.
(c) Non-Reliance. As a condition to the Company’s and PubCo’s obligations under Section 1(b)(i) and Section 1(b)(ii), each of the Ridgewood Investor Member and any potential acquiror shall execute a non-reliance agreement in a form reasonably acceptable to the Company or PubCo, as applicable, agreeing, in addition to other customary provisions: that information is being provided for information purposes only; that such potential acquiror is responsible to conduct its own due diligence and is not relying on accuracy or completeness of information provided by the Company or PubCo, as applicable; that such information is being provided without representation or warranty of any kind; and that such acquiror will indemnify and hold harmless the Company and/or PubCo, as applicable, for any claims arising out of disclosure or use of information other than claims based on actual (and not constructive) fraud.
(d) CUSIP Cooperation. From immediately prior to the expiration of the Initial Lock-Up Period, upon the written request of the Ridgewood Investor Member, the Company shall use its commercially reasonable efforts to cause the Series A Preferred Units held by the Ridgewood Investor Member to be assigned a valid CUSIP number in accordance with the applicable rules and procedures of the CUSIP Service Bureau, as soon as reasonably practicable, but in any event, within fifteen (15) days following the receipt by the Company of written request therefor.
(e) Expense Reimbursement. Other than in connection with an IPO reorganization as described in Section 6.4.3 of the Company LLC Agreement, in the event that the Company requests the consent of the Series A Preferred Members to amend any organizational documents of the Ultimate Parent Company or any of its Subsidiaries or to enter into any other agreements in connection with its investment in the Company, the Company shall reimburse all of the Ridgewood Investor Member’s reasonable and documented out-of-pocket fees incurred in connection with the review and negotiation of such documentation.
(f) MFN.
(i) The Company hereby represents and warrants that, as of the Effective Date, (x) no rights or other terms are offered to or agreed with any other Series A Preferred Member in its capacity as such, other than those in the Company LLC Agreement; the Preferred Purchase Agreement; the Amended and Restated Investor Rights Agreement by and among the Company, the Ultimate Parent Company, PubCo and Mercuria Clean Energy Investments BV (the “Mercuria Investor Member”), dated as of the date hereof; the Consent of the Majority Preferred of MN8 Energy LLC, dated as of the date hereof, by and among Mercuria Investor Member, Ridgewood Investor Member, Ultimate Parent Company, PubCo and MN8 Energy; and the guarantee issued by Mercuria Energy Group Limited in favor of MN8 Energy, dated as of March 28, 2024 (the “Applicable Transaction Documents”); and (y) no obligation of, or restriction with respect to, any Series A Preferred Member set forth in the Applicable Transaction Documents have been waived or modified.
(ii) The Company hereby covenants and agrees from and after the Effective Date, and for so long as the Ridgewood Investor Member is a Series A Preferred Member or holds Preferred Stock, that if any MN8 Entity or the Public Entity intends to enter into any other side letter or agreement offering more favorable terms to any other Series A Preferred Member or holder of Preferred Stock in its capacity as such (in addition to those set forth in Applicable Transaction Documents as in existence on the date of the closing of the Preferred Purchase Agreement), then such MN8 Entity or the Public Entity, as applicable, shall offer the same terms to the Ridgewood Investor Member. This Section 1(f) shall not restrict any MN8 Entity or the Public Entity from entering into, or be applicable to, other commercial agreements with any entity that is also a Series A Preferred Member. In addition, no MN8 Entity or the Public Entity shall permanently waive, terminate or modify any restrictions on, or obligation of, any Series A Preferred Member or holder of Preferred Stock under any Applicable Transaction Document with respect to any term that is also applicable to the Ridgewood Investor Member without offering the same waiver, termination or modification to the Ridgewood Investor Member. The provisions of the preceding sentence shall not apply to any one time waivers or modifications (provided that such provisions shall apply to any partial or complete waiver of any lock-up with respect to shares of common stock in connection with an IPO, whether one-time or permanent) or to any waiver, termination or modification required to maintain compliance with law or to avoid adverse regulatory or tax consequences specific to the other Series A Preferred Member or holder of Preferred Stock. Any offer made to the Ridgewood Investor Member under this clause (ii) may be conditioned upon election to accept within a reasonable period of time following notice of the offer.
(g) Director Fees. If at any time the Ridgewood Investor Member constitutes the Majority Preferred and may exercise the right of the Majority Preferred to designate a director to the Board of Directors, such director shall be entitled to compensation consistent with the Company’s other non-employee directors pursuant to the Company’s non-employee compensation program as may be in effect from time to time.
(h) [Reserved.]
(i) Mercuria Investor Member Agreements. (A) Within three (3) Business Days following the end of each Quarterly Period and (B) in connection with any consent or approval that is required of the Majority Preferred with respect to any matter submitted to the Majority Preferred for approval or consent pursuant to Section 7.6.1 or Section 12.20 of the Company LLC Agreement, or Section 5 of the Certificate of Designations, the Company shall provide to the Ridgewood Investor Member a list reasonably describing the nature and scale of any and all agreements between the Mercuria Investor Member or any of its Affiliates, on the one hand, and any MN8 Entity, on the other hand, as and when requested by the Ridgewood Investor Member not more than 15 days prior to such vote or consent.
(j) Certain Notice Provisions. Notwithstanding anything to the contrary in Sections 12.1.1 and 12.20 of the Company LLC Agreement, if the Board of Directors determines that a
shorter notice period is reasonable with respect to any vote or consent under Sections 12.1.1 or 12.20 of the Company LLC Agreement, the Ridgewood Investor Member shall have the right to elect, at its sole discretion, to be provided with the full notice period.
Section 2. Miscellaneous.
(a) Entire Agreement. This Agreement is intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings other than those set forth or referred to herein with respect to the rights granted by the Ultimate Parent Company or any of its Affiliates or the Ridgewood Investor Member or any of their respective Affiliates set forth herein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter hereof (other than the Preferred Purchase Agreement and the Company LLC Agreement), including the Original Investor Rights Agreement.
(b) Incorporation by Reference. The following sections of the Preferred Purchase Agreement are hereby incorporated by reference into this Agreement, mutatis mutandis: Section 10.4 (Severability), Section 10.5 (Governing Law), Section 10.6 (Descriptive Headings), Section 10.7 (Gender), Section 10.8 (References), Section 10.9 (Consent to Jurisdiction), Section 10.10 (Amendment), Section 10.11 (No Recourse), Section 10.12 (Waiver), Section 10.13 (Specific Performance), Section 10.14 (Counterparts), Section 10.15 (No Strict Construction) and Section 10.16 (Limitation on Damages).
(c) Notices. All notices and demands provided for in this Agreement shall be in writing and shall be delivered to the following addresses:
If to MN8, as set forth below:
MN8 Energy, Inc.
1155 Avenue of the Americas
27th Floor
New York, NY 10036
Attention: General Counsel
Email: notices@mn8energy.com
with a copy (which shall not constitute notice) to:
Vinson & Elkins L.L.P.
1114 Avenue of the Americas
New York, NY 10036
Attention: Todd R. Triller; Crosby W. Scofield
Email: ttriller@velaw.com; cscofield@velaw.com
If to Ridgewood Investor Member, as set forth below:
WSI Fund II Holdings, LP
c/o Ridgewood Infrastructure, LLC
34 E 51 ST
New York, NY 10036
Attention: Maria Haggerty
Email: mhaggerty@ridgewood.com
with a copy (which shall not constitute notice) to:
King & Spalding LLP
1185 Avenue of the Americas
New York, NY 10036
Attention: Jonathan Melmed
Email: jmelmed@kslaw.com
(d) Binding Effect; Assignment. This Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by any Party hereto without the prior written consent of each of the other Parties; provided, that, if (x) the Ridgewood Investor Member Transfers, in accordance with the terms of the Company LLC Agreement (if prior to an IPO) or the Certificate of Designations (if following an IPO), all of its Preferred Securities to an Affiliate, this Agreement shall automatically be assigned by the Ridgewood Investor Member to, and shall be binding upon, such Affiliate(s); and (y) in accordance with the terms of the Company LLC Agreement, the Public Entity is an entity other than PubCo, then MN8 shall cause the Public Entity to execute a joinder to this Agreement as an MN8 Entity, and assume the same obligations as the obligations of the PubCo hereunder.
(e) Termination. This Agreement shall terminate and be of no further force and effect upon the earlier of (i) the date on which the Ridgewood Investor Member, and its Affiliates who are assigned this Agreement in accordance with Section 2(d), if any, ceases to hold any Preferred Securities and (ii) such earlier date as the Parties may otherwise agree.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.
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| MN8 ENERGY LLC |
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| By: | |
| Name: Jon Yoder |
| Title: Chief Executive Officer |
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| MN8 ENERGY HOLDINGS LLC |
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| By: | |
| Name: Jon Yoder |
| Title: Chief Executive Officer |
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| MN8 ENERGY, INC. |
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| By: | |
| Name: Jon Yoder |
| Title: Chief Executive Officer |
Signature Page to Amended and Restated Ridgewood Investor Rights Agreement
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| RIDGEWOOD INVESTOR MEMBER: |
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| WSI FUND II HOLDINGS, LP |
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| By: WSI Fund II Holdings GP, LLC, as General |
| Partner |
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| By: | |
| Name: Michael Albrecht |
| Title: Managing Partner |
Signature Page to Amended and Restated Ridgewood Investor Rights Agreement